Judge: Melvin D. Sandvig, Case: 22CHCV00075, Date: 2023-10-31 Tentative Ruling
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Case Number: 22CHCV00075 Hearing Date: October 31, 2023 Dept: F47
Dept. F47
Date: 10/31/23
Case #22CHCV00075
SUMMARY
JUDGMENT/SUMMARY ADJUDICATION
Motion filed on 7/21/23.
MOVING PARTY: Defendant State of California Department of
Forestry and Fire Protection
RESPONDING PARTY: Plaintiff TNT Tanker Services, Inc.
NOTICE: ok
RULING: The request for summary judgment is
granted.
SUMMARY OF FACTS & PROCEDURAL HISTORY
This action arises out of contractual dispute between
Plaintiff TNT Tanker Services, Inc. dba Class 1 Fire (Plaintiff) and Defendant
State of California Department of Forestry and Fire Protection/Cal Fire
(Defendant).
Plaintiff is a California business that provides water
tender services. (Separate Statement
(SS) 4). Defendant is a California
agency dedicated to fire protection and stewardship over 31 million acres of
California’s privately owned wildlands. (SS 5).
To achieve its mission and operations, Defendant enters into standard
supplier equipment rental agreements with numerous suppliers in the State of
California. (SS 6). Plaintiff is one of many equipment suppliers
that provide water tender services to Defendant. (SS 7).
On 4/18/21, Plaintiff entered into an Emergency Equipment
Rental Agreement (EERA) with Defendant for a term of 5/1/21 – 4/30/23. (SS 8). The EERA provides that “[s]ince the equipment
needs of the State and availability of Supplier’s equipment during an emergency
incident cannot be determined in advance, it is mutually agreed that, upon
request of the State, the Supplier shall furnish the equipment listed herein to
the extent the Supplier is willing and able at the time of order.” (SS 9).
The EERA incorporates by reference “The Hired Equipment
Program Supplier Participation Manual [HEPSPM] with the same force and effect
as if it were given in full text” and details the roles and responsibilities of
the parties. (SS 10). The HEPSPM provides that the “Hired Equipment
Program works to obtain those resources which exactly meet the needs of the
Incident Commander at a price that is fair to the Supplier and represents a
prudent expenditure of state taxpayer funds.” (SS 11).
The “manual defines the rules and standards required of Suppliers and
equipment in order to be eligible for program participation” and the “manual
further includes payment rates, instructions to initiate an agreement, and
guidance for what to expect during incident dispatch and assignment.” (SS 12).
The HEPSM provides that “[n]o Supplier is guaranteed any
amount of business upon entering into an EERA with [Defendant].” (SS 13). With regard to operations, the HEPSPM
provides that “[Defendant] uses established internal policy to distribute
assignments for incident fire suppression and support equipment” and that “Cal
Fire Incident Commanders determine what equipment is needed to support an
incident logistically and operationally to accomplish incident objectives;
suppliers are not participants in the process of determining incident equipment
needs.” (SS 14). The HEPSPM also contains a Supplier Code of
Conduct, which provides that the supplier will immediately notify Defendant of
any instances in which the supplier cannot comply with Defendant orders, as
follows:
“4. I will promptly comply with
lawful orders of Department supervision. Immediately notify CAL FIRE of any
instance in which compliance with assignment requirements and/or the Hired
Equipment Program Supplier Participation Manual is not possible.” (SS 15).
The HEPSPM also provides that operators must communicate
the operational limitations of their equipment or their own ability to perform,
as follows:
“Operators are responsible to
recognize the capabilities and limits of the equipment they are operating and
communicate them appropriately to CAL FIRE supervision. Operators should refuse
assignments beyond the mechanical capability of the equipment or their own
ability to perform.” (SS 16).
Additionally, the HEPSPM provides the following when
suppliers do not comply with the program:
“Supervising incident personnel
shall take immediate action to resolve any issues by hired equipment Suppliers
and/or their employees that involve safety, productivity, operational
effectiveness, or are in violation of the Hired Equipment Program Supplier
Participation Manual.
If immediate resolution is not
possible the situation shall be documented in writing and sent to the Statewide
Hired Equipment Coordinator, Unit Chief, and Unit Hired Equipment Coordinator
for the Unit that generated EERA. The Incident Commander may release hired
equipment from the incident for non-compliance issues. In this case, no payment
shall be issued for return to point of hire.” (SS 17).
The HEPSPM further sets forth instances when suppliers
may be bypassed for assignment and the conditions when a supplier may be
released from the scene, as follows:
“Equipment does not meet the type
requirements of the request. If, after the time of order, CAL FIRE is advised
by the Supplier/operator that the hired equipment will not be able to meet, or
if equipment does not arrive at the incident by, the required date and time,
the resource can be released and replaced by a resource that can meet the
requirement. If a resource which has been released for this reason arrives at
the reporting location and there is an operational need, the resource may be
retained at the discretion of the Incident Commander.
