>Land Lot 1
v. City of Bakersfield













Filed
6/21/12 Land Lot 1 v. City of
Bakersfield CA5











NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS



California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.





IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT


>

LAND LOT 1, LLC, Plaintiff and Appellant, v. CITY OF BAKERSFIELD, Defendant and Respondent.

F061621 (Super. Ct. No. S-1500-CV 263357 WDP) >OPINION

APPEAL from
a judgment of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Kern County. William D. Palmer, Judge.

Neil S.
Tardiff for Plaintiff and Appellant.

Clifford
& Brown, Arnold J. Anchordoquy and Daniel T. Clifford for Defendant and
Respondent.

-ooOoo-

Plaintiff,
Land Lot 1, LLC (Land Lot), appeals from the judgment entered after the trial
court granted a motion for judgment
on the pleadings in favor of defendant, City of Bakersfield (the city), which
was made on the first day of trial. The
motion was granted on the ground Land Lot had assigned its interest in the
litigation to certain individuals in violation of a provision in the contract
between Land Lot and the city that prohibited assignment of the agreement or
any interest in it without the consent of the other party. We conclude that the assignment of Land Lot’s
causes of action alleged in the complaint was not an assignment of an interest
in the contract and was not barred by the nonassignment clause. Therefore, there was no defect on the face of
the complaint and no ground on which to grant judgment on the pleadings. Accordingly, we reverse.

>FACTUAL AND PROCEDURAL BACKGROUND

The
complaint alleges that Land Lot and the city entered into a contract for the
exchange of real property. Land Lot was
to transfer two 20-acre parcels it owned (the Planz Property) to the city in
exchange for 40 acres the city owned (the Berkshire Property). Land Lot agreed to fill and grade the Planz
Property, which had been used for mining sand, to put it in farmable condition
in accordance with a grading plan approved by the city. Land Lot also agreed to a general plan
amendment and zone change, changing the zoning of the Planz Property from M-3
to open space. The city, at the expense
of Land Lot, agreed to process a general plan amendment and zone change for the
Berkshire Property to change it to R-2 or PUD zoning. Land Lot performed, grading the Planz
Property in conformance with the approved grading plan. The city arbitrarily determined the grading
was insufficient and demanded that Land Lot import 400,000 to 500,000 cubic
yards of dirt at a cost in excess of $2,000,000. Land Lot requested that the city perform its
obligations under the contract and complete the exchange, but the city refused
to close escrow. On March 21, 2008, Land
Lot filed its complaint, which included six causes of action: (1) breach of contract, (2) breach of the
covenant of good faith and fair dealing, (3) declaratory relief, (4) specific
performance, (5) inverse condemnation, and (6) violation of civil rights (42
U.S.C. § 1983 (hereafter § 1983)).

On August 6, 2009, Land Lot and
Ricardo Huelga, Lee Vincent LaVelle, Laurette Marie LaVelle, William R. Tuculet
and Katherine L. Tuculet (collectively the Huelga group), filed a motion for
leave to amend the complaint to substitute the Huelga group as plaintiff in
lieu of Land Lot with respect to one 20-acre parcel of the Planz Property. Land Lot had defaulted on a loan made by the
Huelga group, which was secured by a deed of trust on the 20-acre parcel; the
Huelga group had purchased the parcel at a trustee’s sale. On September 1, 2009, the court granted the
motion. On November 30, 2009, the city
and the Huelga group stipulated to entry of judgment between them. A partial judgment was entered in accordance
with the stipulation.

On October 28, 2009, Land Lot filed
a notice of transfer of interest in the action.
It notified the court and all parties that “the interest of Land Lot 1,
LLC in all causes of action that are the subject of this litigation” had been
transferred to S. Brett Whitaker and Kathy L. Whitaker, as trustees of the
Whitaker Family Trust; Newton Construction, Inc.; Mike Buzzetti; Forrest D.
Martin and Eleanor Frances Martin, as trustees of the Martin Family Revocable
Trust; Craig Painter; and Julianne Painter (collectively, the Whitaker
group). The notice stated: “Pursuant to California Code of Civil
Procedure § 368.5, this transfer does not cause the action to abate, and the
action may be continued in the name of the original party.”

