Opinion
C080175
07-11-2017
HUMAN POTENTIAL CONSULTANTS, LLC, Plaintiff and Appellant, v. DEPARTMENT OF CORRECTIONS AND REHABILITATION, Defendant and Respondent.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 34201300143417CUBCGDS)
Plaintiff Human Potential Consultants, LLC (HPC) appeals from the trial court's entry of judgment in favor of defendant Department of Corrections and Rehabilitation (Corrections) after the trial court granted summary judgment in favor of Corrections on HPC's complaint for breach of contract and denied HPC's cross motion. HPC argues the trial court's rulings were in error because Corrections was required to pay certain costs after it terminated the parties' agreement. With respect to its own motion for summary judgment, HPC has waived any challenge to the trial court's conclusion that HPC failed to meet its initial burden of proof. With respect to Corrections' motion for summary judgment, we agree with the trial court that, post-termination, Corrections was not required to pay the disputed costs. Accordingly, we affirm the judgment.
HPC noticed an appeal from the orders granting Corrections' motion and denying HPC's motion. Neither order is an appealable order. (Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 343; Levy v. Skywalker Sound (2003) 108 Cal.App.4th 753, 761, fn. 7; see Code Civ. Proc., § 904.1.) Rather, the appeal is from the judgment entered on the basis of the order granting summary judgment. (Levy v. Skywalker Sound, supra, at p. 761, fn. 7.) And an order denying summary judgment is an interlocutory order that may be reviewed on appeal from a judgment. (See Code Civ. Proc., § 906 ["Upon an appeal pursuant to Section 904.1 . . . , the reviewing court may review . . . any intermediate ruling, proceeding, order or decision which involves the merits or necessarily affects the judgment or order appealed from or which substantially affects the rights of a party"].)
I. BACKGROUND
A. Factual Background
We begin with a few words regarding the record. It is the appellant's burden to provide a record adequate to assess error. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140-1141.) HPC has proceeded with an appendix and without a reporter's transcript. While some or all of the evidence and statements of undisputed facts (and responses thereto) submitted by the parties regarding their motions for summary judgment are in the record on appeal, none of the moving papers are. Additionally, the trial court sustained several objections to the evidence HPC submitted in support of its motion for summary judgment, but we do not know what those objections were or to what evidence they pertain. Nonetheless, as we discuss in more detail below, HPC has waived any challenge to the order denying its motion for summary judgment by failing to dispute a dispositive aspect of the trial court's ruling. Thus, we will limit our recitation of the relevant facts to the undisputed facts at issue in Corrections' motion for summary judgment.
On April 1, 2010, Corrections and HPC entered into a contract under which HPC agreed to provide Corrections services to assist parolees with reintegration into their communities upon release from prison. The services were to be provided at a specified location, and it is undisputed that HPC leased this facility. The contract also explained that "a month-to-month lease is acceptable at the time of bid evaluation; however, the successful bidder must obtain a lease for the entire duration of the contract."
The trial court noted this fact in its order granting Corrections' motion for summary judgment and it appears to be undisputed, though it was apparently not formally submitted as an undisputed fact regarding this motion.
The agreement provided: "For services satisfactorily rendered, and upon receipt and approval of contractor's invoices, [Corrections] agree[d] to compensate [HPC] in accordance with Exhibit B-1, Bid Proposal and the rates specified herein on Exhibit B-2 through B-2.5, Rate Sheet, at the time of contract award which are attached hereto and made a part of this Agreement." Exhibit B-2.1 of the contract was labeled a budget proposal for April 1, 2010, through June 30, 2010. Exhibit B-2.2 of the contract was labeled a budget proposal for the fiscal year from July 1, 2010, through June 30, 2011. Exhibits B-2.3 and B-2.4 of the contract were labeled budget proposals for the fiscal years ending June 30, 2012, and June 30, 2013, respectively. The contract required HPC to "ensure that all costs are considered when developing a budget for a competitive bid process." The parties agree that the contract provided for reimbursement of "actual and allowable costs." Further, it provided: "Allowable costs for a contract shall be limited to those expenditures which are: (1) in conformance with the approved contract budget and have specific prior approval when required; and (2) for goods and services necessary to the project's operation at the time the costs are incurred. Any expenses not meeting these criteria may be disallowed."
