Justia Contracts Opinion Summaries

Coyote Aviation Corporation (Coyote) entered into a 20-year lease with the City of Redlands (City) on April 4, 2000, for property at the Redlands Municipal Airport. The lease included two 15-year options to extend. An amended lease was signed on September 5, 2000, with the same termination date of April 4, 2020. Coyote believed the lease should terminate on September 5, 2020, but no written amendment was made. In June 2020, Coyote attempted to exercise the extension option, but the City rejected it, stating the lease had already terminated. The City issued a 30-day notice to quit, and Coyote filed a lawsuit for breach of contract and other claims.The Superior Court of San Bernardino County sustained the City’s demurrer to Coyote’s first amended complaint (FAC) and entered judgment against Coyote. The court found that Coyote failed to provide timely written notice to exercise the extension option as required by the lease. The court also rejected Coyote’s claims of breach of the implied covenant of good faith and fair dealing, declaratory relief, and promissory estoppel, finding no clear promise by the City to amend the lease termination date.The City filed an unlawful detainer action when Coyote did not vacate the property. The trial court granted summary judgment in favor of the City, ordering Coyote to vacate. The court found no triable issues of fact regarding the timeliness of Coyote’s notice to exercise the extension option and rejected Coyote’s arguments of estoppel and waiver.The California Court of Appeal, Fourth Appellate District, Division Two, affirmed the trial court’s decisions. The court held that the lease’s terms were clear and unambiguous, requiring written notice to exercise the extension option. The court also found that City officials did not have the authority to amend the lease orally or accept late notice. The court upheld the trial court’s rulings on the demurrer and summary judgment, denying Coyote’s claims and requests for leave to amend. View "Coyote Aviation Corp. v. City of Redlands" on Justia Law

R & J Sheet Metal, Inc. (R&J) appealed an order directing it to pay contribution to W.E. O’Neil Construction Co. of California (WEO), Continental Casualty Company (Continental), and Western Surety Company (Western) (collectively, the WEO defendants). R&J and the WEO defendants were co-debtors on a joint and several judgment in favor of Joseph Karscig, Inc., doing business as Architectural Systems, Inc. (ASI). R&J appealed the judgment, while the WEO defendants satisfied it and sought contribution from R&J. The trial court initially took the motion off calendar due to R&J’s pending appeal. After the appeal was resolved, the WEO defendants filed a second contribution motion, including postjudgment interest, which the trial court granted, ordering R&J to pay one-half of the judgment.The Superior Court of Los Angeles County granted the WEO defendants' motion for contribution, deeming them a single entity for liability purposes and ordering R&J to pay one-half of the judgment. R&J argued the motion was untimely and that the trial court should not have allocated liability pro rata without taking evidence on the judgment debtors’ proportionate liability. R&J also contended that Western should not have been included as a single entity with WEO and Continental.The California Court of Appeal, Second Appellate District, Division One, affirmed the trial court’s order. The appellate court held that the original contribution motion was valid despite being filed during the pendency of R&J’s appeal, as taking the motion off calendar did not affect the appeal’s status quo. The court also found that the second motion was a permissible update of the original motion to include postjudgment interest. The court rejected R&J’s argument that the trial court should have determined the judgment debtors’ proportionate liability through an evidentiary hearing, holding that pro rata contribution was proper in the absence of a judgment or underlying instrument allocating liability. The court also found that R&J had forfeited its argument regarding Western’s inclusion in a single entity with WEO and Continental by failing to raise it below. View "R & J Sheet Metal v. W.E. O'Neil Construction" on Justia Law

