Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-01999/USCOURTS-caed-2_04-cv-01999-5/pdf.json

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

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1

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

STOCKTON EXECUTIVE LIMOUSINE

CHARTER SERVICE, INC.,

NO. CIV. S-04-1999 LKK/PAN

Plaintiff,

v.

O R D E R

UNION PACIFIC RAILROAD, et al.,

Defendants.

 /

On September 17, 2004, plaintiff, Stockton Executive 

Limousine Charter Services (“Stockton Executive”), filed a second

amended complaint against defendants Union Pacific Railroad Co.

(UPRC or “Union Pacific”), Crew Transport Services Inc. (CTS), and

Rezenberger, Inc. alleging four causes of action: (1) violation of

§ 17200 of the California Business & Professions Code (against all

defendants); (2) intentional interference with prospective economic

advantage (against CTS and Rezenberger); (3) intentional

interference with contract (against CTS and Rezenberger); and (4)

breach of contract (against Union Pacific). 

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1 At oral argument, counsel for plaintiff also conceded the

statute of limitations arguments raised by Rezenberger in their

papers.

2 Unless otherwise noted, facts are undisputed for purposes

of this motion.

2

The matter is before the court on motions for summary judgment

filed by defendants UPRC and Rezenberger. On February 26, 2006,

plaintiff requested that the court grant Rezenberger’s motion for

summary judgment as to all claims. The court will do so, and

accordingly, this order will not discuss the claims as they relate

to Rezenberger.1

On March 1, 2006, the parties stipulated to dismiss claims

against CTS with prejudice. Consequently, the only claims left in

this litigation relate to Union Pacific (§ 17200 and breach of

contract). Thus, the court will only discuss Union Pacific’s

motion for summary judgment.

I.

UNDISPUTED FACTS2

On May 15, 1979, Western Pacific Railroad (“Western Pacific”)

entered into an agreement with Executive Limousine to provide

Western Pacific with transportation of its employees and crews from

Stockton, California, to points designated by Western Pacific. 

The entire contract reads as follows:

AGREEMENT TO PROVIDE TRANSPORTATION SERVICES

EXECUTIVE LIMOUSINES, a California corporation, hereby agrees

to provide WESTERN PACIFIC and WESTERN PACIFIC hereby agrees

to engage EXECUTIVE LIMOUSINES to transport railroad

employees and crews from Stockton, California, to points

designated by WESTERN PACIFIC. As compensation WESTERN

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3 Donald Bowman, Stockton Executive’s vice-president,

explained that his mother, Caroline Bowman, purchased Executive

Limousines in about 1990, which ultimately became Stockton

Executive. Bowman Dep. at 18:3-6; 27:11-15; 39:8-15. After 1990,

Mecca Equipment Corporation “absorbed” Stockton Executive. 

Caroline Bowman formed Mecca as a vehicle to manage her business

interests, which also include a taxi company and a saloon. Bowman

Dep. at 24:25-25:17.

4 In 1982, the former interstate Commerce Commission approved

a merger between Union Pacific and Western Pacific. Ex. 3, Pl.’s

SAC; Ex. 1, SAC, Union Pacific’s Answer to SAC at ¶¶ 4-5. In

August 1996, the Surface Transportation Board approved a merger

between Union Pacific and Southern Pacific Transportation Company.

See 1996 WL 467636, Surface Transportation Board Decision (August

6, 1996). 

3

PACIFIC agrees to pay EXECUTIVE LIMOUSINES, ONE DOLLAR

($1.00) per railroad mile. WESTERN PACIFIC recognizes that

EXECUTIVE LIMOUSINES is purchasing substantial equipment in

reliance on this agreement and therefore agrees to give

EXECUTIVE LIMOUSINES the exclusive right to transport WESTERN

PACIFIC crews from Stockton, so long as EXECUTIVE LIMOUSINES

is physically capable of providing this service.

The contract was signed by Ken Maybury of Western Pacific and Tom

Daniels of Executive Limousines. Ex. A, Pl.’s Second Amended

Complaint (“SAC”). 

