Justia Contracts Opinion Summaries

Six4Three, LLC developed an app called "Pikinis" that allowed users to search for photos of people in bathing suits on Facebook. Six4Three sued Facebook, Inc. and six individuals, alleging a "bait-and-switch" scheme where Facebook initially provided developers with access to data but later restricted it. Six4Three claimed this restriction harmed their business.The case began in April 2015, with Six4Three filing against Facebook. Facebook responded with demurrers, leading to multiple amended complaints. The trial court allowed new causes of action but not new defendants. Six4Three filed a third amended complaint and sought to add individual defendants through a writ of mandate. The trial court sustained some demurrers and granted summary adjudication on certain damages. Six4Three's fourth amended complaint included eight causes of action against Facebook. Facebook filed an anti-SLAPP motion, and the trial court initially denied it as untimely but granted the individual defendants' anti-SLAPP motion. On appeal, the denial of Facebook's motion was affirmed, but the individual defendants' motion was remanded for reconsideration.The California Court of Appeal, First Appellate District, reviewed the case. The court found that the trial court did not abuse its discretion in considering Facebook's untimely anti-SLAPP motion after granting the individual defendants' motion. The court also held that Six4Three failed to demonstrate the commercial speech exception to the anti-SLAPP statute and did not show a probability of prevailing on its claims. The court affirmed the trial court's orders granting the anti-SLAPP motions and awarding $683,417.50 in attorney fees to the defendants. The court concluded that section 230 of the Communications Decency Act barred Six4Three's non-contract claims and that Six4Three did not show a probability of prevailing on its breach of contract claim. View "Six4Three v. Facebook" on Justia Law

A hospital in Siskiyou County, California, filed a lawsuit against the County of Siskiyou and other defendants, challenging the practice of bringing individuals with psychiatric emergencies to its emergency department under the Lanterman-Petris-Short (LPS) Act. The hospital argued that it was not equipped or licensed to provide the necessary psychiatric care and sought to prevent the county from bringing such patients to its facility unless they had a physical emergency condition. The hospital also sought reimbursement for the costs associated with holding these patients.The Siskiyou County Superior Court denied the hospital's motion for a preliminary injunction, which sought to stop the county from bringing psychiatric patients to its emergency department. The court found that the hospital had not demonstrated a likelihood of success on the merits and that the burden on the county and the potential harm to the patients outweighed the hospital's concerns.The hospital's complaint included several causes of action, including violations of Medicaid laws, disability discrimination laws, mental health parity laws, and section 17000 of the Welfare and Institutions Code. The hospital also alleged breach of an implied-in-fact contract for the costs incurred in providing post-stabilization services to psychiatric patients. The trial court sustained demurrers to the complaint without leave to amend, finding that the hospital failed to identify any clear legal mandate that the county or the Department of Health Care Services had violated.The California Court of Appeal, Third Appellate District, affirmed the trial court's judgment of dismissal. The appellate court concluded that the hospital had not identified any mandatory and ministerial duty that the county or the department had violated, which is necessary to obtain a writ of mandate. The court also found that the hospital's breach of contract claim failed because there were no allegations of mutual consent to an implied contract. Consequently, the hospital's appeal from the denial of its motion for a preliminary injunction was dismissed as moot. View "Siskiyou Hospital v. County of Siskiyou" on Justia Law

The plaintiff, Steve Shehyn, owns a 20-acre avocado orchard in Moorpark, California. He alleged that sediment from the Ventura County Public Works Agency and Ventura County Waterworks District No. 1's (collectively, the District) water delivery system permanently damaged his irrigation pipes and orchard. The plaintiff claimed that the sediment was a direct result of the District's water supply facilities' plan, design, maintenance, and operation.The trial court sustained the District's demurrer to the plaintiff's first amended complaint, which included causes of action for breach of contract, negligence, and inverse condemnation. The court allowed the plaintiff to amend the breach of contract and negligence claims but sustained the demurrer without leave to amend for the inverse condemnation claim, citing that the plaintiff "invited" the District's water onto his property. The plaintiff filed a second amended complaint, maintaining the inverse condemnation claim unchanged and indicating his intent to seek a writ of mandamus. The trial court entered judgment for the District after the plaintiff voluntarily dismissed his contract and negligence claims without prejudice.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case de novo. The court concluded that the plaintiff sufficiently pleaded his claim for inverse condemnation. The court found that the plaintiff's allegations that the District's water delivery system delivered a disproportionate amount of sediment to his property, causing damage, supported a claim for inverse condemnation. The court disagreed with the trial court's reliance on Williams v. Moulton Niguel Water Dist., stating that the issue of whether the plaintiff "invited" the water goes to the merits of the claim, not its viability at the pleading stage. The appellate court reversed the judgment and remanded the case with instructions to enter a new order overruling the demurrer. View "Shehyn v. Ventura County Public Works Agency" on Justia Law

