BRIEFLY SPEAKING March 2006 Our Practice Areas usiness & B Corporate Transactions epresentation R of Emerging Businesses atent & P Intellectual Property Law onstruction C and Real Estate Litigation Employment Law E state Planning & Probate L and Use & Development Franchise Law ax Planning and T Litigation Inside this Issue: oing Places G Costa Rica In The Law I Have Heard of Finger Food, But This Is Ridiculous Book Review oing Places G Irish Wedding Clients On The Go Epicurean Delights - Basque Style Seafood Sauté Quips & Quotes GOING PLACES – Costa Rica After hearing numerous testimonials from friends and family, my wife, Anne, and I ventured to Costa Rica to encounter nature at her most magnificent. Costa Rica is a delightful combination of natural splendor and resort luxury. Costa Ricans boast that they have 32 separate, distinct ecosystems. Anne and I trekked through 38 of them. Of particular note is the cloud forests of Monte Verde. There we encountered a surreal dream world of thick foliage, eerie mists, exotic plants and, most especially, rare and beautiful birds. We spent a good portion of the day searching for the revered Quetzal. This bird, sacred to the ancient Aztecs and Incans as well as modern Costa Ricans, is rarely seen. It has emerald green plumage, a red face and feathers over three feet in length. We huddled in the misty vegetation perfectly silent waiting for a glimpse of the prize. (This reminded me of sitting in a duck blind in the wet and cold waiting for a flock of mallards. I judiciously failed to mention this to our biology major, Greenpeace member, tree hugging guide, Rafael.) And yes, we spotted the Quetzal, took numerous pictures and were off to the hotel bar. Our next adventure was to the volcano at Arenal, the surrounding rain (as distinguished from cloud) forests and the hot springs generated by Pele. While Costa Ricans are by reputation, and are in reality, the world’s nicest In The Law By Brian O’Dea people, I question the wisdom of building resort hotels on the side of an active volcano. It is a tad disconcerting to hear a roar and feel your room tremble while dressing for dinner. An exciting adventure is traversing the canopy of rain forests on suspension bridges up to 500 feet above the ground. Most enjoyable if one does not look down and can ignore the sway of the span – both of which are impossible. When the queasiness ebbed, we were able to see toucans, sloths, arboreal anteaters and various other undefined mutations, all to the vast enjoyment of those without chronic stomach pains. Our final stop was the beach at Manuel Antonio National Park. Again, a panoply of natural phenomenon awaited. The coastal rivers and mangrove forests contain monkeys, river otters, pythons, bats, butterflies and numerous varieties of birds. Perhaps the most disturbing residents were the crocodiles – some exceeding twenty feet in length. While I highly recommend a trip to Costa Rica, I must caution you on the following. 1. The roads are beyond description and belief. Before you go, I would suggest contacting NASA and renting a Luna Excursion Module. 2. Do not go in February during presidential elections (every four years) as we did. For three excruciating, endless days, the sale of alcohol is banned in all of Costa Rica. Costa Rica – pura vida! By Phil Vermont There have been several new statutes taking effect January 1, 2006, which affect the real estate industry. First, California Code of Civil Procedure, section 116.221, has modified the amount awardable in a Small Claims matter. As of January 1, 2006, the Small Claims Court has jurisdiction in an action brought by a natural person (not a corporation, partnership or other business entity) of $7,500.00 (up from $5,000.00) except for certain exceptions (such as a claim against a defendant guarantor). Thankfully for residential landlords, California Code of Civil Procedure, section 1946.1, expired by its own provisions on January 1, 2006. Section 1946.1 previously stated that an owner of residential property must give at least sixty (60) days’ notice of termination of a monthto-month tenancy if the residential tenant had occupied the property for more than one (1) year (if the residential tenant had occupied the property for less than one (1) year, under a month-to-month lease, only thirty (30) days’ notice was required). This statute had been passed by the Legislature in 2001 to remedy (Continued on page 3) “I Have Heard Of Finger Food, But This Is Ridiculous” Although we all know now that Anna Alaya’s claim to have found a fingertip in her Wendy’s chili last May was just a scam, expecting the unexpected in food has a surprisingly long and varied history in jurisprudence. And