Justia Contracts Opinion Summaries

Coles sued to recover an overdue loan that he had extended to a real estate investment company, Cascade. The loan was guaranteed by Glaser and Taylor. That case was settled when Cascade ostensibly paid off the loan, and Coles, in return, executed a release. Shortly after the settlement, Cascade filed for bankruptcy. Coles was forced to surrender most of the settlement proceeds to the bankruptcy trustee as a preferential payment. In a second suit, against Glaser and Taylor, the trial court found that the defendants had breached the settlement agreement and entered judgment in favor of Coles. The court of appeal affirmed, holding that a debt of a contractual co-obligor is not extinguished by another co- obligor's​ pre-bankruptcy payment to a creditor that is later determined to be a bankruptcy preference. View "Coles v. Glaser" on Justia Law

Pulte Homes Corporation sued Williams Mechanical, Inc. for defective performance of a plumbing subcontract. Even before the action was filed, however, Williams was defunct; first, it was suspended by the Secretary of State, and thereafter, it dissolved voluntarily. Pulte served Williams though an attorney whom Williams had designated as its agent for service of process. The attorney, however, did not notify Williams of the action; he also did not identify or notify Williams’s liability insurer. Williams failed to respond to the complaint, and Pulte obtained a default judgment. Pulte then notified Williams’s liability insurer of the default judgment. About four and a half months later, the insurer retained counsel to represent Williams, and Williams’ counsel filed a motion to set aside the default judgment. The trial court granted the motion. Pulte appealed, arguing (1) Williams lacked the capacity to defend this action because it had been suspended; and (2) Williams failed to establish that it was entitled to relief from the default and default judgment. After review, the Court of Appeal held the trial court abused its discretion by ruling that Williams was entitled to relief. Accordingly, the Court did not address whether Williams had the capacity to defend. View "Pulte Homes Corp. v. Williams Mechanical" on Justia Law

RGW entered into a contract with Watson for the delivery of 146 sealed expansion joints for use on the Caltrans project for the construction of Highway 99. Watson filed a breach of contract action, contending it was entitled to an adjustment of the price on RGW’s original purchase order because the items ordered were changed. The trial court concluded that RGW’s purchase order was ambiguous and allowed the jury to decide what the contract meant and what price was appropriate. The jury decided in favor of Watson, finding the amount of the subject agreement was $605,990. The jury awarded Watson damages of $383,032. The court concluded that the trial court correctly (1) determined that RGW’s purchase order was ambiguous and (2) allowed the jury to evaluate the conflicting parol evidence before deciding the meaning of the contract. The court also concluded that the price adjustment owed to Watson for the change in the order was sufficiently certain to meet the statutory requirements for an award of prejudgment interest. Accordingly, the court affirmed the judgment, except for its failure to award prejudgment interest to Watson. View "Watson Bowman Acme Corp. v. RGW Construction" on Justia Law

After plaintiff was injured when he slipped on the stairs in the common area of a commercial building, he filed suit against the building and its managers (the landlords), for negligence and premises liability. The landlords each filed virtually identical cross-complaints against Edward Murachanian (the tenant), a dentist who rents an office suite in the building. The tenant had hired plaintiff’s employer to clean the carpets in his second-floor suite. The trial court granted the tenant’s motion for summary judgment, finding the lease obligated the tenant to indemnify the landlords only against claims for injuries occurring within the tenant’s office suite, not in the common areas. The court held that, under the indemnity clause in this case, the injury to a third party that occurred outside the dental suite, in a common area over which the landlords have exclusive control, did not arise out of the tenant’s use of the dental suite. It does not matter that the accident would not have happened but for the tenant hiring the third party to clean the carpets in the dental suite, and that the third party may have been at fault. Accordingly, the court affirmed the judgments and the order awarding attorney fees. View "Morlin Asset Mgmt. LP v. Murachanian" on Justia Law

After TEC, a subcontractor, submitted a written bid to Flintco, a general contractor, to perform glazing work on a project, Flintco used TEC's bid price in compiling its own bid to the owner of the project. Flintco was awarded the contract and sent TEC a letter of intent to enter into a subcontract and a standard-form subcontract, both of which documents differed materially from TEC’s bid. TEC refused to enter into a subcontract. Flintco secured another subcontractor for that scope of work and sued TEC on a theory of promissory estoppel seeking the difference between TEC’s bid and the amount Flintco was required to pay the replacement subcontractor. The trial court entered judgment for TEC. The court concluded that Flintco failed to demonstrate that there was no substantial evidence to support the trial court’s finding that Flintco did not reasonably rely on TEC’s bid price without considering the material conditions stated in TEC’s bid, the proposed subcontract Flintco sent TEC constituted a counteroffer because it contained material variations from the conditions in TEC’s bid, and the counteroffer gave TEC the right to withdraw its bid. Accordingly, the court affirmed the judgment. View "Flintco Pacific v. TEC Mgmt. Consultants" on Justia Law