The parties agree that Stockton Executive and Union Pacific

are the successors-in-interest to Executive Limousines and Western

Pacific, respectively. Ex. 1, Pl.’s SAC, Bowman Dep. at 101:13-

101:15.3 Stockton Executive continued to provide transportation

services for Union Pacific train crews after Union Pacific merged

with Western Pacific and Southern Pacific.4 Bowman Dep. at 118:1-

12; 136:19-25. 

From the inception of the 1979 contract through 1996, Stockton

Executive and Union Pacific agreed to set new rates from time to

time for Stockton Executive’s services. Howe Dec. at ¶ 3. 

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4

Stockton Executive expanded its fleet of transportation vehicles

in response to Union Pacific’s request for service under the

Agreement. Howe Dec. ¶ 5. At no time between 1982 and 2001 was

a distinction made between Western Pacific or Union Pacific rail

runs. Howe Dec. ¶ 5. From the mid-1990s through termination of

the contract in June 2001, Stockton unilaterally set new rates at

least once for its services and added charges for driver waiting

time. Howe Dep., at 97:6-98:2; Brandon Dec., Ex. 4 to Howe Dep.

From 1991 to 1996, Union Pacific compensated Stockton Executive at

a rate of $1.48 per railroad mile for transportation services and

$12.00 per hour for waiting time. Howe Dec. at ¶ 6. 

On or about April 23, 1996, Stockton Executive proposed a rate

increase from $1.48 to $1.57 per railroad mile for transportation

services and from $12.00 to $17.00 per hour waiting time. Howe

Dec. at 2; Brandon Dec., Ex. 4 to Howe Dep. Union Pacific did not

agree to these new rates or added charges. Ferrell Dec. at 2; Howe

Dep. at 97:6-98:2. Union Pacific notified Stockton Executive that

it did not agree to the rate increase by letter dated May 17, 1996

from Robin Robinson, General Manager of Crew Transport Services,

Inc. (“CTS”), Union Pacific’s agent. Howe Dec. ¶ 7. At that time,

CTS sent a letter to Stockton Executive asking it to sign an

agreement which provided for new terms. Ex. 5, Howe Dep. 

Stockton Executive’s performance under the contract, i.e.,

transportation services for Union Pacific crews and employees

continued uninterrupted until Union Pacific terminated the

Agreement effective August 8, 2001. Howe Dec. at ¶ 9. On June 8,

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5 Ferrell explains that he wrote a letter to Stockton

Executive cancelling their contract. As explained in the letter,

the reasons why the contract was terminated, included: (1) numerous

safety complaints from Union Pacific train crew employees about the

safety deficiencies of the vehicles used by Stockton, (2) numerous

performance issues where Stockton’s vehicles were late in picking

up and delivering crews, (3) Stockton’s failure to agree to a

contract with specific safety, insurance, operating and indemnity

language, all of which was lacking in the Stockton/Western Pacific

contract and (4) Stockton charging rates that were higher than

existing rates for the Stockton, CA area offered by other carriers.

Stockton also billed Union Pacific for wait time not specified in

the contract. Ferrell Dec. at 2. 

5

2001, Union Pacific terminated the 1979 contract based, in part,

on Stockton Executive’s charges. Ferrell Dec. at 2.5

According to Stockton Executive, it has, at all times, been

“physically capable of providing transportation services to Union

Pacific, its crews and employees and continues to be physically

capable of such performance today.” Howe Dec. at ¶ 10. The

contract, executed on May 15, 1979, is the only written agreement

that exists between Stockton Executive and Union Pacific. Bowman

Dep. at 100:13-101:15, 118:1-12. The contract has never been

modified in writing. 

II.

SUMMARY JUDGMENT STANDARDS UNDER FED. R. CIV. P. 56

Summary judgment is appropriate when it is demonstrated that

there exists no genuine issue as to any material fact, and that the

moving party is entitled to judgment as a matter of law. Fed. R.

