Cylinder Enterprises, Inc. vs. City of Garden Grove

First cause of action for breach of contract “[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

Plaintiff did not allege sufficient facts to show Defendant breached the agreement. Plaintiff contends that Plaintiff’s addition of paragraph 28 addresses the Court’s ruling on Defendant’s demurrer to the first cause of action as alleged in Plaintiff’s initial complaint. Plaintiff contends section 17.2 is ambiguous as to whether Defendant would pay Plaintiff for all charges incurred at the time of termination.

“Where a written contract is pleaded by attachment to and incorporation in a complaint, and where the complaint fails to allege that the terms of the contract have any special meaning, a court will construe the language of the contract on its face to determine whether, as a matter of law, the contract is reasonably subject to a construction sufficient to sustain a cause of action for breach.” (Davies v. Sallie Mae, Inc. (2008) 168 Cal.App.4th 1086, 1091, citing Hillsman v. Sutter Community Hospitals (1984) 153 Cal.App.3d 743, 749- 750.) If the facts “appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence.” (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447.)

“[A]n ambiguity is said to exist when, in the light of the circumstances surrounding the execution of an instrument, the written language is fairly susceptible of two or more constructions.” (In re Estate of Russell (1968) 69 Cal.2d 200, 211 [internal citations omitted].)

“The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.” (Civ. Code, § 1638.) “The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.” (Civ. Code, § 1641.)

“[W]here an ambiguous contract is the basis of an action, it is proper, if not essential, for a plaintiff to allege its own construction of the agreement. So long as the pleading does not place a clearly erroneous construction upon the provisions of the contract, in passing upon the sufficiency of the complaint, we must accept as correct plaintiff's allegations as to the meaning of the agreement.” (Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239, citing Marina Tenants Assn. v. Deauville Marina Development Co. (1986) 181 Cal.App.3d 122, 128.)

However, “Courts will not adopt a strained or absurd interpretation in order to create an ambiguity where none exists.” (Alameda County Flood Control & Water Conservation Dist. v. Department of Water Resources (2013) 213 Cal.App.4th 1163, 1180, citing Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 807.) “‘In the construction of a statute or instrument, the office of the Judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all.’” (Code Civ. Proc., § 1858; see Civ.Code, § 1641[‘[t]he whole of a contract is to be taken together ...’].)” (Id.)

Plaintiff alleged Defendant breached the agreement by failing to pay the invoices. (FAC, ¶ 26.) As the Court previously noted, although section 17.2 of the agreement states Plaintiff “shall be entitled to payment for services fully and adequately provided hereunder prior to the effective date of the termination,” the section does not indicate from whom Plaintiff is entitled to compensation. (FAC, Exhibit 1, Pages 6-7, Section 17.2 [at pages 17-18 of the PDF].)

In Plaintiff’s FAC, Plaintiff alleges that section 17.2 of the agreement was understood, intended, and agreed to mean that Defendant would pay Plaintiff for storage fees to the date of the agreement’s termination. (FAC, ¶ 28.) Plaintiff alleges section 17.2 is reasonably susceptible to the interpretation that Defendant is obligated to compensate Plaintiff for all services performed prior to the effective date of the termination. (Id.) Plaintiff also alleges that throughout the term of the agreement, Plaintiff consistently charged Defendant for storage charges. (Id.) However, the FAC does not allege Defendant ever paid Plaintiff any storage charges. Plaintiff also alleges the parties’ course of

performance reflects their mutual understanding that storage services were complete only upon authorized release or transfer of the vehicle. (Id.) Plaintiff does not allege any course of conduct or any facts that would support Plaintiff’s interpretation of this section to mean if Defendant terminated the agreement, Defendant would pay for the charges incurred.

As Defendant again points out, the agreement expressly provides Plaintiff shall be compensated by the vehicle owner. (FAC, Exhibit 1, Page 1, Section 3 [Plaintiff “shall be compensated as follows: [Plaintiff] may charge vehicle owners the amount(s) not to exceed those charges approved by the City...”], Page 28, Section 24.2 of Attachment A [It shall be Plaintiff’s “responsibility to collect payment for services it renders under the Agreement from the vehicle owners, and [Defendant] shall not be responsible in any way whatsoever for payment of these charges.”].)

In addition, Section 18.2 of Attachment A provides, “Notwithstanding any other term or condition herein, in responding to any call from the police department, the CONTRACTOR shall have no claim whatsoever against the CITY or any right to recover from the CITY for the cost of any of the services it renders in the performance of the contract. The CONTRACTOR shall look solely and exclusively to the owner of the vehicle towed, impounded, or stored for payment of the services provided by the CONTRACTOR.” (Id., Exhibit 1, Attachment A, Section 18.2.)

