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Corporate lawyers

Appellant Department of Benefit Payments of the State of California challenged the judgment of the Superior Court of Los Angeles County (California), which found in favor of respondent health care provider in respondent's action for reimbursement for costs incurred in supplying services to Medi-Cal beneficiaries including goodwill for capital invested in the purchase of a hospital.

Respondent health care provider sought reimbursement from appellant Department of Benefit Payments of the State of California for costs incurred in supplying services to Medi-Cal beneficiaries, including reimbursement for goodwill for capital invested in a hospital purchase. Respondent disputed appellant's valuation of the goodwill and filed an action seeking a reevaluation. The trial Corporate lawyers  reevaluated the amount of goodwill in favor of respondent and awarded respondent interest on amounts owed by appellant. On appeal, the court reversed, finding the trial court should have granted appellant's demurrer under a retroactive application of amended Cal. Welf. & Inst. Code § 14104.5 because the amendment recognized a long-standing interpretation of that section. The evidence was sufficient to support appellant's determination. Respondent's right to assert res judicata was waived by its failure to make proper appeals. Interest should have been calculated under Cal. Const. art. XV, § 1 absent any statutory provision for interest on judgments involving reimbursement for Medi-Cal services.

The court reversed the determination of the amount of reimbursement owed to respondent health care provider by appellant Department of Benefit Payments of the State of California because the Welfare and Institutions Code should have been applied retroactively to grant appellant's demurrer. The court found that appellant's determination, supported by sufficient evidence, should have been upheld.

In an action arising from the sale of the assets of a cemetery, the Superior Court of San Mateo County, California, found defendant seller liable for breach of contract because of its failure to deliver an easement giving plaintiff purchaser signage rights on nearby property, awarded $1.7 million in damages, which was less than the purchaser sought, and denied the purchaser's request for attorney fees. The parties brought cross-appeals.

The court of appeal held that, in determining damages under Civ. Code, § 3300, the trial court properly considered how much the owner of the servient property would likely have paid for the buyer to relinquish the easement. Freed from the restrictions of the easement, the servient property would have been adaptable to more profitable commercial use, making the easement uniquely valuable to the owner of the servient property. Both that unique value and the potential uses to which the unencumbered property could be put were proper factors to consider in determining what the owner of the servient property might have paid the purchaser for reconveyance of the easement. The court also held that the purchaser should have been awarded attorney fees under Code Civ. Proc., § 998, subd. (d), even though it was not the prevailing party for purposes of Civ. Code, § 1717, because its recovery was greater than its rejected settlement offer. The costs referred to in § 998 included attorney fees when authorized by contract; expert witness fees were not the sole item of costs available to a plaintiff that recovered a judgment exceeding its pretrial settlement offer.

The court affirmed the judgment but reversed the attorney fee order to the extent it denied an award of postoffer attorney fees under Code Civ. Proc., § 998, subd. (d), and remanded the matter for further proceedings.

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