Justia Contracts Opinion Summaries

Plaintiff filed a putative class action against Wet Seal, alleging that the company violated the Labor and Business and Professions Codes, Industrial Welfare Commission Wage Order No. 7, and Title 8 of the California Code of Regulations. Plaintiff's claim also included a representative claim under the Private Attorneys General Act (PAGA), Lab. Code, § 2699. On appeal, Wet Seal challenges the denial of its motion to compel arbitration, and the grant of plaintiff's motion to compel discovery responses. The court concluded that Wet Seal's motion to compel arbitration was properly denied where the trial court declared the entire arbitration agreement was void and unenforceable based on its determination that the PAGA waiver was invalid, and applied the arbitration agreement's nonseverability provision. Wet Seal also asserts that the trial court should not have reached the merits of the discovery motion while its motion to compel arbitration was undetermined. The court concluded that there is no requirement for a trial court to issue a tentative ruling, or to announce its final ruling before taking a matter under submission. Because there is no basis to treat the appeal from the nonappealable order as a petition for writ of mandate, the court dismissed this portion of the appeal. The court affirmed in all other respects. View "Montano v. Wet Seal Retail, Inc." on Justia Law

M.C., a gestational carrier, challenges the trial court's declaration that Father is the sole legal parent of triplet children and finding that M.C. has no parental rights. M.C. entered into the surrogacy arrangement with Father, pursuant to a written “In Vitro Fertilization Surrogacy Agreement.” As a preliminary matter, the court concluded that M.C. is not estopped from challenging the legal effect or validity of the Agreement. On the merits, the court concluded that Father complied with the requirements for establishing a parent-child relationship and for terminating M.C.’s claimed parental rights pursuant to Family Code section 7962. The court also concluded that the trial court's application of section 7962 is consistent with the constitutional rights of M.C. and the children. In this case, M.C.'s various substantive and procedural challenges are foreclosed by specific legislative provisions and by a prior decision by the California Supreme Court. Because the court found no error in the trial court's ruling, the court affirmed the judgment. View "C.M. v. M.C." on Justia Law

Dr. Hoang, a dentist, died in 2010. Dr. Khan agreed to buy Hoang’s practice. The contract allows the prevailing party to be awarded fees if “any litigation . . . is commenced . . . concerning its terms, interpretation or enforcement or the rights and duties of any party.” Two years later, Khan filed suit for breach of contract, fraud, concealment, negligent misrepresentation, and rescission. Khan alleged failure to comply with warranties, including that none of the practice records contained any untrue statement or material omission; that the practice was in compliance with laws and regulations; that patients and insurance companies had been properly billed; that the practice had not billed for services for which the practice was not entitled to compensation; that the practice had not, as a usual practice, waived co-payments or deductibles; and the practice had not increased any employee’s salary after April 2010. The estate counter claimed that Khan had failed to remit accounts receivable and to provide proper accounting. Before trial, Khan voluntarily dismissed her entire complaint without prejudice. The court found for Khan on all causes of action in the counter-complaint. The estate obtained an award of attorney fees as the prevailing party under Code of Civil Procedure section 1032(a)(4). The court of appeal remanded. Section 1717(b)(2), generally bars the award of fees after a pretrial voluntary dismissal for defense of contract claims, but the agreement's fee provision was broad enough to cover fees for defense against tort actions. View "Khan v. Shim" on Justia Law

VitaVet hired IDS to develop a software program that would increase the speed and efficiency of its online services. IDS delivered an unfinished version of the software and withheld the source code and technical specifications needed to finish it. The parties filed suit against each other and the trial court issued a preliminary injunction that ordered the software consultant to deliver the source code and technical specifications to the company. The court concluded that a preliminary injunction that alters the status quo does not constitute an impermissible final adjudication of the merits of the lawsuit. The court explained that such injunctions are reserved for “extreme cases” where the right to relief is “clearly established.” The court affirmed the issuance of the injunction because the trial court did not abuse it discretion in concluding that this is one of those “extreme cases” where VitaVet had a “clearly established” right to preliminary injunctive relief. In this case, VitaVet established that the contract gave all ownership of IDS's work product to VitaVet, going so far as to empower VitaVet to obtain copies of that product whenever it wanted. IDS's refusal to hand over the source code breached these contractual provisions and damaged VitaVet's business operations. View "Integrated Dynamic Solutions v. Vitavet Labs" on Justia Law

Thompson founded a consulting firm (WREG) to advise clients in a niche internet infrastructure industry called “colocation.” WREG sometimes, but not always, performed services that required a real estate broker’s license. Because Thompson did not have a broker’s license when he founded WREG, he decided to collaborate with Asimos. Thompson and Asimos adapted a standard form independent contractor agreement typically used by real estate brokers and agents, which turned out to be a poor fit. Disputes arose concerning alleged underpayment of commissions and alleged failure to comply with regulatory requirements governing real estate brokerage. They sued each other on various breach of contract and business tort theories. Thompson obtained a substantial damages award, plus an award of attorney fees. The court of appeal affirmed court’s rejection of all of Asimos’s claims against Thompson and its determination of liability against Asimos for breach of contract, unfair competition, and trademark infringement, but vacated the damages award and remanded for recalculation against Asimos on Thompson’s claims for unfair competition and trademark infringement. View "Thompson v. Asimos" on Justia Law