it is not always clear when injuries suffered as a result of contaminated food will be actionable. For food producers and consumers alike, the status of the law may be hard to swallow. There is little disputing that injuries caused by foreign or adulterated food is actionable. A review of the California cases on the subject demonstrate the acceptance of an implied warranty of fitness rule against manufacturers or producers of food. In Klein v. Duchess Sandwich Co., Ltd., 14 Cal.2d 272, 274, (1939), for example, the plaintiff’s husband purchased a sandwich that was infested with maggots.The plaintiff ate the sandwich and not surprisingly became ill. In finding liability against the manufacturer, the court in Klein concluded that by offering food for sale, preparers are impliedly warranting the food’s fitness for consumption. Id. at 284. This same implied warranty against foreign or adulterated substances in food was extended to independent restaurant owners who purchased the food from outside manufacturers in Goetten v. Owl Drug Co., 6 Cal.2d 683, 686 (1936).The Court in Goetten concluded that because restaurateurs have the food under their control prior to serving, the fact that the food may have been manufactured elsewhere does not relieve the restaurateur of their responsibility to inspect it prior to serving. Id. at 687. The more difficult question arises when the injury is caused by an object deemed natural to the food being served. In the early case of Mix v. Ingersoll Candy Co., 6 Cal.2d 674, 675 (1936), for example, plaintiff was injured after swallowing a fragmented chicken bone found in a chicken pot pie he consumed in defendant’s restaurant. Plaintiff sued the restaurant alleging negligence in the preparation and serving of the chicken pie. Id. at 676. In considering the scope of a restaurant owner’s duty to its patrons, the court in Mix concluded that the implied warranty of fitness of food does not make the restaurant owner an ultimate insurer of the food, but merely requires that food be reasonably fit for human consumption. Id. at 681. A chicken pot pie with occasional chicken bones, the Court concluded, was reasonably fit for human consumption. Id. at 682. According to the Mix Court, a consumer who eats meat dishes “ought to anticipate and be on his guard against the presence of such bones.” Id. The Mix “foreign natural test” has been cited with approval and followed by several different state courts and is the standard in Louisiana, Ohio and North Carolina. The test creates liability on the basis of breach of implied warranty of wholesomeness and reasonable fitness for human consumption for vendors of food containing foreign objects which injure consumers. Vendors are absolved, however, where the object is natural to the food and would be expected Page 2 By Kevin Martin by any knowing consumer. The foreign natural test was the rule in California for some time following the Mix decision and routinely followed. The court in Lamb v. Hill, 112 Cal. App.2d 41, 42 (1952), for example, affirmed judgment in favor of a restaurateur and rejected plaintiff’s complaint for injuries suffered in connection with a chicken bone splinter found in a chicken pot pie served in defendant’s restaurant. Similarly, applying the foreign natural test, the California Appeals Court in Maiss v. Hatch, 8 Cal.Rptr. 351, 352 (1960), reversed a judgment rendered for a consumer on breach of warranty after the consumer had broken a tooth on a piece of bone found in a hamburger served to him by defendant. Explaining that the warranty involved was against there being a foreign object in the food, the Maiss Court noted that there was no evidence presented that the bone was not a beef bone, and based thereon concluded that the object in question was not “foreign.” Id. Critics of the foreign natural test, however, argue that it fails to hold food purveyors liable for demonstrably negligent conduct in preparation of the food simply because the object causing injury is deemed natural. This issue was taken up by the California Supreme Court in the landmark case Mexicali Rose v. Superior Court, 1 Cal. 4th 617 (1992). In Mexicali Rose, plaintiff consumer brought an action against a restaurant for damages sustained after he swallowed a chicken bone found in a chicken enchilada. Id. Plaintiff sued on theories of negligence, breach of implied warranty, and strict liability alleging that defendant restaurant negligently left the bone in the enchilada and that the food was unfit for human consumption. Id. at 620. Plaintiff also claimed that he did not expect to find a bone, and that it was not common knowledge that bones were found in chicken enchiladas. Id. In sustaining