Procedural Posture

Procedural Posture

The Superior Court of Los Angeles County (California) entered judgment in favor of defendant employer in a breach of employment contract action brought by plaintiff union employee. The employee sought review.

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Overview

An employer denied a union employee a new position and then terminated the employee. The court found that the employee failed to state a cause of action against the employer’s agents because none of the named individuals appeared as a party to the union contract under which the employee was retained. The court held that Cal. Civ. Proc. Code § 1060 did not entitle the employee to maintain an action against the agents for a declaration of his rights under the contract because they owed the employee no legal rights or duties. The court held that the special demurrer properly challenged the sufficiency of the employee’s complaint because an action for a breach of an employment contract required the employee to state with clarity how or in what manner he had been damaged. The court held that such pleading was necessary so that the employer could prepare a defense.

Outcome

The court affirmed the judgment.

Procedural Posture

Procedural Posture

The Los Angeles County Superior Court, California, entered judgment for plaintiff, where plaintiff was called to perform on public works performance bond which it had executed as surety, after the principal, insured by defendant, defaulted. Plaintiff appealed from demurrer sustained to its breach of implied covenant claim. Defendant cross complained from the damages judgment entered, arguing that plaintiff had not timely filed its claim.

Overview

Plaintiff, as surety, executed a public works performance bond on a project which called for a city to replace pipe culverts for a county. While working on the project, the city damaged adjacent private property. Before that damage was corrected, the county declared the city in default, and demanded that plaintiff perform the city’s remaining obligations. Plaintiff paid a third party contractor to repair and restore the adjacent property. Throughout this time the city held commercial liability insurance written by defendant. Plaintiff sued defendant. Judgment was entered for plaintiff as to the cost to repair. Plaintiff and defendant both appealed. The appellate court found that the trial court had properly sustained the demurrer to plaintiff’s breach of the implied covenant claim. The only basis for that claim was through equitable subrogation, and no breach of implied warranty was shown to have been suffered by the city as a result of defendant’s behavior, to which plaintiff could be subrogated. It also found that plaintiff had given timely notice of the claim to an ostensible agent of defendant within the time period specified by Cal. Civ. Proc. Code § 870. The class action attorney California counseled the civil litigants during trial to the jurors.

Outcome

The court affirmed judgment of the trial court, finding in extensive exegesis of subrogation and contribution, that plaintiff’s breach of implied covenant claim was properly characterized as one for equitable subrogation, but that the principal party on the bond had no breach of implied covenant claim to which plaintiff could be subrogated, and that plaintiff had timely filed the claim upon which judgment was entered.

Procedural Posture

Appellants sought review of the decision of the Superior Court of Los Angeles County (California), which entered a judgment of dismissal of all causes of action alleged against respondent partners in appellants’ wrongful conspiracy action, and breach of fiduciary duty and fraud claims alleged against respondent attorney.

Overview

Appellants and respondent partners formed a partnership. After respondent partners formed a competing partnership, appellants sued and alleged that respondent partners wrongfully conspired to interfere with the partnership’s business relationship, and that respondent attorney breached his fiduciary duty. The trial court sustained demurrers and ordered dismissal. The court reversed. The court held that the trial court erred in sustaining respondents’ contention that no cognizable claims were stated against them, because appellants sufficiently pleaded their causes of actions for conspiracy to interfere with their economic relationship and for dissolution. The court found that no complete justification for respondents’ action appeared on the face of appellants’ allegations and that it was reasonable to infer therefrom that respondents were acting solely in order to obtain for themselves the advantages formerly enjoyed by the partnership as a whole. The court concluded that appellants were entitled to a court-ordered dissolution, if it was proved that respondents competed with the partnership.

Outcome

The court reversed the trial court’s judgment, holding that the trial court erred in sustaining respondent partners’ contention that no cognizable claims were or could be stated against them.

 

Procedural Posture

Procedural Posture

Appellants challenged the decision of the Superior Court of San Mateo County (California), which denied appellants’ motion to compel arbitration because it had to decide whether the arbitration clause was fraudulently induced and because respondent two had not agreed to arbitration. Parties’ San Diego litigation lawyer appeal.

Overview

Respondents agreed to purchase and/or lease a computer system from appellants. Numerous problems arose with respect to the performance of the system and with the services provided by appellants. Respondents filed various causes of action against appellants. Although respondents claimed that the contract was fraudulently induced, they did not seek rescission of the contract. Appellants moved to compel arbitration. The trial court denied the motion. Appellants sought review. The court reversed in part, holding that there was no need to determine the validity of the agreement to arbitrate because mere allegations that the contract as a whole was induced by fraud would not avoid the effect of the arbitration clause with respect to respondent one. The allegation that appellants acted fraudulently in selling defective equipment was nothing more than an allegation of fraud in the inducement of the contract as a whole. Such an allegation could have no effect on the validity of the arbitration clause. However, the court affirmed in part, holding that respondent two was not subject to arbitration because it never entered into the earlier agreement that contained the arbitration clause.

Outcome

The court partially reversed the trial court’s denial of appellants’ motion to compel arbitration, holding that respondent one could not avoid the effect of the arbitration clause by alleging fraud in the inducement of the contract as a whole. However, the court affirmed the trial court’s finding that respondent two never agreed to arbitrate any issues.

Overview

HOLDINGS: [1]-A self-storage facility’s alternative indemnity agreement with its customer did not constitute insurance subject to regulation under the California Insurance Code; [2]-The rental of storage space was the principal object and purpose of the parties’ transaction, and the protection plan was incidental to that purpose; [3]-The legislature’s enactment of Article 16.3 of the Insurance Code enables self-storage facilities to act as agents for insurance companies with respect to the narrow category of insurance described in Article 16.3, but it does not prohibit the parties’ indemnification agreement set forth in the Protection Plan; [4]-Because the customer’s claims were premised on his contention that the protection plan was subject to regulation under the Insurance Code, his claims failed.

Outcome

Judgment of court of appeal affirmed.