Appellant venture partners sought review of a judgment from the Superior Court of Los Angeles County (California), which dismissed appellants’ action against respondent corporation for breach of contract and declaratory relief on statute of limitations grounds.
Overview
The litigants were counseled by California class action attorneys in their civil litigation matter. Appellant venture partners filed a breach of contract complaint against respondent corporation that arose out of appellants’ purchase of stock in a leveraged buyout of a company affiliated with respondent. Respondent demurred to appellants’ claim on the ground that it was barred by another state’s three-year statute of limitations, which was made applicable by the contract’s choice-of-law provision. The trial court agreed and sustained the demurrer without leave to amend. The court affirmed, holding that the trial court did not err in construing the choice-of-law provision to require the application of the other state’s statute of limitations. The court held that the choice-of-law provision incorporated the other state’s statute of limitations and that the provision was enforceable. The court found that the chosen state had a substantial relationship to the parties because it was the state of respondent’s incorporation. Additionally, the court found no fundamental state policy against applying the other state’s statute of limitations regardless of the fact that it was shorter than forum state’s statute of limitations.
Outcome
The court affirmed a judgment that dismissed appellant venture partners’ breach of contract action against respondent corporation on statute of limitations grounds. The trial court did not err in construing a choice-of-law provision in the parties’ contract to require application of the other state’s statute of limitations because the provision effectively incorporated the other state’s statute of limitations and the provision was enforceable.
Procedural Posture
Plaintiffs, three individuals who received a direct mail advertisement, appealed an order of the Superior Court of the City and County of San Francisco (California), which sustained defendant advertiser’s demurrer in plaintiffs’ class action suit as to breach of contract counts, and granted summary judgment for defendant on counts of unfair advertising.
Overview
Plaintiffs, three individuals who received direct mail advertisements, filed a class action against defendant advertiser in connection with an offer for a free watch in return for opening an envelope. The trial court sustained defendant’s demurrer as to the breach of contract counts, and granted summary judgment for defendant as to the unfair advertising counts. On appeal, the court affirmed and held that where plaintiffs suffered no damage or loss other than having opened an envelope in the mistaken belief they would get a free watch, the legal principle that “the law disregards trifles” applied, and dismissal was proper. The court stated that the advertisement was technically an offer to enter into a unilateral contract, and found consideration in the act of opening the envelope, which subjected one to defendant’s advertising. However, the doctrine of anticipatory breach did not apply to unilateral contracts so the complaint failed to state a cause of action for breach as to the two plaintiffs who failed to allege notice of performance. Despite the partial technical validity of the action, the judgment was correct based on the de minimis theory.
Outcome
The court affirmed the dismissal of a class action lawsuit against defendant advertiser for breach of contract and unfair advertising on the de minimis theory, where plaintiffs, three individuals who received direct mail advertisements, suffered no loss or damage other than having to open an envelope on the false hope of getting a free watch.
