Opinion ID: 2624588
Heading Depth: 3
Heading Rank: 2

Heading: Is Declaratory Relief Available Pursuant to Code of Civil Procedure Section 1060

Text: Plaintiffs contend that the trial court erred in granting a demurrer with respect to their declaratory relief action, seeking a court judgment declaring the arbitration and other remedial provisions in question unconscionable and unlawful. As explained below, we conclude the court did not err. The pertinent statute, Code of Civil Procedure section 1060 provides: Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought. Code of Civil Procedure section 1060, which provides that a court  may make a binding declaration (italics added) of a litigant's rights or duties, must be read together with section 1061, which states: The court may refuse to [grant declaratory relief] in any case where its declaration or determination is not necessary or proper at the time under all the circumstances. (Code Civ. Proc., § 1061.) The trial court's decision to entertain an action for declaratory relief is reviewable for abuse of discretion. [Citation.] ( Filarsky v. Superior Court (2002) 28 Cal.4th 419, 433 [121 Cal.Rptr.2d 844, 49 P.3d 194].) This discretion is not boundless: Where . . . a case is properly before the trial court, under a complaint which is legally sufficient and sets forth facts and circumstances showing that a declaratory adjudication is entirely appropriate, the trial court may not properly refuse to assume jurisdiction . . . . ( Columbia Pictures Corp. v. DeToth (1945) 26 Cal.2d 753, 762 [161 P.2d 217].) (10) `The purpose of a declaratory judgment is to serve some practical end in quieting or stabilizing an uncertain or disputed jural relation.' ( Maguire v. Hibernia S. & L. Soc. (1944) 23 Cal.2d 719, 729 [146 P.2d 673].) `Another purpose is to liquidate doubts with respect to uncertainties or controversies which might otherwise result in subsequent litigation [citation].' ( Bess v. Park (1955) 132 Cal.App.2d 49, 52 [281 P.2d 556].) ( In re Claudia E. (2008) 163 Cal.App.4th 627, 633 [77 Cal.Rptr.3d 722].) `One test of the right to institute proceedings for declaratory judgment is the necessity of present adjudication as a guide for plaintiff's future conduct in order to preserve his legal rights.' ( American Tel. & Tel. Co. v. California Bank (1943) 59 Cal.App.2d 46, 55 [138 P.2d 49].) (11) As noted, Code of Civil Procedure section 1060 does not require a breach of contract in order to obtain declaratory relief, only an actual controversy. Declaratory relief pursuant to this section has frequently been used as a means of settling controversies between parties to a contract regarding the nature of their contractual rights and obligations. (See, e.g., Columbia Pictures Corp. v. DeToth, supra, 26 Cal.2d at p. 760; Maguire v. Hibernia S. & L. Soc. (1944) 23 Cal.2d 719, 728 [146 P.2d 673]; Gunn v. Giraudo (1941) 48 Cal.App.2d 622 [120 P.2d 177]; Tolle v. Struve (1932) 124 Cal.App. 263, 269 [12 P.2d 61].) In the present case, there is no doubt a present controversy regarding whether certain terms of a contract to which plaintiffs and defendant are parties is unconscionable and unenforceable. It is true that whereas the cases cited above involved situations in which substantive contractual rights are in dispute, in the present case, the controversy is primarily over the enforceability of certain remedies should a future dispute about substantive rights arise. But it is not necessarily true that this distinction is critical in all cases. We have recognized that contractual provisions that severely restrict ordinarily available remedies may undermine substantive rights. (See Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1076-1077 [130 Cal.Rptr.2d 892, 63 P.3d 979] [arbitrations of unwaivable rights must possess certain minimal safeguards so that these rights may be vindicated].) Courts have granted declaratory relief for parties aggrieved by contracts with unlawfully restrictive remedies. In Baker Pacific Corp. v. Suttles (1990) 220 Cal.App.3d 1148 [269 Cal.Rptr. 709] ( Suttles ), a release from future liability that asbestos removal employees were required to sign as a condition of employment, challenged by an employee who had refused to sign the release, was declared void. (12) Nonetheless, as discussed above, declaratory relief is designed in large part as a practical means of resolving controversies, so that parties can conform their conduct to the law and prevent future litigation. There may indeed be cases in which the settlement of questions of the validity of contractual remedies has practical consequences, such as when a party's decision to enter into a contract reasonably turns on the answer to these questions (see Suttles, supra, 220 Cal.App.3d 1148), or when a party alleges with sufficient particularity that the continuation of a contractual relationship plausibly hinges on such answers. But when resolution of the controversy over future remedies would have little practical effect in terms of altering parties' behavior, courts have considerable discretion, pursuant to Code of Civil Procedure section 1061, to deny declaratory relief because it is not necessary or proper at the time under all the circumstances. In the present case, plaintiffs have not with any particularity alleged that the resolution of the declaratory relief action concerning contractual remedies would, at this point, have any practical consequences. No dispute has arisen that would cause these remedial provisions to come into play, and plaintiffs do not allege that the continuation of the contractual relationship depends on the resolution of these questions. We therefore conclude the trial court did not abuse its discretion in sustaining a demurrer to plaintiffs' declaratory relief action.