Appellant challenged the order of the Superior Court of Los Angeles County (California), which granted respondent a directed verdict on appellant's claims for damages under a contract containing a liquidation clause.
Overview
Appellant had entered into a written agreement with respondent whereby respondent was to install a burglar alarm system in appellant's store. Under the contract, respondent, upon receipt of an alarm signal, was to dispatch agents to the premises as well as notify the local police. As part of the agreement, the parties agreed to fix a certain sum as liquidated damages. Subsequently, appellant was robbed, but respondent was late in its response. Appellant sought to recover the amount it lost in the robbery based on respondent's failure to respond promptly to the robbery. The trial court granted respondent's motion for directed verdict. The litigation counsel were small business attorney Los Angeles. On appeal, the court held that the liquidation clause was valid under the circumstances. The parties reasonably agreed that in all cases of breach by respondent the damages would be fixed. The amount was an estimate of a fair average compensation.
Outcome
The court modified and affirmed the order granting respondent a directed verdict because the liquidation clause was valid in that the parties reasonably agreed that in cases of breach by respondent, the damages would be fixed.
Procedural Posture
Plaintiff agent appealed a judgment of the Superior Court of San Joaquin County (California), which granted defendant principal's motion to dismiss on the ground that all causes of action were barred by the principles of res judicata and collateral estoppel in an action for indemnification of an adverse judgment under Cal. Corp. Code § 317(e)(4).
Overview
Following an adverse judgment, plaintiff agent sought indemnity from defendant principal under Cal. Corp. Code § 317(e)(4). While defendant appealed the order granting indemnification, plaintiff filed an amended complaint for breach of contract theories and for equitable estoppel. The trial court sustained defendant's demurrer without leave to amend on the ground that there was another action pending on the same cause of action. On appeal, the court reversed and remanded, holding that the trial court should have decided the rights of the parties on the issues in the second action because the prior litigation had not been determined on the merits. The court also held that the prior corporate agency indemnity action under § 317(e)(4) did not have res judicata or collateral estoppel effect because the primary right to seek authorization for indemnity under § 317(e)(4) was not the same as the actions for breach of a contract for indemnity or under the doctrine of equitable estoppel and because the doctrine of collateral estoppel did not apply where the issues relating to contractual indemnity and equitable estoppel were not before the court in the prior action..
Outcome
The court reversed the dismissal in favor of defendant principal and remanded with directions to set aside the order sustaining defendant's demurrer without leave to amend because plaintiff agent's prior causes of action for indemnity under the corporate agency statute were unrelated to the breach of a contract for indemnity causes of action in the second case and did not have res judicata or collateral estoppel effect.