On January 5, 2010, the first day
of trial, the city filed a motion for judgment on the pleadings. The city contended the property exchange
agreement contained a nonassignment clause, which precluded Land Lot’s assignment
of its rights in the agreement to the Whitaker group. The city contended this clause prevented the
Whitaker group from recovering any damages on any claims arising out of the
contract; it sought judgment in its favor.
The court continued argument on the motion to permit Land Lot to file
opposition, and eventually heard the matter on May 7, 2010. At that hearing, Land Lot presented an
agreement in which it contended Land Lot and the Whitaker group had rescinded
the transfer of Land Lot’s interest in the action to the Whitaker group. Land Lot contended the rescission rendered
the city’s motion for judgment on the pleadings moot, since the motion was
based on the rescinded transfer; it argued the motion should therefore be
denied. After further briefing, on July
14, 2010, the court granted the city’s motion for judgment on the
pleadings. On November 1, 2010, the
court entered judgment in favor of the city and against Land Lot. Land Lot appeals.

>DISCUSSION

>I. Judgment
on the Pleadings

A motion
for judgment on the pleadings by a defendant may be made on the ground “[t]he
complaint does not state facts sufficient to constitute a cause of action
against that defendant.” (Code Civ.
Proc., § 438, subd. (c)(1)(B)(ii).) The
grounds for the motion must appear on the face of the challenged pleading or
from matter of which the court is required to, or may, take judicial
notice. (Code Civ. Proc., § 438, subd.
(d).) “In determining whether the pleadings, together with matters that may be
judicially noticed, entitle a party to judgment, a reviewing court can itself
conduct the appropriate analysis and need not defer to the trial court.” (Schabarum v. California Legislature
(1998) 60 Cal.App.4th 1205, 1216 (>Schabarum).) The decision is governed by the de novo
standard of review. (>Kapsimallis v. Allstate Ins. Co. (2002)
104 Cal.App.4th 667, 672.) The reviewing
court is “‘“required to render [its] independent judgment on whether a cause of
action has been stated”’ [citation], without regard for the trial court’s reasons
for granting the motion.
[Citation.]” (>County of Orange v. Association of Orange
County Deputy Sheriffs (2011) 192 Cal.App.4th 21, 32.) Thus, we review the matter de novo.

“Matters
which are subject to permissive judicial notice must be specified in the notice
of motion, the supporting points and authorities, or as the court otherwise
permits.” (Schabarum, supra, 60
Cal.App.4th at p. 1216, citing Code Civ. Proc., § 438, subd. (d).) The city’s motion for judgment on the
pleadings argued that Land Lot’s complaint was rendered defective by Land Lot’s
notice, filed with the trial court, that it had transferred its interest in
this action to the Whitaker group. The
notice of motion for judgment on the pleadings did not mention any request for
judicial notice. The caption of the
city’s memorandum of points and authorities indicated a request for judicial
notice was being filed concurrently, but that request is not part of the record
on appeal. The city’s points and
authorities identified the notice of transfer, noted that it had been filed
with the trial court, and stated it was attached as an exhibit to the request
for judicial notice. Land Lot’s
opposition acknowledged it had filed a notice of transfer of interest with the
court; Land Lot did not oppose any request for judicial notice of that
document. The trial court noted, at the
first hearing, that it had received a request for judicial notice of “the
court’s files.” It obtained the parties’
agreement that the transfer reflected in the notice of transfer had
occurred. Thus, the trial court
effectively took judicial notice of the notice of transfer and considered the
effect of the transfer on the claims alleged in the complaint. Because the parties agreed the transfer took
place, we will give it the same consideration.href="#_ftn1" name="_ftnref1" title="">^[1]

>II. Effect
of Assignment on Claims against the City

“An assignment of a right is a manifestation
of the assignor’s intention to transfer it by virtue of which the assignor’s
right to performance by the obligor is extinguished in whole or in part and the
assignee acquires a right to such performance.”
(Rest.2d Contracts, § 317, subd. (1).)
A right arising out of an obligation may be transferred by the person to
whom the obligation is due; “[t]he burden of an obligation may be transferred
with the consent of the party entitled to its benefit, but not otherwise.” (Civ. Code, §§ 1457, 1458.) This state has a strong policy in favor of
the free transferability of all types of property, including rights under
contracts. (Farmland Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 208,
222; Benton v. Hofmann Plastering Co.
(1962) 207 Cal.App.2d 61, 68 (Benton).)

