Court Opinion

ID: 9697264
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:10:20.713235+00
Date Added: 2024-06-11T18:20:30.467558
License: Public Domain

SUNDBY, J.
(dissenting). University of Wisconsin football fans are among the most dedicated in the country. There was a rumor that when they arrived in Pasadena and were denied admission to the Rose Bowl, there was strong sentiment to storm the "Bastille." We now deny them redress against the culpable party, UCLA. We say that UCLA owed no duty to the University of Wisconsin and Badger fans to live up to its commitment under the agreement between the Big Ten Conference and the PAC-10 Conference. We say the contract may not be enforced for their benefit. I disagree and dissent.
The "fans" make a good point: If not them, then who? The Big Ten could sue UCLA for breach of the contract. But what would be its damages? The parties *493damaged would be the fans who lost access to the tickets which should have been allocated to Wisconsin but were allocated by UCLA to others to further ends having nothing to do with the sporting event. For example, UCLA "sold" 4,000 tickets to a deep-pockets donor and 1,233 tickets to persons on condition that they buy UCLA 1994 season tickets. These shenanigans denied Wisconsin fans an opportunity to purchase tickets or obtain the tickets they believed they had purchased.
California law governs the contract issue. Section 1559 of the California Civil Code provides: "WHEN CONTRACT FOR BENEFIT OF THIRD PERSON MAY BE ENFORCED. A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it." (Emphasis added.) Corbin says:
There is a code provision in California and some other western states that a third person may enforce a contract if it was "made expressly for his benefit." This provision should not be held to require "express" words, either written or oral, that the promisee is motivated by a desire to confer a benefit upon the third person. The code provision is merely a provision attempting to express the modem common law empowering contractors to confer rights on third persons. It does not exclude creditor beneficiaries or attempt to state a formal line of distinction between intended beneficiaries and incidental ones.
4 Corbin on Contracts § 776, at 23-24 (1951).
Applying an identical provision in North Dakota law, the federal district court, citing Corbin, stated: "[T]he North Dakota decisions construing the statute have done so resorting to the traditional formula, i.e., determining whether one is an intended beneficiary *494who can sue on the contract as opposed to an incidental beneficiary who may not." United States v. Dairyland Ins. Co., 513 F. Supp. 1017, 1018 (D.N.D. 1981), rev'd on other grounds, 674 F.2d 750 (8th Cir. 1982). The court further stated:
The primary test in determining whether a party may sue as a third-party beneficiary is the "intent to benefit" test. If in reading the contract in light of all the surrounding circumstances, an intent to benefit a third party is shown, the beneficiary is an intended beneficiary. If no such intent to benefit is shown, the asserted beneficiary is merely an incidental beneficiary and cannot enforce the contract.
Id. at 1018-19 (citations omitted).
Corbin is cited in Permian Basin Investment Corp. v. Lloyd, 312 P.2d 533, 537 (N.M. 1957), where the court stated:
The principle upon which intervenors must be denied recovery is implicit in Corbin's general statement and in all of the third party beneficiary decisions which have been rendered by this court; that the promisor should not be held liable in damages for breach of his contract with the promisee by one whose detriment by its nonperformance could not reasonably have been foreseen by the promisor and by one whose existence (whether specific or general) and interest in the contracted-for performance (whether contingent or direct) was not within the reasonable contemplation of the promisor when the promise was made.
UCLA appears to argue that the California statute requires that it be stated in the contract that the contract is made "expressly" to benefit a third party. However, in Lucas v. Hamm, 364 P.2d 685 (Cal. 1961), *495cert. denied, 368 U.S. 987 (1962), Corbin says that the court held as follows:
It is not necessary for the contract to contain any express words describing the third party as a beneficiary. The language of prior cases seeming to make such a requirement is called "unfortunate." The court said: "Inspfar as intent to benefit a third person is important in determining his right to bring an action under a contract, it is sufficient that the promisor must have understood that the promisee had such intent."
4 Corbin on Contracts § 776 n.27, at 30 (Supp. 1996) (quoting Lucas, 364 P.2d at 689).
An article in the California Law Review states:
. . . [I]t may be mentioned that the word "expressly" in Civil Code section 1559 does not require the beneficiary to be designated by name; it is sufficient that he be a member of a class to whom performance is to be rendered. Nor is it even essential that the beneficiary be in existence when the contract is made. It is also immaterial that the promise calls for performance to the promisee himself as well as to his creditors. It would appear to be a question of construction only whether the contract calls for performance to the alleged beneficiary and that the word "expressly" was intended simply to negative "incidently."
Stephen I. Langmaid, Contracts for the Benefit of Third Persons in California, 27 CAL. L. Rev. 497, 510-11 (1939) (footnotes omitted).
When I went into oral argument, I was persuaded by the argument that California's statute required an "express" declaration of intent of the parties to benefit a third person. Clearly, that is incorrect, so we are back to analyzing whether prospective fans and ticket pur*496chasers are third-party beneficiaries of the contract between the two conferences and the management committee. I conclude that they are.
Another issue in this case which we have not reached is whether plaintiffs can maintain a cause of action against UCLA or must first resort to arbitration. This issue was raised at oral argument but has not been briefed. The Big Ten/PAC-10 contract requires arbitration. The law is so well established that a contract which requires arbitration must be honored that a request for additional briefing would be a waste of judicial resources. The cases seem to be unanimous in holding that a third-party beneficiary is subject to the same terms of the contract as the promisee. See, e.g., Mayflower Ins. Co. v. Pellegrino, 261 Cal. Rptr. 224, 226-27 (Ct. App. 1989); Harris v. Superior Court, 233 Cal. Rptr. 186, 188 (Ct. App. 1986); Raffa Assocs., Inc. v. Boca Raton Resort & Club, 616 So. 2d 1096, 1097 (Fla. Dist. Ct. App. 1993); Zac Smith & Co. v. Moonspinner Condominium Ass'n, 472 So. 2d 1324, 1324-25 (Fla. Dist. Ct. App. 1985); District Moving & Storage Co. v. Gardiner & Gardiner, Inc., 492 A.2d 319, 322-23 (Md. Ct. Spec. App. 1985), aff'd, 508 A.2d 487 (Md. 1986).