New Law Effective January 1, 2012 Codifies Right of Landlord to Ban Smoking

A newly enacted code effective January 1, 2012, has codified the right of a landlord to ban smoking on leased premises. Civil Code Section 1947.5 allows the landlord of a residential dwelling unit, to prohibit the smoking of a cigarette, or other tobacco product on the leased property or in any building or portion of the building, including any dwelling unit, other interior or exterior area, or the premises on which it is located. Leases or rental agreement entered into on or after January 1, 2012 that would have this ban, shall
include a provision that specifies the areas on the property where smoking is prohibited. For a lease or rental agreement entered into before January 1, 2012, a new smoking ban can still be enacted but it would constitute a change of the terms of tenancy requiring adequate notice in writing.

All Rights Reserved © 2012 by Michael L. Mau, Esq. & The Mau Law Firm

Robinson v. Countrywide Approves of Gomes Decision

In an appeal from a judgment of the trial court, the Fourth District Court of Appeals issued its ruling in Robinson v. Countrywide Home Loans, Inc. (2011) No. E052011. The appeals court affirmed, where the trial court sustained defendants’ demurrer in an action for wrongful initiation of foreclosure and related-causes. The Court held that even if a statutory action for damages or for declaratory relief were available to challenge the standing of a foreclosing entity, plaintiff’s amended complaint does not allege any facts upon which such an action could be based with respect to the defendants. The Court approved of the Gomes decision, noted previously in this blog, that plaintiffs’ had no basis to plead a claim for damages for wrongful initiation of a foreclosure by MERS (Mortgage Electronic Registration Systems, Inc.) as agent for Countrywide. The case does not mean that a borrower who believes that the foreclosing entity lacks standing to do so is without a remedy. The borrower could seek to enjoin the trustee’s sale or to set the sale aside.

All Rights Reserved © 2011 by Michael L. Mau, Esq. & The Mau Law Firm

Templo v. Gardner Construction Enforces Arbitration Clause from a Construction Contract

In Templo Calvario Spanish Assembly of God v. Gardner Construction Corp. (2011) ([No. F060838. Fifth Dist. Aug. 16, 2011.] the Court of Appeals enforced an arbitration clause from an interesting factual background. This was a contract dispute involving the enforceability of an arbitration provision contained in a construction contract, where the contractor was unlicensed. So the question was whether the contract, and thus arbitration clause in that contract, were automatically void? The trial court had vacated the arbitration award finding that the construction contract with an unlicensed contractor was automatically void. However. the Court of Appeals reversed this decision. The Appellate Court held that under the case precedent of MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, the construction contract was not automatically void just because the contractor was unlicensed. Instead, it confirmed that the Contractors State License Laws still bars suit to collect compensation for unlicensed work.

All Rights Reserved © 2011 by Michael L. Mau, Esq. & The Mau Law Firm

Hensel Phelps v. San Diego interprets what is a Public Work for the Application of Prevailing Wages.

In Hensel Phelps Construction Co. v. San Diego Unified Port Dist. (2011) (Cal.App.4th) Case No. D057277, the Fourth District Court of Appeals analyzed the meaning of a public work of construction for a semi-private development built on land leased from a public entity.

This was a labor dispute involving the scope of Section 1771 of the State’s prevailing wage law (PWL), Lab. Code section 1720 et seq., where judgment of the trial court granting a petition for a writ of mandate was reversed. The court held that where: 1) a hotel construction project on land that the defendant leases to a private party qualifies as public work within the meaning of the PWL; 2) construction was done under a contract that was paid for in whole or in part out of public funds; and 3) the lease specifies that the defendant will provide a rent credit during the first 11 years of the lease such that the rent credit was deemed to be the equivalent of public funding that helped pay for the construction. The net result, was that prevailing wages should have been paid on this project as a public work.

All Rights Reserved © 2011 by Michael L. Mau, Esq. & The Mau Law Firm

U.S. Supreme Court Admission

Michael L. Mau, Esq. participated in a Special Admissions Ceremony at the U.S. Supreme Court on May 31, 2011 and has been Admitted to the Bar of the U.S. Supreme Court. This was a program organized as part of the Centennial for Santa Clara University School of Law.  The Mau Law Firm extends its appreciation to the Law School’s Dean Polden and all of the Law School staff for making these arrangements!

Fei v. Yoon Denies Subcontractor Prompt Payment Penalties due to a Good Faith Dispute

In Fei Enterprises, Inc. v. Yoon (2011) (No. B209862), the Second District Court of Appeals recently issued a ruling providing some guidance on the applicability of prompt payment penalties under California construction law, and looking specifically at Business and Professions Code Section 7108.5. Section 7108.5 requires general contractors to pay subcontractors within ten days of their receipt of payment (unless otherwise agreed to in writing) or face a 2% per month penalty, unless there is a good faith dispute which allows the general contractor to withhold up to 150% of the disputed amount.

This was a construction dispute involving a claim for breach of a subcontract and prompt payment penalties, where the judgment by the trial court declined to award any penalties. The appeals court affirmed finding the failure to make prompt payment was due to the bona fide existence of a good faith dispute over the amount due under the subcontract, and held that the finding of a good faith dispute should be determined using an objective standard. In other words, the dispute must hold up to a reasonable person test, i.e. it has to be objectively supportable and not just a subjective belief.

All Rights Reserved © 2011 by Michael L. Mau, Esq. & The Mau Law Firm

Gomes v. Countrywide Rules Against Wrongful Initiation of Foreclosure Claim

In an suit alleging “Wrongful Initiation of Foreclosure”, the Fourth District Court of Appeals (No. D057005, Feb. 18, 2011) in Gomes v. Countrywide Home Loans, Inc. affirmed defendants’ demurrer against plaintiff in a ruling in favor of the bank. By asserting a right to bring a court action to determine whether the owner of the promissory note has authorized its nominee to initiate the foreclosure process, plaintiff improperly attempted to interject the courts into a comprehensive non-judicial scheme. Essentially, the Court found there was no factual or legal basis to bring judicial action, i.e. a lawsuit, into a non-judicial foreclosure scheme as codified in Civil Code Section 2924, et seq. The Court noted that parties can still bring claims for specific wrongful misconduct that occurred in a non-judicial foreclosure, but that was not at issue in this case. Defendants’ demurrer also in part successfully argued that a plaintiff trying to forestall a foreclosure until they “produced the note” was improper. Ultimately, the defendant bank entities won this battle as all this plaintiff could do was speculate on theories without factual support. This plaintiff’s deed of trust also authorized a named defendant to initiate the foreclosure process which was opposite of his allegations, so the allegations failed.

All Rights Reserved © 2011 by Michael L. Mau, Esq.

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