Case Name: Philip Restivo v. Worldwide Ground Transportation Solutions, Inc., et al.
Case No.: 17CV308469

I. Background

This lawsuit arises from a merger and acquisition transaction involving two limousine companies.

In May 2014, defendant Worldwide Ground Transportation Solutions, Inc. (“Transportation Solutions”)—a limousine company operated by defendant James Brown (“Brown”)—acquired a competing limousine company operated by plaintiff Philip Restivo (“Restivo”). (Compl., ¶¶ 6–7.) They agreed Restivo would not compete with Transportation Solutions for seven years following the sale and would, in exchange, receive limousine services at a discounted rate. (Compl., ¶¶ 6–7.) Restivo claims Brown and Transportation Solutions (collectively, “Defendants”) failed to provide him with discounted limousine services as promised. (Compl., ¶ 7.) He alleges that because he could obtain up to $5,000 worth of limousine services each month, he suffered $5,000 in damages each month from September 17, 2015, and will continue to suffer damages until 2021. (Compl., ¶¶ 7–8.)

Restivo asserts a single cause of action for breach of contract against Defendants. Currently before the Court is Defendants’ motion for summary judgment. Restivo opposes the motion and filed a request for judicial notice in support. Defendants filed objections to Restivo’s evidence in connection with their reply.

II. Legal Standard

A defendant may move for summary judgment on the ground an action has no merit. (Code Civ. Proc., § 437c, subd. (a)(1).) A defendant bears the initial burden of proving “a cause of action has no merit [by] show[ing] 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.” (Code Civ. Proc., § 437c, subd. (p)(2).) To carry this burden, the defendant must present supporting evidence, such as “affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken.” (Code Civ. Proc., § 437c, subd. (b)(1).)

“Once the defendant [ ] has met that 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.” (Code Civ. Proc., § 437c, subd. (p)(2).) “The plaintiff [ ] shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).)

Ultimately, “[t]he motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)

III. Request for Judicial Notice

Restivo requests judicial notice of the Court’s previous orders on a demurrer and motion to disqualify Defendants’ counsel. Although a court may take judicial notice of court records (Evid. Code, § 452, subd. (d)), a matter must be relevant in order for a court to take judicial notice of it (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117). The prior orders are not relevant to the issues before the Court. Thus, they are not proper subjects of judicial notice. Restivo’s request for judicial notice is therefore DENIED.

IV. Summary of Evidence

The undisputed evidence shows that Transportation Solutions and Le Grande Affaire Limousine Service , as buyer and seller respectively, executed an acquisition agreement in May 2014. (Sep. Stat., ¶ 1; Compl., Ex. A.) Transportation Solutions agreed to purchase the assets of Le Grande Affaire for $300,000. (Compl., Ex. A.) The agreement contained an integration clause and prohibition on oral modifications. (Compl., Ex. A.) Restivo and Brown signed the written agreement as representatives of their respective businesses. (Sep. Stat., ¶¶ 1–3; Compl., Ex. A; Brown Decl., ¶ 4.)
Several weeks later, Transportation Solutions and Le Grande Affaire executed a written addendum to their acquisition agreement. (Compl., Ex. A.) They agreed, among other things, that Restivo would receive discounted limousine services as follows:

For the duration of the Covenant Not to Compete, Phillip [sic] Restivo may use vehicles of [Transportation Solutions] for a price equal to the cost of the chauffeur and fuel subject to reasonable amount of use as agreed between [Transportation Solutions] and [Restivo], to service [his] personal use, friends, trades, and family usage.

In exchange, Restivo agreed not to compete with Transportation Solutions within a 100-mile radius for a period of seven years. (Compl., Ex. B.)

Subsequently, a dispute arose between Restivo and Defendants over whether the volume of discount limousine services requested was a reasonable amount within the meaning of the addendum. (Brown Decl., ¶ 14; Restivo Decl., ¶¶ 4–5.) The parties went to mediation to resolve this dispute in September 2015. (Brown Decl., ¶ 11.) They reached an agreement to amend the disputed clause in the addendum (quoted above) by adding the following language:

Vehicle trade use is good for any day or any time with the exception of Saturdays when 8 passenger or smaller is okay but anything over 8 passenger must be booked within 24 hours or less notification.

The value of trade will be no more than $5,000 per month to include all classes of usage. The $5,000 is accumulated and carried over monthly but disregarded every four months, no more than $60,000 of value per year.

(Compl., Ex. C.)

The mediated settlement agreement states “[t]he parties agree that this settlement is intended to be binding and enforceable…without the execution of any further documents.” (Compl., Ex. C at p. 1.) But it also states the parties intended to draft a formal amendment in conformity with their settlement agreement. (Compl., Ex. C at pp. 1–2.) According to Restivo, he subsequently took a draft agreement to Brown for signature, but Brown refused to sign it and stated he changed his mind about their settlement. (Restivo Decl., ¶ 6; see also Brown Ex. 14.) Brown maintains that he continues to honor their agreement and that his attorney informed Restivo and his counsel of this fact in writing on several occasions. (Brown Decl., ¶ 15; Brown Ex. 19.) Since Restivo commenced this action in April 2017, he has not requested limousine services despite Brown’s assurances that he may continue to do so. (Brown Ex. 1, Restivo Dep. at p. 139:7–25.)

