Justia Contracts Opinion Summaries

In 2009, Defendant borrowed $350,000 from a husband and wife (“Plaintiff” and “Co-Plaintiff”). The loan was documented by a promissory note which was secured by a deed of trust on real property belonging to Defendant. In 2009, Co-Defendant borrowed $150,000 from Co-Plaintiff. The loan was documented by a promissory note signed by Co-Defendant; the note was not secured by a deed of trust on real property.   In a court trial on Plaintiffs’ action against Defendants for breach of the obligation to repay the loans, the trial court voided the usurious interest rate on both notes and deemed the principal sum of the notes due at maturity. The Second Appellate Division reversed the trial court’s judgment in part and found Plaintiffs are entitled to prejudgment interest on the unpaid principal of the 2008 loan, but at the prejudgment interest rate set by article XV, section 1.   The court reasoned that even though Civil Code section 3289, subdivision (b) does not apply to the 2008 loan because it was secured by a deed of trust on real property, Plaintiffs were nonetheless entitled to prejudgment interest on the unpaid principal at the date of maturity at the rate of 7 percent which is the default rate of prejudgment interest provided in article XV, section 1 of the California Constitution, which applies except when a statute provides otherwise. View "Soleimany v. Narimanzadeh" on Justia Law

Plaintiff-appellant Nshan Simonyan had a dispute with his insurer, Nationwide Insurance Company of America ("Nationwide") over the company's handling of his defense arising out of a three-car accident in which Simonyan was a driver. Simonyan asked Nationwide to appoint, as "Cumis" counsel, a law firm that he had already hired to advance his affirmative claim against the driver who hit him. Nationwide refused. Simonyan appealed the dismissal of his case after the trial court sustained Nationwide’s demurrer to his second amended complaint without leave to amend. Simonyan argued his allegations were sufficient to state claims for breach of contract and breach of the implied covenant of good faith and fair dealing, and that the trial court abused its discretion in denying his motion to reconsider based on new allegations. Finding no reversible error, the Court of Appeal affirmed the trial court's judgment. View "Simonyan v. Nationwide Ins. Co. of America" on Justia Law

Plaintiff-appellant Joseph Amato sold a house at a price that he contended was much less than the property was worth. He sued the broker who listed the property for him, defendant-respondent Steve Downs, as well as the broker’s employer, defendant-respondent Coldwell Banker Residential Brokerage Company (Coldwell Banker). On the day of trial, the court found that Amato had waived his right to a jury trial by failing to comply with a local pretrial procedural rule. It then denied Amato’s request that a different judge hear the case due to the trial judge’s involvement in pretrial settlement negotiations. After Amato presented his evidence, the court granted a motion for judgment in favor of Downs and Coldwell Banker on all of Amato’s claims. On appeal, Amato argued he was erroneously deprived of his right to a jury trial. Furthermore, the judge should have recused himself as trier of fact, one of Amato's witnesses was dismissed before the witness finished testifying, and defendants' motion should not have been granted. After review, the Court of Appeal found the trial court indeed erred in deeming Amato to have waived jury trial despite his violations of the local rules. Judgment was reversed on this ground, and the matter remanded for further proceedings. View "Amato v. Downs" on Justia Law

Plaintiff sued Aegis Security Insurance Company (Aegis) for breach of contract, insurance bad faith, and declaratory relief after Aegis denied her tender of a lawsuit brought against her by her neighbors. The underlying lawsuit alleged Plaintiff graded land and cut down trees on her neighbors’ property. The trial court granted Aegis’s motion for summary judgment, holding Aegis had no duty to defend because Plaintiff’s homeowner’s policy did not provide coverage for nonaccidental occurrences. The Second Appellate District affirmed the Superior Court’s judgment granting summary judgment to Defendant. The court held that the evidence established that Defendant did not have a duty to defend. The court reasoned that the policy at issue covers property damage resulting from an occurrence, which is defined as an accident. Here, the complaint in the underlying action alleges harm from Plaintiff’s intentional conduct and these events were not unforeseen or accidental. Thus, Plaintiff failed to carry her burden to show the neighbors’ claims may fall within the scope of the policy. View "Ghukasian v. Aegis Security Ins. Co." on Justia Law

Central Coast Development Company (“Central Coast”) owns a parcel of property within the City of Pismo Beach (“City”). The City approved Central Coast's application for a development permit. The City and Central Coast applied to the San Luis Obispo Local Agency Formation Commission (LAFCO) to annex the property. LAFCO denied the annexation application. The Special District Risk Management Authority ("SDRMA"), a public entity self-insurance pool, paid for LAFCO's fees and costs. The City sued Central Coast to recover fees and costs expended in the Central Coast action against LAFCO. LAFCO and SDRMA cross-complained against the City and Central Coast for fees and costs. The trial court granted the City and Central Coast’s judgment on the pleadings against LAFCO and SDRMA (collectively LAFCO). The court denied LAFCO's request for leave to amend its pleadings. LAFCO appealed.The Second Appellate Division affirmed and while the appeal in LAFCO I was pending, the City and Central Coast moved for attorney fees based on section 1717. The trial court granted the motion. The court awarded $172,850 to the City and $428,864 to Central Coast. LAFCO again appealed (“LAFCO II).”The court reversed the judgment order finding that section 1717 cannot apply because it is beyond LAFCO’s powers to bind itself or an applicant to the attorney fee agreement at issue. The lack of such authority renders the contract unenforceable against LAFCO. Further, Central Coast may not recover fees for the same reason that LAFCO could not recover fees. View "San Luis Obispo Local etc. v. Central Coast etc." on Justia Law

