Dominguez Estate Co. v. Los Angeles Turf Club, Inc.

Action to recover $5,000 allegedly agreed to be paid to plaintiff in compromise of a claim made by plaintiff that defendant unlawfully induced a lessee of plaintiff to breach a lease. Defendant appeals from judgment in favor of plaintiff.

At the time the lease was made Curry paid the first installment of $2,000, and he represented to plaintiff that the total rental payable would exceed $50,000.

Defendant is the owner of 400 acres of land at Santa Anita Park in Arcadia, California, which is used principally for horse races. About March 31, 1950 (approximately three months after plaintiff and Curry made said lease), the defendant and Curry entered into a written lease which provided as follows: Curry leased approximately 200 acres of said land for the purpose of conducting thereon a World Transportation Fair. He agreed- that he would commence to construct said fair promptly after the close of defendant’s racing season in March, 1951, and he would operate the fair from May 30, 1951, to September 9, 1951. He agreed to pay a minimum cash rental of $35,000.

Curry did not commence the construction of the fair on plaintiff’s land, did not operate the fair thereon, and did not pay any money- to plaintiff except the first rental installment of $2,000.

Mr. Crawford, the general manager of plaintiff, testified that about April 3, 1950, he read in a newspaper of that date an article indicating that Curry had decided not to go ahead with the fair on plaintiff’s land. That article, which was received in evidence, stated in substance that Santa Anita Park would be the site of the World Transportation Fair from May 30 to September 9, 1951, following the leasing of

“This is to let you know, in advance of newspaper release, that I have today completed an agreement with the Los Angeles Turf Club, Inc. under terms of which they are extending to me use of the fifteen million Santa Anita Park as the new site of the World Transportation Pair.

“While it is a matter of personal regret to me that the Torrance site [plaintiff’s land] will, therefore, not be utilized as previously planned, the existing facilities at Santa Anita will reduce the cost of staging the fair by at least $509,000. I, therefore, had no alternative but to accept the offer.”

Mr. Crawford testified further that on April 4, 1950, the day after he received said letter, he called Curry by telephone (at Dallas) and told him that the letter had been received and he had read the newspaper article; he asked Curry what the reason was—he was under contract with plaintiff to produce the fair on plaintiff’s property; Curry replied that he had been approached by representatives of defendant with an offer to conduct the fair on its grounds, which were already prepared, and the fair there would save him a great amount of money; about May 15, 1950, a real estate agent who negotiated the lease with plaintiff on behalf of Curry, told the witness that representatives of defendant had gone to Dallas to offer Curry the facilities of defendant for a fair similar to the one Curry agreed to conduct on plaintiff’s property; at a meeting in June, 1950, when the real estate agent, his associate, Curry and the witness were present, Curry said that Jaynes and O’Dorisseo, representatives of defendant, had gone to Dallas and discussed the matter with Curry, and that a principal reason Curry had made the lease with defendant was that defendant had offered its facilities and offered to produce more publicity than he could hope to obtain by having the fair on plaintiff’s property; Curry also said at that meeting that in any event defendant was going to conduct a fair of that character and it was offering Curry the first refusal; on June 23, 1950, he (witness) as manager of plaintiff, sent a letter to Curry, the turf club, and Jaynes, who was the manager of leasing operations of the turf club. That letter was to the effect that plaintiff and Curry had entered into the lease herein described, and that plaintiff would seek such redress as may be available against all persons who are parties

On July 7, 1950, Mr. Doherty sent a letter to Mr. Collins wherein he stated the substance of plaintiff’s lease, and.that his understanding of the conditions under which the arrangement between defendant and Curry was made was at variance with the situation outlined in Mr. Collins’ letter of June 30th, and that the theory as to liability on the part of defendant is the principle of unlawful interference with business relations.

After said letter of July 7th had been sent, Mr. Doherty and Mr. Patten, the other attorney for plaintiff, had a conversation with Mr. Collins in Mr. Collins’ office.

