Opinion
D058651
10-27-2011
JEFFREY P. MILLER, Plaintiff and Appellant, v. CELLCO PARTNERSHIP, et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2010-00092363-CU-BC-CTL)
APPEAL from a judgment of the Superior Court of San Diego County, Timothy B. Taylor, Judge. Reversed.
Plaintiff Jeffrey P. Miller doing business as Imagineering Cellular and Imagineering Wireless (Miller) was an agent for the sale of wireless service for defendants Cellco Partnership d/b/a Verizon Wireless, Los Angeles SMSA Limited Partnership d/b/a Verizon Wireless, Oxnard/Ventura/Simi Limited Partnership d/b/a Verizon Wireless, and Verizon Wireless (VAW) LLC d/b/a Verizon Wireless (collectively Verizon). To this end, Miller entered into a written contract with Verizon. Verizon terminated the contract without providing a 30-day cure period, and Miller filed suit. The court sustained Verizon's demurrer to the complaint without leave to amend. Miller appeals the ensuing judgment. We reverse.
FACTUAL AND PROCEDURAL HISTORY
The Complaint
Miller was an agent for the sale of wireless service for either Verizon or one of its legacy companies for the last 24 years. Verizon is a provider of wireless telephone service in California and in the County of San Diego. Miller entered into his last contract with Verizon on or about April 17, 2007, which was for a term of four years.
Paragraph 3.6 of the contract concerns "internet sales" and "telemarketing." Paragraph 3.6 states in pertinent part: "[Miller's] authority to sell and activate [Verizon] service is limited by the locations and approved sub-agent locations. Without limiting the generality of the foregoing, agent shall not, without prior written consent of [Verizon], which can be modified or rescinded at any time, advertise, solicit or consummate any sale or activation of [Verizon] service through (a) any e-commerce functionality, including, but not limited to, a website operated directly or indirectly by agent, or (b) telemarketing."
Miller made internet sales on behalf of Verizon for several years. In 2005, Verizon told Miller to cease his internet sales. Miller complied with the request for a short time, but again commenced internet sales for Verizon in 2005 and continued to do so until he received a letter of termination dated December 29, 2009.
Miller's activations of customers in the last four years earned Verizon approximately $26 million in gross income, plus additional renewals. Most of those activations came from Miller's internet sales. From January 1, 2005, through December 2009, Miller added 11,220 activations of customers to Verizon's system. Verizon thus benefited substantially from Miller's activations.
Between 2005 and May 2009, Verizon was aware Miller was obtaining a substantial number of activations for Verizon through the internet. During that entire period of time, Verizon permitted Miller, without objection, to obtain activations for Verizon's wireless system on the internet. Miller alleges Verizon's conduct constituted tacit approval of his activities, and Verizon waived any objection to Miller's use of the internet to make sales.
In a letter dated May 15, 2009, Verizon advised Miller that it considered him to be in breach of the contract because Miller was using a third party based in Chicago, Illinois, MDG Computer Services, Inc. (MDG), to obtain activations for service with Verizon. Specifically, Miller was using MDG's website to obtain new customers for Verizon. Verizon objected to Miller's use of MDG because MDG not only sold wireless service on behalf of Verizon, but also on behalf of several other wireless telephone companies. In compliance with the May 15, 2009 letter, Miller ceased his relationship with MDG.
Miller, however, continued to use the internet to obtain activations of customers for Verizon. Miller's internet sales persisted until he received a termination letter from Verizon dated December 29, 2009. The December 29 letter states in pertinent part:
"It has come to our attention that [you are] again using a third party to offer, sell and market [Verizon] Services in a manner that violates multiple provisions of your Agreement with [Verizon]. Specifically, you are working with the operator of a website -www.moremobileinternet.com - to solicit sales from customers around the country for which you then activate using the [Verizon] provided tool and the outlet ID assigned to you for your San Diego, California Location."
