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Procedural Posture

Procedural Posture

By: SMITH THOMPSON

Plaintiff dairy farmer appealed from a judgment of the Superior Court of Los Angeles County (California), in favor of defendant dairy marketer, in plaintiff’s action for damages arising from a breach of contract. The California business law lawyers were sought as expert witnesses during trial. Plaintiff contended that defendant’s representative had authority to bind defendant, and that the parties had a meeting of the minds as to the terms of a contract, which was then breached by defendant.

Overview

Plaintiff dairy farmer commenced an action for breach of contract and damages resulting from defendant dairy marketer’s failure to adhere to the terms of a new contract between the parties, which was entered into by defendant’s representative after plaintiff had expressed dissatisfaction with their old arrangement. The new contract was for marketing and distribution by defendant of increased output of plaintiff’s milk. The trial court held that there was no meeting of the minds and entered judgment for defendant, from which plaintiff sought review. The court reversed, holding that there was an outward manifestation of assent to the terms of the contract by defendant, and whether he personally believed otherwise was inconsequential and inadmissible under the parol evidence rule. The court further found that while there was no actual authority for defendant’s representative to have entered into the contract, all of the necessary elements of ostensible authority existed and as such, the contract was binding as written. Accordingly, judgment was entered for plaintiff due to defendant’s breach of contract.

Outcome

The court reversed the judgment in favor of defendant dairy marketer and entered judgment for plaintiff dairy farmer, in his action for damages due to a breach of contract. The court held that the intention of defendant was irrelevant and inadmissible because the contract was unequivocal and set forth the controlling terms. The court further held that defendant’s representative had ostensible authority to bind defendant to the contract.

Procedural Posture

Plaintiff subcontractor sought review of a summary judgment from the Superior Court of San Diego County (California), which ruled that defendant insurer owed the subcontractor no defense or indemnification in a payment dispute with a general contractor regarding work performed on a condominium project.

Overview

The subcontract included an indemnity agreement. When the subcontractor brought suit against the general contractor to recover unpaid amounts, the contractor cross-complained for overpayment and negligent damage. The subcontractor was a named insured under the contractor’s commercial general liability policy, which contained a cross-suits exclusion. The policy provided that the cross-suits exclusion did not apply to actions to apportion liability among insureds where any insured had been sued for a covered loss. The court concluded that the cross-complaint could not fairly be characterized as an action for indemnity or apportionment; therefore, the trial court correctly determined that the exception to the cross-suits exception was inapplicable. The cross-complaint did not allege that the general contractor was held legally responsible for damages to any third party as a result of the subcontractor’s alleged negligent damage, and it was undisputed that the general contractor voluntarily settled third party claims before any suit was filed. Because the general contractor’s cross-complaint against the subcontractor was not preceded by a third party suit, there was no liability.

Outcome

The court affirmed the trial court’s judgment.

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