SCI California Furneral Services, Inc. v. Five Bridges Foundation
203 Cal. App. 4th 549
Cal. Ct. App.2012Background
- In 1998, SCI purchased Olivet Memorial Park assets and obtained an option to acquire additional cemetery land and an Ornamental Easement; the easement and option were central to disputes with Cypress Abbey and Five Bridges.
- Olivet/SCI closed the asset sale while Cypress Abbey refused to complete the 8.71-acre parcel because of unresolved Ornamental Easement issues; SCI sought specific performance and damages.
- The Cypress Abbey litigation determined the Option Agreement lacked a viable mechanism to set a price for the remaining acreage and that the Ornamental Easement reconveyance was enforceable against Olivet/SCI.
- At trial (2007-2009), the court found Five Bridges breached the APA by failing to convey the Ornamental Easement, and SCI was awarded about $1.7 million plus interest for breach of contract.
- The trial court rejected SCI’s indemnity and unjust enrichment claims in part and limited damages by Civil Code § 3300, factoring in Cypress Abbey’s unique desire to reconvey the easement as a bargaining chip.
- On appeal, SCI seeks reversal of the denial of attorney fees; Five Bridges challenges damages, timeliness, indemnity, and related rulings, while SCI cross-appeals on attorney fees under section 998(d).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper measure of damages for loss of the Ornamental Easement | SCI; easement had bargaining-chip value and unique value to SCI. | Five Bridges; damages should be diminution in value of the dominant estate only, using traditional appraisal rules. | Damages may be based on unique-easement value; court approved broader measure under Civ. Code §3300 and §3355. |
| Was there breach of the APA by Five Bridges in conveying the Ornamental Easement | SCI relied on true conveyance as promised; failure breached the APA. | Five Bridges contends no breach given lack of final agreement and disclosure deficiencies. | Yes, Five Bridges breached by not conveying the Ornamental Easement and by nondisclosure; damages awarded accordingly. |
| Timeliness/validity of damages theories and evidentiary objections | SCI presented value-based damages; Five Bridges’ objections were untimely and insufficient. | Lack of proper objection to employing nontraditional valuation. | Court did not abuse discretion; objections forfeited but damages theory accepted based on §3300 and peculiar-value evidence. |
| Indemnity, defense costs, and related contractual provisions | Indemnity provisions should cover Cypress Abbey defense costs; SCI should recover | Indemnity not properly allocated; costs could be nonsegregated and not fully recoverable. | No damages for indemnity as to SCI in trial court; affirmed in part; remanded on related matters. |
| Attorney fees under Civil Code §1717 and §998(d) | SCI as prevailing contract party is entitled to §1717 fees; §998(d) postoffer fees apply. | Fees improperly denied; §998(d) applies to postoffer costs including attorney fees; contract allows fees for prevailing party. | Reversed in part: §998(d) postoffer attorney fees awarded; §1717 not controlling; remand to determine amount. |
Key Cases Cited
- Harman v. City and County of San Francisco, 7 Cal.3d 150 (1971) (value of condemned appurtenant easements; diminution in market value approach explained)
- Hemmerling v. Tomlev, Inc., 67 Cal.2d 572 (1967) (easement valuation for water rights; diminution in market value principle)
- Tobriner v. County of San Bernardino, 215 Cal.App.3d 1087 (1989) (valuation of easements; context of investment and zoning considerations)
- Logan v. City of Berkeley, 198 Cal.App.2d 581 (1961) (easement valuation principles in certain contexts)
- Scott Co. v. Blount, Inc., 20 Cal.4th 1103 (1999) (postoffer costs under §998; prevailing party analysis)
- Pilimai v. Farmers Ins. Exchange Co., 39 Cal.4th 133 (2006) (section 998(d) and costs; arbitration context; symmetry of costs)
- GHK Associates v. Mayer Group, Inc., 224 Cal.App.3d 856 (1990) (damages calculation flexibly; appropriateness of nontraditional bases)
- Brandon & Tibbs v. George Kevorkian Accountancy Corp., 226 Cal.App.3d 442 (1990) (damages recovery philosophy; reasonable basis and approximation)
- King v. Karpe, 170 Cal.App.2d 344 (1959) (peculiar value under Civ. Code §3355; pre-offer damages grounding)