Fifth District Finds No Novation Under the Circumstances.
Here is a contractual interpretation/novation case that presents a set of circumstances we have not reported on to date.
In Miller v. London Properties, Case No. F059259 (5th Dist. Jan. 13, 2011) (unpublished), defendant brokers prevailed in a contractual dispute with plaintiffs over their purchase of an Oakhurst salon known as Sakani Spa. The trial court awarded defendants $78,262.50 in attorney’s fees under an unambiguous fee clause in the purchase agreement.
On appeal, plaintiffs argued that a subsequent independent contractor agreement superseded the purchase agreement, meaning the fee clause also went POOF!
Both the trial and appellate courts disagreed.
The only holistic, reasonable contractual interpretation was that the independent contractor agreement only superseded any prior understandings about one of the plaintiff’s relationships with the spa. Alternatively, under novation principles, there was no clear and convincing evidence of an intent to extinguish the purchase agreement when all the terms of the independent contractor agreement were examined.
Fee award affirmed.
Spa. Hada kurabe hana no shōbuyu kurabe (hoso?), koshi yuki no ya. Artist: Kunichika Toyhara. 1833-1904. Library of Congress.