Following a wildfire near their home, plaintiffs Hovik Gharibian and Caroline Minasian submitted a claim to their property insurer, Wawanesa General Insurance Company. Wawanesa paid the plaintiffs over $20,000 for professional cleaning services that were never used. Dissatisfied with the resolution, the plaintiffs filed a lawsuit against Wawanesa for breach of contract and breach of the implied covenant of good faith and fair dealing.The Superior Court of Los Angeles County granted Wawanesa’s motion for summary judgment, finding that the plaintiffs' insurance policy did not provide coverage for the claimed loss. The court determined that there was no evidence of "physical loss" as required by the policy. Plaintiffs appealed the decision.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the plaintiffs did not demonstrate a "direct physical loss to property" as required by their insurance policy. The court referenced the California Supreme Court's decision in Another Planet Entertainment, LLC v. Vigilant Ins. Co., which clarified that "direct physical loss" requires a distinct, demonstrable, physical alteration to property. The court found that the wildfire debris did not cause such an alteration and could be easily cleaned or removed. Consequently, the court affirmed the trial court's decision, concluding that Wawanesa did not breach the insurance policy since the plaintiffs' claim was not covered. All remaining arguments were deemed moot. View "Gharibian v. Wawanesa Gen. Ins. Co." on Justia Law

A California consumer entered into an agreement with an RV manufacturer that stipulated all legal disputes would be resolved in Indiana under Indiana law. The consumer later filed a lawsuit in California under the Song-Beverly Consumer Warranty Act, alleging the RV manufacturer failed to repair or replace a defective motorhome. The manufacturer moved to stay or dismiss the action based on forum non conveniens, arguing that the case should be heard in Indiana. To address concerns about the consumer's rights under the Song-Beverly Act, the manufacturer offered to stipulate that California law would apply to the warranty claims in Indiana.The Superior Court of Los Angeles County granted the manufacturer's motion, stating that the forum selection clause was not unconscionable and that the consumer's rights could be preserved by staying the California action while the Indiana case was pending. The court concluded that if the Indiana court declined to apply the Song-Beverly Act, the consumer could move to lift the stay in California.The California Court of Appeal, Second Appellate District, Division Two, reviewed the case and found that the lower court erred in its application of the legal standard. The appellate court held that the stipulation to apply California law in Indiana did not cure the unconscionability of the forum selection clause. The court emphasized that the agreement, as written, was void and against public policy because it attempted to waive unwaivable rights under the Song-Beverly Act. The appellate court concluded that severing the unconscionable terms would condone an illegal practice and that the lower court's solution violated California public policy.The Court of Appeal reversed and remanded the case, ordering the trial court to deny the motion to dismiss or stay. The appellate court's decision underscores the importance of protecting California consumers' unwaivable statutory rights and ensuring that forum selection clauses do not undermine those rights. View "Hardy v. Forest River, Inc." on Justia Law

Plaintiff Jenny-Ashley Colon-Perez sued her former employer, Security Industry Specialists, Inc. (SIS), alleging multiple causes of action related to her employment. After SIS moved to compel arbitration, the parties agreed to arbitrate, and the trial court ordered the claims to arbitration and stayed the court action. SIS paid two arbitration fee invoices but failed to pay the third invoice within the 30-day period required by California Code of Civil Procedure section 1281.98. Colon-Perez elected to withdraw from arbitration and moved to vacate the arbitration and stay order. The trial court granted the motion, ruling that SIS had materially breached the arbitration agreement and Colon-Perez was entitled to proceed with her claims in court. SIS then moved to vacate the order under section 473(b), which the trial court denied.The trial court ruled that the Federal Arbitration Act (FAA) did not preempt section 1281.98 and that SIS had materially breached the arbitration agreement by failing to pay the fees on time. The court also found that section 1281.98 did not violate the contracts clause of the United States and California Constitutions. SIS appealed, arguing that the FAA preempted section 1281.98, that section 1281.98 violated the contracts clause, and that it was entitled to relief under section 473(b).The California Court of Appeal, First Appellate District, Division One, affirmed the trial court's orders. The court held that the FAA did not preempt section 1281.98, as the state law could be applied concurrently with federal law. The court also found that section 1281.98 did not violate the contracts clause because it served a significant and legitimate public purpose and was appropriately tailored to achieve that purpose. Additionally, the court ruled that section 473(b) relief was not available for SIS's failure to timely pay arbitration fees, as the statute's strict 30-day deadline was intended to be inflexible. View "Colon-Perez v. Security Industry Specialists" on Justia Law

Plaintiffs, ParaFi Digital Opportunities LP, Framework Ventures, L.P., and 1kx LP, invested in Curve, a decentralized cryptocurrency trading platform developed by Mikhail Egorov. They allege that Egorov fraudulently induced them to invest by making false promises about their stake in Curve and then canceled their investment, leading to claims of fraud, conversion, and statutory violations. Egorov, who developed Curve while living in Washington and later moved to Switzerland, formed Swiss Stake GmbH to manage Curve. The investment agreements included Swiss law and forum selection clauses.The San Francisco County Superior Court granted Egorov’s motion to quash for lack of personal jurisdiction, finding that Egorov did not purposefully avail himself of California’s benefits. The court noted that the plaintiffs initiated contact and negotiations, and the agreements specified Swiss jurisdiction. The court also denied plaintiffs’ request for jurisdictional discovery, concluding that plaintiffs did not demonstrate that discovery would likely produce evidence establishing jurisdiction.The California Court of Appeal, First Appellate District, Division Two, affirmed the lower court’s decision. The appellate court agreed that Egorov’s contacts with California were insufficient to establish specific jurisdiction, as the plaintiffs had solicited the investment and Egorov had not directed any activities toward California. The court emphasized that the plaintiffs’ unilateral actions could not establish jurisdiction and that the agreements’ Swiss law and forum selection clauses further supported the lack of jurisdiction. The court also upheld the denial of jurisdictional discovery, finding no abuse of discretion by the trial court. View "ParaFi Digital Opportunities v. Egorov" on Justia Law