defendant’s demurrer, the Court of Appeal noted it was compelled under Mix to preclude liability for injuries caused by naturally occurring substances in food. Id. The California Supreme Court, however, disagreed. Abandoning the foreign natural test of Mix, the Mexicali Rose decision adopted a new standard based on “reasonable expectations” of the consumer. Id. at 621. Under the “reasonable expectations” test, deciding the liability of a food purveyor for injuries caused by harmful substances in the food now rested with what the “reasonable expectations” of the consumer were with respect to that food. Id. at 631. If the injury-producing substance was natural to the preparation of the food served, it still could not be considered unfit or defective, but if the presence of the injury causing substance was due to the vendor’s failure to exercise due care in food preparation, the injured patron could sue under a negligence theory. Id. If the injury causing substance is foreign to the food served, then the injured patron may also state a cause of action in implied warranty and strict liability. Id. at 633. Achieving Results Through Innovation® “I Have Heard Of Finger Food, . . . Continued This new rule of “reasonable expectations” has been followed in several California cases since its introduction in 1992. The inquiry in many respects now focuses on defendant’s actions in preparing the food, and not so much what substance was found there. In Ford v. Miller Meat Co., 28 Cal.App.4th 1196 (4th Dist. 1994), for example, judgment in favor of defendant supermarket was affirmed against negligence, strict liability and breach-of-warranty claims brought by a consumer who allegedly damaged her tooth when she bit down on a fragment of bone in ground beef purchased at the market. Evidence in the matter centered on defendant’s meat manager testimony that the ground beef obtained from their supplier was regularly compacted In The Law . . . Continued By Phil Vermont some of the drastic evictions that were occurring due to the dot.com bust. However, when the Legislature passed the statute, they gave it a finite life of its own, so that it expired automatically as of January 1, 2006. Now, the law returns to its previous state; a landlord may give thirty (30) days’ notice to terminate a month-tomonth tenancy regardless of the term of tenancy. The issue of disclosing registered sex offenders in a real property transaction has been modified. California Civil Code, section 2079.10a, now states that any contract for lease or rental of residential property, or sale of residential real property compromised of 1 to 4 dwelling units, must contain a new notice as follows: “Notice: Pursuant to section 290.46 of the Penal Code, information about specified, registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at www.Meganslaw.ca.gov. Depending on an offender’s criminal history, this information will include either the address which the offender resides or the community of residence and zip code in which he or she resides.” Finally, California’s mobile home residency law has been amended; specifically there is a significant change in California Civil Code, section 798.36, which prohibits charging a mobile home owner a fee for the enforcement of rules and regulations of the mobile home park, except that a reasonable Book Review through a steel plate perforated by holes 3 to 4 millimeters in diameter and therefore bone fragment in the meat could not have been larger than one-eighth of an inch. Id. at 1199. According to the Ford Court, bone fragments of one-eighth inch or less in ground beef could have reasonably been anticipated by consumer and therefore supermarket’s failure to remove the bone was not negligent. Id. at 1202. As it stands, the reasonable expectations test is the rule in California. Blending portions of the foreign natural test with negligence standards, the courts seemingly have arrived at a hybrid analysis that takes into account both the substance causing injury and the conduct of the food preparer prior to serving. fee may be charged by the management for the maintenance or cleanup of the mobile home park as described in the new revised statute. If the mobile home park management determines, in good faith, that the removal of a homeowner’s personal property from the land and premises upon which the mobile home is situated is necessary to bring the space into compliance with the rules and regulations of the park, the management can remove the property to a reasonably secure storage facility. The management must first provide advance written notice of its intent to remove the property, including a description of the property. The notice must include a reference