2:20-cv-05155
C.D. Cal.Jul 12, 2022Background
- Otis Elevator contracted with JCM Builders (Customer) on Nov. 12, 2018 to furnish and install an Otis hydraulic elevator at property owned by Cherine and Jill Medawar; Medawar signed contract as JCM’s authorized representative and also signed in an owner capacity.
- JCM (a licensed contractor wholly owned by the Medawars) paid Otis invoices; many invoices and change orders were addressed to Medawar personally rather than to JCM.
- Elevator equipment arrived Oct. 2019; Otis installed on Jan. 8, 2020 but did not perform adjustment or schedule final State inspection because required third‑party work (permanent power, machine‑room phone, ventilation) was incomplete.
- Otis performed an overtime adjustment on Feb. 22, 2020 after a signed change order; a machine‑room phone was not working until Jan. 14, 2021; final State inspection occurred Jan. 29, 2021 and the elevator passed.
- Plaintiffs (the Medawars) sued Otis for breach of contract alleging unreasonable delay and seeking damages (including lost rental profits); Otis moved for summary judgment (or partial SJ) arguing lack of standing, no breach, and that the contract bars consequential/special damages.
- Court: granted judicial notice of JCM license; denied SJ on standing and on breach because genuine factual disputes (agency and what is a ‘reasonable time’) exist; granted partial SJ that the contract bars consequential, special, and indirect damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/Who may sue on the contract | Medawar(s) contend JCM acted as their agent or that Medawars were disclosed principals so they have standing (or JCM can be substituted) | Otis: contract was with JCM only; Medawars (not party) lack standing to enforce the contract | Denied SJ — existence/extent of agency is a factual dispute for the jury; standing not resolved on SJ |
| Breach — timely performance (reasonable time) | Medawars: Otis failed to schedule/complete final inspection within a reasonable time after Jan 2020 | Otis: performance was hindered by plaintiffs’ failure to provide permanent power / phone; Otis completed work and scheduled inspection after conditions cured | Denied SJ — "reasonable time" is a question of fact; genuine dispute precludes summary judgment |
| Damages — recovery of lost profits/consequential damages | Medawars: seek lost rental profits and other consequential damages from delay | Otis: contract contains an express exclusion barring special, indirect, and consequential damages (including loss of profits) | Granted partial SJ — the contract’s limitation unambiguously excludes special/consequential/indirect damages; lost rental profits are special/consequential as a matter of law |
| Judicial notice of JCM license | Medawars did not oppose | Otis requested judicial notice of state contractor license record | Granted — public record of state licensing may be judicially noticed |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (sets standard for genuine factual disputes on summary judgment)
- Celotex Corp. v. Catrett, 477 U.S. 317 (movant’s summary judgment burden and shifting burden to nonmoving party)
- C.A.R. Transp. Brokerage Co. v. Darden Rest., 213 F.3d 474 (existence/extent of agency is a question of fact, not for SJ when multiple inferences possible)
- Lee v. City of Los Angeles, 250 F.3d 668 (limitations on judicial notice of disputed facts in public records)
- Disabled Rights Action Comm. v. Las Vegas Events, 375 F.3d 861 (courts may judicially notice records of state agencies)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing burden at successive litigation stages; evidentiary showing at summary judgment)
- Lewis Jorge Constr. Mgmt., Inc. v. Pomona Unified Sch. Dist., 102 P.3d 257 (under California law, lost profits are typically special/consequential damages unless they flow in the ordinary course of events)