M.G. received health care coverage through Medi-Cal and was treated by Dameron Hospital Association (Dameron) after an automobile accident. Dameron required M.G. or her representative to sign a conditions of admissions (COA) form, which included an assignment of benefits (AOB) clause. This clause assigned to Dameron the right to direct payment of uninsured and underinsured motorist (UM) benefits from M.G.'s automobile insurance policy with Progressive Casualty Insurance Company (Progressive). Dameron sought payment from Progressive for M.G.'s treatment at rates higher than Medi-Cal would pay. Progressive settled a UM claim with M.G. but did not pay Dameron, leading Dameron to sue Progressive for damages, an injunction, and declaratory relief.The Superior Court of San Joaquin County sustained a demurrer to Dameron's complaint without leave to amend, citing collateral estoppel based on a prior decision in Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (Dameron v. AAA). The court found the COA forms to be contracts of adhesion and the AOBs unenforceable, as it was not within the reasonable expectations of patients that a hospital would collect payments for emergency care directly from their UM benefits.The California Court of Appeal, Third Appellate District, affirmed the trial court's decision. The appellate court held that the COAs were contracts of adhesion and that it was not within the reasonable expectations of Medi-Cal patients that their UM benefits would be assigned to the hospital for payment of medical bills at rates higher than Medi-Cal would pay. The court concluded that the AOBs were unenforceable and did not need to address arguments regarding collateral estoppel or the Knox-Keene Health Care Service Plan Act. The court also denied Progressive's motion to strike exhibits from Dameron's reply brief. View "Dameron Hospital Assn. v. Progressive Casualty Insurance Co." on Justia Law

Brian Thomas sued Corbyn Restaurant Development Corp and its employees for personal injuries sustained during an altercation. The parties settled the lawsuit for $475,000, with the payment to be made to Thomas's attorney's client trust account. However, an unknown third party impersonated Thomas's counsel and sent fraudulent wire instructions to the defendants' counsel, who then wired the settlement funds to the imposter's account. When the fraud was discovered, Thomas requested the settlement money, but the defendants refused to pay again.The Superior Court of San Diego County reviewed the case and granted Thomas's application to enforce the settlement agreement. The court applied federal case law, which shifts the risk of loss to the party in the best position to prevent the fraud. The court found that the defendants were in the best position to prevent the fraud and that Thomas bore no comparative fault. Consequently, the court entered judgment in favor of Thomas for $475,000.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. The appellate court affirmed the lower court's judgment, agreeing that the defendants were in the best position to prevent the fraud. The court noted several red flags that should have alerted the defendants to the fraudulent scheme, including conflicting payment instructions, inoperable phone numbers, and spoofed email addresses. The appellate court held that the risk of loss from the imposter's fraudulent diversion of the wire transfer should be borne by the party in the best position to prevent the fraud, which in this case was the defendants. View "Thomas v. Corbyn Restaurant Development Corp." on Justia Law

The plaintiff, Joshua Naranjo, filed a class action lawsuit against Doctors Medical Center of Modesto, Inc., alleging violations of the unfair competition law (UCL) and the Consumers Legal Remedies Act (CLRA) due to the hospital's practice of charging an undisclosed "Evaluation and Management Services Fee" (EMS Fee) to emergency room patients. Naranjo claimed that the fee was charged without prior notification or agreement, making it an unfair, deceptive, and unlawful practice.The Superior Court of Stanislaus County sustained the hospital's demurrer to each cause of action in Naranjo's first amended complaint (FAC) without leave to amend and entered a judgment of dismissal. Naranjo appealed, and the Court of Appeal initially reversed the judgment, finding that Naranjo had stated valid causes of action under the UCL and CLRA and for declaratory relief. The court also directed the trial court to consider any future motion by Naranjo to amend his FAC to state a breach of contract cause of action.The California Supreme Court granted review and subsequently transferred the case back to the Court of Appeal, directing it to reconsider the matter in light of its ruling in Capito v. San Jose Healthcare System, LP. In Capito, the Supreme Court held that hospitals do not have a duty under the UCL or CLRA to disclose EMS fees to emergency room patients prior to treatment beyond what is required by the statutory and regulatory scheme.Upon reconsideration, the Court of Appeal concluded that Naranjo's claims are barred to the extent they are based on an alleged duty to disclose EMS fees prior to treatment. However, the court found that Naranjo had stated a valid contract-based cause of action for declaratory relief and should be allowed to amend his FAC to state causes of action for breach of contract and violations of the UCL and CLRA, subject to specific parameters. The judgment of dismissal was reversed, and the case was remanded for further proceedings. View "Naranjo v. Doctors Medical Center of Modesto, Inc." on Justia Law