The letter further states: "It has become abundantly clear to us that you have no intent on heeding our warning and adhering to the Agreement and we are forced by your actions to terminate, effective immediately, your Agreement with [Verizon] as of December 29, 2009."
Paragraph 8 of the contract is entitled "Breach, Termination." It provides: "This agreement may be terminated immediately upon written notice to the breaching party if the breach is not cured within the applicable cure period. Provided, however, that such termination notice may not be sent until after the applicable cure period has expired." Paragraph 8.7 states: "For any breach of this agreement for which a particular cure period is not specified, the breaching party shall have a thirty-day cure period." There is no cure period set forth in the contract for a breach of paragraph 3.6. Miller avers Verizon contends he breached paragraph 3.6; thus, he was entitled to a 30-day cure period.
Because Verizon did not provide Miller with a 30-day cure period prior to the terminating the contract, Miller alleges Verizon breached paragraph 8 of the contract.
The Demurrer
The complaint includes causes of action for breach of contract (wrongful termination), breach of contract (waiver and estoppel), unlawful business practices, and declaratory relief. Verizon demurred to and moved to strike portions of the complaint. As part of its demurrer, Verizon filed a declaration of Stephanie Panduro with a copy of the contract and the May 15, 2009 letter attached as exhibits.
Miller opposed the demurrer, but conceded Verizon's demurrer to the second through fourth causes of action was well taken. Miller argued the first cause of action for breach of contract (wrongful termination) had been properly plead and asked for leave to amend his declaratory relief claim. Miller did not oppose Verizon's motion to strike.
Miller does not raise any issue on appeal regarding his declaratory relief claim.
The court sustained the demurrer without leave to amend. The court found the demurrer presented a question of law as to the interpretation of the contract. Further, the court ruled a 30-day cure period was not required because Verizon could terminate the contract without a cure period for any "unethical, misleading, or unfair business practices."
The court subsequently entered judgment in favor of Verizon. Miller timely appealed.
DISCUSSION
Miller asserts the court committed reversible error by sustaining Verizon's demurrer to the first cause of action without leave to amend. We agree.
I
STANDARD OF REVIEW
" 'On appeal from [a judgment] of dismissal after an order sustaining a demurrer, our standard of review is de novo, i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law.' " (Los Altos El Granada Investors v. City of Capitola (2006) 139 Cal.App.4th 629, 650.) In reviewing the complaint, "we must assume the truth of all facts properly pleaded by the plaintiffs, as well as those that are judicially noticeable." (Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809, 814.) "A judgment of dismissal after a demurrer has been sustained without leave to amend will be affirmed if proper on any grounds stated in the demurrer, whether or not the court acted on that ground." (Carman v. Alvord (1982) 31 Cal.3d 318, 324.)
II
MILLER HAS ALLEGED A BREACH OF CONTRACT CAUSE OF ACTION
A. Miller's Allegations of Breach
The essential elements of a breach of contract claim are: "(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff." (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) Miller has adequately alleged these elements.
In the complaint, Miller alleges he entered into a contract with Verizon. Miller further claims Verizon advised him that he was in breach of paragraph 3.6 of the contract. Because paragraph 3.6 does not contain a cure period, Miller avers Verizon was required to provide a 30-day cure period under paragraph 8.7. Verizon terminated the contract on December 29, 2009 without providing Miller with a 30-day cure period. Miller thus claims Verizon's improper termination of the contract is a breach, and he has been damaged in excess of $50,000. Based on these allegations, which we must accept as true, we are satisfied Miller has plead a cause of action for breach of contract.
B. Verizon's Contentions
1. The Demurrer Only Presents a Question of Law
Verizon argues its demurrer presents a pure question of law, and the trial court properly interpreted the contract in light of undisputed facts. We reject both contentions.
Verizon insists it terminated the contract because Miller's conduct was an "unethical, misleading, or unfair business practice." Specifically, Verizon contends Miller admits he promised to stop selling on the internet multiple times, but then immediately resumed doing so. Verizon, however, fails to cite to the record to support its proposition that Miller made multiple promises to cease his internet sales. Further, we were not able to find any allegations in the complaint to support Verizon's position.
