Justia Contracts Opinion Summaries

In 1999, Ayala, unable to qualify for a mortgage to buy a five-unit Vacaville residential property, sought assistance from Dawson, a real estate broker. According to Ayala, they orally agreed that Dawson would obtain the loan and buy the property in Dawson’s name for $330,000; Ayala would pay the 20% downpayment and pay Dawson a $200 per month fee, plus the monthly principal and interest on the mortgage. The parties executed a written contract provided by Dawson, which Ayala claims he understood to confirm an installment contract on terms the two had previously discussed. Ayala moved into one of the units and claims he spent hundreds of thousands of dollars improving the property. From 2000-2008, he paid Dawson $2,700 per month; from 2008-2012, he paid $2,900 per month. Ayala actually had signed a standard form lease/option; the option expired in 2004. In 2011 Dawson offered to sell Ayala the property for $330,000, with a credit for the down payment. In Dawson’s unlawful detainer action, Ayala defended by claiming he held equitable title. Dawson prevailed. In Ayala's separate action against Dawson for fraud, the court granted Dawson summary judgment. The court of appeal affirmed, stating that, under the doctrine of collateral estoppel, Ayala is barred from relitigating his fraud-in-the-inducement theory. View "Ayala v. Dawson" on Justia Law

Marlene Baker LaBerge, a 73-year-old woman, was a resident and patient of a 24- hour skilled nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). LaBerge's heirs, Paul LaBerge, Suzanne Marx, and Talmadge Baker (collectively Plaintiffs) sued La Paloma and Plum Healthcare, LLC (together Defendants) for elder abuse, violations of the Patient's Bill of Rights as codified at Health and Safety Code section 1430, negligence, and wrongful death. In response, Defendants filed a petition to compel arbitration based on the two arbitration agreements that LaBerge had executed. The two arbitration agreements included language required by Code of Civil Procedure section 1295, subdivision (c), requiring such agreements to include a 30-day "cooling off" period, during which the parties to the agreement may rescind it. Ten days after LaBerge signed the agreements (and therefore, prior to the expiration of the statutorily-required 30- day rescission period), LaBerge passed away. The superior court denied the petition to compel arbitration, relying on Rodriguez v. Superior Court, 176 Cal.App.4th 1461 (2009) to conclude that the agreements were not effective until the 30-day rescission period passed without either party rescinding the agreements; because LaBerge died before the expiration of the 30-day rescission period, the agreements could not be given effect. On appeal, Defendants contended the trial court’s interpretation was wrong, and the Court of Appeal should decline to follow Rodriguez because that case was factually distinguishable from this case. The Court of Appeal concluded the trial court erred in interpreting section 1295, subdivision (c), and that the arbitration agreements were valid and enforceable. Pursuant to the plain language of section 1295, subdivision (c), the terms of those agreements governed the parties' relationship upon their execution; the fact that one signatory died before the expiration of the statutory 30-day rescission period does not render the terms of the parties' agreements unenforceable in the absence of other grounds for not enforcing them. View "Baker v. Italian Maple Holdings" on Justia Law

Plaintiffs filed suit against Vivint Solar, seeking rescission of an agreement in which Vivint Solar agreed to install a solar power generating system on their property in exchange for their agreement to purchase solar power generated by the system. Plaintiffs alleged individual and class claims for declaratory relief and violations of the Unfair Competition Law (UCL). The Court of Appeal held that the delegation clause in the arbitration provision of the agreement was enforceable and therefore it was the arbitrator, not the court, who was required to determine the enforceability of the arbitration provision and whether it covered class claims. The court issued a peremptory writ of mandate commanding the trial court to vacate that portion of its order in which it found the arbitration provision was not unconscionable or unenforceable, the claims asserted in the complaint were arbitrable, and the arbitration provision's prohibition against bringing class claims was enforceable. The court also vacated the order dismissing the class claims. The court denied in all other respects. View "Aanderud v. Superior Court of Kern County" on Justia Law

Plaintiff, a gas station owner, filed suit demanding that its insurer pay for damages when the fiberglass sheath of one of its underground gasoline storage tanks split after resting on a rock for 16 years. The Court of Appeal affirmed summary judgment to the insurer, holding that a substantial impairment of the tank's structural integrity did not constitute a "collapse" as a matter of law. View "Tustin Field Gas & Food v. Mid-Century Insurance Co." on Justia Law

Petitioners filed a tort action alleging that Beats Electronics had engaged in a fraudulent scheme to deprive them of their interest in the company. The trial court granted summary judgment for Beats and subsequently entered an order directing that the amount of Beats' attorney's fees be resolved through a notice motion. Petitionerss filed a petition for writ of mandate seeking an order directing the trial court to vacate its order, and enter a new order granting them a jury trial on the issue of attorney's fees. After issuing an order to show cause, the Court of Appeal granted the petition. The court held that the trial court erred in denying petitioners' requests for a jury trial on Beats' contract damages. In this case, Monster had a right to have a jury determine the amount of attorney's fees resulting from its alleged breach of the Termination Agreement and the 2013 Unit Repurchase Agreement. View "Monster, LLC v. Superior Court" on Justia Law

