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Brandt L. Wolkin, Esq., SBN 112220
David F. Myers, Esq., SBN 185102
WOLKIN - CURRAN, LLP.
555 Montgomery Street, Suite 1100
San Francisco, California 94111
Telephone: (415) 982-9390
Facsimile: (415) 982-4328
Attorneys for Plaintiff/Cross-Defendant
WINCO WINDOW COMPANY, INC.
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO - UNLIMITED CIVIL JURISDICTION
WINCO WINDOW COMPANY, INC.,
Plaintiff,
vs.
PROGRESS GLASS CO., INC., NIBBI
BROS. INC., LIBERTY MUTUAL
INSURANCE COMPANY; and DOES 1
through 100, inclusive,
Defendants.
AND RELATED CROSS-ACTIONS.
ELECTRONICALLY
FILE
Superior Court of
County of San
01/15/2016
Clerk of the Court
BY:ROMY RISK
Case No. CGC-14-537120
WINCO’S MEMORANDUM OF
POINTS AND AUTHORITIES IN
SUPPORT OF MOTION JIN LIMINE
NO. 1 FOR AN ORDER
PRECLUDING APPLICATION OF
CALIFORNIA LAW AND
ENFORCING THE PARTIES’
CHOICE OF LAW PROVISION
DATE: January 19, 2016
TIME: 9:30 a.m.
DEPT.:
[Filed Concurrently with [Proposed]
Order]
Ml
MW
Mt
1.
MPA RE: WINCO’S MIL NO. 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120oo
o 2
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT
I. THE PARTIES’ WRITTEN CONTRACT REQUIRES THAT DISPUTES BE
RESOLVED PURSUANT TO MISSOURI STATE LAW
The instant action involves windows and terrace doors supplied for the construction
of two residential Projects in the Mission Bay neighborhood of San Francisco. The first
project is commonly referred to as the “Natoma” Project. The second project is commonly
referred to as Mission Bay Block 2 “Mission Bay” Project.
Winco entered into a written agreement with Progress Glass Company, Inc.
(“Progress”) in February of 2012 to supply windows and terrace doors for the Natoma
Project. Winco forwarded a Proposal to Progress. The Proposal included, as the final two
pages therein, the Winco Terms and Conditions of Proposal. Progress received the Proposal
and issued a Purchase Order accepting and expressly referencing the Proposal by number.
The Proposal expressly incorporated the Terms and Conditions of Proposal on its first page.
Winco entered into a written agreement with Progress in April of 2012 to supply
similar materials for the Mission Bay Project. The agreement is memorialized in the same
form of Proposal from Winco, including the two pages of identical Terms and Conditions of
Proposal. Progress received the Proposal and issued a Purchase Order expressly referencing
the Proposal by number.
The written agreements between Winco and Progress consist of (a) Winco’s
Proposal, (b) Progress’ Purchase Order, and (c) subsequent approved Change Orders. The
Terms and Conditions of Proposal include a choice of law provision stating:
The Terms and Conditions of Proposal include a choice of law provision stating:
INTERPRETATION. This contract is to be construed according to
the laws of, and under the Uniform Commercial Code as adopted
by, the State of Missouri.
Il. LEGAL ARGUMENT
A. Missouri State Law Applies to the Contracts.
California courts have a “strong policy” of enforcing choice of law provisions.
Nedlloyd Lines B.V. v. Superior Court (1992) 3 Cal.4th 459, 464. When a choice-of-law
2.
MPA RE: WINCO'S MIL NO. 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120w
provision exists in a private contract, California courts will honor it unless (a) there is no
reasonable basis for the parties' choice, or (b) application of the law of the chosen state
would be contrary to the fundamental policy of a state that has a materially greater interest.
Nedlloyd at 464-465; Rest.2d Conflict of Law, § 187, subd. (2).
Both prongs of the test require a two part analysis. First, it must be determined if the
chosen state has a substantial relationship to the parties or their transaction, or whether there
is any other reasonable basis for the parties’ choice of law. If either element is met, the
Court then decides whether application of the law of the chosen state would be contrary to a
fundamental policy of, in this instance California, and whether California has a materially
greater interest.
