Plaintiffs appealed an order of the Superior Court of Alameda County (California) granting summary judgment to defendants in a suit by plaintiffs for breach of contract, tortious interference with a business contract, and for other anticompetitive activity in violation of the Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, 16722, 16726.
Overview
Summary judgment was granted to defendants by the district court for reasons unspecified. Plaintiffs appealed. The reviewing court reversed because plaintiffs presented sufficient evidence to create a question of fact as to: whether the nonintegrated contract between defendants and plaintiffs included an implied requirement of good cause for termination based on trade usage and industry custom; whether defendants entered into a combination in restraint of trade adversely affecting industry competition; and whether defendants tortiously interfered with prospective business relations between plaintiffs and third parties. Appellant and respondents had business lawyer draft their briefs and submitted to the court. The court affirmed the grant of summary judgment against a particular plaintiff regarding defendants’ violation of the Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, 16722, 16726, prohibition of exclusive dealing contracts which might have substantially lessened competition. The court held that the anti-trust laws did not prohibit defendants from selecting dealers who displayed loyalty to the selling of defendants’ products.
Outcome
The court reversed the district court’s grant of summary judgment in favor of defendants because several genuine issues of material fact existed regarding plaintiffs’ claims. Summary judgment was affirmed in part as to a particular plaintiff because defendants did not participate in exclusive dealing contracts that substantially lessened competition.
Procedural Posture
Appellant association and appellant trust sought review after the San Francisco Superior Court (California) entered a judgment notwithstanding the verdict or a new trial. Appellants alleged that respondent insurer negligently failed to disclose past dividend calculations for its workers’ compensation policies when appellants agreed to market the policies to its members. Cal. Code Regs. tit. 10, § 2505, Cal. Evid. Code § 669.
Overview
Appellant association and appellant trust filed a lawsuit against respondent insurer alleging negligence based on respondent’s failure to disclose past dividend calculations for its workers’ compensation policies. The trial court entered a judgment notwithstanding the verdict, or a new trial, after a jury verdict. The court affirmed and held that respondent had no duty to disclose pricing information. The court held that an insured person’s initial decision to obtain insurance and the corresponding decision of an insurer to offer coverage remained, at the inception of the contract at least, an arm’s-length transaction to be governed by traditional standards of freedom to contract. The court rejected appellants’ contention that Cal. Code Regs. tit. 10, § 2505, created a duty of care because an agency, the California Insurance Commission, could not independently impose a duty of care if that authority had not been delegated to the agency by the legislature. The court also held that violation of a statute did not lead automatically to negligence liability; Cal. Evid. Code § 669(a) created only a presumption of negligence, which could be rebutted by Cal. Evid. Code § 669(b).
Outcome
The court affirmed the trial court’s judgment notwithstanding the verdict. The court held that respondent insurer had no duty to disclose past dividend calculations for its workers’ compensation policies because respondent did not have a fiduciary relationship with appellant association and appellant trust. The court held that the relationship was governed by traditional standards of freedom to contract.