Grand Central Recycling v. Universal Waste Systems

Grand Central Recycling v. Universal Waste Systems

Filed 2/24/06 Grand Central Recycling v. Universal Waste Systems

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

GRAND CENTRAL RECYCLING & TRANSFER STATION, INC., Plaintiff, Cross-defendant and Respondent, v. UNIVERSAL WASTE SYSTEMS, INC., Defendant, Cross-complainant and Appellant.

B183110 (Los Angeles County Super. Ct. No. BC312389)

APPEAL from a judgment of the Superior Court of Los Angeles County, Richard L. Fruin, Jr., Judge. Affirmed.

Spach, Capaldi & Waggaman, Madison S. Spach, Jr., and Thomas E. Walling for Defendant, Cross-complainant and Appellant.

Montgomery Law Corp. and Michael B. Montgomery for Plaintiff, Cross-defendant and Respondent.

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The trial court granted a motion for judgment on the pleadings (on a cross-complaint) and denied the cross-complainant’s request for leave to amend. We affirm.

FACT

To operate a refuse transfer station in the City of Pomona, Grand Central Recycling & Transfer Station, Inc. wanted to purchase a parcel of industrial land (the Mission Property) but its owners (Mark, Mila, and Jacob Kornwasser) were apparently unwilling to sell to Grand Central. Grand Central therefore entered into an agreement with Lloyd’s Material Supply Co., Inc., pursuant to which Lloyd’s agreed to acquire the Mission Property for Grand Central in exchange for Grand Central’s services. The Kornwassers accepted Lloyd’s offer and an escrow was opened, but Lloyd’s then refused to close escrow.

Grand Central sued Lloyd’s and others, including Universal Waste Systems, Inc. (a competitor which had an existing relationship with the City of Pomona).[1] With regard to Lloyd’s, Grand Central sought damages and specific performance. With regard to the City and Universal Waste, Grand Central alleged that the City had attempted to preempt Lloyd’s purchase of the Mission Property by threatening Lloyd’s with termination of a development agreement Lloyd’s had with the City, and that the City wanted to acquire the Mission Property so it could turn it over to Universal Waste.

Universal Waste answered and cross-complained against Grand Central for intentional and negligent interference with contract and prospective economic advantage, and for violations of Business and Professions Code section 17200 et seq. According to Universal Waste, it entered a waste transport and disposal agreement with the City in 1998, and since that time had been searching for appropriate property for the construction of a transfer station. To that end, Universal Waste had revealed confidential information to California Acrylic Industries, Inc. (CAI), an entity allegedly related to Lloyd’s, which information Grand Central obtained and used to its advantage by arranging its deal with Lloyd’s to purchase the Mission Property before the City could purchase it. When the City learned about Lloyd’s effort to purchase the property and Lloyd’s alleged use of the confidential information, it “settle[d] its disputes” with Lloyd’s and CAI by agreeing to assign its rights to another parcel of land (the East End property) to Lloyd’s in exchange for Lloyd’s termination of its agreement with the Kornwassers, leaving the Mission Property available for purchase by the City. When Grand Central learned of this, it filed suit.

At some later point, Grand Central acquired the Mission property directly from the Kornwassers, then settled or dismissed its claims against all of the defendants except Universal Waste - because Universal Waste would not dismiss its cross-complaint.

Grand Central filed a special motion to strike the cross-complaint (Code Civ. Proc., § 425.16) but lost, and then answered the cross-complaint.[2] Later, Grand Central moved for judgment on the pleadings, contending Universal Waste could not state a cause of action against Grand Central. (§ 438, subds. (a)(1), (c)(1)(B)(ii).) Over Universal Waste’s opposition, the trial court granted the motion without leave to amend, finding that all of Universal Waste’s “claims depend[ed] on it having an enforceable contract with the City that Grand Central interfered with [and since] no such contract [was] pled, all causes of action” failed. Universal Waste appeals from the judgment thereafter entered.

DISCUSSION

Universal Waste (1) claims in conclusory terms that its cross-complaint was sufficient but (2) devotes its brief to a claim that the trial court’s error was not in granting the motion but in doing so without leave to amend. We consider the first point abandoned (Barnes v. Litton Systems, Inc. (1994) 28 Cal.App.4th 681, 685, fn. 4; Cal. Rules of Court, rule 14(a)(1)) and reject the second point.

A.

Leave to amend when a motion for judgment on the pleadings is granted is governed by the same rules as a demurrer, and an order denying leave to amend is not an abuse of discretion where, as here, the pleading shows on its face (or by facts appearing in exhibits attached to the pleading) that it is incapable of amendment. (Virginia G. v. ABC Unified School Dist. (1993) 15 Cal.App.4th 1848, 1852; Holland v. Morse Diesel Internat., Inc. (2001) 86 Cal.App.4th 1443, 1447 [facts in exhibits take precedence over contradictory allegations]; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967; People v. $20,000 U.S. Currency (1991) 235 Cal.App.3d 682, 691; Mercury Casualty Co. v. Superior Court (1986) 179 Cal.App.3d 1027, 1035.) In the context of this case, the burden is on Universal Waste, as cross-complainant, to show the manner in which the cross-complaint could be amended to state a cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

B.

