U.S. Supreme Court, Kousisis v. United States, Docket No. 23-909

Wire Fraud and Conspiracy to Commit the Same (18 U. S. C. §§1343, 1349)

 

Fraudulent-Inducement Theory

 

Circuit Split

 

 

 

 

The Government charged Alpha and Kousisis with wire fraud, asserting that they had fraudulently induced PennDOT to award them the painting contracts. See 18 U. S. C. §1343. Under the fraudulent-inducement theory, a defendant commits federal fraud whenever he uses a material misstatement to trick a victim into a contract that requires handing over her money or property—regardless of whether the fraudster, who often provides something in return, seeks to cause the victim net pecuniary loss. We must decide whether this theory is consistent with §1343, which reaches only those schemes that target traditional money or property interests. See Ciminelli v. United States, 598 U. S. 306, 316 (2023). It is, so we affirm.

 

The circuits are divided over the validity of a federal fraud conviction when the defendant did not seek to cause the victim net pecuniary loss. Several circuits, now including the Third, hold that such convictions may stand. See, e.g., id., at 240–244; United States v. Leahy, 464 F. 3d 773, 787–789 (CA7 2006); United States v. Granberry, 908 F. 2d 278, 280 (CA8 1990); United States v. Richter, 796 F. 3d 1173, 1192 (CA10 2015). Others disagree. See, e.g., United States v. Shellef, 507 F. 3d 82, 108–109 (CA2 2007); United States v. Sadlar, 750 F. 3d 585, 590–592 (CA6 2014); United States v. Bruchhausen, 977 F. 2d 464, 467–468 (CA9 1992); United States v. Takhalov, 827 F. 3d 1307, 1312–1314 (CA11 2016); United States v. Guertin, 67 F. 4th 445, 450–452 (CADC 2023). We granted certiorari to resolve the split. 602 U. S. ___ (2024).

 

(…) The money-or-property requirement lies at the heart of this dispute. Although the lower courts once interpreted the phrase “money or property” as something of a catchall, we recently reiterated that the federal fraud statutes reach only “traditional property interests.” Ciminelli, 598 U. S., at 316. Schemes that target the exercise of the Government’s regulatory power, for example, do not count. See Kelly, 590 U. S., at 400; see also Cleveland v. United States, 531 U. S. 12, 23–24 (2000). Nor do schemes that seek to deprive another of “intangible interests unconnected to property.” Ciminelli, 598 U. S., at 315; see also McNally, 483 U. S., at 356. And in all cases, because money or property must be an object of the defendant’s fraud, the traditional property interest at issue “must play more than some bit part in a scheme.” Kelly, 590 U. S., at 402. Obtaining the victim’s money or property must have been the “aim,” not an “incidental byproduct,” of the defendant’s fraud. Id., at 402, 404.

 

 

 

 

(U.S. Supreme Court, May 22, 2025, Kousisis v. United States, Docket No. 23-909, J. Barrett)

U.S. Supreme Court, Kousisis v. United States, Docket No. 23-909

Fraud

 

Rescission of Contract

 

Common Law

 

 

 

When Congress uses a term with origins in the common law, we generally presume that the term “‘brings the old soil with it.’” Sekhar v. United States, 570 U. S. 729, 733 (2013). As petitioners note, we have long interpreted the statutory term “fraud” (and its variations) this way—that is, by reference to its common-law pedigree. See Neder v. United States, 527 U. S. 1, 21–22 (1999); Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U. S. 176, 187 (2016) (“The term ‘fraudulent’ is a paradigmatic example of a statutory term that incorporates the common-law meaning of fraud”).

 

This old-soil principle applies, however, only to the extent that a common-law term has “‘accumulated a settled meaning.’” Neder, 527 U. S., at 21; Kemp v. United States, 596 U. S. 528, 539 (2022). So to show that economic loss is necessary to securing a federal fraud conviction, Alpha and Kousisis must show that such loss was “widely accepted” as a component of common-law fraud. Morissette v. United States, 342 U. S. 246, 263 (1952). They cannot.