Brandy filed a probate petition seeking to be appointed the personal representative of her late husband’s (Scott) estate. The trial court denied her petition based on a premarital agreement that waived Brandy’s interests in her husband’s separate property. The court named his parents as co-administrators of the estate. The court of appeal held Brandy was entitled to introduce extrinsic evidence in support of her argument that she and her late husband mistakenly believed the premarital agreement would apply only in the event of divorce, rather than upon death. On remand, the trial court found that the mistake was a unilateral mistake on Brandy’s part and that she was not entitled to rescission. The court expressly found “there was insufficient evidence that Scott encouraged or fostered Brandy’s mistaken belief.”The court of appeal affirmed. Because Brandy failed to read the agreement and meet with her attorney to discuss it before signing it, she bore the risk of her mistake and is not entitled to rescission. View "Estate of Eskra" on Justia Law

Hospitals provided emergency medical services to members of the county’s health plan, which is licensed and regulated by the state Department of Managed Health Care under the Knox-Keene Health Care Service Plan Act, Health & Saf. Code 1340. The county reimbursed the Hospitals for $28,500 of a claimed $144,000. The Hospitals sued, alleging breach of an implied-in-fact or implied-in-law contract. The trial court rejected the county’s argument that it is immune from the Hospitals’ suit under the Government Claims Act (Gov. Code 810).The court of appeal reversed. The county is immune from common law claims under the Government Claims Act and the Hospitals did not state a claim for breach of an implied-in-fact contract. The county does not contest its obligation to reimburse the Hospitals for the reasonable and customary value of the services; the issue is what remedies may be pursued against the county when the reasonableness of the reimbursement is disputed. The Knox-Keene Act provides alternative mechanisms to challenge the amount of emergency medical services reimbursements. A health care service plan has greater remedies against a private health care service plan than it does against a public entity health care service plan, a result driven by the Legislature broadly immunizing public entities from common law claims and electing not to abrogate that immunity in this context. View "County of Santa Clara v. Superior Court" on Justia Law

Plaintiff, a Hollywood restaurant, maintained a business interruption insurance policy through Defendant.  In response to COVID-19, the Governor, Mayor of Los Angeles, and several public health agencies ordered Plaintiff to close its restaurant, resulting in the loss of all its business. Plaintiff filed a claim with Defendant insurance company, which was denied based on the grounds that the policy only covered “direct physical loss of or damage to” the property, and expressly excluded coverage for losses resulting from a government order and losses caused by or resulting from a virus. Plaintiff appealed after Defendant's demurrer was sustained without leave to amend.   The California Court of Appeal affirmed the dismissal and held that Plaintiffs cannot establish a breach of contract.  At issue is whether the clause’s requirement can be construed to cover the pandemic-related closure. The court held that under California law a business interruption policy that covers physical loss and damages does not provide coverage for losses incurred by reason of the COVID-19 pandemic. Moreover, the court explained that the fact that loss and damage requirements are sometimes found in exclusionary provisions does not change the plain meaning of the terms. The court noted that even if Plaintiff could bring itself within the coverage clause, the virus exclusion would bar coverage. View "Musso & Frank Grill v. Mitsui Sumitomo Ins. USA" on Justia Law

Dual Diagnosis Treatment Center, Inc., d/b/a Sovereign Health of San Clemente, and its owner, Tonmoy Sharma, (collectively Sovereign) appealed the trial court's denial of Sovereign's motion to compel arbitration of claims asserted by Allen and Rose Nelson for themselves and on behalf of their deceased son, Brandon. The Nelsons alleged a cause of action for wrongful death, and on behalf of Brandon, negligence, negligence per se, dependent adult abuse or neglect, negligent misrepresentation, and fraud. According to the complaint, despite concluding that 26-year-old "Brandon requires 24 hour supervision ... at this time" after admitting him to its residential facility following his recent symptoms of psychosis, Sovereign personnel allowed him to go to his room alone, where he hung himself with the drawstring of his sweatpants. The trial court denied Sovereign's motion to compel arbitration because: (1) the court found Sovereign failed to meet its burden to authenticate an electronic signature as Brandon's on Sovereign's treatment center emollment agreement; and (2) even assuming Brandon signed the agreement, it was procedurally and substantively unconscionable, precluding enforcement against Brandon or, derivatively, his parents. Sovereign challenged the trial court's authentication and unconscionability findings. Finding no reversible error, the Court of Appeal affirmed the trial court's judgment. View "Nelson v. Dual Diagnosis Treatment Center" on Justia Law

Respondent, a consulting company, entered into a written contract whereby respondent agreed to provide services to a health care company on an hourly basis. Appellant, a licensed attorney, is the General Counsel of the health care company. When the health care company did not pay for services, the respondent filed a complaint alleging an ordinary breach of contract. Acting in his individual capacity, appellant filed a special motion to strike the complaint as a strategic lawsuit against public participation (“SLAPP”). His complaint consisted of six causes of action. Appellant contends that the trial court erroneously determined that he had failed to satisfy the first step of the anti-SLAPP statute he also claims that the trial court abused its discretion in awarding attorney fees.The Second Appellate District reasoned that the Legislature enacted anti-SLAPP statute to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights. Here, the court looked to only the first step under the statute because the trial court determined appellant had failed to carry its initial burden. He argued that respondent’s causes of action for intentional misrepresentation and concealment invaded his ability to advise his client and attacked his settlement efforts. The court held that while settlement discussions constitute protected activity, the fifth and sixth causes of action had nothing to do with settlement discussions nor did they arise from protected speech. Thus, the court affirmed the trial court’s orders denying appellant’s special motion and imposing sanctions. View "Clarity Co. Consulting v. Gabriel" on Justia Law