1 A Reasonable Basis Exists for Application of Missouri Law.
Here, Winco is a Missouri Corporation having its principal place of business in St.
Louis, Missouri. Winco’s representatives and employees reside in Missouri. The Proposal
was prepared by Winco in Missouri. The products supplied to the Natoma Project and the
Mission Bay Project were fabricated within, and shipped from, Missouri. The parties agreed
in their express Contracts that Missouri law would apply to any contractual dispute between
them. This agreement creates a relationship between the parties and Missouri. E.g., Burger
King Corp. v. Rudzewicz (1985) 471 U.S. 462, 482 (An agreement to be bound by forum
law supports a finding of “purposeful availment” of the benefits and protections of local
law.) As such, not only is there a substantial relationship between the parties and Missouri
but there is a reasonable basis for the application of Missouri law.
2. California has no Fundamental Policy That Would Require That
California Laws Should Apply to this Dispute.
The standard this Court must apply is whether application of the Missouri choice of
law provision would be “contrary to a fundamental policy” of the State of California and
whether California has a materially greater interest. The California Supreme Court has held
that there is no fundamental public policy related to its contract laws. Aerojet-General
Corp. v. Transport Indem. Co. (1997) 17 Cal.4th 38, 75.
3.
MPA RE: WINCO’S MIL NO. 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120In California, a fundamental public policy is a distinct interest that must arise out of,
or be tethered to, a statute or constitutional provision. See, e.g., Green v. Ralee Engineering
Co. (1998) 19 Cal.4th 66, 74 (Federal safety regulations “promulgated to address important
safety concerns may serve as a source of fundamental public policy. The regulations satisfy
our requirement that the action be tethered to fundamental policies delineated in a statutory
or constitutional provision.”). In determining public policy "... courts should venture into
this area, if at all, with great care and due deference to the judgment of the legislative
branch, ‘lest they mistake their own predilections for public policy which deserves
recognition at law.’” Gantt v. Sentry Ins. (1992) 1 Cal.4th 1083, 1095 overruled on other
grounds by Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 71 (“[A]side from
constitutional policy, the Legislature, and not the courts, is vested with the responsibility to
declare the public policy of the state.”) “A review of the pertinent case law in California
and elsewhere ... reveals that few courts have recognized a public policy claim absent a
statute or constitutional provision evidencing the policy in question.” Gantt, supra at 1090,
Whether California's contract laws constitute public policy was addressed in Boghos
y. Certain Underwriters at Lloyd’s, London (2005) 36 Cal.4th 495, There, an insured
brought claims for breach of contract and bad faith, among others, against a disability
insurer. The insurer moved to compel arbitration under a provision in the policy that stated
the parties agree to waive the right to a jury trial and submit to binding arbitration under the
commercial arbitration rules of the American Arbitration Assoc. In determining whether the
arbitration provision was enforceable, the court construed the policy language “based on the
same state law standards that apply to contracts generally.” Jd. The court held the
arbitration provision to be a clear and unambiguous agreement by the parties to submit to
arbitration.
The Supreme Court then determined whether the insured’s claims were protected by
public policy and concluded that they were not. Id., 36 Cal.4th at 506-508. Specifically, the
court held that “nonpayment of benefits [i.e., the contract claim] and breach of the covenant
of good faith and fair dealing cannot properly be ... described” as “unwaivable claims
4.
MPA RE: WINCO’S MIL NO. I TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120based on or tethered to statutes.” Id. at 507. (Emphasis added.) If anything, a fundamental
policy of California would be contradicted if this Court were to ignore, rewrite or omit a
plain contract term absent a finding that enforcement would violate a fundamental policy.
j| See, e.g. Aerojet-General Corp. v. Transport Indem. Co. (1997) 17 Cal.4th 38, 75 (“Asa
i general matter at least, we do not add to, take away from, or otherwise modify a contract for
‘public policy considerations.’”)
