Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_02-cv-05200/USCOURTS-caed-1_02-cv-05200-9/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Account Receivable

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

FLAGSHIP WEST, LLC, et al., )

)

)

)

Plaintiffs, )

)

vs. )

)

)

EXCEL REALTY PARTNERS, L.P., )

et al., )

)

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Defendants. )

)

)

No. CV-F-02-5200 OWW/DLB

ORDER CONTINUING ORAL

ARGUMENT ON MOTIONS FOR

ATTORNEYS' FEES FROM MONDAY,

OCTOBER 22, 2007 TO MONDAY,

DECEMBER 3, 2007 AND

DIRECTING PARTIES TO FILE

SUPPLEMENTAL BRIEFS 

Oral argument on the parties' respective motions for

attorneys' fees is hereby continued from Monday, October 22, 2007

to Monday, December 3, 2007 so that the parties can file the

supplemental briefs ordered herein.

Defendant New Plan Excel Realty Trust, Inc.’s motion for

attorneys’ fees is based primarily on New Plan’s contention that

it is a prevailing party because New Plan’s motion for judgment

as a matter of law pursuant to Rule 50(a), Federal Rules of Civil

Procedure, was granted on November 26, 2003 based on Section

Case 1:02-cv-05200-LJO-SAB Document 478 Filed 10/16/07 Page 1 of 3
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22.25 of the Ground Lease.

In their supplemental opposition to New Plan’s motion for

attorneys' fees, Plaintiffs refer to the “Order re: Post Trial

Election of Remedies; Defendants’ Claimed Rescission Waiver

Clause; Defendants’ Claimed Damage Limitation Clause” filed on

November 19, 2004 (Doc. 353) (November 19, 2004 Order):

D. Rescission’s Effect on Contractual

Clauses.

Plaintiffs are correct in stating that

rescission would void ordinary contractual

clauses such as § 22.25. Once a contract is

rescinded, all its provisions cease to have

effect. See Larsen v. Johannes, 7 Cal.App.3d

491, 501 (Cal.Ct.App.1970)(citing Lemle v.

Barry, 181 Cal.1, 5 (Cal.1919)) (‘When a

contract is rescinded, it ceases to exist. 

If the action to rescind or an action based

on an alleged rescission or abandonment is

successful, the contract is forever ended and

its covenants cannot thereafter be enforced

by any action’). In an unpublished state

court opinion, an analogous question was

posed: ‘The issue presented is elemental –-

may a defendant resist an action for

rescission by relying on a liquidated damages

provision of the contract the plaintiff is

seeking to rescind? The answer is equally

simple –- no.’ BTS, Inc. v. Sonitrol Corp.

of Contra Costa, ... 2002 WL 234889 (Cal.App.

1 Dist., Feb. 19, 2002)(‘rescinded contract

is an extinguished contract meaning that it

has ceased to exist and none of its

provisions can be enforced by any party’).

...

G. Conclusion

... In the event rescission is elected, §

22.25 cannot be enforced as rescission avoids

enforceability of clauses of the Lease,

including damage limitations.

Case 1:02-cv-05200-LJO-SAB Document 478 Filed 10/16/07 Page 2 of 3
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Plaintiffs contend that the Court appears to have inadvertently

overlooked this determination in entering Judgment for New Plan

following the election of rescission and award of rescission and

consequential damages. Plaintiffs assert that the Court has the

inherent power to correct the Judgment pursuant to Rule 60(a),

Federal Rules of Civil Procedure, and further assert that the

election of rescission negates New Plan’s contention that it is a

prevailing party.

Defendants have not filed a brief addressing these specific

contentions. Because resolution of these issues may be of

critical importance to the resolution of the motions for

attorneys’ fees, Defendants are ordered to file a supplemental

brief addressing these issues on or before Monday, November 5,

2007. Plaintiffs’ reply, if any, shall be filed on or before

Monday, November 19, 2007.

IT IS SO ORDERED.

Dated: October 16, 2007 /s/ Oliver W. Wanger 

668554 UNITED STATES DISTRICT JUDGE

Case 1:02-cv-05200-LJO-SAB Document 478 Filed 10/16/07 Page 3 of 3