Nevertheless, Verizon insists Miller's admission that Verizon told him to stop "violating multiple provisions" of the contract, and Miller's temporary corrective action coupled with Miller executing the contract "amount to conduct that [Verizon] could reasonably conclude" constituted an "unethical, misleading, or unfair business practice." We disagree.
Other than the December 29, 2009 letter terminating the contract, the only allegations in the complaint on which Verizon can base its argument are: (1) in 2005, Verizon told Miller to cease his internet sales; and (2) the May 15, 2009 letter. Verizon's reliance on the 2005 conduct, however, is misplaced. Any conduct occurring in 2005 could not support Verizon's argument because it occurred prior to the parties entering the contract in April 2007.
Also, the May 15, 2009 letter does not support Verizon's position. The complaint mentions the May 15 letter in one paragraph. And Miller only alleges, in regard to the letter, Verizon instructed him to cease doing business with MDG, which he did. There are no other allegations in the complaint about the May 15, 2009 letter.
Finally, the mere fact Miller signed the contract does not support Verizon's argument Miller engaged in "unethical, misleading, or unfair business practice[s]." Even if we were to assume Miller breached the contract, there is nothing in the complaint that supports Verizon's theory. Miller does not allege he engaged in unethical, misleading, or unfair business practices. Moreover, the December 29, 2009 letter, which was mentioned extensively in the complaint and supposed to be attached to the complaint as an exhibit, states Miller "violate[d] multiple provisions" of the contract, but fails to list any specific paragraphs that were breached. At best, the December 29, 2009 letter supports Miller's allegation that Verizon believes he has breached paragraph 3.6 by working with an unauthorized "operator of a website. . . ." Thus, unless Verizon can properly get additional facts before us, the demurrer to the first cause of action lacks merit. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (Donabedian).)
2. The Panduro Declaration and the May 15, 2009 Letter
In an attempt to have us to consider additional facts in support of its demurrer, Verizon requests we take judicial notice under Evidence Code section 452, subdivisions (d) and (h), of the Panduro declaration and the exhibits attached to it. We decline to do so.
The contract is attached as the first exhibit to the Panduro declaration. Verizon also asks us to take judicial notice of the declaration of J. David Franklin and both of the exhibits (the contract and December 29, 2009 letter) attached to the declaration. The Franklin declaration appears to be an attempt to correct Miller's inadvertent error of omitting the contract and December 29, 2009 letter as exhibits to the complaint. Both the contract and December 29, 2009 are discussed and quoted extensively throughout the complaint. As such, to the extent necessary, we take judicial notice of the contract and December 29, 2009 letter attached to the Franklin declaration. We decline as moot Verizon's request we take judicial notice of the contract attached to the Panduro declaration.
"Judicial notice may not be taken of any matter unless authorized or required by law." (Evid. Code, § 450.) Matters that are subject to judicial notice are listed in Evidence Code sections 451 and 452. A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute. (Post v. Prati (1979) 90 Cal.App.3d 626, 633.) Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable. (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375-1376; StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9 (StorMedia).)"In ruling on a demurrer, a court may consider facts of which it has taken judicial notice. [Citation.] This includes the existence of a document. When judicial notice is taken of a document, however, the truthfulness and proper interpretation of the document are disputable. [Citation.]" (Ibid.)
Evidence Code section 452, subdivision (h) allows us to take judicial notice of facts and propositions not reasonably subject to dispute. (See Post v. Prati, supra, 90 Cal.App.3d at p. 633.) Neither the Panduro declaration nor the attached May 15, 2009 letter meets this criterion. Panduro is a Verizon employee, and through her declaration, attempts to authenticate and provide a business records hearsay exception for the contract and the May 15, 2009 letter. The May 15, 2009 letter is from John Hassett of Verizon Wireless to Miller. It concerns Miller's use of the MDG website and discusses "facts" beyond what Miller alleges in the complaint.
