Edwin Oster

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Edwin Oster is a partner in the firm’s Newport Beach office, where he specializes in litigation, with a heavy trial practice. Prior to joining the firm as a partner in 1990, Mr. Oster primarily practiced business and commercial litigation. Since then, he has devoted most of his efforts to a wide variety of first-party insurance disputes and class actions, while still maintaining a demanding non-insurance trial practice.
The range of Mr. Oster’s litigation and trial experience includes his work in every federal court in California and all 11 of the major counties in Northern and Southern California. In addition, since 1989, Mr. Oster has served as a Judge Pro Tem for the Orange County Superior Court, and since 1991 as a court-appointed arbitrator.


Articles By This Author

Recovery From Dissolved Corporation's Liability Insurer Barred By Foreign Survival Statute

The recent case of Greb v. Diamond International Corp. highlights the need for dissolved corporations and their insurers to consider the survival statute of their state of incorporation when defending against actions brought in California.

In Greb, the California Supreme Court held that California law does not preclude the application of a foreign jurisdiction’s survival statute. The defendant, a Delaware corporation, argued that Delaware’s three-year survival statute barred the action. Plaintiffs contended that California corporate law – which places no time limit on suits against dissolved corporations – governed their suit.

The trial court agreed with the defendant and sustained its demurrer with prejudice on the grounds that Delaware’s survival statute barred the action which was filed more than three years after defendant dissolved. The court of appeal affirmed.

The Supreme Court unanimously affirmed the appellate court’s judgment. The opinion, authored by Chief Justice Cantil-Sakauye, rejected plaintiffs’ arguments that foreign corporations that qualified to do business in California were thereby organized under the laws of California.

The court found “no evidence” that the legislature intended to accomplish that “dramatic result.” Furthermore, “such a scheme would require foreign corporations to ‘follow a litany of requirements regarding various corporate activities that their home state already regulates.’”

For more information on this matter, please contact the article authors: James Hazlehurst, Ed Oster or Robert Renner.

Representations Of Future Tax Treatment To Induce Creation Of Pension Plan Are Not Actionable As A Matter Of Law

The California Fourth District Court of Appeal adopted the principle that:

it is inherently unreasonable for any person to rely on a prediction of future IRS enactment, enforcement, or non-enforcement of the law by someone unaffiliated with the federal government. As such, the reasonable reliance element of any fraud claim based on these predictions fails as a matter of law,” citing Berry v. Indianapolis Life Insurance Co.

In Brakke v. Economic Concepts, Inc., the trustee of a defined benefit plan and the principals of the company that established it brought suit against American General Life Insurance Company, Economic Concepts, Inc. and others for alleged fraud. The plaintiffs alleged they were induced to establish the pension plan by false representations that contributions to the plan were tax deductible under the Internal Revenue Code. Years after the plan was established, the Internal Revenue Service made an adverse ruling that the pension plan did not qualify for favorable tax treatment and required plaintiffs to pay back taxes and penalties.

The dispositive issues were whether defendants’ statements were actionable misrepresentations and if so, whether plaintiffs could establish reasonable reliance. The trial court sustained a demurrer without leave to amend.

On a purely factual basis, the appellate court noted inconsistencies between allegations in the complaint and exhibits to the complaint concerning the representations. More importantly, the representations were made and the plan was established in 2002-2003, whereas the IRS did not rule until 2006. This led the court to conclude that plaintiffs failed to allege the statements by defendants were false when made.

Equally fatal to plaintiffs’ position was the court’s reference to and reliance upon the Berry decision quoted above, albeit non-controlling, and analogous case law in California such as Holder v. Home Sav. & Loan Assn. (1968) (“statements with regard to future assessments or levies of taxes … made by a private person ... may not justifiably be relied on.”). The rationale in Holder was that:

“[t]he fixing of assessed values of property and of tax rates is solely within the power of public officials, whose decisions are not and should not be subject to control by a property owner.”

As a result, the Fourth District affirmed dismissal of the entire case.

Potential plaintiffs in comparable circumstances will need to find a more creative way around the court’s straightforward directive:

[I]t simply was not reasonable for plaintiffs to rely on representations concerning how the IRS would treat their pension plan in the future.”

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