Justia Contracts Opinion Summaries

Amira Manderson-Saleh was the daughter of an oncology nurse (Mother) who worked at the University of California at San Diego (UCSD) for about 12 years until she retired shortly before her death. Mother earned a pension under rules permitting the employee to designate a beneficiary to receive specified monthly pension benefits upon the employee’s death. When Manderson-Saleh claimed her rights as the designated beneficiary shortly after Mother’s death, The Regents of the University of California (Regents) denied her claim, finding Mother did not properly identify Manderson-Saleh as the contingent beneficiary before her death. Thus, none of the earned pension benefits were paid. Manderson-Saleh filed a complaint against the Regents, alleging breach of contract. Alternatively, she sought a writ of mandate to overturn the Regents’ decision. The Regents demurred only to the contract claim, and the court sustained the demurrer without leave to amend. Proceedings on the mandate petition, the court found Manderson-Saleh was not entitled to relief because the Regents had the right to strictly apply its rule that contingent-annuitant pension benefits were conditioned on the Regents receiving a signed beneficiary-election form before the employee’s death, and the Regents received this form one week after Mother’s death. The court rejected Manderson-Saleh’s different interpretation of the rule and her arguments this rule was satisfied by the Regents receiving Mother’s election worksheet before her death. The court entered a final judgment sustaining the demurrer and denying the mandate petition. Manderson-Saleh challenged both rulings. Finding the trial court properly sustained the demurrer, the Court of Appeal affirmed in part. However, the trial court erred in denying the mandate petition. "The undisputed evidence establishes Mother substantially complied with the Regents’ pension rules and the Regents abused its discretion in failing to consider and apply the substantial compliance doctrine in evaluating Manderson-Saleh’s claim." The matter was remanded with directions for the trial court to grant mandamus relief, and to issue a a writ ordering the Regents to grant Manderson-Saleh's contingent-annuitant pension claim. View "Manderson-Saleh v. Regents of the University of California" on Justia Law

Murphy, a journalist with approximately Twitter 25,000 followers, had a Twitter “verification badge,” which “lets people know that an account of public interest is authentic.” Murphy “writes primarily on feminist issues, including the Me Too movement, the sex industry, sex education, third-wave feminism, and gender identity politics.” Murphy argues “that there is a difference between acknowledging that transgender women see themselves as female and counting them as women in a legal or social sense.” Murphy posted several tweets critical of transgender women. Twitter removed her posts and informed her she had violated its hateful conduct rules. After she posted additional similar messages, Twitter permanently suspended her account.Murphy filed suit, alleging breach of contract, promissory estoppel, and violation of the unfair competition law. The trial court dismissed the complaint, concluding Murphy’s suit was barred by the Communications Decency Act of 1996, 47 U.S.C. 230, under which interactive computer service providers have broad immunity from liability for traditional editorial functions undertaken by publishers—such as decisions whether to publish, withdraw, postpone or alter content created by third parties. The court of appeal affirmed. Each of Murphy’s causes of action seeks to hold Twitter liable for its editorial decisions. Murphy also failed to state a cognizable claim under California law. The Hateful Conduct Policy was in place when Murphy began posting her deleted tweets; Twitter expressly reserved the right to remove content, and suspend or terminate accounts “for any or no reason.” View "Murphy v. Twitter, Inc." on Justia Law

Plaintiff Anna Sandoval-Ryan signed admission documents on behalf of her brother, Jesus Sandoval, following his admission to Sacramento Post-Acute (Post- Acute), a skilled nursing facility owned by Oleander Holdings, LLC (Oleander) and Plum Healthcare Group, LLC (Plum Healthcare). Among the documents plaintiff signed were two agreements to arbitrate claims arising out of the facility’s care for Sandoval. Sandoval’s condition deteriorated while being cared for at the facility, and he was transferred to a hospital where he later died. Plaintiff sued defendants Post-Acute, Oleander, and Plum Healthcare in superior court; she brought claims on her own behalf and on behalf of Sandoval. Defendants moved to compel arbitration of plaintiff’s claims. The trial court denied the motion on the basis the agreements were invalid because they were secured by fraud, undue influence, and duress. Defendants appealed the trial court’s ruling, contending the parties agreed to allow the arbitrator to decide threshold questions of arbitrability, and the trial court erred by deciding the issue instead. Absent clear and unmistakable language delegating threshold arbitrability issues to the arbitrator, the Court of Appeal concluded defendants’ claim lacked merit. View "Sandoval-Ryan v. Oleander Holdings" on Justia Law

