Justia Contracts Opinion Summaries

This appeal involved two lawsuits, three parties, and one contract. In the first lawsuit, three neighboring property owners incurred varying damages due to a mudslide. The three parties sued and countersued each other for negligence and other claims related to water drainage. The parties eventually settled. The owners agreed to perform mitigation and repair work on their own properties according to their own separate plans. The agreement was memorialized in a contract (the Settlement Agreement). In the second lawsuit, two owners sued the third owner (a married couple). Plaintiffs alleged defendants breached the Settlement Agreement because their work was not in substantial compliance with their plan. But in a bench trial, the court found defendants complied with the contract by providing a copy of an engineer’s report stating their work was “‘substantially completed in accordance with the approved plans.’” The court also found no evidence of bad faith, fraud, or gross negligence. On appeal, plaintiffs contended the trial court misinterpreted the Settlement Agreement. Finding no reversible error in the trial court's interpretation of the Settlement Agreement, the Court of Appeal affirmed. View "Coral Farms, L.P. v. Mahony" on Justia Law

After plaintiffs lost their home in a fire, they promptly submitted a claim under their homeowner’s insurance policy to their insurer, Mid-Century. Mid-Century denied the claim on the ground that the policy had been canceled for nonpayment of premium six days before the fire. Plaintiffs immediately paid the past due premium, the policy was reinstated, but Mid-Century continued to deny the claim. Plaintiffs filed suit for breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court granted summary adjudication for plaintiffs on the issue of Mid-Century's duty to provide coverage and denied Mid-Century's motion for summary judgment in its entirety.The Court of Appeal concluded that the trial court properly denied Mid-Century's motion for summary judgment but improperly granted plaintiff's motion for summary adjudication. The court rejected Mid-Century's argument that the loss-in-progress rule precludes coverage. Rather, the court concluded that the law allowed Mid-Century to retroactively reinstate the policy with no lapse in coverage. However, the court concluded that there exists a triable issue of material fact regarding Mid-Century's intent when it reinstated the policy that precludes summary adjudication for either party. View "Antonopoulos v. Mid-Century Insurance Co." on Justia Law

Rabineau served MLG with a statutory offer to compromise, but the offer did not specify how MLG could accept it. MLG's counsel hand-wrote MLG's acceptance onto the offer itself and filed a notice of acceptance with the trial court. The trial court then entered judgment in favor of MLG pursuant to Code of Civil Procedure 998, subdivision (b)(1). The Legislature enacted section 998 to encourage and expedite settlement of lawsuits before trial. At issue is whether the purported acceptance of a section 998 offer lacking an acceptance provision gives rise to a valid judgment.The Court of Appeal concluded that the trial court correctly found the judgment was void and affirmed the trial court's grant of Rabineau's motion to vacate the judgment. The court explained that California appellate courts have consistently followed Puerta v. Torres (2011) 195 Cal.App.4th 1267, to hold that a section 998 offer lacking an acceptance provision is invalid, and therefore an offeree's failure to accept it does not trigger any of section 998's cost-shifting provisions. Furthermore, application of general contract principles to conclude a section 998 offer is valid, even if it does not have an acceptance provision, would conflict with the language of section 998, which clearly provides otherwise. Finally, the court rejected arguments based on equity. View "Mostafavi Law Group, APC v. Larry Rabineau, APC" on Justia Law

California residents who sell goods on eBay, an online marketplace, as part of their online businesses and use PayPal to receive payments for many of their sales filed a putative class action. The suit challenged provisions of the user agreements, including PayPal’s policy of placing a temporary hold on funds in a user’s account when PayPal believes there is a high level of risk associated with a transaction or a user’s account; PayPal’s retention of interest on users’ funds that are placed in pooled accounts when users maintain a balance in their PayPal accounts; PayPal’s buyer’s protection policy, which allows buyers, under certain circumstances, to dispute transactions up to 180 days after the date of purchase; and a claim that PayPal aids and abets buyers in defrauding sellers by the manner in which it resolves disputes. The court of appeal affirmed the dismissal of the claims against PayPal, without leave to amend. The challenged practices are not unconscionable. The degree of procedural unconscionability that arises from the fact that a contract is one of adhesion is ‘minimal.” View "Chen v. Paypal, Inc." on Justia Law