Civ. P. 56(c); See also Adickes v. S.H. Kress & Co., 398 U.S. 144,

157 (1970); Secor Limited v. Cetus Corp., 51 F.3d 848, 853 (9th

Cir. 1995).

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6

Under summary judgment practice, the moving party

[A]lways bears the initial responsibility of informing

the district court of the basis for its motion, and

identifying those portions of "the pleadings,

depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any," which it

believes demonstrate the absence of a genuine issue of

material fact. 

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 

“[W]here the nonmoving party will bear the burden of proof at

trial on a dispositive issue, a summary judgment motion may

properly be made in reliance solely on the 'pleadings, depositions,

answers to interrogatories, and admissions on file.'" Id. Indeed,

summary judgment should be entered, after adequate time for

discovery and upon motion, against a party who fails to make a

showing sufficient to establish the existence of an element

essential to that party's case, and on which that party will bear

the burden of proof at trial. See id. at 322. "[A] complete

failure of proof concerning an essential element of the nonmoving

party's case necessarily renders all other facts immaterial." Id.

In such a circumstance, summary judgment should be granted, "so

long as whatever is before the district court demonstrates that the

standard for entry of summary judgment, as set forth in Rule 56(c),

is satisfied." Id. at 323.

If the moving party meets its initial responsibility, the

burden then shifts to the opposing party to establish that a

genuine issue as to any material fact actually does exist.

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586 (1986); See also First Nat'l Bank of Ariz. v. Cities Serv. Co.,

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7

391 U.S. 253, 288-89 (1968); Secor Limited, 51 F.3d at 853. 

In attempting to establish the existence of this factual

dispute, the opposing party may not rely upon the denials of its

pleadings, but is required to tender evidence of specific facts in

the form of affidavits, and/or admissible discovery material, in

support of its contention that the dispute exists. Fed. R. Civ.

P. 56(e); Matsushita, 475 U.S. at 586 n.11; See also First Nat'l

Bank, 391 U.S. at 289; Rand v. Rowland, 154 F.3d 952, 954 (9th Cir.

1998). The opposing party must demonstrate that the fact in

contention is material, i.e., a fact that might affect the outcome

of the suit under the governing law, Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986); Owens v. Local No. 169, Assoc. of

Western Pulp and Paper Workers, 971 F.2d 347, 355 (9th Cir. 1992)

(quoting T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n,

809 F.2d 626, 630 (9th Cir. 1987), and that the dispute is genuine,

i.e., the evidence is such that a reasonable jury could return a

verdict for the nonmoving party, Anderson, 477 U.S. 248-49; see

also Cline v. Industrial Maintenance Engineering & Contracting Co.,

200 F.3d 1223, 1228 (9th Cir. 1999).

In the endeavor to establish the existence of a factual

dispute, the opposing party need not establish a material issue of

fact conclusively in its favor. It is sufficient that "the claimed

factual dispute be shown to require a jury or judge to resolve the

parties' differing versions of the truth at trial." First Nat'l

Bank, 391 U.S. at 290; See also T.W. Elec. Serv., 809 F.2d at 631.

////

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8

Thus, the "purpose of summary judgment is to 'pierce the pleadings

and to assess the proof in order to see whether there is a genuine

need for trial.'" Matsushita, 475 U.S. at 587 (quoting Fed. R.

Civ. P. 56(e) advisory committee's note on 1963 amendments); see

also International Union of Bricklayers & Allied Craftsman Local

Union No. 20 v. Martin Jaska, Inc., 752 F.2d 1401, 1405 (9th Cir.

1985).

In resolving the summary judgment motion, the court examines

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any. Rule

56(c); See also In re Citric Acid Litigation, 191 F.3d 1090, 1093

(9th Cir. 1999). The evidence of the opposing party is to be

believed, see Anderson, 477 U.S. at 255, and all reasonable

inferences that may be drawn from the facts placed before the court

must be drawn in favor of the opposing party, see Matsushita, 475

U.S. at 587 (citing United States v. Diebold, Inc., 369 U.S. 654,

655 (1962) (per curiam)); See also Headwaters Forest Defense v.

