Justia Contracts Opinion Summaries

Appellants are patients at medical facilities operated by respondent Centrelake Medical Group. In reliance on Centrelake’s allegedly false representations that it employed reasonable safeguards for patients’ personal identifying information (PII), Appellants entered into contracts with Centrelake. Appellants brought an action against Centrelake on behalf of themselves and a putative class of patients affected by a data breach. The complaint contained causes of action for breach of contract, negligence, and violations of the Unfair Competition Law (UCL). Centrelake demurred, arguing that Appellants had failed to adequately plead any cognizable injury and that their negligence claim was barred by the economic loss rule. Appellants opposed the demurrer. On appeal, Appellants contend the court erred in sustaining the demurrer with respect to each of their claims and abused its discretion in denying their request for leave to amend.   The Second Appellate District affirmed the judgment with respect to the dismissal of Appellants’ negligence claim without leave to amend, but reverse with respect to Appellants’ UCL and contract claims. The court concluded that Appellants adequately alleged UCL standing and contract damages under their benefit-of-the-bargain theory, and the Appellant who purchased monitoring services, did the same under Appellants’ monitoring-costs theory. However, Appellants have not shown the court erred in dismissing their negligence claim under the economic loss rule; nor have they shown the court abused its discretion in denying their request for leave to amend. View "Moore v. Centrelake Medical Group, Inc." on Justia Law

The City of Oakland filed a lawsuit against the National Football League (the League or the NFL) and its 32 member clubs (collectively, Defendants) after one member club, the Raiders, relocated from Oakland to Las Vegas. The City alleged Defendants did not comply with the process for approving club relocations set forth in the NFL Constitution and related documents. The City asserted causes of action for breach of contract as a third-party beneficiary, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. The trial court sustained Defendants’ demurrer to all three causes of action without leave to amend and entered judgment for Defendants.The City argues the trial court erred in ruling it was not a third-party beneficiary of the NFL Constitution and related documents and therefore did not have standing to enforce those documents. The City also argues the court applied an incorrect legal standard in ruling on the demurrer to its cause of action for unjust enrichment.The Second Appellate District affirmed. The court concluded that, because the City did not and cannot allege it is a third-party beneficiary of the alleged contracts, its causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing fail. The court further concluded that the City has not and cannot allege facts sufficient to state a cause of action based on a theory of unjust enrichment. View "City of Oakland v. The Oakland Raiders" on Justia Law

Apple Annie operated restaurants in Marin, San Francisco, and Santa Barbara counties and had comprehensive commercial liability and property insurance through Oregon Mutual for “for direct physical loss of or damage to Covered Property at the [insured] premises,” and to “pay for the actual loss of Business Income you sustain due to the necessary suspension of your ‘operations’ during the ‘period of restoration. The suspension must be caused by direct physical loss of or damage to property at the described premises. The loss or damage must be caused by or result from a Covered Cause of Loss.” The policy did not define “direct physical loss of or damage.”Apple Annie filed claims for losses resulting from the COVID pandemic and ensuing lockdown. The court of appeal affirmed summary judgment in favor of Oregon Mutual. The policy language,“direct physical loss or damage to,” despite its disjunctive phrasing, is unambiguous. A loss of use simply is not the same as a physical loss. Although the COVID virus has a physical presence, and thus Apple Annie may have suffered economic loss from the physical presence of the COVID virus, it has not suffered “direct physical loss of or damage to [its] property.” View "Apple Annie, LLC v. Oregon Mutual Insurance Co." on Justia Law