Myranda De la Cruz tripped on a pothole in a parking lot at a Mission Hills shopping center, which was managed by Triwell Properties. De la Cruz sued Mission Hills Shopping Center LLC and Triwell Properties (collectively referred to as Mission) for her injuries. Mission moved for summary judgment based on a contract between Mission and De la Cruz’s employer, a tenant in the shopping center. The contract contained an exculpatory clause relieving Mission from liability for negligent or wrongful acts. However, De la Cruz had not signed this contract.The Superior Court of Los Angeles County granted Mission’s motion for summary judgment, accepting the argument that the exculpatory clause in the contract applied to De la Cruz. The court did not address why De la Cruz, who was not a party to the contract, would be bound by its terms.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The court held that the trial court erred in granting summary judgment because Mission failed to establish a legal basis for binding De la Cruz to a contract she had not signed. The court emphasized that contracts require mutual assent, and it was Mission’s burden to demonstrate why De la Cruz was bound by the contract. The appellate court exercised its discretion to consider De la Cruz’s argument, despite it not being raised in the trial court, due to the foundational nature of the legal error.The Court of Appeal reversed the judgment and remanded the case, instructing the trial court to enter a new order denying Mission’s summary judgment motion. The appellate court also awarded costs to De la Cruz. View "De la Cruz v. Mission Hills Shopping Center LLC" on Justia Law

Plaintiff Zackary Diamond was injured by a punch from a third party during an altercation in the restricted pit area at Bakersfield Speedway. He alleged that the defendants, Scott Schweitzer, Schweitzer Motorsports Productions, and Christian Schweitzer, were negligent in providing security, responding to the altercation, and undertaking rescue efforts. Defendants moved for summary judgment, arguing that Diamond's claims were barred by a release and waiver of liability form he signed to enter the pit area. The trial court granted the motion, finding the release clear, unequivocal, and broad in scope, covering the negligent conduct alleged.The Superior Court of Kern County granted summary judgment in favor of the defendants, concluding that the release included risks related to racing activities and that the assault was such a risk. The court interpreted the release as covering the type of event that occurred, thus barring Diamond's negligence claims.On appeal, Diamond contended that the release was unenforceable because the injury-producing act was not reasonably related to the purpose of the release, which he described as observing the race from the pit area. The Court of Appeal of the State of California, Fifth Appellate District, concluded that the release met the requirements for enforceability: it was clear, unambiguous, and explicit in expressing the intent to release all liability for Diamond's injury; the alleged acts of negligence were reasonably related to the purpose of the release; and the release did not contravene public policy. The court also found that the defendants adequately raised a complete defense based on the signed release and that Diamond failed to rebut this defense. Consequently, the court affirmed the summary judgment in favor of the defendants. View "Diamond v. Schweitzer" on Justia Law