County of Humboldt, 211 F.3d 1121, 1132 (9th Cir. 2000).

Nevertheless, inferences are not drawn out of the air, and it is

the opposing party's obligation to produce a factual predicate from

which the inference may be drawn. See Richards v. Nielsen Freight

Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d

898, 902 (9th Cir. 1987).

Finally, to demonstrate a genuine issue, the opposing party

"must do more than simply show that there is some metaphysical

doubt as to the material facts. . . . Where the record taken as a

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9

whole could not lead a rational trier of fact to find for the

nonmoving party, there is no 'genuine issue for trial.'"

Matsushita, 475 U.S. at 587 (citation omitted).

III.

ANALYSIS

Union Pacific moves for summary judgment on both claims

brought against it. As I explain below, Union Pacific’s motion

must be denied in part and granted in part as to the breach of

contract claim, and granted as to the Business and Professions Code

§ 17200 claim.

A. BREACH OF CONTRACT CLAIM

In its second amended complaint, Stockton Executive avers that

Union Pacific breached the 1979 contract in three ways, by: 

“a. engaging transportation companies other than Stockton

Executive, which pursuant to the 1979 contract, should have

been performed exclusively by Stockton Executive;

b. preventing Stockton Executive from providing

transportation services for UPRC employees traveling from

Stockton; 

c. Purporting to cancel the 1979 contract while Stockton

Executive remained “physically capable of providing this

service,” in violation of the terms of the 1979 contract.” 

SAC at 9. 

Defendant argues that it is entitled to summary adjudication

as to the breach of contract claim for several reasons. I turn

to Union Pacific’s contentions below.

1. Was Union Pacific Entitled to Terminate the Contract?

Stockton Executive alleges in its SAC, inter alia, that Union

Pacific breached the 1979 contract by “[p]urporting to cancel the

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6 The court notes that Wilson v. Corrugated Kraft, 117

Cal.App.2d 691, 696 (1963) is distinguishable from the instant

case. There, the plaintiff agreed to buy from the defendant, a box

manufacturer, all of its requirements for corrugated paper

products. Defendant cancelled the contract when plaintiff began

to purchase products from other sources. The court explained that

plaintiff “wilfully departed from a fundamental obligation under

the contract” by actually purchasing products from another

10

1979 contract” while Stockton Executive remained "physically

capable of providing this service.” SAC at 9. Union Pacific, on

the other hand, urges this court to grant summary judgment in its

favor because it argues that because Stockton Executive “materially

breached the Contract when it unilaterally increased the rates and

fees,” Union Pacific was entitled to terminate the contract. Mot.

at 6. Union Pacific’s argument, however, is belied by the

undisputed facts. 

Cal. Civ. Code § 1689 permits the rescission of a contract

“[i]f the consideration for the obligation of the rescinding party

fails, in whole or in part, through the fault of the party as to

whom he rescinds.” As Union Pacific points out, California courts

have applied this provision to entitle a party to rescind a

contract when one party’s “default in performance went to the very

root of the consideration bargained for,” such that the “breach

amounted to a failure of consideration.” See, e.g., Wilson v.

Corrugated Kraft, 117 Cal.App.2d 691, 696 (1963). Defendant relies

on Wilson to argue that Stockton Executive did not have a

unilateral right to set new rates for its services and driver

waiting time, which justified Union Pacific’s termination of the

contract.6 

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manufacturer. In the instant case, although plaintiff sent a

letter purporting to raise rates for its services, when defendant

refused to pay the new rates, plaintiff did not attempt to enforce

the higher rates, but continued to perform so that it cannot be

said that plaintiff did “wilfully depart from a fundamental

obligation under the contract” to perform as promised. 

11

The court cannot agree that Stockton Executive materially

breached the contract by requesting higher rates than previously

agreed in the 1979 contract justifying rescission of the contract.