V. Merits of Motion

To establish a claim for breach of contract, a plaintiff must prove the existence of a contract, he or she performed or was excused from performing, defendant failed to perform, and he or she suffered damages as a result. (Agam v. Gavra (2015) 236 Cal.App.4th 91, 104.) Defendants argue Restivo’s claim lacks merit because he cannot establish the existence of a contract with Brown and damages suffered as a result of a breach by Transportation Solutions.

A. Transportation Solutions

“Damages awarded to an injured party for breach of contract ‘seek to approximate the agreed-upon performance.’ [Citation.]” (Lewis Jorge Construction Management, Inc. v. Pomona Unified School Dist. (2004) 34 Cal.4th 960, 967.) “In other words, the plaintiff is entitled to damages that are equivalent to the benefit of the plaintiff’s contractual bargain.” (Id. at pp. 967–68.) “The injured party’s damages cannot, however, exceed what it would have received if the contract had been fully performed on both sides.” (Id. at p. 968, citing Civ. Code, § 3358.)

As Transportation Solutions points out, the benefit Restivo bargained for was a discount on limousine services. Consequently, the measure of his damages consists of the difference between what he would have ordinarily had to pay for limousine services and the discounted price he was entitled to pay Transportation Solutions under the parties’ agreement. (See, e.g., KGM Harvesting Co. v. Fresh Network (1995) 36 Cal.App.4th 376, 382.) Contrary to what Restivo alleges, he is not necessarily entitled to damages in the amount of the maximum value of services he conceivably could have requested each month, namely $5,000 per month.

With that clarification in mind, Transportation Solutions does not present evidence establishing Restivo did not suffer any damages. Restivo did unequivocally concede that, since he commenced this action in April 2017, he has not requested limousine services despite Brown’s assurance that he may continue to do so. (Brown Ex. 1, Restivo Dep. at p. 139:7–25.) Thus, the evidence shows Restivo has not suffered damages as a result of Transportation Solutions refusing to furnish him vehicles from the time he commenced this action until he was deposed. But Restivo alleges Transportation Solutions first breached the agreement in September 2015.

Transportation Solutions asserts Restivo has no evidence of unfulfilled requests for limousine services from September 2015 until April 2017. A defendant moving for summary judgment cannot carry its initial burden by simply pointing out the absence of evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854–55.) When moving for summary judgment, a “defendant may…conclusively negate an element of the plaintiff’s cause of action [or] present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence—as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.” (Ibid.)

Transportation Solutions does not present evidence conclusively negating the element of damages. Additionally, the evidence does not show Restivo admitted he lacks and cannot reasonably obtain needed evidence. Restivo did not admit in response to requests for admissions that he lacks and cannot reasonably obtain evidence to support this element of his claim. (Brown Ex. 17.) Although his deposition testimony lacks clarity and specificity, he did testify that he kept notes about his requests for services and purchased services from another limousine company; he did, however, have some difficulty recalling any specific instance. (Brown Ex. 1, Restivo Dep. at pp. 99–100, 182.) The evidence is equivocal at best. For these reasons, Transportation Solutions does not carry its initial burden by either conclusively negating the element of damages or showing Restivo admittedly lacks and cannot obtain evidence of the damages he suffered.

B. Brown

Brown argues Restivo’s breach of contract claim lacks merit because he cannot establish the existence of an agreement with him as an individual. It is undisputed that the parties to the acquisition agreement, inclusive of the addendum, were Transportation Solutions and Le Grande Affaire; Brown was not a party to this agreement. (Sep. Stat., ¶¶ 1–3; Compl., Ex. A; Brown Decl., ¶ 4; Brown Ex. 17.)

Nevertheless, Restivo maintains that Brown is a party to the agreement because he signed the mediated settlement agreement. “Directors and officers are not personally liable on contracts signed by them for and on behalf of the corporation unless they purport to bind themselves individually.” (United States Liability Insurance Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 595.) Thus, Brown is not personally bound by an agreement simply because his signature appears on the agreement. Furthermore, there is no basis for concluding he signed the agreement in his individual capacity. An agreement necessarily can only be modified by the parties to that agreement. (Riverside Rancho Corp. v. Cowan (1948) 88 Cal.App.2d 197, 208.) Restivo does not dispute that Brown is not a party to the acquisition agreement inclusive of the addendum. Thus, Brown necessarily cannot have individually agreed to modify the agreement between Transportation Solutions and Le Grande Affaire, which agreement contains the clause regarding discounted limousine services that has purportedly been breached. Restivo presents no reasoned explanation supported by legal authority to support a contrary conclusion. Instead, he rests on conjecture and speculation that does not address this fundamental principle of contract law.

For these reasons, Brown demonstrates Restivo cannot establish that Brown personally agreed to provide discounted limousine services. Restivo fails to raise a triable issue of material fact in opposition. Thus, the breach of contract claim lacks merit to the extent it is asserted against Brown.

C. Conclusion

Based on the foregoing, Defendants’ motion for summary judgment is GRANTED IN PART and DENIED IN PART. The motion is granted to the extent it is brought by Brown because he demonstrates Restivo cannot establish an essential element of his breach of contract claim as asserted against him. The motion is denied to the extent it is brought by Transportation Solutions because it does not carry its initial burden of demonstrating Restivo’s claim lacks merit as asserted against it in particular.

The Court will prepare the order.