 

At common law, “fraud” was a term with expansive reach. Rather than settle on a single form of liability, courts recognized at least three, and the particular elements and remedies turned on the nature of the plaintiff ’s alleged injury. To appreciate how the three forms differed, it may help to consider a variation of the facts here. Imagine that PennDOT discovered petitioners’ scheme soon after Alpha and Kousisis had begun work on the Girard Point and 30th Street projects. In such a circumstance, law and equity provided at least three avenues for relief: PennDOT could (1) seek to rescind the contracts; (2) refer the matter for indictment under the crime of false pretenses; or (3) bring a tort action against the fraudsters for the damages incurred. If PennDOT had wanted to rescind the fraud-infected contracts, most courts would historically have permitted it to do so even without a showing of economic loss. To obtain a rescission, PennDOT would have needed to establish only that it had “received property of a different character or condition than it was promised” (“although of equal value”) or, more relevant here, that the transaction had “proved to be less advantageous than as represented” (“although there was no actual loss”). W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Law of Torts §110, p. 766 (5th ed. 1984) (Prosser & Keeton). Put differently, many courts would have awarded the equitable remedy of rescission simply because Alpha and Kousisis had tricked PennDOT into a bargain materially different from the one they had promised. See Hirschman v. Healy, 162 Minn. 328, 331, 202 N. W. 734, 735 (1925) (“It is to be noted that it was not indispensable to prove damages in dollars and cents to have cancellation or rescission of the contract and note for misrepresentations”); Williams v. Kerr, 152 Pa. 560, 565, 25 A. 618, 619 (1893); Spreckels v. Gorrill, 152 Cal. 383, 391, 92 P. 1011, 1015 (1907). To borrow a summary from Black (of Black’s Law Dictionary fame) many “decisions repudiated altogether a rule requiring a showing of actual damage.” 1 H. Black, Rescission of Contracts and Cancellation of Written Instruments §112, p. 314 (1916).

 

 

 

(U.S. Supreme Court, May 22, 2025, Kousisis v. United States, Docket No. 23-909, J. Barrett)

 

California Court of Appeal, Ng v. Super. Ct., Docket G064257M

Medical Malpractice

 

Survival Claim

 

Wrongful Death Claim

 

Personal Injury

 

Noneconomic Damages

 

Motion to Strike

 

Motion for Leave to Amend

 

Writ of Prohibition

 

Writ of Mandate

 

California Law

 

 

 

In this case for medical malpractice and wrongful death, plaintiff Joely Ng (Ng) and defendant Los Alamitos Medical Center, Inc. (the Medical Center), dispute whether recent amendments to the cap on noneconomic damages (Civ. Code, § 3333.2) under the Medical Injury Compensation Reform Act of 1975 (MICRA) and to the availability of noneconomic damages in survival actions (Code Civ. Proc., § 377.34) permit Ng to recover noneconomic damages under one or two MICRA caps. In this petition, Ng seeks a writ of prohibition or mandate directing respondent court to vacate its May 24, 2024, order granting the Medical Center’s motion to strike portions of Ng’s complaint that allege her entitlement to seek two MICRA caps. We conclude Ng’s claims are subject to two separate MICRA caps. Accordingly, we grant the petition and direct the court to vacate its order and enter a new and different order denying the motion.

 

 

(…) The complaint alleges two causes of action against all defendants: (1) wrongful death, in Ng’s individual capacity; and (2) medical malpractice, in Ng’s capacity as successor in interest to the Decedent (the survival claim). In addition to economic damages, Ng sought noneconomic damages for each claim: (1) for the wrongful death claim, damages for the loss of the Decedent’s love, companionship, comfort, care, assistance, protection, affection, society, and moral support, up to the cap allowed in Civil Code section 3333.2; and (2) for the survival claim, damages for the Decedent’s pre-death pain and suffering, up to the cap allowed in Code of Civil Procedure section 377.34, subdivision (b).