The parties’ subsequent course of performance undermines

defendant’s contention that plaintiff breached the contract by

raising their service rates and waiting time charges. The record

reflects that Stockton Executive’s attempt to raise service rates

and waiting time charges was promptly rejected by Union Pacific,

at which point the parties continued to perform the contract based

on previous terms. Stockton Executive did not stop its services

when defendant refused to pay the new rates it proposed, nor did

it insist on enforcing the new rates. Rather, it continued to

provide services and accepted the previously agreed upon rates.

The facts do not demonstrate that Stockton Executive denied the

defendant the benefit of the agreement, or that any “default in

performance went to the very root of the consideration bargained

for.” Wilson, supra, at 696.

The parties do not dispute that on April 23, 1996, via letter,

Stockton Executive proposed a rate increase from $1.48 to $1.57 per

railroad mile for transportation services and from $12.00 to $17.00

per hour waiting time. Howe Dec. at 2; Brandon Dec., Ex. 4 to Howe

Dep. Union Pacific notified Stockton Executive by letter dated May

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12

17, 1996 that it did not agree to the rate increases, and also

attached an agreement which provided for new contract terms, though

it is not clear whether that contract was ever signed by Stockton

Executive. What is clear, however, is that the parties continued

to perform the contract uninterrupted until Union Pacific

terminated the contract five years later, in 2001. Howe Dec. at

¶ 9. As Stockton Executive contends, it attempted to renegotiate

its mileage and wait time rates after five years at the same rate,

but Union Pacific “refused to pay the requested increase.” Opp’n

at 4. Union Pacific did not materially breach the contract when

it proposed new rates because it appears they did not enforce these

rates and continued to perform under previous terms. The court

must deny defendant’s motion for summary judgment as to the breach

of contract claim based on this contention. 

2. Scope of Stockton Executive’s Damages

Union Pacific seeks to contain the plaintiff’s damages under

the breach of contract claim to services Stockton Executive

provided to Western Pacific when it merged with Union Pacific in

1982. Union Pacific urges the court to limit any damages award to

that which is “commensurate with Western Pacific’s pre-merger use

of Stockton Executive for trips “from Stockton.” Mot. at 7. It

is unclear from Union Pacific’s brief whether by “commensurate”

Union Pacific means “trips from Stockton” or the amount of business

that existed between the parties before Western Pacific merged with

Union Pacific, or both. Out of an abundance of caution, the court

addresses both possible arguments below. 

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13

I. Trips other than those from Stockton

In discovery, Stockton Executive’s vice president indicated

that he would seek damages associated with the full extent of the

transportation services Stockton Executive provided to Union

Pacific in the years preceding the termination of the contract.

Def.’s Ex. 2 at 70:10-19. The parties do not dispute that the

plain terms of the 1979 contract only required Union Pacific to

give Stockton Executive the “exclusive right to transport [Union

Pacific] crews from Stockton.” Def.’s Ex. A. The record reflects,

however, that Union Pacific also used Stockton Executive “for years

and years transporting crews in other areas,” and that “more than

half” of Union Pacific’s crew “were being transported from

somewhere else.” Bowman Dec. at 101-104. Although plaintiff seeks

damages relating to transportation of services from places other

than Stockton, it cannot do so. 

The court looks first to the contract and a party’s

performance or non-performance in order to determine the measure

of damages sought. "A cause of action for damages for breach of

contract is comprised of the following elements: (1) the contract,

(2) plaintiff's performance or excuse for nonperformance, (3)

defendant's breach, and (4) the resulting damages to plaintiff."

Careau & Co. v. Security Pacific Business Credit, Inc., 222

Cal.App.3d 1371 (1990) (citing Reichert v. Gen. Ins. Co. 68 Cal.2d

822, 830 (1968)). The contract’s terms undoubtedly define the

damages Stockton Executive may claim. It is undisputed that the

only written agreement that existed between the parties, as

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14

successors-in-interests, is the May 15, 1979 contract. The parties

both agree the 1979 contract has never been modified in writing.