Jones established a trust, naming his daughter (Spencer) as successor trustee. The property was the trust’s principal asset. Jones later married Grays-Jones, but did not amend the trust. Jones contracted to sell the property to CDI for $13.6 million. Jones died shortly thereafter. Months later, Grays-Jones petitioned for an interest in Jones’s estate as an omitted spouse. While the property was still in escrow, Grays-Jones and Spencer, as trustee, agreed the trust “shall pay to [Grays-Jones] a total of $3,000,000 . . . as her full and final settlement of [Grays-Jones’s] interest in the Estate. Payment of said amount shall be paid ... out of the escrow from the sale of the [property].” Grays-Jones would move out of Jones’s residence in exchange for $150,000, which would constitute “an advance against the total settlement.” A stipulated judgment incorporated the settlement. Spencer, as trustee, paid Grays-Jones $150,000; Grays-Jones moved out of Jones’s residence. The sale of the property fell through. Spencer did not pay Grays-Jones the outstanding $2.85 million.Grays-Jones sought to enforce the stipulated judgment, alleging Spencer frustrated the sale of the property. She requested the appointment of a temporary trustee to sell the residence and property. The trial court denied the petition, finding the settlement agreement unenforceable because the sale was a condition precedent. The court of appeal reversed. The settlement agreement contained a condition precedent as to the method of payment, but Spencer’s independent promise to pay $3 million is enforceable and remains payable upon the property’s sale. View "Estate of Jones" on Justia Law

Northfield issued a policy to insure an apartment complex. The coverage excludes liability for violations of the insured’s duty to maintain habitable premises; this exclusion also encompasses coverage for “any claim or ‘suit’ ” that also alleges habitability claims. Tenants sued the insured, alleging multiple habitability claims and other causes of action that were arguably not based on habitability. Northfield declined to defend the tenants’ lawsuit. After settling the underlying action, the insured sued Northfield for breach of its duty to defend. The trial court concluded the case presented a “mixed” action containing both potentially covered and uncovered claims, and that Northfield was obliged to provide a defense.The court of appeal reversed. The policy exclusion is plain and clear. The court rejected arguments that claims for retaliation, conversion, and trespass to chattels did not arise from the duty to provide habitable premises. The retaliation concerned complaints about habitable conditions and the claims are alleged in a suit that also alleges habitability claims. View "24th & Hoffman Investors, LLC v. Northfield Insurance Co." on Justia Law

Siri sued her former employer, Trinchero, for wrongful termination. Trinchero served an offer to compromise by paying Siri $500,000 in exchange for dismissal, Code of Civil Procedure section 998. During the 30-day period in which Trinchero’s offer remained in effect, the parties communicated about whether Siri’s acceptance would trigger a right to prejudgment interest of approximately $379,000. After Trinchero declined to modify the offer, Siri served “objections” to the offer, contending it was defective because it did not address the availability of interest. Days later, Siri served a “Notice of Conditional Acceptance,” then filed the objections to Trinchero’s offer and requested that the court enter a judgment, “consistent with [her] conditional acceptance” and including prejudgment interest. Trinchero filed a “Notice of Plaintiff’s Acceptance of 998 Offer,” stating that “Although [Trinchero] does not waive any right" to "separately respond to the substantive issues” and characterizing the conditions as “simply requests that the court clarify post-resolution questions.”Trinchero moved to enforce the purported settlement agreement. The court found that Siri’s service of her conditional acceptance created a binding settlement and did not condition acceptance on particular findings by the court. Siri then filed an unsuccessful motion seeking interest. The court of appeal reversed. Siri’s “conditional acceptance” included additional terms and did not create a binding settlement enforceable under section 998. View "Siri v. Sutter Home Winery, Inc." on Justia Law

Plaintiff CAM-Carson, LLC sued the City of Carson (City), the Carson Reclamation Authority (CRA) and others for breach of contract and breach of the covenant of good faith and fair dealing. Plaintiff is a commercial real estate developer. Plaintiff entered contracts with the City and CRA to develop a 40-acre site after the City and CRA remediated soil and groundwater contamination, installed infrastructure, and built roads. Plaintiff alleged the City and CRA engaged in gross mismanagement and malfeasance that created a massive funding deficit that derailed the project, causing damages to Plaintiff of over $80 million. Plaintiff sought to hold the City liable in equity under alter ego principles for the CRA’s breach of a contract between Plaintiff and the CRA.   The Second Appellate District reversed the trial court’s judgment of dismissal and remanded the cause to the trial court to vacate its order sustaining the City’s demurrer and to enter a new order overruling the demurrer. The court held the alter ego doctrine may be applied to government entities where the facts justify an equitable finding of liability. Here, the allegations in Plaintiff’s second amended complaint are sufficient to survive the City’s demurrer. The court wrote, as a matter of law, the City cannot be held the alter ego of the CRA if Plaintiff is able to prove the facts alleged. Accordingly, the trial court erred in sustaining the City’s demurrer to Plaintiff’s breach of contract claim. For the same reason, the trial court erred in sustaining the City’s demurrer to Plaintiff’s breach of implied covenant claim. View "Cam-Carson, LLC v. Carson Reclamation Authority" on Justia Law