to the regulation justifying the removal, and must provide an estimate of the charges. Within seven (7) days from the date the property is removed, the management must provide the homeowner a written notice that includes an inventory of the property removed, the location of the property, and a notice of the cost of removal and storage to be paid by the residents or homeowner to reclaim the property. If, within sixty (60) days, the homeowner does not claim the property, the property is deemed to be abandoned, and the management may dispose of the property in any manner. This description of new developments in the law is not intended as legal advice to any person or entity, and therefore, you should consult with your counsel before applying any of these new laws or interpreting them yourself. By Steve McNichols “Why Societies Need Dissent” by Cass R. Sunstein, Harvard University Press, Cambridge Massachusetts, 2003. In the last decade, America has witnessed a rapid and profound polarization among our citizens in politics, religion, economic and social issues. All indications are that this trend will continue and, possibly, even accelerate. When groups think that they have all of the answers on a subject, the natural effects are intolerance of other views and close-mindedness. Another consequence is the tendency of the groups to move to extreme views which is caused by failure of group members to entertain dissenting views. The groups, particularly those on the fringes of the spectrum, demand and produce blind conformity by creating the impressions with its members that the group is right and all other opinions are wrong and not worth considering. The most harmful outcome is that groups who think that they have a monopoly on the truth use every means to impose their ideas and practices on society as a whole. Cass Sunstein argues persuasively that this type of conformity and the stifling of dissent deprives society of what it needs most to survive and prosper; namely, information. “The general (Continued on page 4) Achieving Results Through Innovation® Page 3 Book Review . . . continued lesson is clear. Organizations and nations are far more likely to prosper if they welcome dissent and promote openness. Wellfunctioning societies benefit from a wide range of views.” The book begins with a look at the psychology of conformity and group polarization. The rather shocking psychological studies discussed demonstrate a “remarkable human tendency to conform”. Have you ever wondered, as I have, how Hitler was able to find the many thousands of people necessary to run the Nazi death camps? The psychological studies cited by Sunstein indicate that it may not have been very difficult, given the apparently natural tendency of people to conform. One of the most interesting parts of the book is the discussion of the acknowledgement by the framers of the United States Constitution of the harm caused by conformity, group polarization and lack of dissent, and their efforts to design a system of government that would ensure a place for diverse views in government. The emphasis today is on the fact that the framers created a “representative democracy”. What is often forgotten is that they also attempted to create a “deliberative democracy”. That is, the founders attempted to create “…a system that combines accountability to the people with a measure of reflection and reason-giving”. The Founders were well aware of John Stuart Mill’s concern in On Liberty about the “tyranny of the majority” which is inherent in any democratic government. Their goal was to create a well-functioning democratic system that ensures “not merely responsiveness to the people through elections but also an exchange of reasons in the public sphere. In a deliberative democracy, the exercise of public power must be justified by legitimate reasons – not merely by the will of some segment of society, and indeed not merely by the will of the majority.” GOING PLACES – Irish Wedding by Randy Sullivan From the first steps off the plane and the view of the striking green landscape, I knew we had arrived. We were in Cork, Ireland. Groggy and jet lagged we traveled fifteen miles south to Kinsale. While driving on the left side of the road was a challenge, it paled in comparison to the difficulty of safely navigating the narrow country roads and the daring Irish drivers. Kinsale was our grand idea to simplify the wedding. This would certainly be better than handing off loads of cash to the professional, sophisticated wedding experts who were constantly developing new ideas to sell to future newlyweds. Instead we would have a weeklong adventure in Ireland. Some twenty of our close family members and friends