Equipment. Upon arrival at an
incident, or as soon as possible thereafter, incident personnel will inspect
each piece of equipment to ensure that the vehicle and operator meet all
requirements for complement, capacity, and capability, and that the vehicle and
operator are in a condition to work safely.” (SS 18).
The “Dixie” fire was the largest single wildfire in
California recorded history, spanning several counties. (SS 19).
The fire, which burned approximately 963,276 acres, began in the Feather
River Canyon near Cresta Dam on 7/13/21 and was contained on 10/25/21. (SS 19).
On 8/5/21, Defendant called Plaintiff to service. (SS 20).
Upon reaching the staging site, Defendant requested Plaintiff to fill
its 2019 Kenworth Water Tanker with “Phos-Chek,” a fire retardant material, in
order to spray the various roadways. (SS
21). Plaintiff’s representative objected
to the request on the grounds that this was outside the scope of services
contracted and beyond the mechanical capability of the equipment and the
driver’s own ability to perform. (SS 22).
Plaintiff believed that the use of
Phos-Chek was incompatible with the use for which the equipment was intended,
could damage the equipment, and was prohibited under the manufacturer’s
warranty. (SS 23). Plaintiff further objected on the grounds that
it was not trained in the handling and use of Phos-Chek or any other fire
retardant material. (SS 24). Once Plaintiff objected to Defendant’s request,
the Incident Commander released Plaintiff from the site. (SS 25). Plaintiff was paid for the day of operation. (SS 26).
Plaintiff contends that Defendant breached the contract
by: (1) assigning Plaintiff tasks outside the scope of water tender services
contracted for, (2) ordering Plaintiff to misuse its equipment in violation of
clear warnings, which would subject the equipment to significant damage, and
void manufacturer’s warranty, among other things, and (3) terminating the Dixie
Fire Contract without cause before the end of the Dixie Fire, releasing the
2019 Kenworth Water Tender and ordering Plaintiff to return the equipment and
operator to storage facility in Castaic, California, thereby preventing
Plaintiff from completing performance under the contract to meet Defendant’s water
tender needs through the duration of the Dixie fire. (SS 27).
Plaintiff also contends that Defendant breached its
implied covenant of good faith and fair dealing under the Dixie Fire Contract
by terminating the Dixie Fire Contract without cause, releasing Plaintiff’s
equipment and ordering Plaintiff to return the equipment and operator without
cause, thereby preventing Plaintiff Fire from performing water tender services
under the contract for the duration of the Dixie fire. (SS 28).
Plaintiff alleges that such conduct was in bad faith and in retaliation
for Plaintiff’s justified refusal (1) to follow Defendant’s improper directive
to perform work outside the scope of its contracted water tender services and
misuse its equipment, and (2) to accept tasks that the equipment was not
designed for and the operator was not trained for, among other things. (SS 29).
Therefore, on 1/31/22, Plaintiff filed this action
against Defendant for: (1) breach of contract and (2) breach of covenant of
good faith and fair dealing. On 7/21/23,
Defendant filed and served the instant motion seeking an order granting summary
judgment in favor of Defendant and against Plaintiff on Plaintiff’s complaint
for breach of contract and breach of the implied warranty/covenant of good
faith and fair dealing. Alternatively,
Defendant seeks summary adjudication of each cause of action in Plaintiff’s
complaint. Plaintiff has opposed the
motion and Defendant has filed a reply to the opposition.
ANALYSIS
Plaintiff’s Request for Judicial Notice is denied. (See below - Defendant’s objections to
the request are sustained).
Defendant’s objection (no.1) to the entirety of the
declaration of Douglas J. Lannon is sustained.
Based on the sustaining of
Defendant’s objection to the entire Lannon declaration, Defendant’s objections
(nos. 2-5) to specific portions of the declaration are moot.
Defendant’s objection (no.6) to the declaration of Craig
Taraello is sustained.
Defendant’s objections (nos. 7 and 8) to Plaintiff’s
Request for Judicial Notice are sustained.
A defendant may move for summary judgment on the ground
that the action has no merit. CCP
437c(a)(1). A cause of action has no
merit if one or more elements of the cause of action cannot be separately
established or a defendant establishes an affirmative defense to the cause of
action. CCP 437c(o). A defendant has met its burden of
establishing a cause of action has not merit if the
defendant establishes that that one or more elements of the cause of action,
even if not separately pleaded, cannot be established, or that there is a
complete defense to the cause of
action. CCP 437c(p)(2). Once a defendant has met that initial burden,
the burden shifts to the plaintiff to show that a triable issue of one or more
material facts exists as to the cause
of action or a defense thereto. Id. The plaintiff cannot meet its burden by
relying on the allegations or denials of its pleadings but rather must set
forth specific facts showing that a triable issue of material fact exists as
to the cause of action or a defense
thereto.
