Court Opinion

ID: 9536667
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:04:47.275152+00
Date Added: 2024-06-11T14:54:56.823594
License: Public Domain

*723CARTER, J.
— I dissent.
I agree with the majority opinion that the trial court erred in concluding that the decree in the abatement action determined the issues raised in this action. I am further convinced, however, that the trial court erred also in concluding that Los Angeles is excused from performing its contractual obligations by reason of impossibility.
It is the general rule, so well established that it requires but token citation of authority, that the mere fact that performance of a promise is made more difficult and expensive than the parties anticipated when the contract was made, will not excuse the promisor from his obligation to perform his part of the contract. (Metzler v. Thye, 163 Cal. 95 [124 P. 721]; Coulter v. Sausalito Bay Water Co., 122 Cal.App. 480 [10 P.2d 780] ; Williston on Contracts (rev. ed.), vol. 6, § 1963; Rest., Contracts, § 467.) “Parties should be careful about making contracts, for once made the courts will not relieve them for light or trivial reasons. Public policy is subserved by leaving the parties and their rights to be measured by the terms of their engagements. (California Cured Fruit Assn. v. Stelling, 141 Cal. 713 [75 P. 320].) They may have made an unfortunate arrangement, but when they have entered into it voluntarily, they are bound by it in the absence of equitable grounds for avoidance. (Cook v. Snyder, 16 Cal.App.2d 587 [61 P.2d 53].) They must be presumed to have contracted with reference to existing conditions known to them. (Dore v. Southern Pac. Co., 163 Cal. 182 [124 P. 817].) A person contracting with eyes open and aware of the facts is presumed to undertake performance at the risk of interference from agencies not expressly provided against. (McCulloch v. Liguori, 88 Cal.App.2d 366 [199 P.2d 25].) Moreover, contracting parties cannot escape performance of their undertakings because of unforeseen hardship. (Metzler v. Thye, 163 Cal. 95 [124 P. 721].) ” (12 Cal.Jur.2d, Contracts, § 226.) Applied to factual situations analogous to that presented here, the rule has been stated that laws or other governmental acts that make performance unprofitable or more difficult or expensive do not excuse the duty to perform a contractual obligation (Aristocrat Highway Displays v. Stricklen, 68 Cal.App.2d 788 [157 P.2d 880] ; Western Industries Co. v. Mason M. etc. Co., 56 Cal.App. 355 [205 P. 466] ; McCulloch v. Liguori, 88 Cal.App.2d 366 [199 P.2d 25]; Lloyd v. Murphy, 25 Cal.2d 48 [153 P.2d 47]; Sample v. Fresno Flume etc. Co., 129 Cal. 222 [61 P. 1085] ; Klauber v. San Diego Street Car Co., 95 Cal. 353 [30 P. 555]).
*724Looking at the present factual situation, we note that a governmental act — the abatement action — -has caused Los Angeles to make certain expenditures, and has made performance by Los Angeles of its contractual obligations more expensive. Applying the general rule to this factual situation, we would conclude that Los Angeles is not excused from performing its contractual obligations, and that Los Angeles therefore has no right to retain all of the payment made by Vernon under court order to help finance the construction of a facility whereby Los Angeles may legally perform its contractual obligation.
The rule has developed in modern times that supervening impossibility will, in proper eases, excuse a promisor’s failure to perform. Unusual or unexpected expense does not establish impossibility of performance. (Metzler v. Thye, 163 Cal. 95 [124 P. 721]; Glens Falls Indem. Co. v. Perscallo, 96 Cal.App.2d 799 [216 P.2d 567].) Failure to perform may be excused, however, when the added cost is so great as to have the effect of making performance impracticable. In legal contemplation a thing is impossible when not practicable, and a thing is impracticable when it can be done only at an excessive and unreasonable cost (Mineral Park Land Co. v. Howard, 172 Cal. 289 [156 P. 458, L.R.A. 1916F 1]).
The following characteristics should be particularly noted in regard to this defense of legal impossibility: First, it operates to excuse a nonperforming obligor from liability for his failure to perform. Second, it operates only when performance of the obligor’s part of the contract is impracticable. Third, the unanticipated expense which will render performance impracticable must be very much greater (in the Mineral Park ease it was 10 or 12 times greater) than the expected or usual cost of performance. With these characteristics in mind, it is evident that the majority opinion has erred in supporting the trial court’s judgment on the basis of legal impossibility.
