Procedural Posture

Appellant purchaser sought review of a decision by the Superior Court of Los Angeles County (California), which entered a judgment of dismissal in favor of respondents, warranty corporation and its claim manager. Appellant’s action alleged that the vehicle service contract was a contract of insurance under Cal. Ins. Code §22, and that respondents acted in bad faith by denying him benefits under the contract.

Overview

The appellants and respondents through their small business lawyer in California submitted their briefs. Appellant purchaser bought a vehicle and vehicle service contract from a car dealer. The contract specified that respondent warranty corporation was administrator of the contract. Following the denial of his claim for a breakdown, appellant brought an action against the car dealer, its general manager, and respondents, warranty corporation and its claims manager, alleging tortious breach of the contractual covenant of good faith and deceit. The trial court dismissed appellant’s claims against respondents. On appeal, the court held that following the trial court’s proper granting of respondents’ motions in limine, which on the record amounted to the sustaining of an objection to all evidence owing to appellant’s failure to state a cause of action, dismissal was not prejudicial. It held that because the contract was sold by the dealer was incidental to the business of selling automobiles, it was not a contract of insurance under Cal. Ins. Code § 116(c). The court held that appellant was not a third-party beneficiary of the contract between the car dealer and respondents because no express intent to benefit appellant appeared in the contract.

Outcome

The court affirmed the trial court’s judgment, dismissing appellant purchaser’s action against respondents, warranty corporation and its claim manager, for tortious breach of the contractual covenant of good faith and deceit. The vehicle service contract sold to appellant by the car dealer was not a contract of insurance, and appellant was only an incidental beneficiary of the contract between respondent warranty corporation and the car dealer.

Procedural Posture

Appellant purchaser of real estate sought review of judgment from the Superior Court of Los Angeles County, (California) of nonsuit on all its causes of action against respondents sellers, after the court held that appellant did not overcome the defense that it had defaulted on the contract by failing to close escrow within 60 days from the date of the contract.

Overview

Appellant purchaser of real estate sought review of judgment of nonsuit in favor of respondents sellers in a breach of contract action. Appellant contended that respondents had breached the contract for purchase of real estate and respondents alleged that appellant defaulted on the contract by failing to close escrow within 60 days from the date of the contract. The trial court held that appellant did not show a prima facie breach of contract and was not permitted to introduce parol evidence to attempt to show that the 60-day limit meant something other than 60 days. The court affirmed and held that parol evidence was only admissible to prove a meaning to which the contractual language was reasonably susceptible and the contract was not reasonably susceptible to the interpretation proposed by appellant. Nonsuit was proper as to the contract claims, the court held, because appellant failed to introduce sufficient evidence it performed, or was excused from performing, its duty to open escrow.

Outcome

The court affirmed the judgment of nonsuit and held that appellant had not proven a prima facie breach of contract claim and could not overcome the defense that it had breached the contract by filing to close escrow within the 60-day time limit.