 

 

Objecting to Ng’s request for two separate caps for noneconomic damages, the Medical Center filed a motion to strike the following language from the complaint (at paragraph 20 and repeated verbatim in the prayer): “This is separate, apart, and in addition to the general damages sought by Kenneth Ng’s widow in the first cause of action. (See Keys v. Alta Bates Summit Medical Center (2015) 235 Cal.App.4th 484, 488; Atkins v. Strayhorn (1990) 223 Cal.App.3d 1380.)” Although the Medical Center agrees that Ng is entitled to seek noneconomic damages for both claims, it contends those damages are subject to one MICRA cap. In other words, the Medical Center interprets the relevant statutes as prohibiting Ng from recovering two separate noneconomic damages caps, one for each claim.

 

 

Respondent court granted the motion. The court reasoned that because “the wrongful death claim is not separate and distinct from a medical negligence claim, it cannot be . . . subject to a separate MICRA cap.” The court, however, “noted that while the MICRA cap affects the final judgment, it does not have any impact on the jury’s verdict itself or the amount determined to be plaintiff’s actual noneconomic losses.” Although the court denied leave to amend, it did so “without prejudice to plaintiff bringing a motion for leave to amend to assert the two claims as separate and distinct for purposes of the MICRA cap, should plaintiff discover and allege facts that support a finding the wrongful death claim is separate and distinct from the medical negligence claim.”

 

 

A trial court may “strike out any irrelevant, false, or improper matter inserted in any pleading” and “all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (§ 436, subds. (a), (b).) Generally, we review a ruling on a motion to strike for abuse of discretion. (Cal-Western Business Services, Inc. v. Corning Capital Group (2013) 221 Cal.App.4th 304, 309.) But where, as here, the ruling concerns “the proper interpretation of a statute, and its application to undisputed facts,” it is a question of law which we review de novo. (Ibid.)

 

 

At issue here is whether the recent amendment to Code of Civil Procedure section 377.34, which authorizes a decedent’s personal representative or successor in interest to recover noneconomic damages, means a plaintiff can seek two MICRA cap awards (one for himself or herself and one for the decedent) under Civil Code section 3333.2. We conclude it does. Because a wrongful death claim and a survival claim—even when premised on the same alleged medical malpractice—are separate and distinct claims, a plaintiff suing for both claims can seek to recover two MICRA caps.

 

 

Ng’s action, filed in 2023, is subject to the recent amendments to these statutes. As relevant here, effective January 1, 2022, subdivision (b) was added to section 377.34 of the Code of Civil Procedure to allow for the recovery of damages for a decedent’s “pain, suffering, or disfigurement” in survival actions “filed on or after January 1, 2022, and before January 1, 2026.” (Stats. 2021, ch. 448, § 1.) It also provided that “nothing in this section alters Section 3333.2 of the Civil Code.” (Code Civ. Proc., § 377.34, subd. (e).) Effective January 1, 2023, Civil Code section 3333.2 was amended to, among other things, increase the $250,000 cap on noneconomic damages. (Id., § 3333.2, subds. (a)–(c) [$350,000 in medical malpractice cases not involving wrongful death, $500,000 in wrongful death cases, with annual increases]; Stats. 2022, ch. 17, § 3.) These amendments raised the question of whether a survival claim was subject to a separate MICRA cap.

 

 

A survival claim (§ 377.30) is “a separate and distinct cause of action which belonged to the decedent before death but, by statute, survives that event. [Citation.] The survival statutes do not create a cause of action. Rather, ‘they merely prevent the abatement of the cause of action of the injured person, and provide for its enforcement by or against the personal representative of the deceased.’” (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1264 (Quiroz).) In contrast, a wrongful death claim (§ 377.60) compensates the heirs of the decedent “for the loss of companionship and for other losses suffered as a result of the decedent’s death.” (Quiroz, supra, 140 Cal.App.4th at p. 1263.) Such “damages . . . are in the nature of compensation for personal injury to the heir” and “include (1) the loss of the decedent’s financial support, services, training and advice, and (2) the pecuniary value of the decedent’s society and companionship.” (Id. at p. 1264.) “Unlike some jurisdictions wherein wrongful death actions are derivative,” California’s wrongful death statute “‘creates a new cause of action in favor of the heirs as beneficiaries, based upon their own independent pecuniary injury suffered by loss of a relative, and distinct from any the deceased might have maintained had he survived.’” (Horwich v. Superior Court (1999) 21 Cal.4th 272, 283.)