Contract
provisions prohibiting assignment of the contract, or of rights or interests in
the contract, without the consent of the other party are generally valid and
enforceable. (Henkel Corp. v. Hartford
Accident & Indemnity Co. (2003) 29 Cal.4th 934, 943 (Henkel);
Gordon Bldg. Corp. v. Gibraltar Sav.
& Loan Assn. (1966) 247 Cal.App.2d 1, 6-7.) Such restrictions on assignment, however, are
strictly construed. (>Benton, supra, 207 Cal.App.2d at p.
68.) In Benton, Hofmann and Coelho entered into agreements by which
Hofmann, a plastering contractor, subcontracted lathing work to Coelho. (Benton,
supra, 207 Cal.App.2d at p. 65.) Plaintiff
and Coelho contracted for plaintiff to finance these lathing jobs; Coelho
assigned to plaintiff the proceeds of all subcontracts for which plaintiff had
advanced it money. (Id. at pp. 64-66.) The
Hofmann-Coelho subcontracts contained a provision “‘[t]hat no assignment of
this Subcontract, nor of any money due or which may become due hereunder
shall be made without the written consent of the Contractor [Hofmann].’” (Id.
at pp. 66-67.) The court observed that,
by clear language, the parties to a contract may provide that the contract
rights are not assignable. (>Id. at p. 67.) However, “[t]here is a distinction between an
assignment of a contract and an assignment of the proceeds of the
contract.” (Ibid.) Ordinarily, a
nonassignment provision does not preclude the assignment of money due or to
become due under the contract. But in
this case, the nonassignment provision expressly prohibited assigning either
the contract or the money due under it.
(Ibid.) “The area of limitations on assignments is,
of course, one in which the courts strictly construe such restrictions just as
they jealously guard the right to transfer property in general. However, explicit language will be followed
in cases of this kind.” (>Id. at p. 68.) Accordingly, the nonassignment provision was
valid and enforceable, precluding recovery of proceeds of the subcontracts by
the assignee (plaintiff) against the nonassigning party (Hofmann). (Id.
at p. 69.)

A nonassignment clause prohibiting
assignment of the contract, or the rights or interests under the contract, does
not preclude assignment of a cause of action for breach of the contract. “In California a ‘chose in action,’ also
known as a ‘thing in action,’ is statutorily defined as ‘a right to recover
money or other personal property by a judicial proceeding.’” (Baum
v. Duckor, Spradling & Metger (1999) 72 Cal.App.4th 54, 64, citing Civ.
Code, § 953 (Baum).) “A thing in action, arising … out of an
obligation, may be transferred by the owner.”
(Civ. Code, § 954.) Thus, a cause
of action for breach of contract is a thing in action and may be transferred or
assigned. Assignability of things in
action is the rule, and nonassignability the exception. (Baum,
supra, 72 Cal.App.4th at p. 65.) The
Restatement Second of Contracts provides:

“(1) Unless the circumstances
indicate the contrary, a contract term prohibiting assignment of ‘the contract’
bars only the delegation to an assignee of the performance by the assignor of a
duty or condition.

“(2) A contract term
prohibiting assignment of rights under the contract, unless a different
intention is manifested,

“(a) does not forbid assignment of a right to damages for breach of the
whole contract or a right arising out of the assignor’s due performance of his
entire obligation;

“(b) gives the obligor a right
to damages for breach of the terms forbidding assignment but does not render
the assignment ineffective;

“(c) is for the benefit of the
obligor, and does not prevent the assignee from acquiring rights against the
assignor or the obligor from discharging his duty as if there were no such
prohibition.” (Rest.2d Contracts, § 322,
italics added.)

