Fifth District Concludes It Does, Sustaining A Supporting Superior Court Appellate Division Decision In The Cause Before It.
Although the facts were very convoluted, the Fifth District did confront the legal issue of whether the “tort of another” doctrine applies to contractual cases in State Center Community College Dist. v. American Property Holdings, LLC, Case No. F072306 (5th Dist. Aug. 1, 2017) (unpublished).
The appellate court decided that the doctrine did apply to appropriate contractual cases, validating the same result reached by the Los Angeles County Superior Court’s Appellate Division in De La Hoya v. Slim’s Gun Shop, 80 Cal.App.3d Supp. 6, 7-8, 10 (1978). The Fifth District did endorse this extension to contract cases, observing that a “handful of federal and sister-state cases” have referred to De La Hoya “as exemplifying California law”—rejecting the proposition that it was inapt to contract cases. The bottom line was that the litigant in State Center Community College (a community college district) properly relied on this doctrine in a contract case at the trial court level to garner a fee recovery of $581,335.91, plus the opportunity to reap some more fees for winning on appeal.
COMMENT: The key here is that, under the circumstances, the Court believed that damages in the form of attorneys fees incurred in third-party litigation were foreseeable. Therefore, the case might be viewed as an application of the rule of Hadley v. Baxendale we learned in law school, namely, that consequential damages are those losses that the breaching party should have foreseen.