Universal Waste contends the defects in its cross-complaint could “easily be corrected by . . . amend[ment] . . . to include allegations regarding [an] oral waiver and modification between the City and Universal [Waste] of certain of the contract provisions, including the site for the transfer station . . . and the dates that performance was required [plus] additional allegations of Grand Central’s knowledge of the orally modified contract, [and] its specific intent to disrupt th[e] relationship between the City and Universal [Waste].” The exhibits to Universal Waste’s cross-complaint prove otherwise (and were properly considered by the trial court). (Holland v. Morse Diesel Internat., Inc., supra, 86 Cal.App.4th at p. 1447; Columbia Casualty Co. v. Northwestern Nat. Ins. Co. (1991) 231 Cal.App.3d 457, 468.)

Four agreements are attached to the cross complaint:

■ An October 1998 “Waste Hauling and Disposal Agreement” between the City and Universal Waste, which provided that a transfer station would be located on a property owned by Universal Waste on Holt Avenue in the City of Pomona, and that “[n]o supplement, modification or amendment of this agreement [would] be binding unless executed in writing by all of the parties.”

■ A December 2002 “Memorandum of Understanding” (MOU) between the City and CAI (a developer), which provided that the City would help CAI acquire certain properties for development in exchange for CAI’s help in acquiring the Mission Property. The agreement expressly stated that “[n]o third-party benefit is intended to be conferred by any provision of this MOU nor may any third party, whether claiming to be a creditor beneficiary or a donee beneficiary, act in reliance upon any provision hereto or claim of any right, benefit or entitlement under this MOU.”

■ An April 2004 agreement between Lloyd’s and Grand Central, which obligated Lloyd’s to sell the Mission Property (which was then in the Kornwasser-Lloyd’s escrow) to Grand Central, and which obligated Grand Central to provide solid waste removal services to Lloyd’s in the future.

■ A March 2004 settlement agreement between the City on the one hand, and Lloyd’s and CAI on the other, resolving a dispute based on CAI’s alleged breach of the MOU for failing to support the City’s purchase and development of the Mission Property, and requiring termination of the then-pending sale of the Mission Property to Lloyd’s. In the agreement, CAI agreed “to support and not oppose . . . the City’s development and operation of a Transfer Station on the [Mission] Property regardless of the City’s choice of the operator or owner of the Transfer Station. . . .”

C.

As the trial court observed, all of Universal Waste’s “claims depend on it having an enforceable contract [or relationship] with the City that Grand Central interfered with” - a theory contradicted by the exhibits to the cross-complaint.

Although the 1998 Waste Hauling and Disposal Agreement confirms a contract between the City and Universal Waste, its content shows there was no interference with the relationship based on Grand Central’s purchase of the Mission Property - because the existing contract contemplated and referred to a transfer site on Holt Avenue, not on the Mission Property. Universal Waste claims the Holt Avenue site became unavailable and that the City was looking for replacement properties, and maintains it can amend to allege an oral waiver or modification of the 1998 agreement. This suggestion ignores the fact that the 1998 agreement itself precludes any modification unless it is in a writing signed by all the parties. But even assuming such a modification would be acceptable to the City and could be alleged, (1) there was no interference with the contract - the parties continue to have a relationship, and simply have to continue their effort to locate an appropriate property for their transfer site, and (2) there was no wrongful act by Grand Central separate and apart from any alleged interference - although Grand Central may have obtained and used confidential information in deciding to purchase the Mission Property, it did not violate any confidential or fiduciary relationship. (See Buckaloo v. Johnson (1975) 14 Cal.3d 815, 822, 827-829; Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 390-391, 393.)

Universal Waste was not a party to the 2002 MOU but claims to be a third-party beneficiary - and simply ignores the provision in the MOU that no “third party benefit is intended to be conferred by any provision of the MOU nor may any third party . . . act in reliance upon any provision hereto or claim any right, benefit or entitlement under this MOU.”

Although Universal Waste is correct that the April 2004 agreement between Grand Central and Lloyd’s acknowledged the City’s desire to have Universal Waste operate a new transfer station, Universal Waste’s own pleading acknowledges that the terms of that agreement were never fulfilled by Lloyd’s, and that the Mission Property was never purchased by Lloyd’s. There is also the fact that the City’s settlement agreement with CAI and Lloyd’s left open the possibility of a different transfer station operator.

Accordingly, the fact that Grand Central ultimately purchased the Mission Property does not constitute actionable misconduct. The most that can be said is that Grand Central placed itself in a better position to compete for the City’s waste disposal business, but there is nothing in the existing cross-complaint, its exhibits, or Universal Waste’s description of its proposed amendment to suggest that Grand Central’s acts have any wrongful effect on Universal Waste’s dealings with the City.

Under these circumstances, the trial court did not abuse its discretion when it denied leave to amend.

DISPOSITION

The judgment is affirmed. Grand Central is awarded its costs of appeal.

NOT TO BE PUBLISHED.

VOGEL, J.

We concur:

MALLANO, Acting P.J.

ROTHSCHILD, J.

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[1] Specifically, Grand Central sued Lloyd’s for breach of contract and specific performance; the Kornwassers for specific performance; K&K Lumber Co. (an entity apparently related to the Kornwassers that was named in the caption but not in the body of the complaint); Universal Waste and the City of Pomona for intentional interference with contractual rights and quiet title; and Chicago Title Co. and Inland Empire Escrow Co. for specific performance.

[2] Subsequent undesignated section references are to the Code of Civil Procedure.