Corrections had the right to terminate the agreement with 30 days notice to HPC. In May 2011, Corrections exercised this right, and the contract was terminated as of June 30, 2011. On July 29, 2011, HPC submitted an invoice to Corrections requesting reimbursement of $110,297.22: $105,437.50 for "Facility/Lease Rent," (2) $945.74 for "Utilities - ADT," and (3) $3,913.98 for "Non-Expendable - Copier/Leaf." The invoice stated, "In accordance with the above-referenced contract, payment is requested for satisfactory services provided[.] [¶] Close out Invoice July 1, 2011[,] to June 30, 2013." Corrections has not paid any portion of these claimed costs. B. Procedural Background
On May 21, 2015, the trial court heard oral argument on the parties' motions for summary judgment. After argument, the court granted Corrections' motion and denied HPC's motion. The court explained, in pertinent part:
"[HPC] acknowledges that the costs were for the lease of the premises and copier after the termination date. [Citations.] [Corrections] is not contractually obligated to pay them as there was no approved contract budget applicable after the termination date, and defendant is only required to reimburse plaintiff for costs in conformance with the approved budget. [Citation.]
"[Corrections] did not have an 'accrued' obligation prior to June 30, 2011[,] to reimburse [HPC] for termination costs, because [HPC] did not submit its invoice until after the contract was terminated and the costs were not due to be paid to the third parties until after the contract was terminated. The termination costs were not for goods or services necessary to the project's operation at the time those costs were incurred, as the project was no longer in operation at that time.
"Any hardship to [HPC] is not the fault of [Corrections], as [HPC] should have accounted for the contract terms in its negotiations with third parties and in developing its budget proposal, as [HPC] knew that [Corrections] had the right to terminate the contract.
"The Court finds that the contract unambiguously provides for the right of termination, and [Corrections] properly terminated the contract. As the costs were all for services no longer necessary to the project, which had ceased, and not covered by a budget, which was no longer in effect, the Court finds that pursuant to the contract, [Corrections] had no obligation to pay [HPC] for post termination costs." (Emphasis omitted.)
In the order denying HPC's motion for summary judgment, the trial court added that HPC "ha[d] failed to establish by admissible evidence that it actually incurred damages from the alleged breach, thus failing to meet its initial burden of proof on summary judgment."
The trial court entered judgment in favor of Corrections accordingly. HPC timely appealed.
II. DISCUSSION
A. Standard of Review
A motion for summary judgment should be granted where there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)
A plaintiff moving for summary judgment "bears the burden of persuasion that 'each element of' the 'cause of action' in question has been 'proved,' and hence that 'there is no defense' thereto." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; see also Code Civ. Proc., § 437c, subd. (p)(1).) A defendant moving for summary judgment "bears the burden of persuasion that 'one or more elements of' the 'cause of action' in question 'cannot be established,' or that 'there is a complete defense' thereto." (Aguilar v. Atlantic Richfield Co., supra, at p. 850; see also Code Civ. Proc., § 437c, subd. (p)(2).) Whichever party is the moving party, it "bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact." (Aguilar v. Atlantic Richfield Co., supra, at p. 850.) Once the moving party meets its initial burden, the burden shifts to the opposing party to demonstrate the existence of a triable issue of material fact. (Ibid.)