The Orange County Transportation Authority (OCTA) awarded a contract to OC 405 Partners Joint Venture (OC 405) for improvements to Interstate 405. OC 405 then awarded subcontracting work to Golden State Boring & Pipe Jacking, Inc. (GSB). However, the parties disagreed on the scope of the subcontract work and did not execute a written subcontract. OC 405 subsequently contracted with another subcontractor, leading GSB to file a lawsuit seeking benefit of the bargain damages, claiming OC 405 did not comply with Public Contract Code section 4107’s substitution procedures.The Superior Court of Orange County granted summary judgment in favor of OC 405 and other defendants, holding that GSB was not entitled to the protections of section 4107 because it did not meet the requirements of section 4100 et seq. Specifically, GSB was not a "listed subcontractor" in the original bid, and its proposed work did not exceed one-half of 1 percent of the prime contractor’s total bid, a threshold requirement under section 4104.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court affirmed the lower court’s decision, concluding that section 4107’s substitution procedures did not apply to OC 405’s substitution of GSB. The court emphasized that the protections of section 4100 et seq. only apply to subcontractors whose proposed work exceeds the one-half of 1 percent threshold of the prime contractor’s total bid. Since GSB’s bid did not meet this threshold, it was not entitled to the protections under section 4107. The court also noted that the contractual provisions in the prime contract did not alter this statutory requirement. Thus, the judgment in favor of the defendants was affirmed. View "Golden State Boring & Pipe Jacking, Inc. v. Astaldi Construction" on Justia Law

Billy Ford worked as a full-time security guard for Parkwest Casino Lotus from September 2018 to December 2021. Upon hiring, Ford signed an arbitration agreement that excluded claims for workers' compensation, unemployment compensation, certain administrative complaints, ERISA claims, and "representative claims under [PAGA]." In February 2022, Ford filed a complaint against Parkwest under PAGA, alleging Labor Code violations, including mandatory off-the-clock health screenings and inaccurate wage statements. Parkwest moved to compel arbitration of Ford's individual PAGA claims and to dismiss the representative PAGA claims, citing Viking River Cruises, Inc. v. Moriana.The Superior Court of Sacramento County denied Parkwest's motion to compel arbitration, finding that the arbitration agreement specifically excluded all PAGA claims. Parkwest appealed, arguing that the agreement was ambiguous regarding the exclusion of individual PAGA claims and that such ambiguity should be resolved in favor of arbitration.The Court of Appeal of the State of California, Third Appellate District, reviewed the case. The court concluded that the arbitration agreement unambiguously excluded all PAGA claims, including individual claims. The court reasoned that the language of the agreement and the circumstances under which it was executed indicated that the parties intended to exclude all PAGA claims from arbitration. The court affirmed the trial court's order denying Parkwest's motion to compel arbitration. View "Ford v. The Silver F" on Justia Law

Allan Gumarang entered into a lease agreement with Braemer on Raymond, LLC (Lessor) to operate an ice cream parlor. The lease included provisions requiring the Lessor to maintain the property and for Gumarang to obtain liability insurance and indemnify the Lessor against claims arising from his use of the property. In October 2017, a fire destroyed the property, and Gumarang alleged that the Lessor and its management (Management) failed to ensure the property had adequate fire prevention systems.Gumarang filed a lawsuit against the Lessor and Management for breach of contract, negligence, and other claims. In response, the Lessor and Management demanded that Gumarang defend and indemnify them under the lease terms. When Gumarang refused, they filed a cross-complaint for indemnity and breach of contract. Gumarang filed an anti-SLAPP motion to strike the cross-complaint, arguing it arose from his protected activity of filing the lawsuit.The Superior Court of Los Angeles County granted Gumarang’s anti-SLAPP motion in part, striking the cross-claims for comparative indemnity and equitable indemnity but denied it for the contractual indemnity and breach of contract claims. The court found that the latter claims did not arise from protected activity and that the indemnity provision in the lease was enforceable. The court also denied Gumarang’s request for attorney fees, finding he did not achieve a practical benefit from the partial success of his anti-SLAPP motion.The California Court of Appeal, Second Appellate District, affirmed the lower court’s decisions. The appellate court agreed that the cross-claims for contractual indemnity and breach of contract did not arise from Gumarang’s protected activity of filing the lawsuit but from his alleged breach of the lease’s indemnity provision. The court also upheld the denial of attorney fees, concluding that Gumarang did not obtain a significant practical benefit from the partial success of his anti-SLAPP motion. View "Gumarang v. Braemer on Raymond, LLC" on Justia Law