Among the contractual obligations of Los Angeles, which the majority opinion says are excused, is a duty to accept at designated places, and to dispose of a specified quantity (up to 16 cubic feet per second) of sewage from Vernon. It should be noted that this duty was performed by Los Angeles up until the time of commencement of this action; it is presumably being performed by Los Angeles while this case is pending in the courts; and it will assuredly be performed in the future, after a decision is rendered in this case. It is obvious, then, that the doctrine of legal impossibility *725as here applied by the majority does not excuse an obligor from liability for failure to perform a contractual duty; instead that doctrine is employed by the majority to rewrite the contract between these parties. Los Angeles will continue to perform the services which it undertook to perform by this contract; Vernon will continue to dispose of its sewage at designated points on the Los Angeles outfall sewer; but Vernon, the obligee, will be required to pay more money, now and in the future, for this continuation of performance of the contractual obligations of Los Angeles.
I am aware of no prior decision of this or any other court in which the doctrine of legal impossibility has been applied to increase the consideration to be paid by the promisee while recognizing that the promisor will continue to perform as before. By the same token, I can find neither law nor logic to support a decision which terms “impracticable” or “impossible” of performance, a contract which both parties and this court recognize as having been performed and is expected to be performed for an indefinite period in the future. This situation comes as near approaching a legal paradox as any which has come under my observation.
As an additional matter, careful examination of the record in this case raises a question as to whether the cost of performing the contract, using the new facilities, is substantially disproportionate to the anticipated cost of performance. The majority opinion refers to certain payments made by Vernon to Los Angeles. The total sum which Vernon had paid up to the time of trial for the use of the facilities of the Los Angeles sewer system was $296,801.50, in addition to the granting of flowage rights through Vernon. The majority opinion then refers to the trial court’s finding that Los Angeles is required to build a new treatment plant and tube at a cost of about $41,000,000, and that operation and maintenance of these facilities will cost about $500,000 per year. But these figures, juxtaposed in the majority opinion, are misleading. The figures “$41,000,000” and “$500,000” have but slight bearing on the cost to Los Angeles of performing its contractual obligation to Vernon.
If this were a proper case for application of the doctrine of legal impossibility (if Vernon were seeking damages for a refusal by Los Angeles to accept any sewage from Vernon), the figure which would be computed to determine whether performance was unreasonably or excessively expensive would be the increased cost of performing this contract. Presumably *726the cost of performance before the advent of the abatement action was not disproportionate to the approximately $300,000 consideration paid by Vernon. To compute the increase in cost, one must recognize the additional facts that Los Angeles is building a sewage disposal plant with capacity for 260 million gallons per day; that 10 million gallons per day of this capacity is allotted to Vernon. If the plant were designed and constructed without allotment of gallonage to Vernon, it would still have capacity for 250 million gallons per day. The increased cost of performing the contract is the difference in cost of construction between a 260-million-gallon per day plant and a 250-million-gallon per day plant. What this difference would be is impossible to determine from the record before us; It requires no engineer, however, to deduce that the cost of construction would not increase in direct proportion to the increase in capacity; the structural differences between a 250-million-gallon per day plant and a 260-million-gallon per day plant would presumably be slight. It is clear, at any rate, that the increase in cost attributable to making the plant large enough to take care of Vernon’s sewage, and thus the increased cost of performing the Vernon sewage contract, would not be 10 or 12 times as great as the approximately $300,000 which it would have cost to perform the contract if the abatement action had not intervened.
Another point on which I am convinced the majority opinion is in error relates to Vernon’s second cause of action, on the theory of negligence. The majority opinion states: “Vernon’s second cause of action is for damages in the amount which it is required to pay under the abatement judgment in return for its use of the Los Angeles disposal facilities. This cause of action is based on the theory that the negligent failure of Los Angeles to perform its contractual duty to keep its sewage disposal facilities in good condition and carry away the sewage of Vernon was the proximate cause of the abatement judgment against Vernon. Since performance of such duty was excused, the cause of action cannot be maintained.” (Emphasis added.)
On this point the majority opinion appears to be inconsistent with itself. It is beyond dispute that a negligence action may be predicated on the breach of a duty arising out of contract. (L. B. Laboratories, Inc. v. Mitchell, 39 Cal.2d 56 [244 P.2d 385].) If the breach which causes the damage and gives rise to the cause of action occurs while the contractual duty is subsisting, can plaintiff’s right to. maintain a cause of action for that breach be destroyed by *727the later occurrence of events which are held to excuse the performance of the duty? Obviously not.