"Although we independently assess the grant of summary judgment, our inquiry is subject to two constraints. Under the summary judgment statute, we examine the evidence submitted in connection with the summary judgment motion, with the exception of evidence to which objections have been appropriately sustained. [Citations.] . . . [¶] Furthermore, our review is governed by a fundamental principle of appellate procedure, namely, that ' "[a] judgment or order of the lower court is presumed correct," ' and thus, ' "error must be affirmatively shown." ' [Citations.] Under this principle, [the appellant] bear[s] the burden of establishing error on appeal, even though [the respondent] had the burden of proving its right to summary judgment before the trial court. [Citation.] For this reason, our review is limited to contentions adequately raised in the [appellant]'s briefs." (Paslay v. State Farm General Ins. Co. (2016) 248 Cal.App.4th 639, 644-645.) B. HPC's Motion for Summary Judgment
As set forth above, the trial court denied HPC's motion for summary judgment in part because it concluded HPC "has failed to establish by admissible evidence that it actually incurred damages from the alleged breach, thus failing to meet its initial burden of proof on summary judgment." HPC has forfeited any claim that this conclusion was erroneous by failing to raise it. (See Jones v. Superior Court (1994) 26 Cal.App.4th 92, 99 ["Issues do not have a life of their own: if they are not raised or supported by argument or citation to authority, we consider the issues waived"].) In its reply brief, HPC argues "[o]n remand, [Corrections] may try to dispute the quantum of HPC's damages, but that issue was not raised on summary judgment." By conflating the motions before the trial court, HPC has disregarded the pivotal fact that, with respect to its own motion, it had the burden to show "that 'each element of' the 'cause of action' in question has been 'proved.' " (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850; see also Code Civ. Proc., § 437c, subd. (p)(1).) Further, a plaintiff's resulting damages are one of the elements of a cause of action for breach of contract. (Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 921.) Because HPC has waived any challenge to the trial court's determination that it did not meet its burden of proof in this respect, HPC can establish no error regarding the trial court's decision to deny its motion for summary judgment. Moreover, even if it had raised such a challenge, HPC has not presented a record adequate for us to discern what evidence was excluded based on Corrections' objections. Because HPC has forfeited any claim of error with respect to the trial court's denial of HPC's motion for summary judgment, we turn to the trial court's decision to grant summary judgment in favor of Corrections. C. Corrections' Motion for Summary Judgment
As the trial court explained, the general rule is " '[w]here under the contract a party may terminate it at his option, he is not liable after termination for further transactions thereunder, but obligations which have already accrued are not affected. Stipulations in the contract as to the rights of the parties on termination will ordinarily be enforced according to their terms.' " (Merrill v. Continental Assurance Co. (1962) 200 Cal.App.2d 663, 670 (Merrill).) On appeal, HPC argues "the court never analyzed whether [Corrections'] obligation to pay HPC accrued before [c]ontract termination by virtue of HPC performing the [c]ontract obligation to secure the lease for the entire [c]ontract duration and to contract security services and a copier necessary to perform [c]ontract obligations."
As a threshold matter, HPC offers no citation for its assertion that it was contractually obligated to contract for security services and a copier. The appellant must "[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears." (Cal. Rules of Court, rule 8.204(a)(1)(C).) "It is not the task of the reviewing court to search the record for evidence that supports the party's statement; it is for the party to cite the court to those references. Upon the party's failure to do so, the appellate court need not consider or may disregard the matter." (Regents of University of California v. Sheily (2004) 122 Cal.App.4th 824, 826, fn. 1.) Moreover, requiring a contractor to do something is not the same as agreeing to pay for it having done so. The relevant inquiry is not whether HPC performed on some contractual obligation to secure a lease, but whether and when Corrections was obligated under the contract to reimburse HPC for the claimed costs. HPC's brief similarly conflates the question of when HPC incurred costs with when Corrections' obligation to pay those costs would have accrued.
"Incurred" and "accrued" are different words. Thus, when HPC incurred a claimed cost (which is relevant to applying the contractual definition of allowable costs) is not necessarily the same as when (or if) Corrections accrued the obligation to pay for it under Merrill. "To 'incur,' one must 'suffer or bring on oneself (a liability or expense).' " (Hall v. U.S. (2012) 566 U.S. 506, 511-512 ; see also Pacific Shores Property Owners Assn. v. Department of Fish & Wildlife (2016) 244 Cal.App.4th 12, 62 ["Incur means 'to become liable or subject to: bring down upon oneself' "].) "Accrued" generally means " 'to accumulate over time.' " (McCarther v. Pacific Telesis Group (2010) 48 Cal.4th 104, 113.) Significantly, "in some legal contexts, the term 'accrue' means to 'come into existence as an enforceable claim or right; to arise.' " (Id. at p. 114; see Black's Law Dict. (10th ed. 2014) p. 25, col. 2 ["To come into existence as an enforceable claim or right; to arise"].) It is this latter meaning of "accrued" that is employed in Merrill. (See Merrill, supra, 200 Cal.App.2d at p. 670.) Therefore we must ask when HPC could have enforced its right to payment for the claimed costs against Corrections.
