Commercial Contract / General Business

Plaintiff physical therapy providers filed a class action against defendant health care insurer, alleging that the insurer violated California's antitrust and unfair competition laws (Bus. & Prof. Code, §§ 16720, 17200 et seq.) by engaging in an improper market allocation (through its preferred provider geographic restrictions) and a boycott of plaintiffs’ businesses (through the plan’s exclusive contract with a single physical therapy provider). Primary issue concerned whether the insurer’s conduct in forming efficient-sized contracting units was statutorily exempt from antitrust laws under certain statutes (Bus. & Prof. Code, § 16770, subd. (g); Ins. Code, § 10133.6; Health & Saf. Code, § 1342.6), although its conduct in negotiating alternative rates of payment was subject to antitrust enforcement.

Plaintiff, a long-time franchisee of a fast-food company, was removed as a franchisee. In her suit against the company for fraud, a jury awarded her $ 6.5 million in compensatory damages and $ 10 million in punitive damages. Issues included whether (1) plaintiff proved conspiracy to defraud; (2) her claim was predicated on a breach of contract theory and therefore could not be prosecuted as a tort; (3) the awards for emotional distress damages and punitive damages were invalid, because her claims became part of her bankruptcy estate and she prosecuted the case as an assignee of a corporation which purchased the claims from the bankruptcy trustee; and (4) she was entitled to damages arising from the sale of franchises that purportedly were owned by a corporation of which she was the principal or sole shareholder.

A corporation filed a tax refund suit against the Franchise Tax Board. The corporation had paid all assessments which were due at the time of the suit but had not paid more than $50 million in other proposed (but not final) disputed tax assessments for the tax years at issue. Primary issue involved whether Cal. Const., art. XIII, § 32 (taxpayer must pay a disputed tax before bringing an action in court to adjudicate the validity of that tax) and Pope Estate Co. v. Johnson (1941) 43 Cal. App. 2d 170 (all tax liability issues for a tax year be must generally be litigated in a single action), required the corporation to pay the proposed assessments to maintain its suit.

The California Department of Health Services (DHS) entered a contract with an advertising agency to conduct its state-wide tobacco education media campaign. The agency hired plaintiff media buyer to purchase radio and television time for the tobacco campaign but failed to pay plaintiff for its services. Primary issue involved whether plaintiff could sue DHS for breach of contract on a third-party beneficiary theory.

Plaintiff, a clothing design and wholesale distribution company, sued a vendor company for breach of contract, and also named as defendants various individuals associated with the vendor company. Plaintiff was awarded more than $2 million as liquidated damages. Primary issue was whether the liquidated damages clause in the vendor contract was unreasonable and unenforceable, and whether the individual defendants could be held jointly liable with the vendor company, because they acted as a single enterprise with, or were alter egos of, the vendor company.

A corporation's founder entered into written agreements to give shares to the investor-plaintiffs in return for their investments but died shortly thereafter. His successor in interest then named himself director, issued shares to certain investors (not plaintiffs), and installed a board of directors. Plaintiffs sued to invalidate the election of directors under Corp. Code, § 709, subd. (a). Primary issue was whether, although they did not meet the statutory definition of "shareholder" in Corp. Code, § 185, plaintiffs nonetheless had standing to sue under Corp. Code, § 709, subd. (a).

The developer of a hotel/retail project entered a joint defense agreement with the architect in which the architect agreed to assist in litigation against the developer brought by the general contractor and several subcontractors. The agreement required the developer to execute a release of any claims it might have against the architect at “the final conclusion” of the litigation. Several types of “final conclusion” were listed, but “settlement” was not. After the litigation was settled and dismissed, the owner developer sued the architect for breach of contract, professional negligence, and equitable indemnity. Issues involved (1) whether the release provision required the developer to release the architect in the event the litigation settled; (2) even if the release provision applied in the event of a settlement, was the developer required to release the architect only if there was an arbitration or adjudication to determine the architects’ liability to the developer, and only after the architect paid the amount owed; and (3) whether the developer timely withdrew from the agreement, which terminated any duty to give the release.

Plaintiff company, which provided internet fax services, sued for a refund of a local communications tax. Primary issue was whether the company was immune from taxes under the Internet Tax Freedom Act, as amended in 2007 (47 U.S.C.A § 151).

The operator of a sports and entertainment venue sued a company for breach of contract for failing to pay for luxury suites. Primary issue was whether the individual who signed the contract for the luxury suites was an ostensible agent of the purchasing company.

Plaintiff-purchasers of an unregistered security sued the seller under the Securities Act of 1933 (15 U.S.C. §§ 77a et seq.), but the action was filed after expiration of the one-year statute of limitations. Primary issue was whether the principle of equitable tolling was inapplicable to an action under the Securities Act, given that whether a security is registered is a matter of public record, and Congress included a discovery rule for certain classes of claims but omitted that rule for plaintiffs’ class of claims.

In a dispute among the two principals of a business over allegations of stolen funds, the principals exchanged several letters and a draft settlement agreement that was never formally signed. Primary issue involved whether the exchange of letters constituted an offer and acceptance of the draft settlement agreement.

In resolution of a dispute about a contract to provided dialysis service to California prisons, plaintiff (a business providing administrative and managerial services related to biomedical treatment) agreed to release defendant (a dialysis clinic) from all claims against the clinic in connection with a bid they had made to provide dialysis services to the prison system and in connection with the parties’ contract. Later, plaintiff sued defendant for breach of contract, interference with contract, and interference with prospective economic relationship. Primary issues involved whether plaintiff had effectively rescinded the agreement based on fraud and whether the agreement was unconsummated because defendant never signed it.

Plaintiff contractor sued homeowners for failure to pay for his work, and homeowners countersued for reimbursement of funds already paid. Primary issue was whether the work performed fell outside the scope of plaintiff’s tile setter’s license, such that plaintiff could not recover unpaid sums and homeowners were entitled to reimbursement of funds already paid under Business and Professions Code, § 7031(b)