Plaintiff filed suit under the Song-Beverly Consumer Warranty Act, popularly known as the lemon law, alleging claims related to defects with her car's throttle body connector. In this case, the trial court gave the jury a special instruction, at the request of plaintiff and over defendant's objection, that if a defect existed within the warranty period, the warranty would not expire until the defect had been fixed.The Court of Appeal concluded that the special instruction misstated the law and conflicted with another instruction given to the jury, CACI No. 3231, which correctly explains the continuation of warranties during repairs. Therefore, the trial court erred in giving the special instruction, and the error was prejudicial. The court reversed and remanded for further proceedings. However, the court affirmed the trial court's order granting a nonsuit on plaintiff's cause of action for breach of implied warranty. The court concluded that, under the lemon law, only distributors and retail sellers, not manufacturers, are liable for breach of implied warranties in the sale of a used car where, as here, the manufacturer did not offer the used car for sale to the public. Finally, the court reversed the attorney fee award to plaintiff. View "Nunez v. FCA US LLC" on Justia Law

Plaintiff Jason Varney was a master dock builder, and star of a cable television show called “Docked Out.” He was also the president and sole shareholder of plaintiff Varney Entertainment Group, Inc. (Varney). Defendant Avon Plastics Inc., d/b/a/ Master Mark Plastic Products (Avon), manufactured products used to build docks. Plaintiff’s operative complaint alleged claims for breach of contract and for unauthorized commercial use of name or likeness in violation of Civil Code section 3344. Defendant served a statutory offer to compromise under Code of Civil Procedure section 998, offering to have a $250,000 judgment entered against it on both claims, plus attorney fees and costs through the date of the offer. Less than a week later, while its section 998 offer was still pending, defendant offered to enter into a stipulated judgment for $191,626.03 on the contract claim only, and further offered that plaintiff would be the prevailing party on that claim for purposes of awarding attorney fees and costs. Plaintiff accepted the second offer and never responded to the section 998 offer. Two months later, at the beginning of trial, plaintiff dismissed its remaining section 3344 claim without prejudice so it could refile that claim in a different jurisdiction. Defendant moved for attorney fees and costs based on section 3344’s fee shifting provision and its unaccepted section 998 offer. The trial court denied its motion, and the Court of Appeal affirmed: "Section 3344 does not provide a basis for awarding the defendant its fees or costs here because the defendant was not the prevailing party on that claim within the meaning of section 3344. And section 998 does not provide a basis for shifting fees or costs to the defendant because the defendant’s offer to enter into a stipulated judgment extinguished its prior section 998 offer." View "Varney Entertainment Grp. v. Avon Plastics" on Justia Law

Guo owned TVGC, which operated a Pleasanton spa. TVGC agreed to sell the business to Mazurova's corporation, LSI. The sale was partially financed through a promissory note. The sales agreement and promissory note contained provisions allowing a party prevailing in a legal action to recover attorney fees. After the sale, a dispute arose regarding Guo’s alleged nondisclosure of outstanding coupons for free spa services and Mazurova’s alleged failure to make payments. A judgment was entered for $161,085.58 against Guo and TVGC, which was affirmed. A subsequent order specifically stated that LSI and Mazurova were deemed the prevailing parties under Code of Civil Procedure Section 1032, “entitled to recover their costs of suit and reasonable attorney fees.” Mazurova and LSI assigned the judgment to Moorpark, which engaged in collection efforts and moved for attorney fees under Code of Civil Procedure section 685.040.The court denied the motion because the underlying judgment did not include an award of attorney’s fees. The court of appeal reversed. The judgment awarded reasonable attorney fees to the prevailing parties, although it did not set a particular amount of fees and no costs bill including such fees was ever filed. The court’s failure to include a specific amount in the judgment does not defeat section 685.040. View "Guo v. Moorpark Recovery Service, LLC" on Justia Law

In a putative class action, plaintiffs Joe Maldonado, Alfredo Mendez, J. Peter Tuma, Jonabette Michelle Tuma, and Roberto Mateos Salmeron (collectively referred to as “the Customers”), claimed Fast Auto Loans, Inc., (Lender) charged unconscionable interest rates on loans in violation of California Financial Code sections 22302 and 22303. Lender filed a motion to compel arbitration and stay the action pursuant to an arbitration clause contained within the Customers’ loan agreements. The court denied the motion on the grounds the provision was invalid and unenforceable because it required consumers to waive their right to pursue public injunctive relief, a rule described in McGill v. Citibank, N.A., 2 Cal.5th 945 (2017). On appeal, Lender argued the “McGill Rule” did not apply, but even if it did, other claims were subject to arbitration. Alternatively, Lender contended the McGill Rule was preempted by the Federal Arbitration Act . Finding Lender’s contentions on appeal lacked merit, the Court of Appeal affirmed the trial court’s order. View "Maldonado v. Fast Auto Loans" on Justia Law

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