Bowman Dep. at 100:13-101:15, 118:1-12. The 1979 contract states

in unambiguous terms, that “EXECUTIVE LIMOUSINES” shall “transport

railroad employees and crews from Stockton, California,” and that

the agreement gives “EXECUTIVE LIMOUSINES the exclusive right to

transport WESTERN PACIFIC crews from Stockton, so long as EXECUTIVE

LIMOUSINES is physically capable of providing this service.” 

Def.’s Ex. A. The plain language of the contract demonstrates that

Union Pacific was not required to use Stockton Executive for trips

other than those that were “from Stockton,” and thus damages must

be confined to any failure on the part of defendants to engage

plaintiff to transport employees and crews “from Stockton.” 

The contract is silent as to the parties’ obligations when

Stockton Executive provided services for trips other than those

“from Stockton.” Plaintiff suggests in its opposition brief that

the parties’ “long, consistent course of performance is

determinative as to the scope of damages Plaintiff may claim.”

Opp’n at 5. Plaintiff relies on City of Santruz v. Younger, 223

Cal.App.2d 818 (1963) and Cutter Lab, Inc v. Twining, 221

Cal.App.2d 320 (1963), which held that course of performance gives

rise to a “practical interpretation” of the original agreement.

It is true that the purpose of judicial interpretation is to

ascertain the parties' intentions, and that the parties' own

practical interpretation of the contract – how they actually acted

- can be an important aid to the court. Nonetheless, the doctrine

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7 Plaintiff has not argued or plead that it is bringing a

breach of contract claim for other contracts which may have been

formed between the parties as to transportation services it

provided for Union Pacific. The complaint makes clear that it is

only suing as to alleged breaches of “terms of the 1979 contract.”

SAC at 9:12, 20. Moreover, a contention of oral amendment would

raise “equal dignities” and statute of fraud issues because of the

statute of frauds which bars an oral agreement.

15

of “practical interpretation” is not applicable in the instant

case. California law establishes that the parties’ course of

conduct, or the doctrine of practical construction, “can only be

applied when the contract is ambiguous, and cannot be used when the

contract is unambiguous.” Crestview Cemetery Ass'n v. Dieden, 54

Cal.2d 744 (1960). Here, the contract unambiguously defines that

the transportation services at issue only related to trips “from

Stockton.” The court cannot - as plaintiff suggests - consider

course of performance to add new terms and obligations to the

contract when the existing contract terms are unambiguous. See

Levi Strauss & Co. v. Aetna Cas. & Sur. Co., 184 Cal.App.3d 1479,

1486 (1986)(“[A] court does not have the power to create for the

parties a contract which they did not make, and it cannot insert

in the contract language which one of the parties now wishes were

there.”) Therefore, any damages award for plaintiff for breach of

contract must relate to trips “from Stockton” as stated in the 1979

contract.7

ii Commensurate to pre-merger use of Stockton

Executive for trips “from Stockton.”

Union Pacific argues that the court should hold that Stockton

Executive’s damages, if any, must be commensurate with Western

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Pacific’s pre-merger use of Stockton Executive for trips “from

Stockton.” Mot. at 11. In their reply brief, defendant contends

that any contract damages must “correspond to the volume of trips

‘from Stockton’ that [Stockton Executive] was performing for

Western at the time of the UPR-Western merger.” Repl. at 10.

These two statements could be read to mean that Union Pacific

believes that contract damages must correspond to the same amount

of business which was what Western had given to Stockton executive

in 1979, whether or not that business included trips “from

Stockton.”

Union Pacific cites a number of cases where courts held that

a merger, in and of itself, does not alter or expand the

contractual obligations of the surviving corporation. See, e.g.,

Hall v. Paramount Pictures Corp., 2002 WL 1858766 (S.D.N.Y. 2002).

