Justia Contracts Opinion Summaries

This case arose out of the purchase of a used 2007 BMW vehicle by plaintiff-appellant Michael Tun from defendant-respondent Plus West LA Corporation, dba CA Beemers (CA Beemers). Defendant-appellant Wells Fargo Dealer Services, Inc., an incorporated division of Wells Fargo Bank, N.A. (collectively Wells Fargo), subsequently accepted assignment of Tun's retail installment sales contract (RISC) under an agreement with CA Beemers and/or defendant and respondent West LA Corporation, dba California Beemers (California Beemers) (sometimes collectively dealer). Tun listed 11 causes of action in a third amended complaint, all based primarily on his contention that dealer knowingly and intentionally failed to disclose that the vehicle had suffered "frame/unibody damage" from a prior collision, which damage Tun further alleged "existed at the time it was sold" to him and which "substantially decreased the value of the vehicle." Tun alleged he first learned the vehicle had been in a prior collision when he took it to a mechanic near his home, after he experienced problems while driving the vehicle. After a multi-day trial, the jury returned a verdict in favor of the dealer, finding dealer had not committed fraud, breached its contract with Tun or otherwise engaged in conduct that violated the Consumers Legal Remedies Act. The jury also found that Wells Fargo was not derivatively liable as holder of the RISC. Following the verdicts, the trial court granted Tun's new trial motion only as to Wells Fargo, despite the fact Wells Fargo was only liable to the extent, if at all, dealer was liable. In granting the motion, the trial court determined it had erred in ruling pretrial that Tun could not comment to the jury regarding Wells Fargo's tender under section 2983.4—a statute awarding a party prevailing under the Automobile Sales Financing Act (hereafter ASFA) reasonable attorney fees and costs—of the amount Tun had paid under the RISC ($15,700). Wells Fargo appealed, arguing that the court had correctly ruled in limine that Tun could not comment on Wells Fargo's tender under section 2983.4 because that tender could not be treated as a judicial admission of liability; that the tender was irrelevant to the issues decided by the jury, which focused on the conduct of dealer in connection with the sale of the vehicle; that, even assuming error, Tun could not establish prejudice; and that the new trial order was improper because there were no issues left to try, inasmuch as Wells Fargo's liability, if any, was derivative of dealer's, and dealer was exonerated. After review, the Court of Appeals concluded the trial court erred in granting Tun a new trial against Wells Fargo because the Court concluded the court's pretrial ruling precluding comment on the Wells Fargo tender was not legal error. The Court rejected Tun's cross-appeal. View "Tun v. Wells Fargo Dealer Services" on Justia Law

Don Mealing, as Trustee of the Mealing Family Trust (Mealing), sought a judgment directing Diane Harkey for Board of Equalization 2014 (Campaign) to repay a loan Diane Harkey made to the Campaign, and to apply the proceeds to partially satisfy a nearly $1.6 million judgment Mealing obtained against Diane's husband, Dan Harkey. Mealing claimed the Campaign's indebtedness to Diane was a community property asset of Dan and Diane that could be used to partially satisfy the judgment. To preserve the Campaign's assets, Mealing applied ex parte for an order under Code of Civil Procedure section 708.240, subdivision (a), to prohibit the Campaign from making any payments to Diane on the loan. The trial court denied the application without explanation and Mealing appealed. On appeal, Mealing argued the trial court lacked discretion to deny his application because he made a prima facie showing that he obtained a judgment against Dan, the judgment remained unpaid, and Diane's loan to the Campaign was a marital asset that he could use to partially satisfy the judgment, and the Campaign presented no evidence to overcome that showing. Finding no error however, the Court of Appeals affirmed: Diane was not a judgment debtor, which was statutorily defined as the person against whom a judgment was rendered. View "Mealing v. Diane Harkey for Board of Equalization 2014" on Justia Law

BMW of North America, LLC and GMG Motors, Inc., doing business as BMW of San Diego (BMW San Diego) appealed a judgment awarding Nancy Goglin over $185,000 in attorney fees and costs for successfully settling her claims under the Song-Beverly Consumer Warranty Act and other consumer protection statutes. Both BMW North America and BMW San Diego contended Goglin was not entitled to any attorney fees or costs because BMW San Diego offered an appropriate remedy before Goglin filed her complaint, which Goglin unreasonably refused to accept. Alternatively, BMW San Diego argued the fee award should have been be reduced because there was insufficient evidence to show Goglin's counsel's hours worked and hourly rate were reasonable given the litigation's lack of risk and complexity. After review, the Court of Appeals was not persuaded by these contentions and affirmed. View "Goglin v. BMW of North America" on Justia Law