In >Trubowitch
v. Riverbank Canning Co. (1947) 30 Cal.2d 335 (Trubowitch),
the defendant and Pan American Food Corporation entered into a contract by
which the defendant was to sell tomato paste to Pan American. Pan American dissolved and assigned its
assets to the plaintiffs, its shareholders; the plaintiffs formed a partnership
and carried on the business of Pan American.
The plaintiffs sought arbitration of their claim that the defendant
failed to make deliveries under the contract.
The defendant contended the plaintiffs could not invoke the arbitration
provision in the contract, because they were purported assignees, but the
contract contained a provision prohibiting assignment of the contract without
consent of the defendant. (>Id. at p. 338.) The plaintiffs contended they were assigned
only a claim for money damages for nonperformance, which was not within the
scope of the provision prohibiting assignment of the contract. (Id.
at p. 339.)

“‘Where a bilateral contract in terms forbids
assignment, it becomes a matter of interpretation as to what is meant. Is it intended that a duty under the contract
shall not be delegated, or is it intended that a right shall not be assigned,
or are both prohibitions intended?’
[Citation.] Even if it is assumed
that the prohibition against assignments relates to rights rather than duties,
it does not necessarily apply to all claims under the contract or to all
transfers of the contract rights. It is
established that in the absence of language to the contrary in the
contract, a provision against assignment does not govern claims for money due
or claims for money damages for nonperformance; [citation] … that a
provision against assignment in a contract or lease does not preclude a
transfer of the rights thereunder by operation of law [citations]; and that if
an assignment results merely from a change in the legal form of ownership of a
business, its validity depends upon whether it affects the interests of the
parties protected by the nonassignability of the contract. [Citations.]”
(Trubowitch, supra, 30
Cal.2d at pp. 344-345, italics added.)

The court concluded the defendant
had refused to make deliveries under the contract prior to the time the
assignment to the plaintiffs was made, giving Pan American a claim for money
damages for nonperformance. (>Trubowitch, supra, 30 Cal.2d at p.
342.) “The assignment of the contract
rights related clearly to the claim for nonperformance of the contract, for
when it made the assignment Pan American Food Corporation could not
reasonably expect that the goods would be delivered.” (Ibid.) Additionally, assignment of the contract
rights to the shareholders of the corporation, who continued the business after
dissolution of the corporation and distribution of its assets to the
shareholders, was not a prohibited assignment.
(Id. at pp. 344-345.) The defendant’s interests would not be served
by preventing such an assignment. The
assets of the corporation were distributed to the shareholders subject to the
rights of creditors of the corporation, and dissolution of the corporation did
not terminate its ability to enforce a contract for the delivery of goods. (Id.
at p. 345.) The court reversed the trial
court’s determination that the plaintiffs could not enforce the contract by
compelling defendant to arbitrate the dispute.

In Balfour, Guthrie & Co. v. Hansen (1964) 227 Cal.App.2d
173, Southwest Storage Company hired Hansen to build 10 silos on its
property. Hansen secured a performance
bond from Pacific Indemnity. (>Id. at p. 175.) After the silos were built, Southwest sold
them to Hill, who sold them to Balfour.
About seven years after completion of the silos, Balfour observed pieces
of concrete breaking loose inside the silos.
Investigation revealed that the reinforcing steel in the silos did not
comply with the specifications. Balfour
settled its claims against Southwest and received an assignment of Southwest’s
claims; Balfour, as assignee, sued Hansen and Pacific Indemnity for
fraudulently representing that the silos had been built in accordance with the
construction contract. (>Id. at pp. 181-182.) The defendants contended Balfour had no cause
of action against Pacific Indemnity because of a restriction in the bond which
stated: “‘No right of action shall
accrue under this bond to or for the use of any person other than the said
Obligee.’” (Id. at pp. 177, 187.) The
trial court found Hansen breached the construction contract and was guilty of
fraud, and Pacific Indemnity was liable on the performance bond. (Id.
at p. 184.) On appeal, the defendants
challenged the finding that Southwest’s causes of action for breach of contract
and on the performance bond were validly assigned to Balfour. (Id.
at pp. 184-185.)