The main theory of the majority opinion is that Los Angeles’ performance of duties under the contracts is excused because of excessive or unreasonable expense occasioned by the' decree in the abatement action. But Vernon seeks relief by way of damages for the alleged negligent operation of the sewage disposal facilities which brought about the abatement action. In other words, Vernon alleges a breach of contractual duties by Los Angeles before the existence of the conditions which are held in the majority opinion to excuse performance of those duties. Clearly the breach of duty alleged by Vernon in its second cause of action is a sufficient basis' for maintenance of that cause of action even if the majority opinion were correct in holding the duty to be later excused. In other words, it was a breach of duty on the part of Los Angeles which brought about the condition on which its defense of impossibility of performance is predicated.
The pleadings relating to the second cause of action raised the issues (1) whether Los Angeles owed a contractual duty to maintain the old treatment plan and ocean outlet in good repair; (2) whether Los Angeles breached that duty by negligence, carelessness and mismanagement in the operation and maintenance of the treatment plant and ocean outlet; and (3) whether such breach, if any, was the direct and proximate cause of damage to Vernon. Much of the testimony in the trial court related to these issues. The failure of the trial court to make direct findings on these issues was prejudicial error. (Baggs v. Smith, 53 Cal. 88; Taylor v. Taylor, 192 Cal. 71 [218 P. 756, 51 A.L.R. 1074] ; Strong v. Strong, 22 Cal.2d 540 [140 P.2d 386] ; Elliott v. Bertsch, 59 Cal.App.2d 543 [139 P.2d 332]; Mayer v. Beondo, 83 Cal.App.2d 665 [189 P.2d 327, 190 P.2d 23]; Chamberlain v. Abeles, 88 Cal. App.2d 291 [198 P.2d 927] ; Flennaugh v. Heinrich, 89 Cal.App.2d 214 [200 P.2d 580].)
The trial court’s finding of fact relative to the second cause of action reads as follows: “Insofar as the allegations of paragraphs III, IV, V and VI of said second cause of action purport to assert any present obligation of the City of Los Angeles, or any present right of the City of Vernon, arising from any or all of the aforesaid contracts and/or from any conduct on the part of the City of Los Angeles, each of said allegations is untrue. It is not true that any *728negligence and/or carelessness or other conduct of the defendant was the proximate cause of the judgment entered against Vernon in said State Abatement Action, or of the order of the court which, in effect, required Vernon to pay the sum of $901,250.00 or any other sum as its proportionate share of the new treatment plant and/or submarine outfall and/or any other facility for sewage disposal, which said judgment required the City of Los Angeles to construct; and it is not true that plaintiff will be damaged in said or any sum by compliance with the orders or any order of said judgment. To the contrary, plaintiff has been benefited by the compliance with said judgment on the part of the defendant, and plaintiff has been and will be benefited by said compliance to an extent greater in fair monetary value than the total of all sums which she, Vernon, has been or will be required by said judgment to pay.”
This finding does not purport to deal with the issue of a contractual duty owed by Los. Angeles to Vernon during the period prior to the judgment in the abatement action. There is no finding on the factual question whether Los Angeles breached its contractual duty. The finding that Vernon will not be damaged by compliance with the abatement judgment, but will instead be benefited, is obviously based on the trial court’s erroneous conclusion that Los Angeles is excused from performing the contract. If Vernon is required to pay for a service which Los Angeles is contractually bound to render, obviously Vernon will be damaged to the extent of the value of the service, which damage was suffered by Vernon as the result of the failure of Los Angeles to perform its contractual duty by operating its sewage disposal facilities in such a manner as to create a public nuisance which necessitated the abatement action. It should be noted that Vernon had no power to control the manner of operation of the disposal facilities.
In my opinion Los Angeles should be held to the terms of the contract which it made with Vernon. Vernon’s contractual right to flow 11.7 cubic feet per second of sewage into the Los Angeles sewer system without further payment should be upheld. Vernon should have the further right to flow an additional 4.3 cubic feet per second of sewage into the Los Angeles sewer system, subject to payment of a proportionate share of the sewage disposal cost as provided in the contract. Los Angeles should be ordered to return to Vernon so much of the payment made by Vernon pursuant to the decree in the abatement action as is attributable to *729the 16 cubic feet per second flow which Los Angeles is contractually bound to accept.
For the reasons above stated I would reverse the judgment.
Traynor, J., concurred.
Appellant’s petition for a rehearing was denied January 5, 1956. McComb, J., did not participate therein. Bray, J. pro tem.,* participated therein in place of Shenk, J. Carter, J., and Traynor, J., were of the opinion that the petition should be granted.

 Assigned by Chairman of Judicial Council.