were along for the trip. The tourist season was dying down and we were left alone to share Kinsale with Page 4 The Founders knew that error is likely to result when likeminded people, insulated from others, deliberate on their own. In their view “heterogeneity of opinion can be a creative force.” In the early debates on the bill of rights, the Founders considered and rejected a “right to instruct” provision that would have given the people the right to instruct their representatives how to vote. The consensus, as expressed by Roger Sherman, was that such a right to defeat the concept of deliberative government which requires the representatives of the people to meet, consult and agree among them on ”such acts as are for the general benefit of the whole community”. He went on to say that “if they were to be guided by instructions, there would be no use in deliberations”. The Founders placed right and procedures in the constitution to reduce the risk of conformity and group polarization. Sunstein discusses freedom of speech and association, right to privacy, bicameralism, the presidential veto, Federalism and combined grants of interacting powers to the President and Congress. This book is a powerful reminder of what we all know in theory if we think about it in the abstract; namely, institutions and groups are far more likely to achieve their goals if they subject ideas and leaders to critical scrutiny and ensure that courses of action face continuing monitoring and review from outsiders. Diversity and dissent reduce the risks of errors that come from social influences. “Diversity, openness, and dissent reveal actual and incipient problems.” As history has shown, and current events continue to confirm, what we know theoretically is often difficult to put into practice. Diversity and dissent are often suppressed in practice – particularly, in times of war, when avoidance of error and success are most critical. the locals. The days before the wedding were spent with visits to sites like Blarney Castle, Killarney, and the Ring of Kerry, entertaining newly arriving guests, and the necessary trips to familiarize ourselves with the town. After all, we did not even know where the church for the wedding was located or the restaurant that would serve as the venue for the reception. Mapquest would be of no help, since there were no maps of this village. By the day of the wedding everything was set: ceremony, our vows, church, priest, restaurant, and pub. It went perfectly. Ireland exceeded our expectations and we left wanting more. Since we were already in Europe we trekked to Italy for the honeymoon. It was a nice change, privacy. We saw the sites in Rome, relaxed on the Amalfi coast, and our final stop was Venice. Achieving Results Through Innovation® Irish Wedding . . . continued Unexpectedly, Irish weather was awaiting us in Venice. The evening we arrived it was cold and rainy. The next morning it looked like there was a break in the weather, so with renewed enthusiasm we headed to Piazza San Marco. While plotting our path through the labyrinth of windy streets, it began to sprinkle. Once we arrived to the Piazza we noticed that the water was not draining, but was flowing up through the drains from the canal and filling the square. Then, the storm came. It was pouring. As we waited in the long line of tourists to enter Basilica San Marco wood planks were placed throughout the Piazza as a walkway above the flood. By the time we exited the Basilica the water level had risen at least four inches. Of course, we thought we would be welcomed with nothing but warm weather in Italy, so we hadn’t packed our raincoats. Determined to enjoy our stay in Venice we looked for gear. Forty-five (45) euros later we had bright red poncho raincoats and green galoshes. Now we were discreetly dressed for Venice. We spent the next two days charging around romantic Venice without fear of puddle or flood. On our final day it was clear. We spent that evening listening to a Venetian string quartet play Vivaldi’s Four Seasons. It was the right way to end a trip that had started with traditional Irish folk songs played in a warm cozy pub. We had come full circle. Clients on the Go! ALLOPTIC – by John Nielsen Alloptic is an international company headquartered in Livermore that was founded in June 1999 to address the “last mile bottleneck” in communications infrastructure. Alloptic offers a complete suite of central office and customer premise equipment that simplifies the deployment of highly scalable Fiber-to-the-Home, Business, and Multi-Dwelling Unit (MDU) applications. Alloptic’s Gigabit Ethernet Passive Optical Network (GEPON) solution offers an industry-standard topology, quality