In determining the effect of the restrictive
clause in the bond, the court distinguished “between a contract (the bond) and
rights coming into existence after breach of that contract.” (Balfour,
supra, 227 Cal.App.2d at p. 187.)
Citing Trubowitch, the court
stated that “‘a provision in a contract … against assignment does not preclude
the assignment … of money damages for the breach of the contract.’” (Balfour,
at p. 187.) “‘[I]f such an interpretation
of a policy is possible, an assignment of a right which has already accrued
under the policy is held not to be within prohibition against assignment; and
even though the policy clearly forbids assignment after as well as before loss,
it has been held that the provision is void.’
[Citation.]” (>Id. at pp. 187-188.) Accordingly, the court affirmed the judgment
against Pacific Indemnity.

The contract between Land Lot and
the city provided: “Neither this
Agreement, nor any interest in it, may be assigned or transferred by either
party without the prior written consent of the other party.” Land Lot’s notice of transfer stated that its
“interest … in all causes of action that are the subject of this litigation”
had been transferred to the Whitaker group.
Thus, Land Lot did not transfer or assign its interest in the contract
itself; it transferred the already existing alleged causes of action against
the city being prosecuted in this action, including the cause of action for
breach of the property exchange contract.
Assignment of Land Lot’s accrued causes of action was not barred by the
provision prohibiting assignment of the contract.

The city argues that the phrase “this Agreement [or] any interest in it”
includes an interest in a cause of action for breach of the agreement. We disagree.
In Comunale v. Traders &
General Ins. Co. (1958) 50 Cal.2d 654, the insurer invoked a clause
in an insurance policy it issued, which provided that an
assignment of an interest under the policy would be binding only with the
insurer’s consent; the court applied the “well settled [rule] that such a
provision does not preclude the transfer of a cause of action for damages for
breach of a contract.” (>Id. at pp. 661-662.) Balfour
indicates that, where a cause of action for breach of contract has already
accrued, a nonassignment clause does not preclude assignment of that cause of
action. (Balfour, supra, 227 Cal.App.2d at pp. 187-188.)

The rationale for permitting
assignment of a cause of action for money damages for breach of contract even
in the face of a nonassignment clause “is that, on breach (or anticipatory
breach) of the contract, the nonassignability clause ceases to bind the other
party, because that party may then elect his or her remedy of damages for breach,
and the assignment will be treated as a transfer of an accrued cause of
action.” (1 Witkin, Summary of Cal. Law
(10th ed. 2010) Contracts, § 716.) Additionally, prohibiting assignment of the
rights and duties due under the contract preserves the parties’ right to choose
with whom to contract; once a cause of action for breach has accrued, however,
no further performance under the contract is expected and no interest of a
contracting party is served by prohibiting assignment of the cause of action.

In Folgers Architects Limited v. Kerns (2001) 262 Neb. 530, 633 N.W.2d
114 (Folgers), the court concluded a
nonassignment clause applying to “any interest” in the contract did not bar
assignment of a cause of action for its breach.
There, the contracts between a property owner and the architect that
designed apartment complexes for the owner contained a provision that “‘Neither
the Owner nor the Architect shall assign, sublet or transfer any interest in
this Agreement without the written consent of the other.’” (Id.
at p. 544.) The court discussed other
cases with similar nonassignment provisions.
In one case involving a dispute between a construction company and an
architect, “the architect … argued that the contract prohibited the assignment
of ‘any interest,’ which necessarily included a cause of action for
breach of contract. [Citation.] Reasoning that the contractual language at
issue was ‘a boilerplate provision intended to prohibit the exchange of
contractual performances’ and that the architect had completed the terms of the
contract prior to the assignment, the court held that the clause did not
prohibit the assignment of a cause of action for breach of contract. [Citation.]”
(Id. at p. 545.) Another case discussed in >Folgers reasoned: “The law draws a distinction between the
right to assign performance under a contract and the right to receive damages
for its breach. The nonassignability
clause prohibits the assignment or transfer of any ‘interest in this
agreement.’ This ‘any interest’ language must be construed to mean any interest
in the performance of the executory contract. [¶]
Plaintiffs contend, and we agree, that this is a suit for damages for
breach of a fully executed contract and is not a suit for performance by
the Architects of an executory contract.
What the plaintiffs acquired by the assignment was any claim that [the
owner] had against the Architects for money damages for nonperformance and such
a claim is not within the scope of the clause prohibiting assignment of ‘any
interest in this agreement.’” (>Folgers, supra, 262 Neb. at p. 546.)