To prevail on a breach of contract cause of action, a
plaintiff must prove: (1) the existence of a contract between plaintiff and
defendant, (2) plaintiff’s performance or excuse for nonperformance of the
contract, (3) defendant’s breach and (4) resulting damage to plaintiff. Richman (2014) 224 CA4th 1182,
1186. A covenant of good faith and fair
dealing is implied in every contract. Kransco
(2000) 23 C4th 390, 400; CalFarm Ins. Co. (2005) 131 CA4th 273, 285-286. The implied covenant does not impose substantive
terms and conditions beyond those to which the contracting parties agreed. Avidity Partners, LLC (2013) 221 CA4th 1180, 1203-1204. Generally, courts
will enforce the breach of a contract only through contract law, except when
the actions that constitute the breach violate a social policy that merits the
imposition of tort remedies. Robinson
Helicopter Co., Inc. (2004) 34 C4th 979, 992.
Here, Plaintiff and Defendant entered an executory
contract whereby Plaintiff was to provide services at Defendant’s request. (SS 8).
Plaintiff’s acceptance of Defendant’s assignment was a condition to
Defendant’s performance under the contract.
See JMR Construction Corp. (2015) 243 CA4th 571, 593;
Civil Code 1437, 1582. Here, Plaintiff’s
refusal, justifiable or not, of Defendant’s assignment to fill Plaintiff’s
water tanker with fire retardant excused Defendant’s further performance. See Habitat Trust for Wildlife,
Inc. (2009) 175 CA4th 1306, 1335; Britschgi (1953) 41 C2d 138, 144; Colaco
(2018) 25 CA5th 1172, 1182-1183. Once
Plaintiff refused the assignment, each parties’ obligations to perform were
terminated for the assignment and Plaintiff was paid for its day on site. (SS 26).
Plaintiff points to no contract term which required
Defendant to reassign Plaintiff to another location and/or use its services for
the duration of the Dixie Fire. To the
contrary, the contract specifically does not require Defendant to use
Plaintiff’s services for any specific amount of time and provides that
Plaintiff is not guaranteed any sum of business as a result of being
dispatched. (SS 9, 11, 13). The contract specifically provides that
suppliers, such as Plaintiff, do not participate in the process of determining
incident equipment needs. (SS 14). The contract also sets forth what is to occur
if a supplier cannot perform which is what occurred here. (SS 15-16).
As such, the expert opinion of Douglas J. Lannon offered by Plaintiff to
justify its refusal to accept the assignment is irrelevant to the facts of this
case where Defendant’s obligation to further perform under the contract was
excused once Plaintiff refused the specific assignment.
Plaintiff’s
refusal to accept the assignment also constitutes a failure of
consideration which excused Defendant’s performance. A failure to perform constitutes a failure of
consideration which excuses the performance of the other party. Bliss (1947) 30 C2d 240, 248-249;
Civil Code 1689(b)(4).
In other words, to the extent Plaintiff’s dispatch to the
site created an obligation on the part of Defendant, such obligation was met
when Plaintiff was paid for the day of operation after being released from the
incident. (SS 25-26). Otherwise, pursuant to the terms of the
contract, once Plaintiff refused the assignment (i.e., failed to perform),
Defendant had no obligation under the contract to reassign Plaintiff, and did
not breach same. (SS 13-19). Therefore, Plaintiff’s breach of contract
cause of action fails.
A breach of the covenant of good faith and fair dealing
implied in a contract which relies on the same acts and seeks the same damages
as a breach of contract claim may be disregarded as superfluous. See Careau & Co. (1990) 222
CA3d 1371, 1395. As noted above, in
order to recover in tort for a breach of contract, the breach must violate some
social policy such as fraud or a party intentionally breaches intending or
knowing that such conduct will cause severe, unmitigable harm in the form of
mental anguish, personal hardship, or substantial consequential damages. See Erlich (1999) 21 C4th 543,
553-554; Robinson Helicopter Co., Inc., supra.
Here, Plaintiff’s breach of the implied covenant of good
faith and fair dealing cause of action is essentially the same as its breach of
contract claim. (SS 26-29). As set forth above, the evidence shows that
Defendant’s further performance under the contract was excused (i.e., Defendant
did not breach the contract). Even if Defendant’s performance was not
excused or could be deemed a breach of the contract, Plaintiff has not shown
that Defendant’s conduct deviated from socially useful business practices such
that imposing tort liability would aid rather than discourage commerce. See Erlich, supra at
554. As such, the breach of implied
covenant of good faith and fair dealing cause of action fails.
CONCLUSION
Summary judgment in favor of Defendant and against
Plaintiff on the causes of action in Plaintiff’s complaint is granted.