Plaintiffs, employees of the State of California providing dental care to inmates, sued the state seeking compensation for time spent on pre- and post-shift safety and security activities. These activities included going through security and handling alarm devices. The trial court sustained the defendants' demurrer without leave to amend, ruling that these activities were not compensable under the Portal-to-Portal Act of the Fair Labor Standards Act (FLSA). Plaintiffs appealed, arguing that their wage claims were viable and that the trial court improperly decided a disputed question of fact.The trial court, Solano County Superior Court, sustained the demurrer on the grounds that the activities in question were not compensable under the FLSA. The court did not address other grounds raised by the defendants, such as the Memorandum of Understanding (MOU) precluding the claims, the inapplicability of the statutes to government employers, failure to exhaust contractual remedies, and the statute of limitations.The California Court of Appeal, First Appellate District, Division Two, reviewed the case. The court concluded that the trial court erred in not accepting as true the plaintiffs' allegation that providing security is among their principal activities. The appellate court found that the MOU precludes plaintiffs from seeking additional wages under general state wage laws, thus affirming the demurrer as to the first and second causes of action. However, the court held that plaintiffs stated a claim for breach of contract and that the affirmative defense of failure to exhaust contractual remedies could not be resolved on demurrer. The court also determined that the plaintiffs' contract claim was not time-barred.The appellate court affirmed in part and reversed in part, allowing the breach of contract claim to proceed while dismissing the other claims. View "Bath v. State" on Justia Law

Govind Vaghashia and other plaintiffs appealed a trial court order denying their motion to vacate a settlement agreement with Prashant and Mita Vaghashia. The settlement involved a $35 million payment from the Govind Parties to Prashant and Mita, with specific terms about property collateral and a quitclaim deed for a residence. Disputes arose over the interpretation of the agreement, leading to motions to enforce it by both parties. The trial court enforced the agreement but not in the manner the Govind Parties desired.The Los Angeles County Superior Court initially heard the case, where Prashant and Mita sued Govind and his affiliates, claiming a 50% interest in their business ventures. Govind counter-sued for mismanagement. A bench trial began but was paused for settlement discussions, resulting in the contested agreement. When disputes over the settlement terms emerged, both parties filed motions to enforce the agreement. The trial court ruled largely in favor of Prashant and Mita, enforcing the settlement.The California Court of Appeal, Second Appellate District, reviewed the case. The court found no abuse of discretion in the trial court's decision, holding that the Govind Parties were judicially estopped from seeking to vacate the settlement agreement after previously moving to enforce it. The appellate court noted that the Govind Parties' positions were totally inconsistent and that they had been successful in asserting the enforceability of the agreement in their initial motion. The court affirmed the trial court's orders, including the denial of the motion to vacate the settlement agreement. View "Vaghashia v. Vaghashia" on Justia Law

Condominium owners Gregory and Kathleen Haidet filed a lawsuit against their homeowners association (HOA), Del Mar Woods Homeowners Association, alleging that their upstairs neighbors' improperly installed floors constituted a nuisance. The HOA demurred to the Haidets' initial complaint, and the trial court sustained the demurrer, dismissing one cause of action without leave to amend and two with leave to amend. The Haidets chose not to amend their claims against the HOA and instead filed an amended complaint naming only other defendants. Subsequently, the Haidets filed a motion to dismiss the HOA without prejudice, while the HOA filed a motion to dismiss with prejudice. The trial court granted the HOA's request for dismissal with prejudice and awarded the HOA attorney fees.The trial court found that the Haidets' breach of contract claim failed because the governing documents did not require HOA consent for installing hardwood flooring. Additionally, the claims were time-barred as the Haidets had notice of their claims starting in 2016 but did not file until 2022. The court also found that the HOA had no fiduciary duty regarding the structural violation of the governing documents and that the business judgment rule applied to the HOA's decisions. The court dismissed the breach of fiduciary duty claim without leave to amend.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the case. The court held that the trial court was permitted to dismiss the HOA with prejudice under Code of Civil Procedure section 581, subdivision (f)(2), as the Haidets failed to amend their claims against the HOA within the allowed time. The court also found no abuse of discretion in the trial court's determination that the HOA was the prevailing party for purposes of Civil Code section 5975 and its award of $48,229.08 in attorney fees. The judgment was affirmed. View "Haidet v. Del Mar Woods Homeowners Assn." on Justia Law