Missouri State law applies to the contracts at-issue in this action. Accordingly,
Winco seeks an appropriate order precluding reference to, or application or, California legal
}| authority,
| Respectfully submitted,
Dated: January 15, 2016 WOLKIN « CURRAN, LLP
David F. Myers
Attorneys for Plaintiff, WINCO WINDOW
COMPANY, INC.
5.
| MPA RE: WINCO’S MIL NO, 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120
Preview
wn ND 14 15 Brandt L. Wolkin, Esq., SBN 112220 David F. Myers, Esq., SBN 185102 WOLKIN - CURRAN, LLP. 555 Montgomery Street, Suite 1100 San Francisco, California 94111 Telephone: (415) 982-9390 Facsimile: (415) 982-4328 Attorneys for Plaintiff/Cross-Defendant WINCO WINDOW COMPANY, INC. SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO - UNLIMITED CIVIL JURISDICTION WINCO WINDOW COMPANY, INC., Plaintiff, vs. PROGRESS GLASS CO., INC., NIBBI BROS. INC., LIBERTY MUTUAL INSURANCE COMPANY; and DOES 1 through 100, inclusive, Defendants. AND RELATED CROSS-ACTIONS. ELECTRONICALLY FILE Superior Court of County of San 01/15/2016 Clerk of the Court BY:ROMY RISK Case No. CGC-14-537120 WINCO’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION JIN LIMINE NO. 1 FOR AN ORDER PRECLUDING APPLICATION OF CALIFORNIA LAW AND ENFORCING THE PARTIES’ CHOICE OF LAW PROVISION DATE: January 19, 2016 TIME: 9:30 a.m. DEPT.: [Filed Concurrently with [Proposed] Order] Ml MW Mt 1. MPA RE: WINCO’S MIL NO. 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120oo o 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT I. THE PARTIES’ WRITTEN CONTRACT REQUIRES THAT DISPUTES BE RESOLVED PURSUANT TO MISSOURI STATE LAW The instant action involves windows and terrace doors supplied for the construction of two residential Projects in the Mission Bay neighborhood of San Francisco. The first project is commonly referred to as the “Natoma” Project. The second project is commonly referred to as Mission Bay Block 2 “Mission Bay” Project. Winco entered into a written agreement with Progress Glass Company, Inc. (“Progress”) in February of 2012 to supply windows and terrace doors for the Natoma Project. Winco forwarded a Proposal to Progress. The Proposal included, as the final two pages therein, the Winco Terms and Conditions of Proposal. Progress received the Proposal and issued a Purchase Order accepting and expressly referencing the Proposal by number. The Proposal expressly incorporated the Terms and Conditions of Proposal on its first page. Winco entered into a written agreement with Progress in April of 2012 to supply similar materials for the Mission Bay Project. The agreement is memorialized in the same form of Proposal from Winco, including the two pages of identical Terms and Conditions of Proposal. Progress received the Proposal and issued a Purchase Order expressly referencing the Proposal by number. The written agreements between Winco and Progress consist of (a) Winco’s Proposal, (b) Progress’ Purchase Order, and (c) subsequent approved Change Orders. The Terms and Conditions of Proposal include a choice of law provision stating: The Terms and Conditions of Proposal include a choice of law provision stating: INTERPRETATION. This contract is to be construed according to the laws of, and under the Uniform Commercial Code as adopted by, the State of Missouri. Il. LEGAL ARGUMENT A. Missouri State Law Applies to the Contracts. California courts have a “strong policy” of enforcing choice of law provisions. Nedlloyd Lines B.V. v. Superior Court (1992) 3 Cal.4th 459, 464. When a choice-of-law 2. MPA RE: WINCO'S MIL NO. 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120w provision exists in a private contract, California courts will honor it unless (a) there is no reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to the fundamental policy of a state that has a materially greater interest. Nedlloyd at 464-465; Rest.2d Conflict of Law, § 187, subd. (2). Both prongs of the test require a two part analysis. First, it must be determined if the chosen state has a substantial relationship to the parties or their transaction, or whether there is any other reasonable basis for the parties’ choice of law. If either element is met, the Court then decides whether application of the law of the chosen state would be contrary to a fundamental policy of, in this instance California, and whether California has a materially greater interest. 