 

 

Crucially, a wrongful death claim may not include any damages recoverable as part of a survival claim, and the claims may be tried separately. (§ 377.61; Wilson v. John Crane, Inc. (2000) 81 Cal.App.4th 847, 861.) For these reasons, we conclude respondent court erred in finding the claims were “not separate and distinct” and subject to one MICRA cap.

 

 

DISPOSITION

The petition is granted. Let a peremptory writ of mandate issue, directing the trial court to vacate its May 24, 2024, order granting the Medical Center’s motion to strike and to issue a new and different order denying the motion. Petitioner to recover costs of this proceeding. (Cal. Rules of Court, rule 8.493(a)(1)(A).)

 

 

 

 

 

(California Court of Appeal, Feb 20, 2025, Ng v. Super. Ct., Docket G064257M, Certified for Publication)

California Court of Appeal, Ng v. Super. Ct., Docket No. G064257M

Demurrer

 

Verified Answer

 

California Law

 

 

 

 

(…) Because the Medical Center’s “response is not a demurrer or verified answer, it does not constitute a ‘return’ and does not effectively deny any of the allegations in the petition.” (Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 372, fn. 5, disapproved on other grounds by ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 196, fn. 8.) Thus, as against the Medical Center, “all facts pleaded in the petition are accepted as true. [Citation.] That consequence, however, has little, if any, significance in this proceeding, which involves an issue of statutory interpretation . . . .” (Caliber Bodyworks, Inc., at p. 373, fn. 5.) (Fn. 2).

 

 

 

(California Court of Appeal, Feb. 20, 2025, Ng v. Super. Ct., Docket No. G064257M, Certified for Publication)

 

California Court of Appeal, Gharibian v. Wawanesa Gen. Ins. Co., Docket No. B325859

Insurance Law

 

Payments to Plaintiffs

 

Admission of Liability

California Law

 

 

 

The fact that Wawanesa made payments to plaintiffs even though there was no coverage is irrelevant. (See, e.g., State Farm Fire & Casualty Co. v. Superior Court (1988) 206 Cal.App.3d 1428, 1431 [“Because insurance companies often adjust claims for reasons entirely unrelated to their merits, [the insurance company’s] decision to pay money to the [insureds] may not be construed either as an admission of liability or as the substantive equivalent of accepting its obligations under the policy”].)

 

 

 

(California Court of Appeal, Feb. 7, 2025, Gharibian v. Wawanesa Gen. Ins. Co., Docket No. B325859, Certified for Publication)

 

 

 

California Court of Appeal, Gharibian v. Wawanesa Gen. Ins. Co., Docket No. B325859

Notice of Appeal

 

Motion for Summary Judgment

 

Judgment Actually Entered

 

Premature Notice of Appeal

 

California Law

 

 

 

Plaintiffs actually filed their notice of appeal prematurely—after Wawanesa’s motion for summary judgment had been granted but before judgment was actually entered. Given that judgment has since been entered, we deem plaintiffs’ premature notice of appeal to have been taken from the judgment. (Mukthar v. Latin American Security Service (2006) 139 Cal.App.4th 284, 288.) (Fn. 4).

 

 

 

(California Court of Appeal, Feb. 7, 2025, Gharibian v. Wawanesa Gen. Ins. Co., Docket No. B325859, Certified for Publication)

 

 

 

 

California Court of Appeal, Gharibian v. Wawanesa Gen. Ins. Co., Docket No. B325859

Triable Issue of Fact

 

California Law

 

 

 

It is well-settled that a party cannot create a triable issue of fact with a declaration that contradicts the declarant’s earlier deposition testimony. (Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087; Visueta v. General Motors Corp. (1991) 234 Cal.App.3d 1609, 1613; Benavidez v. San Jose Police Dept. (1999) 71 Cal.App.4th 853, 860.)

 

 

 

(California Court of Appeal, Feb. 7, 2025, Gharibian v. Wawanesa Gen. Ins. Co., Docket No. B325859, Certified for Publication)