Mr. Doherty (who did not participate in the trial) testified that said conversation was, in substance, as follows: He told Mr. Collins that after plaintiff had entered into a lease with Curry and that fact was made public by a notice in the press,

On October 10,1950, Mr. Doherty sent a letter to Mr. Collins wherein he stated that the time has come when plaintiff must file a suit unless some satisfactory adjustment is made, and he asked that they (the attorneys) try to meet the following Monday. It appears that thereafter, for two or three weeks, the attorneys had telephone conversations regarding the matter.

Mr. Doherty testified that on November 9, 1950, Mr. Collins called him by telephone and said that the best offer we can make is $2,500 now and $2,500 in 30 days; the turf club to be responsible for the payments; he replied that he would take it up with the Dominguez Estate people (plaintiff) and see what they said in reply to his offer. Mr. Doherty also testified that he was talking to Mr. Collins solely as the representative of the turf club, because Mr. Collins had told him that he was not the attorney for Curry; that the two payments of $2,500 were in full settlement of plaintiff’s claim against the turf club,—there was no discussion with Mr. Collins of any claim against Curry.

On November 10, 1950, Mr. Doherty sent a letter to Mr. Collins which stated, in part:

“Yesterday you told me the best offer you were authorized to make is the following: $2500 now and $2500 in thirty days, the Turf Club to be responsible for the payments.

On February 1st, Mr. Doherty asked Mr. Cannan when the $5,000 was going to be paid, and Mr. Cannan replied that Mr. Collins “is doing the best he can,” he is trying to get Curry to make a contribution of $2,500—that Curry was able to raise only $2,000. Mr. Doherty said that was a matter between the turf club and Curry and that plaintiff’s deal was with the turf club. Mr. Cannan replied that if the turf club paid the $5,000 and Curry knew about it, then Curry would let the turf club hold the bag and would not make a contribution.

On February 17th, Mr. Doherty sent a letter to Mr. Collins stating that he had not received a return telephone call as requested by him, and he asked Mr. Collins if he (Mr. Doherty) should write Mr. Wilson (an officer of defendant) to the effect that unless the matter is settled within a reasonable time, it would be necessary to file suit for the $5,000. There was no reply to that letter.

“By the time this letter reaches you I will have undoubtedly talked to you on the telephone but, in case we should miss each other, as we sometimes do, I thought I should write you and tell you that I have just been told that Curry has instructed me to withdraw the $2,500 offer of settlement to Dominguez. ’ ’

On April 12th, Mr. Doherty sent a letter to Mr. Collins stating, in part: “In our negotiations with you we never at any time entertained any offer of $2500, or any other sum, made by you on behalf of Mr. Curry. When you called me and said that Mr. Curry could borrow $2500 from his mother-in-law, and would offer that in settlement, I told you that we had already reached an agreement with the Turf Club for the payment of $5,000 in the matter, and that we were expecting the Turf Club to live up to its commitment. I still expect the Turf Club to carry out its agreement. . .. While we hope that the Turf Club will make the payment before it becomes necessary for us to file suit ... it is our purpose to bring an action for collection . . ..”

Mr. Doherty testified further that, in a conversation in March, 1951, Mr. Collins stated that Curry was making an application for a permit from the city of Arcadia; and that, in a conversation between him and Mr. Collins concerning the execution of the release, Mr. Collins stated that he wanted the release to include Curry because he did not want the agreement between the plaintiff and Curry to be in effect— it would involve litigation between the Dominguez Estate people and Curry, and in putting on the fair at the turf club such litigation would embarrass Curry.

Curry did not sign the release. It was stipulated that the claim of plaintiff was referred by the defendant to Mr. Collins, who was defendant’s assistant secretary and general counsel, with authority to contest or compromise the claim.