Plaintiff's almost-new Toyota Tundra Pickup sustained structural damage, while parked, as a result of a collision between the vehicles of Hollandsworth and Sebastian. Plaintiff had an insurance policy through AAA covering collision-related damages.Hollandsworth also had an AAA insurance policy, covering property damage that he caused through negligence. AAA refused to consider the pickup a “total loss,” had the vehicle repaired at a reported cost of $8,196.06, and provided a rental car during the interim. As a result of the collision and the repairs, the pickup’s future resale value was decreased by more than $17,100. Plaintiff sued Hollandsworth and Sebastian for negligence and sued AAA for breach of contract and bad faith. The trial court dismissed the claims against AAA, finding that plaintiff essentially was seeking reimbursement for the lost market value of his pickup, a loss that specifically was excluded under his insurance policy. The court of appeal affirmed, rejecting an argument that the resale value exclusion violated public policy and was void. The court stated that, in the insurance context, courts are not at liberty to imply a covenant (of good faith) directly at odds with a contract’s express grant of discretionary power, View "Baldwin v. AAA N. Cal." on Justia Law

The College Network, Inc. (TCN) appealed an order denying its motion to compel arbitration of a consumer fraud and breach of contract action brought by Plaintiffs Bernadette Magno, Rosanna Garcia, and Sheree Rudio. TCN argued the arbitration provision in Plaintiffs' purchase agreements was valid and enforceable and contended the trial court erred when it ruled the provision unconscionable. Alternatively, TCN argued that if the forum selection clause was unconscionable, the court abused its discretion in voiding the arbitration provision altogether rather than severing the objectionable provisions and enforcing the remainder. After review of the provision at issue, the Court of Appeal concluded the trial court correctly determined the arbitration provision to be procedurally and substantively unconscionable and did not abuse its discretion in voiding it in its entirety. View "Magno v. The College Network, Inc." on Justia Law

Popescu sued Apple for damages after he was fired by his employer, Constellium. He alleged that Apple took affirmative steps to convince Constellium to terminate him in retaliation for his resistance to Apple’s alleged illegal anti-competitive conduct. The court dismissed. The court of appeal reversed with respect to claims for intentional interference with contractual relations and for intentional interference with prospective economic advantage. An employee whose at-will employment contract is terminated as a result of a third party’s interference need not allege that the defendant’s conduct was independently wrongful to state a contract interference claim. Popescu was not required to allege that he was directly harmed by an independently wrongful act so long as he alleged (as he did) that Apple’s wrongful act interfered with his economic relationship with Constellium. View "Popescu v. Apple Inc." on Justia Law

The trial court granted anti-SLAPP motions, Code of Civil Procedure section 425.16, against a city‘s exclusive agent in its action for breach of, and interference with, the agency contract and related causes of action. The court concluded that the alleged wrongful conduct in plaintiffs‘ tortious breach of contract cause of action is the City‘s violation of the terms of the Exclusive Agency Agreement (EAA) by allowing someone other than Rand Resources to act as its agent with respect to efforts to bring an NFL franchise to the City. Thus, the cause of action is not premised upon protected free speech or the right to petition for redress of grievances. The alleged wrongful conduct in plaintiffs‘ promissory fraud cause of action is the false representation regarding renewal of the EAA. Although the basis of the cause of action is a statement, the gravamen of the cause of action is the manner in which the City conducted itself in relation to the business transaction between it and Rand Resources, not the City‘s exercise of free speech or petitioning activity. The gravamen of the fourth cause of action with respect to the City is the City‘s violation of the terms of the EAA and the manner in which the City conducted itself in relation to the business transaction between it and Rand Resources, not the City‘s exercise of free speech or petitioning activity. The alleged wrongful conduct at the heart of plaintiffs‘ interference with contract and interference with prospective economic advantage causes of action is again the Bloom defendants‘ efforts to usurp Rand Resources‘s rights and role under the EAA. As addressed with respect to the fourth cause of action, this conduct arises from the Bloom defendants‘ private conduct of their own business, not their free speech or petitioning activities. Accordingly, the court reversed the order granting the anti-SLAPP motions and reversed the award of attorney fees. View "Rand Resources LLC v. City of Carson" on Justia Law

Moreno was arraigned for felony domestic violence and false imprisonment. The court issued a domestic violence protective order and set bail. Bankers issued a bail bond of $50,000 to secure Moreno‟s release. Moreno appeared at two hearings. On February 22, Moreno appeared for a plea hearing. The prosecutor announced that she was filing an amended complaint, adding misdemeanor counts of violating a protective order and aggravated trespass, and sought an increase to the bail amount. After an unreported bench conference, the court did not increase bail and set the preliminary examination for April 5. Moreno did not appear; the court ordered the bail forfeited. The court subsequently granted Bankers‟s request to extend the appearance period by 180 days to April 2013. In April 2013, Bankers moved to vacate the forfeiture and exonerate the bond, arguing that the court had materially increased its risk when it permitted Moreno to remain free after the amended complaint was filed. The court noted that the bond stated that it applied to “duly authorized amendments” and entered judgment on the bond. The court of appeal affirmed. Although the amendment to the complaint was not duly authorized, it did not materially increase the risk and did not require the court to vacate the forfeiture and exonerate the bond. View "People v. Bankers Ins. Co." on Justia Law