of service, economics, interoperability, ease of use, and virtually unlimited bandwidth required to deliver today and tomorrow’s voice, video and data services. Alloptic has recently retained MROT to handle its patent matters, and we look forward to working with them to expand and protect their intellectual property assets now and into the future. www.alloptic.com ZINUS – by Kevin Martin Are you having trouble sleeping? If so, one of MROT’s newest clients ZINUS INCORPORATED may have just the ticket. ZINUS is a manufacturer of specialty sleep, travel and other homecare products. This Pleasanton-based company signature product line Theratouch consists of memory foam pillows, toppers and accessories all designed to improve quality of your sleep. ZINUS has recently retained MROT to handle its patent and trademark issues. We look forward to working with ZINUS in helping their clients, and ours, rest easy. www.zinus.com Epicurean Delights Basque Style Seafood Sauté – By Phil Vermont This is a recipe I learned from my French Aunt, who resides in the South of France, in Anglet, on the Atlantic Coast. This is a slight modification of a shrimp scampi dish. Ingredients: 2 lbs. uncooked, deveined, peeled large shrimp (or 2 lbs. combination large shrimp and giant sea scallops, or substitute giant scallops for shrimp); Half a bunch of fresh parsley; 5 to 8 cloves finely crushed fresh garlic; White wine of your choice, preferably dry or semi-dry; Ground black pepper; Salt; Fresh thyme and fresh rosemary, finely powdered (about 1 tsp. of each); Angel hair pasta; Small button mushrooms. Achieving Results Through Innovation® Begin by sautéing in either margarine (for a lighter dish) or butter, the fresh garlic, herbs, ground pepper to taste, and a small pinch of salt (be careful with the salt, because the seafood is salty in itself). Sauté on low heat until garlic begins to become soft. Put ½ to ¾ of one bottle of white wine into the sauté pan, add the mushrooms, and slowly simmer until flavors mix and about ½ of the white wine has boiled out (in other words, reduce the sauce). Set the wine, garlic, mushroom and butter sauce aside for at least one hour, and let cool. Approximately 10-15 minutes before serving the dish, reheat the sauce until it slowly begins to simmer and add the shrimp and/or scallops (simmer the shrimp and scallops in the sauce on a low to medium heat for no more than 10-15 minutes, stirring occasionally). Serve the seafood mixture with sauce over angel hair pasta. This dish goes very well with a simple salad, using an authentic French vinaigrette dressing. To modify this dish, and make it more Basque-style, add 1 to 2 medium, peeled and chopped tomatoes at the same time as the wine and mushrooms. It is highly suggested that this dish be served with a French sweet baguette, so that the sauce/juice can be enjoyed fully. Page 5 PRSRT STD U.S. POSTAGE PAID PLEASANTON, CA PERMIT NO. 354 5000 Hopyard Road, Suite 400 Pleasanton, CA 94588 Phone: 925-460-3700 Fax: 925-460-0969 E-Mail: info@McNicholsLaw.com Web Site: McNicholsLaw.com Briefly Speaking is offered as information only. It is not intended as legal, tax, or investment advice and should not be substituted for the counsel of your personal advisor. Achieving Results Through Innovation® Quotes from Confucius By John Nielsen “A superior man is modest in his speech, but exceeds in his actions.” “He who wishes to secure the good of others has already secured his own.” “If I am walking with two other men, each of them will serve as my teacher. I will pick out the good points of the one and imitate them, and the bad points of the other and correct them in myself.” “Of neighborhoods, benevolence is the most beautiful. How can the man be considered wise who when he had the choice does not settle in benevolence.” “Our greatest glory is not in never falling, but in rising every time we fall.” “Real knowledge is to know the extent of one’s ignorance.” “Study the past, if you would divine the future.” “The perfecting of one’s self is the fundamental base of all progress and all moral development.” Page 6 “The superior man thinks always of virtue; the common man thinks of comfort.” “Those who know the truth are not equal to those who love it.” “To practice five things under all circumstances constitutes perfect virtue; these five are gravity, generosity of soul, sincerity, earnestness, and kindness.” “Virtue is not left to stand alone. He who practices it will have neighbors.” “What you do not want others to do to you, do not do to others.” “When you are laboring for others let it be with the same zeal as if it were for yourself.” “Work to become, not to acquire.” Achieving Results Through Innovation®