Mr. Collins testified that, in the telephone conversation on November 10, 1950, he told Mr. Doherty that he thought that this should be a complete settlement all around, and that it

The court found that between March 31, 1950, and November 10, 1950, a controversy existed between plaintiff and defendant concerning defendant’s liability to plaintiff for the breach of plaintiff's lease by Curry; plaintiff was advised by counsel, and that plaintiff honestly and in good faith claimed and believed that defendant unlawfully had induced Curry to breach the lease with plaintiff and to refuse to comply with its terms, and that defendant was liable for damages suffered by plaintiff as a consequence thereof; plaintiff engaged attorneys to file a suit for damages against defendant for allegedly inducing Curry to breach his lease with plaintiff; defendant denied plaintiff’s claims, but was desirous of avoiding litigation in connection therewith; defendant referred the matter of plaintiff’s claims to one of its corporate officers and general counsel with authority to contest or compromise the same; negotiations relating to the claims were conducted between defendant’s general counsel and plaintiff’s attorneys over a period of several months; in such negotiations said counsel was informed by plaintiff’s attorney that plaintiff had information on which plaintiff in good faith believed that defendant had induced the breach of plaintiff’s lease by Curry, and that defendant was liable to plaintiff on account thereof; in such negotiations plaintiff’s attorney informed said counsel that if Curry staged the fair on defendant’s land, plaintiff planned to sue Curry for rentals of plaintiff’s land and to attach the gate receipts to secure satisfaction of judgment; in order to settle and compromise said controversy, said general counsel, on behalf of defendant, made the oral agreement of compromise referred to in the findings; on or about

Appellant contends that the alleged agreement of settlement is invalid because there was no consideration for it; that there was no consideration, in that, there was no basis for plaintiff’s claim. It is argued that there was no evidence showing any basis for a belief that defendant, at the time it made a lease with Curry, had any knowledge or notice of plaintiff’s lease with Curry, or that defendant did anything to induce him to break his lease with plaintiff. “ [A]n action will lie for unjustifiably inducing a breach of contract.” (Imperial Ice Co. v. Rossier, 18 Cal.2d 33 , 39 [ 112 P.2d 631 ].) “A promise given in consideration of the settlement or compromise of a dispute or controversy the event of which is uncertain or doubtful, is founded upon a sufficient consideration.” (Baker v. Philbin, 97 Cal.App.2d 393 , 397 [ 218 P.2d 119 ].) It was also said in the case last cited, at page 397: “The trial court found that the claim was asserted in good faith. This was a finding of good consideration for the compromise, even though the claimant might not have prevailed in a lawsuit based on the contract.” In Kale v. Bankamerica Agr. Credit Gorp., 2 Cal.App.2d 113 [ 37 P.2d 494 ], the plaintiff claimed an agistor’s lien for hay furnished for sheep which were on land allegedly owned by plaintiff. The defendant therein wanted to move the sheep to other land, but plaintiff refused to allow them to be moved until his bill for hay had been paid; whereupon defendant agreed that if plaintiff would allow the sheep to he moved, defendant would pay the bill. Plaintiff therein, relying upon the promise, consented to the removal. It was said therein, at page 116: “It is established by the findings that the sheep were not pastured upon the lands of plaintiff . . . and therefore plaintiff never acquired an agistor’s lien upon the sheep.

Appellant also contends that no agreement of settlement was reached. It is argued that since the agreement was to be in writing and since the writing was not signed by Curry, the oral agreement was not valid. The defendant does not assert that the proposed written release signed by plaintiff did not include all that was agreed upon orally. The attorneys for plaintiff, in preparing the proposed written release, included

Even from defendant’s point of view that it was to pay the $5,000 only in case Curry signed the agreement it still would have had no valid defense to the action. Its promise to pay plaintiff was not upon the condition that Curry contribute $2,500 of the amount. It imposed that condition which was no part of its agreement with plaintiff. It appears that Curry was willing to contribute $2,000 but that defendant would not reduce its demand. It therefore appears that the

The judgment is affirmed.

Shinn, P. J., and Vallée, J., concurred.

Appellant’s petition for a hearing by the Supreme Court was denied October 1, 1953. •