The Folgers court concluded that “[a]ssigning an interest in a
[contract] directly affects the parties’ actual performance of the contract,
whereas the assignment of a right to collect damages for a breach of contract,
as in the instant case, does not.
Therefore, the intent of the provision against assignment of rights
under a contract, which generally is to
allow the parties to choose with whom they contract, is not affected by
allowing an assignment of a right to collect damages for breach of
contract.” (Folgers, supra, 262 Neb. at pp. 546-547, italics added.) Consequently, because the assignment in issue
occurred after the contracts were breached, the assignment of a cause of action
for breach of the contracts was valid and not barred by the nonassignment
clause. (Id. at p. 547.)

We find Folgers’ reasoning persuasive.
Land Lot’s complaint alleges both that Land Lot fully performed its
obligations under the property exchange contract and that the city breached the
contract prior to commencement of this action.
Land Lot’s notice of transfer indicates Land Lot assigned to the
Whitaker group its causes of action asserted in this action, including the
cause of action for breach of contract.
Land Lot did not assign its rights or interests in the contract
itself. The specific performance cause
of action having been dismissed previously, the complaint does not seek any
performance under the contract, but seeks only damages for breach of the
property exchange agreement. The
assignment of Land Lot’s causes of action to the Whitaker group is not barred
by the nonassignment clause of that contract.
Consequently, nothing on the face of the complaint or in the matters
considered by the trial court bars the Whitaker group as assignee from pursuing
the claims asserted in the complaint.

Henkel,
by which the trial court apparently was persuaded to grant the motion, does not
support a contrary result. (>Henkel, supra, 29 Cal.4th 934.) In Henkel,
Amchem No. 1, a chemical manufacturer insured by the defendants, transferred
all of its right, title and interest in the assets of its metallic chemical
business to Amchem No. 2. (>Id. at p. 938.) Henkel subsequently purchased all the stock
of Amchem No. 2, acquiring its assets and liabilities. (Id.
at p. 939.) Henkel was sued for injuries
resulting from the claimants’ exposure to metallic chemicals prior to its
purchase of Amchem No. 2. Henkel
tendered the defense of the action to the defendants, who denied coverage. (Ibid.) Henkel settled with the claimants, the
defendants refused to contribute to the settlement, and Henkel sued the
defendants for declaratory relief. (Id.
at p. 940.)

The insurance policies issued to
Amchem No. 1 provided that there could be no assignment of interest under the
policy without the insurer’s consent. (>Henkel, supra, 29 Cal.4th at p.
943.) The defendants did not consent
when Amchem No. 2 acquired Amchem No. 1.
Henkel contended consent to assignment was not required under an
occurrence-based policy when the event giving rise to liability had already
occurred. (Id. at p. 944.) The court
observed that “a provision in a contract … against assignment does not preclude
the assignment … of money damages for the breach of the contract.” (Ibid.) But “when Amchem No. 2 assumed the
liabilities of Amchem No. 1, the duty of defendant insurers to defend and
indemnify Amchem No. 1 from claims of the [claimants] had not become an assignable
chose in action. Those claims had not
been reduced to a sum of money due or to become due under the policy. Defendants had not breached any duty to
defend or indemnify Amchem No. 1, so Amchem No. 1 could not assign any cause of
action for breach of such duty.
[Citation.] Consequently, Amchem
No. 1 could not assign the right to defense and indemnity against such claims
without the insurers’ consent.” (>Ibid.)

Here, in contrast, Land Lot assigned
its causes of action to the Whitaker group after the alleged breach of contract
had occurred and litigation of that claim was in progress. Nothing in Henkel supports a conclusion that Land Lot was precluded by the
nonassignment provision in the property exchange contract from assigning its
accrued causes of action to the Whitaker group.