Section 18.2 expressly provides that Defendant is not liable for any of the costs associated with Plaintiff’s services. Plaintiff contends this section, as well as section 3 and 24.2 only applies to Plaintiff’s compensation prior to termination. (Opposition, 6:24-25.) However, there is no indication in the language of the agreement that establishes these provisions only apply pre-termination. Plaintiff has not shown any ambiguity as to whether Defendant agreed to pay Plaintiff’s invoices after termination.

Section 17.2 only states Plaintiff is entitled to payment for its services, but Section 3 of the agreement and sections 18.2 and 24.2 of the Attachment to the agreement expressly state Plaintiff should seek payment from the vehicle owners and Defendant is not responsible for payment of the charges Plaintiff seeks in the FAC. Despite Plaintiff’s allegation that the parties had a different understanding, the express terms of the agreement do not support such an understanding, nor does any ambiguity exist.

Accordingly, the demurrer is sustained.

Although Plaintiff requests leave to amend, Plaintiff did not make any showing that Plaintiff is able to properly amend this cause of action to state a cause of action for breach of contract. Accordingly, Plaintiff’s request for leave to amend is denied.

Second cause of action for common counts: account stated “The only essential allegations of a common count are ‘(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.’” (Farmers Insurance Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)

“The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.” (Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600.)

An account stated is an agreement, based on prior transactions between the parties, that the items of an account are true and that the balance struck is due and owing. (Leighton v. Forster (2017) 8 Cal.App.5th 467, 491.) To be an account stated, it must appear that at the time of the statement an indebtedness from one party to the other existed, that a balance was then struck and agreed to be the correct sum owing from the debtor to the creditor,

and that the debtor expressly or impliedly promised to pay to the creditor the amount thus determined to be owing. (Id.)

Plaintiff did not allege sufficient facts to state this cause of action. Plaintiff alleges Plaintiff invoiced amounts to Defendant regarding vehicles Plaintiff towed and stored, and that Defendant accepted the amounts; however, there is no allegation that Defendant acknowledged Defendant was responsible for paying the amount (i.e. that Defendant was the debtor). Plaintiff alleges Defendant agreed to pay the amounts pursuant to the terms of the agreement. (FAC, ¶¶ 37-40.) However, as discussed above, the agreement does not include any express agreement by Defendant to pay.

Rather, the agreement expressly provides Defendant is not responsible for payment for services Plaintiff provides under the agreement. (Id., Exhibit 1, Attachment A, Section 18.2.) In addition, although Plaintiff alleges there is an implied agreement to pay, Plaintiff does not allege facts to support such an implied agreement, especially in light of section 18.2 in the attachment to the agreement. Plaintiff did not allege sufficient facts to show the relationship of a debtor and creditor. Accordingly, the demurrer is sustained.

Although Plaintiff requests leave to amend, Plaintiff did not make any showing that Plaintiff is able to properly amend this cause of action to state a cause of action for account stated. Accordingly, Plaintiff’s request for leave to amend is denied.

In light of this ruling, the Case Management Conference is vacated.

Defendant shall give notice.

107 2024-01444402 1. Motion to Compel Arbitrations 2. Review Hearing Orona vs. Efficient Builders Corp. The unopposed motion by Defendant Solar Mosaic LLC (“Mosaic”) for an order compelling arbitration and staying this action as to Mosaic is granted.

The action as to Mosaic is stayed. (Code Civ. Proc., § 1281.4.)

The Court sets an ADR Review Hearing for July 26, 2027 at 10:00 a.m. in Department C27.

Should Plaintiff appear, Plaintiff should be prepared to address the status of service on Defendant Efficient Builders Corp. Should Plaintiff not appear, the Court sets an Order to Show Cause as to why Defendant Efficient Builders Corp. should not be dismissed for January 4, 2027 at 10:00 a.m. in Department C27. In the event Plaintiff fails to serve Defendant Efficient Builders Corp. by this date, the Court will dismiss the action against such Defendant pursuant to CCP section 583.420(a)(1).

Mosaic shall give notice of this ruling. The clerk is ordered to give notice of the OSC.

108 2025-01469228 1. Motion for Attorney Fees 2. Order to Show Cause re: Dismissal on Settled Case Little vs. Volkswagen The unopposed motion by Plaintiff Evevon Lynette Little (“Plaintiff”) for attorneys’ fees is Group of America, granted. However, the Court denies the request for a multiplier. Additionally, the Court Inc denies the request of $4,000 in anticipated fees for reviewing the opposition, preparing a reply, and attending the hearing. The motion was not opposed.