HPC argues Corrections' obligation to pay HPC "accrued by the time of Contract termination." HPC's exact theory regarding when and how any obligation on the part of Corrections accrued is unclear. HPC explains that its "position is not that all contractual obligations accrue when a contract is formed. For example, if [Corrections] had not required HPC to secure the lease for the entire Contract duration, then [Corrections] would not necessarily be liable for the entire lease term. Similarly, HPC's invoice includes the comparatively minor costs of terminating security services and the copier lease, which were not for the entire Contract duration. [Citation.] HPC's position is that [Corrections'] obligation to pay HPC accrued when and to the extent that HPC incurred the obligation in performance, limited (of course) to the approved budgeted amount. That obligation had accrued . . . prior to Contract termination." HPC's admission that it seeks "costs of terminating security services and the copier lease" seemingly defeats any assertion that these costs were budgeted because it is implausible that a proposed budget assumed early termination costs. But, as set forth above, the lack of citation to the evidence forfeited HPC's claims relating to security services and a copier. (Regents of University of California v. Sheily, supra, 122 Cal.App.4th at p. 826, fn. 1.) Nonetheless, HPC's arguments defy the requirements set forth in the contract.
The contract limited allowable costs to those that were: "(1) in conformance with the approved contract budget and have specific prior approval when required; and (2) for goods and services necessary to the project's operation at the time the costs are incurred." We agree with the trial court's conclusion that the claimed costs were not in conformance with an approved budget. HPC refers us generally to the proposed budgets that were "made a part of" the agreement, but Corrections had the right to terminate the agreement and it did so. Therefore, there is no evidence of any approved budget corresponding to the claimed costs. HPC argues without any support that "the Contract obligated [Corrections] to compensate HPC in accordance with the budgets in place at the time the obligation was incurred, which was prior to Contract termination." We disagree. The requirement that allowable costs be limited to those in conformance with an approved budget makes no reference to when or how any obligation on the part of HPC was incurred. Corrections was simply not required to pay the disputed costs without an approved budget.
Accordingly, we need not address whether the claimed costs were "for goods and services necessary to the project's operation at the time the costs are incurred."
While it is possible that the acceptance of the bid was intended to operate as the approval of these proposed budgets, the parties do not cite us to any evidence indicating this was so. --------
Further, even if there was an approved budget, Corrections' obligation did not accrue prior to termination. (See Merrill, supra, 200 Cal.App.2d at p. 670.) The contract provided that Corrections agreed to reimburse HPC its actual and allowable costs "[f]or services satisfactorily rendered" in accordance with the attached rates "upon receipt and approval of [HPC]'s invoices." The relevant invoice was submitted after the contract was terminated and seeks to recover costs for leasing the facility in the future. The claimed costs thus had not yet come into existence as an enforceable claim on the part of HPC prior to the termination date. Additionally, HPC has not identified any " '[s]tipulations in the contract as to the rights of the parties on termination' " other than Corrections' right to terminate subject to 30 days notice to HPC. (Ibid.) Thus, we must conclude that Corrections is "not liable after termination for further transactions" under the contract. (Ibid.)
Accordingly, the trial court did not err by granting Corrections' motion for summary judgment.
III. DISPOSITION
The judgment is affirmed. The Department of Corrections and Rehabilitation shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
/S/_________
RENNER, J. We concur: /S/_________
BLEASE, Acting P. J. /S/_________
ROBIE, J.