A nonassignability clause is for the
benefit of the obligor and does not prevent the assignee from acquiring rights
against the assignor by an assignment apparently prohibited by the terms of the
contract. (Benton, supra, 207 Cal.App.2d at p. 68.) “In other words, the interest of the assignor
in the contract passes to the assignee, subject to the rights of the
[obligor].” (Johnston v. Landucci (1942) 21 Cal.2d 63, 68.) This rule applies while the contract is still
being performed. Once a party has
materially breached the contract, the nonbreaching party may make a valid,
enforceable assignment of its cause of action for damages for breach of
contract, regardless of any nonassignment clause in the contract.

Citing McCown v. Spencer (1970)
8 Cal.App.3d 216, 225, the city asserts that, once a party makes an absolute
assignment of a claim to a third party, it cannot maintain an action on that
claim; the assignee acquires the right to demand performance, and the
assignor’s right to performance is extinguished. The city adds that, if the contract contains
a provision prohibiting assignment without consent of the other party, and the
other party does not give its consent, the assignee cannot enforce the contract
against the other contracting party.
From these rules the city concludes that neither the assignor nor the
assignee may prosecute the causes of action alleged in the complaint against
the city. McCown, however, did not address a situation in which the contract
contained a contractual provision prohibiting assignment. Further, neither rule presented by the city
addressed assignment of an existing cause of action for damages for breach of
contract as opposed to assignment of a party’s interest in an executory
contract.

The rule advocated by the city and
adopted by the trial court would result in a complete forfeiture of the cause
of action for a breach of the contract by the nonassigning party. Neither the assignor nor the assignee would
be permitted to enforce the contract; both would forfeit any remedy for the
city’s alleged breach of the contract.
Such a result is not justified by the case authorities relied on by the
city.

>III. Defect
on the Face of the Pleading

“An action or proceeding does not abate by the transfer of an interest in
the action or proceeding or by any other transfer of an interest. The action or
proceeding may be continued in the name of the original party, or the court may
allow the person to whom the transfer is made to be substituted in the action
or proceeding.” (Code Civ. Proc.,
§ 368.5.) This action was initiated
by Land Lot. In the course of the
litigation, Land Lot assigned its causes of action to the Whitaker group. Land Lot gave notice of the assignment, but
indicated the assignor and assignee intended to continue the action in the name
of the original party, Land Lot, as permitted by Code of Civil Procedure
section 368.5. Consequently, the
assignment of Land Lot’s causes of action to the Whitaker group did not result
in a defect on the face of the complaint; the assignment was not a valid ground
for granting judgment on the pleadings.

>IV. Civil
Rights Cause of Action

The city
contends that, even if assignment was not precluded by the nonassignment clause
of the property exchange agreement, the cause of action for violation of Land
Lot’s civil rights under section 1983 was not assignable. The city asserts that civil rights claims
under section 1983 are construed as tort claims for personal injury, which are
not assignable under California law. We
disagree.

The United
States Supreme Court cases on which the city relies refer to civil rights
claims as tort claims. They do not
characterize them as tort claims “for personal injury.” (See City of Monterey v. Del Monte Dunes (1999) 526 U.S. 687, 717 (>Monterey), referring to a government
taking of property for public use without compensation as unconstitutional and
tortious; Heck v. Humphrey (1994) 512
U.S. 477, 483 (Heck), noting “‘that
42 U.S.C. § 1983 creates a species of tort liability’”; Memphis Community School Dist. v. Stachura (1986) 477 U.S. 299, 305
(Memphis), same.) The only case the city cites that refers to
civil rights claims as tort claims for personal injury is Pony v. County of Los Angeles (9th Cir. 2006) 433 F.3d 1138 (>Pony).
Pony involved claims “arising
out of medical procedures” and causes of action for traditional torts and
constitutional violations. (>Id. at p. 1140.) Thus, the claims in that case included torts
for personal injury. The court
stated: “The Supreme Court has construed
claims brought under Section 1983 as tort claims for personal injury.” (Id. at p. 1143.) In support, it cited Monterey, Memphis, and >Heck, none of which mentioned tort
claims for personal injury.