Plaintiff 347 Group, Inc. (347 Group) sued and obtained a default judgment against defendant Philip Hawkins Architect, Inc. (Architect, Inc.) for breach of contract. Defendants Philip Hawkins, as an individual, and Design-Build, Inc. (Design Build) were also named in the lawsuit, although were not defaulting parties. Instead, 347 Group dismissed its breach of contract cause of action against Hawkins and Design Build but maintained causes of action for fraudulent conveyance and conspiracy, seeking to establish Hawkins and Design Build were alter egos of Architect, Inc. and liable under the contract with Architect, Inc. After Design Build and Hawkins prevailed on those causes of action, they moved for attorney fees. The trial court denied the motion finding an attorney fees award improper because 347 Group dismissed its contract cause of action and the remaining tort causes of action did not allow for an attorney fees award. On appeal, Hawkins argued the trial court erred and he was entitled to attorney fees because he was sued as an alter ego. The Court of Appeal determined Hawkins was indeed entitled to a prevailing party determination and whatever attorney fees the contract allowed him to recover. Judgment was reversed and the matter remanded for consideration of fees. View "347 Group, Inc. v. Philip Hawkins Architect, Inc." on Justia Law

In 2009, the president of the International Congress for Joint Reconstruction, Inc. (ICJR) retained Mark Sacaris, part owner of the Center for Healthcare Education and Research, Inc. (CHE), to assist ICJR in producing medical education conferences on the subject of joint-reconstruction surgery. Their agreement was unwritten, and there was no discussion of the rates ICJR would be charged. Sacaris was given full control over ICJR’s money accounts as part of the arrangement. Sacaris used ICJR’s money accounts to pay CHE’s invoices without notifying ICJR’s board members of the amounts ICJR was being charged. Over time, and also without informing the board of ICJR, he increased the scope of CHE’s services, thereby creating additional sources of profit for CHE, and indirectly for himself, but he did not disclose his interest in these arrangements to ICJR. Eventually the ICJR board was informed by Sacaris that ICJR had amassed a $2 million to CHE. ICJR terminated its relationship with Sacaris and CHE. CHE filed suit to recover amounts it claimed it was owed by ICJR under the agreement. ICJR cross-sued Sacaris and CHE, asserting Sacaris secretly profited from his relationship with ICJR. After a bench trial, the court found ICJR liable to CHE for breach of contract. Although the court also found that CHE and Sacaris breached their fiduciary duties to ICJR in earning all four categories of the profits ICJR sought to disgorge, the court awarded ICJR recovery only as to categories two and four. On appeal, ICJR contended the trial court erred in determining that ICJR could not recover disgorgement of CHE and Sacaris’s profits from their undisclosed charges for management services without proof their breach of fiduciary duties caused ICJR to suffer monetary damages. The Court of Appeal agreed ICJR was not required to show it suffered monetary harm to establish a right to disgorgement of CHE and Sacaris' profits from undisclosed charges for event management services. The Court of Appeal reversed that portion of the judgment affected by the error and remanded for the trial court to determine the appropriate amount of the award of disgorgement. However, the Court rejected ICJR’s claim that the court erred in determining that running symposia for pharmaceutical companies was not a corporate opportunity of ICJR. View "Center Healthcare Ed. & Res. v. Internat. Cong. Joint Reconst." on Justia Law

Plaintiff filed suit against Fresno Unified and the Contractor, alleging that they violated California's competitive bidding requirements, the statutory and common law rules governing conflicts of interest, and Education Code sections 17406 and 17417. Based on the Court of Appeal's review of the four corners of the construction agreements and resolution of Fresno Unified’s board, the court concluded that plaintiff properly alleged three grounds for why Education Code section 17406's exception to competitive bidding did not apply to the purported lease-leaseback contracts. The court also concluded that California's statutory and common law rules governing conflicts of interest extended to corporate consultants and plaintiff alleged facts showing Contractor participated in creating the terms and specifications of the purported lease-leaseback contracts and then became a party to those contracts. After remand, the further proceedings included defendants' motion for judgment on the pleadings, which argued the lawsuit had become moot because the construction was finished and the contracts terminated. The trial court agreed.The Court of Appeal reversed, holding that defendants and the trial court erroneously interpreted plaintiff's lawsuit as exclusively an in rem reverse validation action. Rather, plaintiff is pursuing both a validation action and a taxpayer action. In this case, plaintiff asserts violations of California's competitive bidding laws and Education Code sections 17406 and 17417 along with conflicts of interest prohibited by Government Code section 1090 and common law principles. The remedy of disgorgement is available under these counts asserted in plaintiff's taxpayer's action even though the Construction Contracts are fully performed. Therefore, the counts in plaintiff's taxpayer's action seeking disgorgement are not moot. The panel remanded for further proceedings. View "Davis v. Fresno Unified School District" on Justia Law

Plaintiff-respondent Sarah Coughenour worked for defendant-appellant Del Taco, LLC, starting when she was 16 years old. When she was first employed by Del Taco, she signed a “Mutual Agreement to Arbitrate” (Agreement). After Coughenour reached the age of 18, she continued working for Del Taco for four months. Coughenour quit and filed a lawsuit against Del Taco for sexual harassment committed by one of their employees, wage and hour claims brought pursuant to the Labor Code, and other claims under the Fair Housing and Employment Housing Act. Del Taco moved to compel arbitration. The trial court denied the Motion, finding that Coughenour’s filing of the lawsuit was a disaffirmance of the Agreement within the meaning of Family Code section 6710, which allowed a person upon reaching majority age to disaffirm a contract entered into while a minor. Del Taco appealed the denial of its motion, arguing that by working for Del Taco for four months after she reached the age of majority, Coughenour ratified the Agreement, which estopped her power to disaffirm the Agreement. In the alternative, Del Taco argued that Coughenour did not disaffirm the Agreement within a “reasonable time” after reaching the age of 18 as required by Family Code section 6710. The Court of Appeal affirmed denial of Del Taco's motion: [t]he filing of the lawsuit was notice that [Coughenour] disaffirmed the Agreement." The trial court did not abuse its discretion by concluding that Coughenour disaffirmed the Agreement within a reasonable time. View "Coughenour v. Del Taco" on Justia Law

