Hood v. Superior Court, B085213

• Decision Date: 22 March 1995
• Docket Number: No. B085213,B085213
• Citation: 33 Cal.App.4th 319,39 Cal.Rptr.2d 296
• Court: California Court of Appeals
• Parties: John HOOD, et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent, UNITED CHAMBERS ADMINISTRATORS, INC., Real Party in Interest.

Page 296

39 Cal.Rptr.2d 296

33 Cal.App.4th 319

John HOOD, et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent UNITED CHAMBERS ADMINISTRATORS, INC., Real Party in Interest.

No. B085213.

Court of Appeal, Second District, Division 4, California.

March 22, 1995.

Buxbaum & Chakmak, John Chakmak, Newport Beach, Terrence Mitchell Leve, Sr. Irvine, Daniels, Baratta & Fine, Mary Hulett and Mark A. Vega, Los Angeles, for petitioners.

No appearance for Respondent.

Dewey Ballantine, David S. McLeod, Jeffrey R. Witham, John P. Flynn and Patrick S. Schoenburg, Los Angeles, for Real Party in Interest.

EPSTEIN, Acting Presiding Justice.

May a party select issues (other than duty and punitive damages) implicated in one or more causes of action in its complaint or cross-complaint, amend that pleading to add a cause of action for declaratory relief as to those issues, and then obtain a summary adjudication of the declaratory relief cause of action? We answer that it cannot, for, if it could, the result would fully subvert the restrictions of Code of Civil Procedure section 437c, subdivision (f)(1). ¹ Since the order granting summary adjudication in the case before us was made in precisely this situation, we shall grant the petition for a writ of mandate directing that it be set aside.

FACTUAL AND PROCEDURAL SUMMARY

This case presents a fairly simple issue enveloped in a complicated factual context. The summary that follows is limited to facts pertinent to our discussion.

John A. Hood and Agoura Hills Insurance Services, Inc., (Hood) were insurance agents for United Chambers Administrators, Inc. (UCA). Mr. Hood also served as an assistant territorial manager for UCA. UCA marketed group health insurance policies to members of chambers of commerce. A non-competition clause in the agreement between Hood and UCA, the Associate Territorial Manager (ATM) agreement, prohibited Hood from marketing policies issued by other companies to chamber of commerce members. A termination provision in that agreement empowered both UCA and Hood to terminate the agreement upon 30 days notice. It also allowed UCA to immediately terminate the ATM agreement for violation of the non-competition clause.

In July 1992, UCA learned that Hood had begun marketing a chamber-sponsored insurance plan called the Quorum Chamber Classic Plan. Based on the non-competition and termination clauses, UCA terminated Hood's services.

UCA brought this suit for damages and injunctive relief alleging, among other things, that Hood breached the non-competition clause in the ATM agreement by marketing the Quorum Chamber Classic Plan. Hood cross-complained seeking injunctive relief and asserting breach of contract and sundry torts inflicted by UCA. Hood's second amended cross-complaint disputed UCA's right to terminate the contract and alleged that UCA failed to pay commissions and service fees. It also alleged that UCA fraudulently induced Hood to enter the ATM agreement by leading Hood to believe the non-competition provision would not be enforced.

In December 1993, UCA filed a motion for summary adjudication with respect to the Hood cross-complaint. The trial court denied this motion because it failed to completely dispose of any of the causes of action in the cross-complaint, as required by section 437c, subdivision (f). Following that, UCA amended its complaint by adding a new cause of action for declaratory relief. It sought a determination of its rights under the termination clause. Specifically, the declaratory relief cause of action sought determination that (1) Hood's activities in connection with the Quorum Chamber Classic Plan violated the non-competition clause, (2) the termination provision of the ATM agreement entitled UCA to immediately end the agreement, and (3) it was within its rights in doing so. Hood demurred to the amended complaint, but its demurrer was overruled. When the amended complaint was at issue, after Hood filed its answer and affirmative defenses, UCA moved for summary adjudication of the declaratory relief cause of action. This time its motion was granted. The trial court concluded UCA's termination of the ATM agreement "was effective and within its rights" and that Hood's attempt "to create triable issues based on a waiver theory [was] unavailing." The Hood parties petitioned for mandate and we issued an alternative writ.

DISCUSSION

Petitioners contend UCA's addition of a declaratory relief claim to assert issues disputed in the underlying action is insufficient to overcome the provisions in section 437c, subdivision (f). We agree. We limit our discussion to the procedural arguments and decline to address petitioners' substantive arguments relating to the competitiveness of the Quorum Chamber Classic Plan and the asserted unconscionability of the ATM agreement.

The policy underlying motions for summary judgment and summary adjudication of issues is to " 'promote and protect the administration of justice, and to expedite litigation by the elimination of needless trials.' " (Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848, 1854, 16 Cal.Rptr.2d 458, quoting Wiler v. Firestone Tire & Rubber Co. (1979) 95 Cal.App.3d 621, 625, 157 Cal.Rptr. 248.) The summary judgment statute was amended in 1990 to restrict the summary adjudication remedy to motions that would adjudicate an entire cause of action or affirmative defense, or the issues of duty or punitive damages. Section 437c, subdivision (f)(1) (as amended in 1993) provides: "A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if that party contends that the cause of action has no merit or that there is no affirmative defense thereto, or that there is no merit to an affirmative defense as to any cause of action, or both, or that there is no merit to a claim...