While the court agrees that the merger cannot alter the parties’

contractual obligations unless they agreed to obligations outside

of the contract, the court cannot hold that contractual damages in

the instant case must be proportional or commensurate to the amount

of business between the parties pre-merger. The 1979 contract

merely states that Executive Limousine would provide for

transportation services “from Stockton,” and the rates Executive

Limousine would charge for its services and for driver waiting

time. There is no mention of the amount of business, or how much

service plaintiff would provide for defendant, in 1979 or in the

future. Thus, although the court can hold that the contract gave

exclusive rights only as to routes from Stockton, and thus damages

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must relate only as to those rights, the court cannot hold that the

parties agreed to the same volume of business which reflected

Western Pacific’s use of Stockton Executive at the time of its

merger with Union Pacific. Consequently, the court also cannot

hold that plaintiff’s contract damages must be confined to an

amount which corresponds to the amount of business entered into

between the parties pre-merger. See Levi Strauss & Co., 184

Cal.App.3d at 1486 (1986)(“[A] court does not have the power to

create for the parties a contract which they did not make, and it

cannot insert in the contract language which one of the parties now

wishes were there.”).

iii. Statute of Limitations

Plaintiff concedes that it is entitled to damages for

transporation services only for four years before it filed this

suit on November 13, 2003. Thus, the court holds that Stockton

Executive may not seek damages for transportation services it would

have provided before November 13, 1999. 

B. CALIFORNIA BUSINESS AND PROFESSIONS CODE § 17200 CLAIM

Union Pacific contends that Stockton Executive’s § 17200 claim

under California’s Unfair Competition Law (“UCL”) should be

dismissed in its entirety because plaintiff seeks damages available

under contract law, a remedy unavailable under the UCL statute. 

Union Pacific’s argument is well-taken.

The remedies available under the UCL are restitution and

injunctive relief. Korea Supply Co., 29 Cal. 4th at 1144. In the

context of the UCL, an order for restitution compels a defendant

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to return money obtained through an unfair business practice to

those persons in interest from whom the property was taken. Id.

Although restitution “is broad enough to allow a plaintiff to

recover money or property in which he or she has a vested

interest,” Korea Supply, 29 Cal.4th at 1149, “[c]ompensation for

a lost business opportunity is a measure of damages and not

restitution to the alleged victims,” Id. at 1151.

In the instant case, plaintiff’s allegations make clear that

plaintiff takes issue with defendant’s participation in a “scheme”

to “poach runs assigned to Stockton Executive” whereby plaintiff

was deprived of previously contracted business opportunities. See,

e.g., SAC at 6 (defendants “interfer[ed] with known existing

contractual relationship between Stockton Executive between

Stockton Executive and UPRC.”). Plaintiff also concedes that the

gist of its cause of action for violation of California Business

& Professions Code § 17200 is that it had been damaged by

defendant’s conduct, which resulted in Rezenberger performing

transportation services that Stockton Executive allegedly had the

exclusive right to perform. SAC at ¶¶ 14-16, 22.

Nowhere in Stockton Executive’s SAC does it allege - nor could

it - that Union Pacific has engaged in any conduct where it has

obtained money or property that it was not entitled to keep. Nor

has Stockton Executive alleged that Union Pacific is holding funds

that would be akin to unpaid wages, or “vested interests” that

plaintiff is entitled to, which may be considered “restitution”

under Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134

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(2003). The damages sought by Stockton Executive rests on

assertions that, but for Union Pacific’s breach, it would have

provided Union Pacific with additional transportation services.

Plaintiff’s allegations amount to a breach of contract claim and

it is therefore only entitled to contract damages. Because

Stockton Executive seeks damages rather than the limited remedies

available under the UCL, the UCL does not provide a basis for

recovery. Accordingly, this court must grant defendant’s motion

for summary adjudication as to plaintiff’s § 17200 UCL claim.

 IV.

 CONCLUSION

For all the foregoing reasons, the court hereby ORDERS that:

1. Union Pacific’s motion for summary judgment as to the

breach of contract claim is GRANTED in part and DENIED in part as

consistent with the order.

2. Union Pacific’s motion for summary judgment as to the 

§ 17200 claim is GRANTED.

IT IS SO ORDERED. 

DATED: March 23, 2006.

/s/Lawrence K. Karlton 

LAWRENCE K. KARLTON

SENIOR JUDGE

UNITED STATES DISTRICT COURT

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