Both the Panduro declaration and the May 15, 2009 letter present facts and propositions that are reasonably subject to dispute. We therefore decline to take judicial notice of the Panduro declaration or May 15, 2009 letter under Evidence Code section 452, subdivision (h), as Verizon requests. (See StorMedia, supra, 20 Cal.4th at p. 457, fn. 9.)
We also will not take judicial notice of the Panduro declaration and May 15, 2009 letter under Evidence Code section 452, subdivision (d). While it is true the documents are part of the court record, judicial notice of such documents is limited to matters that are indisputably true. Therefore, judicial notice is typically confined to the orders and judgments in the court file, as distinguished from the contents of the court documents. (Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482-484; Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113 (Fremont).)
Evidence Code section 452, subdivision (d) allows a court to take judicial notice of "[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States."
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Here, Verizon is not requesting we take judicial notice of orders or judgments, but instead, asks for judicial notice of the content of a declaration and a letter. Verizon's request for judicial notice thus is an improper attempt to put evidence in front of us on a demurrer. (See Donabedian, supra, 116 Cal.App.4th at p. 994 ["In reviewing the ruling on a demurrer, a court cannot consider . . . the substance of declarations, matter not subject to judicial notice, or documents judicially noticed but not accepted for the truth of their contents."]; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604-605 ["The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of . . . declarations . . . on behalf of the adverse party and which purports to contradict the allegations and contentions of the plaintiff."].)
Verizon claims the May 15, 2009 letter forms the basis of the allegations of the complaint; thus, judicial notice is appropriate. We disagree. The complaint did not incorporate the May 15, 2009 letter or rely on it as a primary basis for its allegations. It is not discussed in detail, but merely mentioned in a single paragraph of the complaint. Miller uses the letter to show Verizon complained about Miller's use of MDG to conduct internet sales, and Miller ceased doing business with MDG at Verizon's request. In contrast, Verizon urges us to consider the content of the letter to support its purported justification in terminating the contract without a 30-day cure period. This we cannot do. (See Fremont, supra, 148 Cal.App.4th at pp. 114-115 ["For a court to take judicial notice of the meaning of a document submitted by a demurring party based on the document alone, without allowing the parties an opportunity to present extrinsic evidence of the meaning of the document, would be improper. A court ruling on a demurrer therefore cannot take judicial notice of the proper interpretation of a document submitted in support of the demurrer."].)
We also are not persuaded by Verizon's contention Miller waived any objection to the May 15, 2009 letter by failing to raise the issue at the demurrer hearing. As we noted, the standard of review here is de novo. (See Los Altos El Granada Investors v. City of Capitola, supra, 139 Cal.App.4th at p. 650.) Accordingly, we are not bound by the trial court's consideration of the May 15, 2009 letter. To the contrary, we see no authority allowing us to consider the content of the May 15, 2009 letter in reviewing Verizon's demurrer. (See Fremont, supra, 148 Cal.App.4th at pp. 114-115.)
3. Verizon Need Not Provide a Reason for Termination of the Contract
In addition, Verizon contends it did not have to provide Miller with a reason to terminate the contract. Even if this were true, Verizon still could not base its demurrer on facts beyond those alleged in the complaint and what is properly subject to judicial notice. As we discussed, Miller alleges Verizon improperly terminated the contract because it failed to provide a 30-day cure period. Whether Verizon had to provide Miller with a reason for the termination in its December 29, 2009 letter is of no significance on demurrer.
Nor are we persuaded by Verizon's argument that our determination Miller's admitted breaches of the contract are not within the scope of paragraphs 8.3.1 and 8.3.2 of the contract would render those paragraphs superfluous. These paragraphs allow Verizon to terminate the contract without a cure period if it determines, in its reasonable discretion, Miller has engaged in "unethical, misleading, or unfair business practices" or made an untrue representation in connection with the contract or his application to act as a Verizon agent.