Plaintiff designated his nephew as his health care agent and attorney-in-fact using an advance health care directive and power of attorney for health care decisions form developed by the California Medical Association (the Advance Directive). After the execution of the Advance Directive, Plaintiff was admitted to a skilled nursing facility. Nineteen days later, his nephew executed an admission agreement and a separate arbitration agreement purportedly on Plaintiff’s behalf as his “Legal Representative/Agent”. The sole issue on appeal is whether the nephew was authorized to sign the arbitration agreement on Plaintiff’s behalf.   In answering the relevant question on appeal, the Second Appellate District held that an agent’s authority to make “health care decisions” on a principal’s behalf does not include the authority to execute optional arbitration agreements. Accordingly, the court affirmed the trial court’s order denying the motion to compel arbitration. The court explained that its conclusion that the execution of an arbitration agreement is not a “health care decision” finds support in the regulatory history of the recently enacted federal regulatory scheme prohibiting nursing facilities participating in Medicare or Medicaid programs from requiring a resident (or his representative) to sign an arbitration agreement as a condition of admission. Specifically, in the Centers for Medicare & Medicaid Services’ (i.e., the agency’s) responses to public comments published in the Federal Register. These comments and responses demonstrate that practically speaking, arbitration agreements are not executed as part of the health care decision-making process, but rather are entered into only after the agent chooses a nursing facility based on the limited options available and other factors unrelated to arbitration. View "Logan v. Country Oaks Partners" on Justia Law

Appellant appealed the order denying his motion to vacate the judgment entered against him for $251,200.13 after he failed to pay $30,000 as required pursuant to a stipulation for entry of judgment. Appellant contends the trial court erred because the judgment is an unenforceable penalty and is therefore void.   The Second Appellate disagreed with Appellant and affirmed the order denying the motion to vacate the $251,200.13 judgment. Here, the $251,200.13 damage provision in the stipulation for entry of judgment is not arbitrarily drawn from thin air. It is the actual and stipulated amount of damages. This is not a penalty or a liquidated damage provision. The court explained it cannot delete the terms of the stipulated judgment calling for monthly payments and it cannot add a provision to the terms of the stipulated judgment allowing a seven-year moratorium on monthly payments. Money has value over time. Appellant has had the use of the money for seven years. Respondent has been deprived of the use of the money for seven years. Respondent’s “more than reasonable” settlement terms should not be used against it to show “liquidated damages” or a “penalty.” View "Creditors Adjustment Bureau v. Imani" on Justia Law

Shao Yan Chen, Han Lin Liu, Zhi Hua Mo, Yuk Yee Cheng, Hui Zhen Hu, Ruizhao Wu, and Qi Di Wu (collectively, tenants) had a dispute with Valstock Ventures, LLC and 371 Broadway Street, LLC (together, Valstock) over which of two documents was the operative lease governing the tenants’ tenancies in two of Valstock’s apartment buildings. The tenants filed suit against Valstock seeking a declaratory judgment on this question, alleging a civil conspiracy, and stating claims for violations of the Fair Employment and Housing Act (FEHA), Unfair Competition Law (UCL), and section 37.10B of the San Francisco Rent Ordinance. The trial court awarded the tenants approximately $1.1 million in attorney’s fees under Civil Code section 1717 after granting their motion for summary adjudication of the sole cause of action on the contract in this case, before trial or disposition of the remaining non-contract causes of action. The defendants appealed, arguing the award of attorney’s fees was premature because the litigation as a whole had not yet ended. To this the Court of Appeal agreed and therefore reversed. View "Chen v. Valstock Ventures, LLC" on Justia Law