The Pony court also cited >Wilson v. Garcia (1985) 471 U.S. 261 (>Wilson), in which the court determined
that the appropriate statute of limitations for all claims for violation of
section 1983 was the particular state’s statute of limitations for personal
injury claims. The court concluded that,
for the sake of uniformity and certainty, and to minimize litigation, the
courts should “select, in each State, the one most appropriate statute of
limitations for all § 1983 claims.” (>Wilson, supra, at p. 275.) Although “[a]lmost every § 1983 claim
can be favorably analogized to more than one of the ancient common-law forms of
action, each of which may be governed by a different statute of limitations,” (>id. at pp. 272-273) the court concluded
“that the tort action for the recovery of damages for personal injuries is the
best alternative available.” (>Id. at p 276.) The Wilson
court did not address assignability of section 1983 claims or determine the
nature of such claims for purposes of assignability. “An opinion is not authority for a point not
raised, considered, or resolved therein.
[Citations.]” (>Styne v. Stevens (2001) 26 Cal.4th 42,
57-58.)

In
California, “‘“[a]ssignability of
things in action is now the rule; nonassignability, the exception; and this
exception is confined to wrongs done to the person, the reputation, or the
feelings of the injured party, and to contracts of a purely personal nature,
like promises of marriage.”’” (>Balfour, supra, 227 Cal.App.2d at
p. 188.) Nonassignable causes of
action include “slander, assault and battery, negligent personal injuries,
criminal conversation, seduction, breach of marriage promise, malicious
prosecution, and others of like nature.”
(Wikstrom v. Yolo Fliers Club
(1929) 206 Cal. 461, 463.) Assignable
causes of action include: “causes of
action arising from the breach of a contract of any kind (except the breach of
a promise to marry); causes of action arising from torts which affect the
estate rather than the person of the individual who is injured. Under the latter head are claims arising from
the carrying away or conversion, of personal property, from the fraudulent
misapplication of funds by the officer of a bank, from negligent or intentional
injury done to personal property or upon real estate.” (Ibid.) “‘Assignable are choses in action arising out
of an obligation or breach of contract as are those arising out of the
violation of a right of property [citation] or a wrong involving injury to
personal or real property.’
[Citations.]” (>Baum, supra, 72 Cal.App.4th at p.
65.)

We conclude a cause of action for
violation of civil rights, which alleges a taking of real property by a public
entity without compensation, falls within the category of assignable choses in
action. It is not based on a personal
injury or a purely personal wrong. It
seeks redress for a violation of property rights, or for a wrong affecting
property rights, similar to a tort action for injury to real property, which is
assignable. Accordingly, there is no
defect on the face of the sixth cause of action, taking into account the notice
of the assignment to the Whitaker group that would support judgment on the
pleadings in favor of the city on that cause of action.

>V. Effect
of Attempted Rescission

We need not
consider whether the attempted rescission of the assignment was effective. The rescission was not properly before the
trial court when it considered and ruled on the motion for judgment on the
pleadings. Land Lot and the Whitaker
group attempted to rescind the assignment after the motion for judgment on the
pleadings was filed. Thus, the
rescission was not alleged in the complaint, nor was it a trial court record at
the time the motion was filed. Judicial
notice was not requested and could not have been taken of the content of the
documents reflecting the rescission. (>Columbia, supra, 231 Cal.App.3d at p.
473.) The parties did not stipulate to
the rescission as they did to the assignment.


Additionally,
if the rescission was effective, Land Lot would be the proper plaintiff, and
the complaint names it as such. If, as
the trial court found, the rescission was ineffective, the Whitaker group would
be the real party in interest, but the action may be continued in the name of
the original plaintiff, Land Lot. (Code
Civ. Proc., § 368.5.) Either way, there
is no defect on the face of the complaint; therefore there is no ground for
granting judgment on the pleadings.

>DISPOSITION

The
judgment is reversed with directions to the trial court to vacate the order
granting the motion for judgment on the pleadings and to enter a new and
different order denying that motion.
Appellant is entitled to its costs
on appeal.





_____________________

HILL, P. J.

WE CONCUR:





_____________________

LEVY, J.





_____________________

FRANSON, J.