In 2011, the Hjelms leased an apartment in a large San Mateo complex from Prometheus. They signed the 24-page lease while still living in another state and without any negotiation. The lease had three one-sided provisions allowing Prometheus to recover attorney fees. Their apartment became infested with bedbugs, and the complex had an ongoing raw sewage problem. Ultimately the Hjelms and their children were forced to leave. The Hjelms sued Prometheus; a jury returned a verdict for them, awarding economic damage to the Hjelms in the amount of $11,652; non-economic damage to Christine Hjelm of $35,000; and non-economic damage to Justin Hjelm of $25,000. The trial court then awarded the Hjelms their attorney fees ($326, 475) based on Civil Code section 1717. The court of appeal affirmed, noting that a one-sided attorney’s fee provision violates Civil Code 1717(a). No challenge to the verdict could succeed and section 1717 does apply. View "Hjelm v. Prometheus Real Estate Grp., Inc." on Justia Law

Festival Fund guaranteed a loan made to an affiliate in connection with the purchase of a retail property. After default on the loan and a nonjudicial foreclosure, Clover sought to enforce the guaranty. The trial court concluded that the guaranty was unenforceable and found that Festival Fund was protected by antideficiency laws. The court concluded, however, that evidence does not support a conclusion that Festival Fund was a principal obligor on the loan. The court concluded, instead, that Festival Fund itself structured the transaction and determined that its affiliate—a separate legal entity—would take out the loan and take title to the property. Therefore, the trial court erred in applying a sham guaranty defense and entering judgment for Festival Fund. View "LSREF2 Clover Property 4 v. Festival Retail Fund 1" on Justia Law

Defendant insurance company denied uninsured motorist coverage to a third party beneficiary injured in an automobile accident because it had cancelled the policy before the accident occurred. The third party sued, and the insurer sought summary judgment. The third party opposed, contending the cancellation was invalid because a written notice seeking information sent by the insurer to the insureds prior to cancellation was unreasonable as a matter of law, and disputed facts existed as to whether the insurer had mailed the notice of cancellation and actually cancelled the policy. The trial court granted summary judgment, and finding no error, the Court of Appeal affirmed. View "Mills v. AAA Northern CA, NV and Utah Ins. Exch." on Justia Law

Schellinger planned commercial development of a large Sebastopol tract that it had agreed to purchase from Cotter. Certification of an environmental impact report (EIR) under the California Environmental Quality Act (Pub. Resources Code, 21000) was stalled for five years. In the first lawsuit, the court of appeal rejected Schellinger’s contention that CEQA section 21151.1 imposed a mandatory deadline of one year for EIR approval of an EIR and noted that a significant portion of the delay was attributable to Schellinger’s changes to its proposal. Cotter then sued Schellinger for breach of the contract, arguing that the prior litigation established that Schellinger took an unreasonably long time to secure approval. The trial court rejected that argument, but fixed a date by which Schellinger must secure final approval. The court of appeal affirmed. Schellinger then sued Cotter for breaching the contract and obtained a $2,855,431.77 judgment, plus costs and attorney fees. The court of appeal affirmed, agreeing that Cotter committed a breach of contract “animated by egregious bad faith” after failing to obtain relief in prior litigation, by undermining Schellinger’s efforts to obtain approval and by Cotter’s management of the property and efforts to transfer the property to others. View "Schellinger Bros. v. Cotter" on Justia Law

Plaintiff filed suit against the Plan to recover payment for health care services provided to Plan policyholders. The trial court dismissed plaintiff's suit because the state law causes of action were preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court concluded that, notwithstanding procedural irregularies, plaintiff's due process rights were not violated where any error by the trial court was harmless; plaintiff's claims for breach of contract, quantum meruit, and promissory estoppel are not preempted by ERISA where these quasi-contract and contract causes of action do not address an area of exclusive federal concern; and plaintiff's claim for interference with contractual relations is preempted where this cause of action addresses an area of exclusive federal concern. View "Morris B. Silver M.D., Inc. v. Int'l Longshore & Warehouse Union" on Justia Law

Concrete Construction (Contractor) was sued by employees of Nibbi Concrete, who were injured after a shoring system designed by Contractor collapsed. Subsequently, Contractor sued Employer for indemnification based on a specific provision in the parties’ contract. The trial court dismissed, relying on the allegations in the underlying lawsuit that set forth claims only against Contractor and not against Employer. The court of appeal reversed, stating that the allegations in the underlying lawsuit are not determinative of Contractor’s claim for indemnity. View "Aluma Systems Concrete Constr. of Cal. v. Nibbi Bros., Inc." on Justia Law

Plaintiffs filed suit against Mercury for breach of contract and breach of the implied covenant of good faith and fair dealing. Judgment was entered in favor of plaintiffs for $3 million plus interest from the date of judgment in the underlying personal injury action. The court concluded that substantial evidence supports the finding that Mercury unreasonably refused to accept the modified release where the offering of the policy limits was not sufficient in and of itself to defeat a bad faith claim as a matter of law, and substantial evidence supports the referee’s finding that Mercury unreasonably rejected the policy limits settlement proposed by counsel for plaintiffs. Accordingly, the court affirmed the judgment. View "Barickman v. Mercury Cas. Co." on Justia Law