Ryan sued his former employer, NextG, alleging that NextG had breached a promise to grant him lucrative stock options as a condition of his employment. The case went to the jury with an “unclear special verdict form and unhelpful instructions.” The jury sustained two contract-based causes of action, but failed to find the value of the promised options, despite a directive on the verdict form that it do so. Instead it made a finding of the income plaintiff lost by entering the employment relationship, despite a directive obviating such a finding in light of the jury’s rejection of plaintiff’s tort causes of action. The trial court denied a motion for a new trial, and suggesting that declarations were necessary to determine “what the jury actually did.” The court of appeal reversed with instructions to grant a new trial. The court was fully empowered and obligated to make an independent assessment of the adequacy of the verdict, which was unmistakably unsound. If viewed as an award of tort damages, it had no foundation in law. If viewed as an award of contract damages, it had no foundation in fact. View "Ryan v. Crown Castle NG Networks, Inc." on Justia Law

In early 2008, plaintiff-appellant Taghi Alereza agreed to help his nephew Habib (Bobby) purchase a business consisting of a gas station and convenience store in Sacramento. They planned to have Bobby run the business. Alereza’s role involved nothing more than providing the initial purchase funds and a $100,000 note secured by his residence. The sole issue in this appeal centered on whether escrow company Chicago Title Company (Chicago Title) owed a legal duty of care to Alereza, who was not a party to the escrow nor mentioned as a third party beneficiary in the escrow instructions. Chicago Title admitted its employee negligently listed the wrong name of the insured (the purchaser of the gas station business) when securing a new certificate of insurance for the business. “This was the first of a series of missteps by several persons that eventually led to Alereza giving a personal guarantee to save the gas station business.” Claiming damages for losses incurred after giving his personal guarantee, Alereza sued Chicago Title. The trial court granted Chicago Title’s motion for nonsuit, and Alereza appealed. The Court of Appeal concluded Chicago Title did not owe a duty of care to Alereza because he was not a party to the escrow, not mentioned in the escrow instructions as a third party beneficiary, and did not sustain his losses as a direct result of the escrow company’s negligence. View "Alereza v. Chicago Title Co." on Justia Law

Plaintiff filed suit against the former attorneys who had represented her in a personal injury action. Plaintiff alleged eight causes of action arising from alleged misconduct during the course of the parties’ attorney-client relationship. The trial court sustained defendants’ demurrer to plaintiff’s operative first amended complaint on the basis of the statute of limitations. The court concluded that all of plaintiff's causes of action are time-barred as a matter of law. Accordingly, the court affirmed the judgment. View "Foxen v. Carpenter" on Justia Law

Stephen Shapiro was a licensed real estate broker and the principal of plaintiff Westside. Shapiro's friends, James and Eleanor Randall, agreed to have Shapiro represent them in a residential real estate purchase. However, the agreement was never put in writing. The Randalls later worked with their attorney, Richard Meaglia, to buy the $65 million dollar estate Shapiro had originally identified and negotiated offers and counteroffers on. Westside then filed suit against the Randalls for breach of an implied contract and filed suit against Meaglia for intentional interference with an implied contract. Westside sought compensatory damages of $925,000, the same amount as the broker’s fee Meaglia eventually collected. Westside subsequently dismissed its case against Meaglia, and the trial court entered a final judgment dismissing the first amended complaint (FAC) against all defendants. The court concluded that the trial court correctly ruled that the statute of frauds applies to Westside's claim; the FAC alleges no written agreement between Westside and the Randalls; and thus Westside’s claim for its commission is subject to—and barred by—the statute of frauds. Finally, the court concluded that the trial court did not abuse its discretion in denying leave to amend its claim against the Randalls. Accordingly, the court affirmed the judgment. View "Westside Estate Agency v. Randall" on Justia Law

A fire destroyed a house. The homeowner’s insurer agreed to pay for the damages resulting from the fire, then sued the contractor who installed the fireplace several years earlier, claiming negligence. The contractor tendered defense of the action to its liability insurer, asserting that even though the fire occurred after the relevant policy periods ended, there was a possibility of coverage because the fire may have been the result of ongoing damage to the wood in the chimney during one or more policy periods due to the exposure of that wood to excessive heat from the chimney every time a fire was burned in the fireplace. The issue this case presented for the Court of Appeal’s review was whether, under the standard language of the commercial general liability policy at issue here, did the liability insurer have a duty to defend the contractor? After review of that policy, the Court answered “yes” and reversed the trial court’s judgment that concluded otherwise. View "Tidwell Enterprises v. Financial Pacific Ins. Co." on Justia Law