Plaintiffs Hillarie and Keith Levy appealed the dismissal of their lawsuit filed against defendant, Only Cremations for Pets, Inc. Plaintiffs alleged it agreed to cremate individually two of their dogs, but then intentionally sent them random ashes instead. Plaintiffs sought recovery of emotional distress damages under contract and tort law. The Court of Appeal determined: the complaint failed to state a cause of action under any contract theory; and there were no factual allegations showing the existence of any contract between plaintiffs and defendant. Plaintiffs’ veterinarian, not plaintiffs, contracted with defendant. However, the complaint adequately pled two tort theories: trespass to chattel and negligence. The Court found allegations here "fit comfortably" in a cause of action for trespass to chattel claim, which permitted recovery of emotional distress damages. The allegations also supported a negligence cause of action because defendant advertised its services as providing emotional solace, and thus it was foreseeable that a failure to use reasonable care with the ashes would result in emotional distress. The Court reversed and remanded, giving plaintiffs an opportunity to plead more fully a third-party beneficiary cause of action. View "Levy v. Only Cremations for Pets, Inc." on Justia Law

Auburn Woods I Homeowners Association (HOA) and its property manager Frei Real Estate Services (FRES), tendered the defense of two lawsuits filed against them by a member of HOA under HOA’s condominium/association policy. HOA’s insurer, State Farm Insurance Company (State Farm), denied the tender for the first lawsuit, but accepted defense of the second lawsuit as to HOA only. HOA and Al Frei, individually and doing business as FRES, sued State Farm and its agent Frank Lewis for, among other things, breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court entered judgment in favor of State Farm and Lewis after a bench trial. HOA and Frei appealed, contending: (1) the trial court erred in concluding that State Farm did not owe a duty to defend HOA and FRES against the first lawsuit; (2) HOA had a reasonable expectation that FRES would be covered under the directors and officers liability provision of its policy; (3) State Farm failed to reimburse HOA for post-tender expenses related to the second lawsuit; (4) Lewis breached his contract with HOA by failing to include FRES as an additional insured and failing to alert HOA and Frei that itwas not possible to include FRES under the directors and officers liability provision; (5) State Farm breached the covenant of good faith and fair dealing implied in HOA’s policy; and (6) the trial court erred in denying HOA and Frei’s motion to tax the expert witness fees State Farm and Lewis sought to recover under Code of Civil Procedure section 998. After review, the Court of Appeal concluded: (1) State Farm did not have a duty to defend HOA and FRES against the first lawsuit; (2) HOA and Frei failed to establish that FRES should have been deemed an insured under the directors and officers liability provision; (3) substantial evidence supported the trial court’s finding that HOA did not present State Farm with a clear statement of the amount of attorney’s fees and costs HOA incurred in defending against the second lawsuit; (4) HOA and Frei did not establish the alleged contract between Lewis and HOA; (5) HOA and Frei failed to demonstrate error with regard to their breach of implied covenant cause of action; and (6) State Farm and Lewis’s pretrial offer to compromise was effective to trigger cost shifting under section 998. View "Auburn Woods I Homeowners Assn. v. State Farm General Ins. Co." on Justia Law

Oakland entered into agreements with OBOT for the development of the former Oakland Army Base. The project was to include a bulk commodity shipping terminal for products, including coal. When the subject of coal became public, it activated interest groups, ultimately leading to an ordinance banning coal handling and storage in the city and a resolution applying the ordinance to the terminal. A federal court held that the resolution was a breach of the OBOT agreements, and enjoined Oakland from relying on the resolution. Friction between OBOT and Oakland continued. OBOT sued, alleging breach of contract and tort claims.The city filed a demurrer, then a special motion to strike (SLAPP motion, Code of Civil Procedure 425.16) that sought to strike “in part” the complaint. The SLAPP motion was heard with other matters. The hearing dealt primarily with the demurrer, which the court overruled in most part, and sustained in part with leave to amend. Days later, the court “denied without prejudice” the SLAPP motion, describing it as “premature” in light of the amended complaint to come.The court of appeal determined that the SLAPP motion has no merit because the complaint is not based on protected activity and remanded with instructions to deny the motion on the merits. The essence of the complaint arose from Oaklands’s acts or omissions in breach of its agreements, its refusal to cooperate, and its tortious conduct. View "Oakland Bulk and Oversized Terminal, LLC v. City of Oakland" on Justia Law