1 A Reasonable Basis Exists for Application of Missouri Law. Here, Winco is a Missouri Corporation having its principal place of business in St. Louis, Missouri. Winco’s representatives and employees reside in Missouri. The Proposal was prepared by Winco in Missouri. The products supplied to the Natoma Project and the Mission Bay Project were fabricated within, and shipped from, Missouri. The parties agreed in their express Contracts that Missouri law would apply to any contractual dispute between them. This agreement creates a relationship between the parties and Missouri. E.g., Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 482 (An agreement to be bound by forum law supports a finding of “purposeful availment” of the benefits and protections of local law.) As such, not only is there a substantial relationship between the parties and Missouri but there is a reasonable basis for the application of Missouri law. 2. California has no Fundamental Policy That Would Require That California Laws Should Apply to this Dispute. The standard this Court must apply is whether application of the Missouri choice of law provision would be “contrary to a fundamental policy” of the State of California and whether California has a materially greater interest. The California Supreme Court has held that there is no fundamental public policy related to its contract laws. Aerojet-General Corp. v. Transport Indem. Co. (1997) 17 Cal.4th 38, 75. 3. MPA RE: WINCO’S MIL NO. 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120In California, a fundamental public policy is a distinct interest that must arise out of, or be tethered to, a statute or constitutional provision. See, e.g., Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 74 (Federal safety regulations “promulgated to address important safety concerns may serve as a source of fundamental public policy. The regulations satisfy our requirement that the action be tethered to fundamental policies delineated in a statutory or constitutional provision.”). In determining public policy "... courts should venture into this area, if at all, with great care and due deference to the judgment of the legislative branch, ‘lest they mistake their own predilections for public policy which deserves recognition at law.’” Gantt v. Sentry Ins. (1992) 1 Cal.4th 1083, 1095 overruled on other grounds by Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 71 (“[A]side from constitutional policy, the Legislature, and not the courts, is vested with the responsibility to declare the public policy of the state.”) “A review of the pertinent case law in California and elsewhere ... reveals that few courts have recognized a public policy claim absent a statute or constitutional provision evidencing the policy in question.” Gantt, supra at 1090, Whether California's contract laws constitute public policy was addressed in Boghos y. Certain Underwriters at Lloyd’s, London (2005) 36 Cal.4th 495, There, an insured brought claims for breach of contract and bad faith, among others, against a disability insurer. The insurer moved to compel arbitration under a provision in the policy that stated the parties agree to waive the right to a jury trial and submit to binding arbitration under the commercial arbitration rules of the American Arbitration Assoc. In determining whether the arbitration provision was enforceable, the court construed the policy language “based on the same state law standards that apply to contracts generally.” Jd. The court held the arbitration provision to be a clear and unambiguous agreement by the parties to submit to arbitration. The Supreme Court then determined whether the insured’s claims were protected by public policy and concluded that they were not. Id., 36 Cal.4th at 506-508. Specifically, the court held that “nonpayment of benefits [i.e., the contract claim] and breach of the covenant of good faith and fair dealing cannot properly be ... described” as “unwaivable claims 4. MPA RE: WINCO’S MIL NO. I TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120based on or tethered to statutes.” Id. at 507. (Emphasis added.) If anything, a fundamental policy of California would be contradicted if this Court were to ignore, rewrite or omit a plain contract term absent a finding that enforcement would violate a fundamental policy. j| See, e.g. Aerojet-General Corp. v. Transport Indem. Co. (1997) 17 Cal.4th 38, 75 (“Asa i general matter at least, we do not add to, take away from, or otherwise modify a contract for ‘public policy considerations.’”) Missouri State law applies to the contracts at-issue in this action. Accordingly, Winco seeks an appropriate order precluding reference to, or application or, California legal }| authority, | Respectfully submitted, Dated: January 15, 2016 WOLKIN « CURRAN, LLP David F. Myers Attorneys for Plaintiff, WINCO WINDOW COMPANY, INC. 5. | MPA RE: WINCO’S MIL NO, 1 TO PRECLUDE APPLICATION OF CALIFORNIA LAW CASE NO. CGC-14-537120