SJJC Aviation is a fixed base operator (FBO) that operates a full-service facility at the Norman Y. Mineta San Jose International Airport, which is owned by the city. In 2012 the city addressed a plan to add a second FBO on the west side of the airport and issued a request for proposals “for the development and operation of aeronautical services facilities to serve general aviation activities at the [airport].” The city awarded the lease and operating agreement to Signature and its prospective subtenant, BCH, rejecting SJJC's bid as nonresponsive. SJJC filed suit, contending that the “flawed” process of soliciting bids for the lease should be set aside. The court of appeal affirmed dismissal of the suit. SJJC lost its own opportunity to compete for the new airport FBO by submitting a manifestly nonresponsive bid. SJJC is in reality complaining of past acts by the city and is seeking a remedy that will allow it another opportunity to submit a responsive proposal. View "SJJC Aviation Services v. City of San Jose" on Justia Law

Phoenix Pipeline filed a second amended complaint (SAC) alleging breach of contract claims related to SpaceX's failure to pay for its services from 2010 to October 2013. The trial court subsequently granted SpaceX's demurrer, which argued that the license issued to Phoenix Plumbing was not sufficient to satisfy the requirements of Business Code section 7031. The Court of Appeal held that Phoenix Pipeline's SAC failed to state a claim for construction related services because it did not allege that Phoenix Pipeline was a licensed contractor. The court explained that Phoenix Pipeline may not rely upon a license issued to another and that section 7031 was not limited to contracts with unsophisticated persons or homeowners. The court held, however, that Phoenix Pipeline adequately alleged that it provided some services for which no contractor license was necessary. Finally, the trial court acted within its discretion in declining to permit an amendment alleging that Phoenix Pipeline was an employee. Accordingly, the court reversed and remanded. View "Phoenix Mechanical Pipeline, Inc. v. Space Exploration Technologies Corp." on Justia Law

The trial court found that plaintiff failed to prevail on any of his breach of contract claims because, while his evidence in support of those claims was "considerable," it was nonetheless "insufficient." The trial court awarded damages to plaintiff under Civil Code section 1692, nonetheless, because there was evidence showing that defendant had breached the parties' contract. The court of appeal held that the trial court's interpretation of section 1692 was flawed; the court reversed and directed that judgment be entered in favor of defendant; and the trial court did not abuse its discretion in denying plaintiff's posttrial motion to conform his pleadings to the proof presented at trial. View "Li Guan v. Yongmei Hu" on Justia Law

Pacific Bay treated an individual who was a subscriber to a Blue Shield health plan. It submitted invoices to Blue Shield for payment for the services rendered to the subscriber. Pacific Bay contends it was underpaid and brought suit against Blue Shield to recover the additional amount it claimed to be owed. The court sustained Blue Shield's demurrer to the first amended complaint (FAC) without leave to amend, finding that Pacific Bay had not shown that it was entitled to any payment from Blue Shield. As an out-of-network, nonemergency service provider, Pacific Bay was entitled to payment for treating Blue Shield's subscriber under the terms of the applicable evidence of coverage (EOC). Pacific Bay did not allege Blue Shield paid it improperly under the EOC, nor did it argue that it could allege additional facts to support such a claim. Pacific Bay claimed it was underpaid. Against this backdrop, Pacific Bay's other allegations did not give rise to any valid cause of action. View "Pacific Bay Recovery v. Cal. Physicians' Services" on Justia Law

Whether a contract provision is an illegal penalty or enforceable liquidated damage clause is a question for the trial court; on review, appellate deference to that court’s factual findings is required.In 2005, Brother and Sister entered a contract under which Brother, a licensed real estate agent, would develop Sister’s Pebble Beach property through funding from investors and then sell the developed property, with Brother and Sister to split the profits after paying $1.5 million to Sister, reflecting her equity, and $30,000 to Brother as a fee. Brother obtained investors. Sister obtained loans totaling $1,008,000.00, secured by first and second deeds of trust. Brother did not use the money for its intended purposes. The property was sold at foreclosure. The investors and Sister sued Brother. Brother filed for bankruptcy. The bankruptcy court granted relief from the automatic stay for Sister’s state claims for “Breach of Fiduciary Duty, Conversion, Fraud, and Intentional Infliction of Emotional Distress.” In 2014, after mediation, Brother and Sister signed a settlement, under which Sister was awarded a stipulated judgment of $850,000. The court of appeal affirmed, rejecting Brother’s “fact-based” argument that the amount included an unenforceable liquidated damages penalty of $250,000.00 (Civil Code 1671), which he had not raised in the trial court. View "Krechuniak v. Noorzoy" on Justia Law