Again, Verizon's argument depends on additional facts not plead in the complaint, namely Verizon's urged justification for termination of the contract without a 30-day cure period. "This contention ignores the limited role of a demurrer -- to test the legal sufficiency of the complaint." (Donabedian, supra, 116 Cal.App.4th at p. 994.) Miller alleges Verizon claims he breached paragraph 3.6 of the contract dealing with internet sales. Miller thus asserts Verizon is obligated to provide him a 30-day cure period prior to terminating the contract. Having not done so, Miller avers Verizon breached the contract. Accepting these facts as true for purposes of a demurrer (Howard Jarvis Taxpayers Assn. v. City of La Habra, supra, 25 Cal.4th at p. 814), we do not conclude Miller's theory of breach renders paragraphs 8.3.1 and 8.3.2 superfluous. Under a plain reading of the contract, if Verizon believes Miller breached paragraph 3.6 of the contract, it must provide Miller with a 30-day cure period, under paragraph 8.7, prior to terminating the contract. The allegations in the complaint do not trigger paragraphs 8.3.1 and 8.3.2 of the contract. On demurrer, we simply cannot consider Verizon's proffered justification for terminating the contract because it is based on additional facts not found in the complaint. It might well be Verizon terminated the contract because Miller engaged in "unethical, misleading, or unfair business practices," but this is an issue better left for a motion for summary judgment or trial.
C. Miller Adequately Alleged Verizon Waived Paragraph 3.6
Verizon also argues Miller cannot maintain its breach of contract claim because Miller admits to being in breach of the contract himself by obtaining activations through the internet. Miller contends Verizon waived any such breaches by allowing Miller to obtain the activations. In response, Verizon insists Miller waived his waiver argument in opposing the demurrer, and Verizon cannot waive the breaches as a matter of law. On demurrer, Miller has the better argument.
In the complaint, Miller alleges a breach of contract based upon waiver and estoppel. Verizon demurred to this cause of action, and Miller conceded the demurrer was valid. Verizon now argues Miller's concession acts as a waiver of his argument that Verizon waived Miller's breaches of the contract by obtaining activations through the internet. We disagree.
In conceding Verizon's demurrer as to his second cause of action, Miller admitted that his breach of contract claim based upon waiver was not valid. In other words, Miller agreed he was not entitled to damages based upon this theory of breach of contract. He was not, however, conceding that he has not or could not allege Verizon waived any breach of paragraph 3.6 of the contract. Indeed, as we discuss below, Miller adequately allege this waiver in paragraphs 9 and 10 of the complaint.
We also are not persuaded Verizon could not waive Miller's breaches as a matter of law. Waiver is "the intentional relinquishment of a known right with knowledge of the facts." (McDermott v. Superior Court (1972) 6 Cal.3d 693, 698, fn. 3.) In the complaint, Miller alleges Verizon, for almost five years between 2005 and May 2009, was fully aware Miller obtained a substantial number of activations for Verizon through the internet. Miller also claims Verizon allowed him to obtain these activations without objection. Miller further alleges Verizon substantially benefited from his internet sales. Accordingly, Miller's allegations of waiver create a question of fact that cannot be resolved on demurrer. (Cf. Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 319 ["Generally, the determination of either waiver or estoppel is a question of fact . . . . "])
Citing Kay v. Kay (1961) 188 Cal.App.2d 214, Verizon argues the passage of time alone does not establish waiver. While this might be a correct statement of the law, it has little bearing on Miller's waiver allegations. Not only does Miller support his waiver allegations by claiming Verizon allowed the breaching conduct (i.e., internet sales) to occur without complaint for several years, he also contends Verizon approved every one of Miller's internet sales and substantially benefited from them. Thus, Miller's allegations of waiver are not based solely on the passage of time, and Kay, supra, 188 Cal.App.2d 214 is not instructive.
DISPOSITION
The judgment in favor of Verizon with respect to the demurrer to the first cause of action is reversed. Miller is awarded his costs on appeal.
HUFFMAN, J. WE CONCUR:
BENKE, Acting P. J.
HALLER, J.