Articles Posted in Contracts

by
Plaintiff Dennis Ponte demanded defendant County of Calaveras (County) to pay him over $150,000 to reimburse him for work purportedly performed on the County’s behalf pursuant to an oral contract. The contract did not contain any fixed payment, and no bid was submitted nor approved pursuant to relevant county ordinances governing public contracts. Ponte disregarded opportunities to abandon his claims after the County provided him with pertinent legal authority demonstrating that his claims lacked merit. After multiple sustained demurrers, the trial court granted summary judgment to the County on Ponte’s third amended complaint. The court later awarded substantial attorney fees, finding Ponte’s claims, including those based on promissory estoppel, were not brought or maintained in both subjective and objective good faith. Ponte appealed. Finding no reversible error, the Court of Appeal affirmed. View "Ponte v. County of Calaveras" on Justia Law

by
Property owners who purchased through a foreclosure sale sued the bank that sold the house, alleging that they were mislead the bank’s deed of trust was the first deed of trust, when another remained on the property, and was not extinguished by the foreclosure sale. Wells Fargo assigned any claim against the title insurer it had to David and Lina Hovannisian (the property owners), and the Hovannisians sued First American Title Insurance Company, alleging breach of contract, negligent misrepresentation and breach of the implied covenant of good faith and fair dealing. First American moved for summary judgment, arguing its title insurance coverage had terminated, and no benefits were due. The motion was granted, and the Hovannisians appealed, arguing First American failed to establish that coverage did not continue under the title policy or there were no benefits due under the policy. They also contended triable issues of fact existed regarding their bad faith claim. The Court of Appeal affirmed, finding First American showed, based on the facts Wells Fargo and the Hovannisians presented before and after the underlying action was filed, that there was no potential for coverage under the policy. The Hovannisians did not learn about the first deed of trust until after they purchased the property at the foreclosure sale without warranty. Thus, the only potential claim they had against Wells Fargo was for the alleged misrepresentations for which there was no liability or loss under the policy. View "Hovannisian v. First American Title Ins. Co." on Justia Law

by
FC Surety posted $150,000 bail to secure Ventura‘s release from custody in San Francisco. On September 15, 2014, when Ventura failed to appear, the court issued a bench warrant and declared the bond forfeited, stating FC‘s obligation to pay the bond would become absolute on April 10, 2015. On March 12, FC‘s agent discovered Ventura was in custody in Contra Costa County and tried to surrender the San Francisco warrant and have Ventura held. The Contra Costa County Sheriff found no active warrants, although the agent had verification from the San Francisco Sheriff. On April 3, the bail agent moved to vacate the forfeiture and exonerate the bond, arguing that failure to enter the warrant into the National Crime Information Center was an error that required exoneration of liability on the bond under Penal Code 980(b). The court denied the motion because the bench warrant remained outstanding. The agent then, unsuccessfully, orally requested to extend the time to secure Ventura‘s appearance. On August 19, the court issued summary judgment of bail forfeiture. The court of appeal reversed in favor of FC. FC‘s motion was timely and supported by good cause; under Penal Code 1305(c)(3) a court “shall vacate the forfeiture and exonerate the bail” if, outside the county where the case is located, the defendant is surrendered to custody by the bail or is arrested in the underlying case. View "P.eople v. Financial Casualty & Surety" on Justia Law

Posted in: Contracts, Criminal Law

by
In a 2005 Cooperation and Option Agreement to facilitate Russell's construction and operation of the Energy Center, a natural gas-fired, combined cycle electric generating facility in Hayward, the city granted Russell an option to purchase 12.5 acres of city-owned land as the Energy Center's site and promised to help Russell obtain permits, approvals, and water treatment services. Russell conveyed a 3.5-acre parcel to the city. The Agreement's “Payments Clause” prohibited the city from imposing any taxes on the “development, construction, ownership and operation” of the Energy Center except taxes tethered to real estate ownership. In 2009, Hayward voters approved an ordinance that imposes “a tax upon every person using electricity in the City. … at the rate of five and one-half percent (5.5%) of the charges made for such electricity” with a similar provision regarding gas usage. Russell began building the Energy Center in 2010. In 2011, the city informed Russell it must pay the utility tax. The Energy Center is operational.The court of appeal affirmed a holding that the Payments Clause was unenforceable as violating California Constitution article XIII, section 31, which provides “[t]he power to tax may not be surrendered or suspended by grant or contract.” Russell may amend its complaint to allege a quasi-contractual restitution claim. View "Russell City Energy Co. v. City of Hayward" on Justia Law

by
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

by
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

by
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

by
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

by
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

Posted in: Contracts

by
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