J.B.B. Inv. Partners Ltd. v. Fair
249 Cal. Rptr. 3d 368
Cal. Ct. App. 5th2019Background
- Plaintiffs J.B.B. Investment Partners, Ltd. and Silvester Rabic invested in two Arizona LLCs managed by Bronco RE Corp.; they alleged fraud and negotiated a settlement offer dated July 4, 2013 for $350,000.
- On July 5, 2013 defendant Tom Fair (Bronco founder) repeatedly communicated acceptance of the July 4 offer by email, voicemail and text; plaintiffs later served a formal draft settlement on July 11 which defendants did not sign.
- Plaintiffs moved to enforce the July 4/5 agreement; the trial court granted enforcement and later granted summary adjudication on plaintiffs’ breach-of-contract claim (eighth cause of action), finding a binding settlement on July 5, 2013.
- This court previously reversed a judgment under Code Civ. Proc. § 664.6 solely on the ground that Fair’s typed name did not satisfy that statute’s signature requirement, expressly leaving open other methods to enforce the July 4 offer.
- Defendants appealed the summary adjudication; the appellate court (this opinion) affirmed, rejected defendants’ multiple challenges (mutual assent, uncertainty, statute of frauds, duress/rule 5-100), and imposed sanctions of $44,654.64 against defendants and their attorneys for a frivolous appeal.
- Separately, plaintiffs’ request for broad attorney fees under Civ. Code § 1717 was mostly denied; the court affirmed that denial because the operating agreements’ fee/arbitration clause did not entitle plaintiffs to the court-litigation fees they sought.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of binding settlement on July 5, 2013 | Plaintiffs: Fair objectively accepted the July 4 offer by multiple unambiguous communications; a binding contract formed despite later-drafted formal paperwork | Defendants: Fair’s responses were tentative, conditioned, or intended only as a step toward a formal agreement; filing the complaint terminated the offer | Held: Objective record shows mutual assent and definite terms on July 5; settlement formed and summary adjudication proper |
| Ambiguity/material terms/need for formal writing | Plaintiffs: July 4 offer included clear, specific material terms (10 paragraphs) sufficient for enforcement | Defendants: Material terms were uncertain and additional July 11 terms were material (integration, indemnity, signatures) | Held: Terms were sufficiently certain; subsequent formalization did not defeat an already binding agreement |
| Statute of frauds/real property issue | Plaintiffs: Settlement is not a real-property sale and statute of frauds inapplicable | Defendants: Investments concern real property; alleged agreement falls within statute of frauds | Held: Settlement of claims over LLC investments is not a real-property sale; statute of frauds did not bar enforcement |
| Attorney fees under Civ. Code § 1717/arbitration clause | Plaintiffs: § 1717 mutuality requires fee recovery for litigation, including fees incurred defeating arbitration | Defendants: Operating agreements (which plaintiffs never signed) control fees; fees specified apply to arbitration and arbitrators | Held: § 1717 reciprocity inapplicable because the contracts plaintiffs sought to enforce did not contain an applicable fee provision for court litigation; the operating agreements’ fee language awards fees to prevailing parties in arbitration, not for court work; fee denial affirmed |
Key Cases Cited
- Weddington Prods., Inc. v. Flick, 60 Cal.App.4th 793 (Cal. Ct. App.) (objective manifestations of consent govern contract formation)
- Harris v. Rudin, Richman & Appel, 74 Cal.App.4th 299 (Cal. Ct. App.) (interpretation focuses on objective words, not subjective intent)
- Stewart v. Preston Pipeline Inc., 134 Cal.App.4th 1565 (Cal. Ct. App.) (formalization later does not negate an intended binding agreement)
- Kleveland v. Siegel & Wolensky, LLP, 215 Cal.App.4th 534 (Cal. Ct. App.) (standards and factors for imposing sanctions for frivolous appeals)
- Brown Bark III, L.P. v. Haver, 219 Cal.App.4th 809 (Cal. Ct. App.) (scope of Civ. Code § 1717 reciprocity and when fee provisions may be reciprocal)
- Frog Creek Partners, LLC v. Vance Brown, Inc., 206 Cal.App.4th 515 (Cal. Ct. App.) (defeating a petition to compel arbitration does not automatically yield § 1717 fees for court litigation)