Procedural Posture

Plaintiff claimants sought review of the decision from the Superior Court of Sacramento (California), which granted summary judgment in favor of defendants, Secretary of State and State of California, on plaintiff's claim that defendants improperly disbursed a cash deposit in lieu of bond from a discount buying business when plaintiffs attempted to satisfy a judgment against that business.

 

Overview

A discount buyers business made a statutory cash deposit in lieu of surety bond with defendants Secretary of State and State of California. Plaintiff claimants brought a class action suit alleging the improper disbursement of funds when defendants refused to satisfy plaintiffs' breach of contract judgment against the discount buyers business because all the funds of the cash deposit had been disbursed. The trial court granted summary judgment to defendants and the court reversed and remanded. The court held that defendants improperly disbursed the statutory cash deposit based on the order of presentment of claims because such funds had to be distributed on a pro rata basis when total claims exceeded the amount of the statutory bond or cash deposit. The court held that defendants were bound to the laws of surety because Cal. Civ. Code § 1812.103 permitted a cash deposit to be made with defendants in lieu of a surety bond. The court also held that defendants would be liable beyond the statutory cash deposit amount if it disbursed the full amount of the deposit while having notice that other claimants existed.

 

Outcome: ada attorney

Summary judgment in favor of defendants Secretary of State and State of California was reversed because defendants improperly disbursed a statutory cash deposit bond on the basis of order of presentment of claims rather than on a pro rata basis when the total claims exceeded the amount of the bond and because there was a triable issue on whether defendants had timely notice of plaintiffs' claims.

 

Procedural Posture

Appellants, lessee, assignee, and sublessee of property, sought review of a decision for respondent lessor by the Superior Court of Santa Barbara County (California) in a quiet title action.

 

Overview

The lessor and lessee entered into a lease to drill for oil and gas by a certain time. If there was a non-compliance with the lease, the lease was to be terminated with notice. The lessee and the assignee of the lessee's interests entered into a lease contract with the sublessee to drill for oil and gas. Though the sublessee did not physically begin drilling, the sublessee did: (1) take possession of the land; (2) obtain a permit, license, and bond for drilling; (3) post "no trespassing signs;" (4) bring personal property to the land; and (5) build a road and sump hold. Because the drilling had not begun, the lessor filed a quiet title action without notice to the lessee, sublessee, and assignee. The court reversed. There was no breach of contract where the sublessee did begin drilling operations though no drilling had begun yet. Thus, the lessor had to give notice of the alleged non-compliance with the lease before a quiet title action was filed. Even if the lessor was defrauded, the notice was still required where the lease was not rescinded. Though the trial court failed to provide specific findings, this was not as important of a reason to reverse the trial court's decision.

 

Outcome

The court reversed the decision for the lessor and ruled for the lessee, assignee, and sublessee in a quiet title action.