Court Opinion

ID: 6985717
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:05:19.283771+00
Date Added: 2024-06-11T16:09:26.361086
License: Public Domain

CANBY, Circuit Judge,
dissenting in part:
I reluctantly dissent from the majority’s decision that CCT has a viable claim for breach of contract, or for other claims related to that claim. I say “reluctantly” because there is evidence, disputed by Sanders, from which a trier of fact could conclude that Sanders did not deal in good faith with CCT.. I am convinced, however, that the district court correctly concluded that no contract had been entered between CCT and Sanders.
CCT’s first claim for relief was for breach of the “teaming agreement.” CCT still maintains that this was the single agreement between the parties, which was an agreement to team together and submit a joint bid to Boeing for its contract. There is abundant evidence, however, that the parties intended this teaming agreement to be in writing; indeed Boeing required it to be in writing and submitted with the bid. The parties went through various drafts, negotiating and disputing various terms of this agreement, which was necessarily a complicated document for a twenty-million-dollar joint project. Every draft contained an integration clause and provided that the written agreement was effective upon execution. The teaming contract was never executed, however, because there was disagreement over such fundamentals as who would be lead contractor and what price would be paid, for materials supplied.
In a letter accompanying a revised second draft of the teaming agreement, the project manager for CCT, having rejected several of Sanders’ proposed clauses, said that he wanted a telephone conference “to effect closure on the Teaming Agreement so that each of us can proceed to either continue with our proposal ... or redirect our efforts towards other business opportunities.” In the light of the course of *1040negotiations and such communications as this one, the district court correctly concluded that no jury could find that the parties intended to be bound until a written agreement was reached and executed.
The majority opinion apparently concedes this point-that there was no meeting of minds on a teaming agreement that would govern the submission of a joint bid and, if Boeing accepted the bid, the performance of the resulting Boeing contract. The majority concludes, however, that there was an oral agreement to work together in good faith to reach such an agreement, and that there is a triable issue whether Sanders breached that agreement. It was this agreement, according to the majority, that was reflected in the statement of a Sanders executive that “[w]e’ve got a deal.” In my view, California law does not allow for enforcement of such a preliminary agreement.
In agreeing to work together to negotiate a written teaming agreement and to submit a bid to Boeing, CCT and Sanders were doing nothing more than agreeing to agree in the future. California restricts the enforcement of such an agreement, however.
It is Hornbook law that an agreement to make an agreement is nugatory; and that this is true of material terms of any contract. But the law has progressed to the point that it “does not favor, but leans against, the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties if that can be ascertained.” [Citation omitted.] But, in the absence of internal or external indicia of what the parties would have agreed upon, the court cannot supply the omitted provision, for that would amount to making a contract for the parties.
Roberts v. Adams, 164 Cal.App.2d 312, 314-315, 330 P.2d 900, 901-02 (1958). Here, there are no objective criteria by which we can determine what the parties would have agreed upon. We cannot decide which party would be lead in the teaming arrangement, nor can we decide what price the parties should receive for items supplied. “The court may not imply what the parties will agree upon.” Autry v. Republic Productions, 30 Cal.2d 144, 152, 180 P.2d 888, 893 (1947).
The majority might respond that there is no need to decide those questions; the only issue is whether the parties bargained in good faith-that is, whether they performed in good faith their initial agreement to work together to craft a proposal. But there is no way to measure the good faith of a party that is insisting on its own proposal, or rejecting the other party’s proposal, when there are no bounds to the ultimate agreement that they are supposedly trying to reach. Even if we had a written, executed agreement to work together to reach a teaming agreement and submit an agreed-upon bid to Boeing, the written agreement would be unenforceable because of the indefiniteness of its terms. Thus a written, fully executed joint venture agreement is unenforceable when the most essential part of the venture is yet to be determined. See Pacific Hills Corp. v. Duggan, 199 Cal.App.2d 806, 812, 19 Cal.Rptr. 291, 295 (1962).
It is true that contracts may sometimes be enforceable when they leave a matter to be determined in the future, but “it is a question of degree and may be settled by determining whether the indefinite promise is so essential to the bargain that inability to enforce that promise strictly according to its terms would make unfair the enforcement of the remainder of the agreement.” City of Los Angeles v. Superior Court, 51 Cal.2d 423, 433, 333 P.2d 745, 750 (1959). Here, the matter to be left for future determination is the entire teaming enterprise-the sole goal of the initial agreement to work together. Surely that is far too central to permit enforcement of any preliminary agreement to work together for a future agreement. See, e.g., Alaimo v. Tsunoda, 215 Cal.App.2d 94, 99, 29 Cal.Rptr. 806, 808-09 *1041(1963) (option to purchase real estate with price to be determined later by seller unenforceable); Roberts v. Adams, 164 Cal.App.2d at 315, 330 P.2d at 902 (1958) (option to purchase real estate at specified price “payable as mutually agreed by both parties” unenforceable because of uncertainty of terms of payment). I conclude, therefore, that even we view as a separate contract the initial agreement to work together to create a teaming agreement and a joint bid, it is too indefinite to be enforceable.
Because I conclude that the parties merely agreed to agree in the future, and that no contract resulted, I would affirm the district court’s dismissal of the promissory estoppel claim as well. As the majority opinion concedes, the district court’s ruling was correct if there was never any intention to enter a binding contract; promissory estoppel cannot create a contract where none exists. See Rennick v. Option Care, Inc., 77 F.3d 309, 316-17 (9th Cir.1996).
The tort claim of intentional interference with prospective economic advantage also fails. The absence of a contract between CCT and Sanders means that there could be no interference with that relationship. As for the prospective relationship between CCT and Boeing, the district court correctly concluded that there was no evidence that CCT would have been awarded the contract on its own. Its relationship with Boeing was thus defeated by the failure of Sanders to agree with CCT, a failure that violated no duty owed by Sanders.
The fraud claim also depends in considerable degree upon the existence of a promise upon which CCT had the right to rely, and the agreement to agree was too indefinite to constitute such a promise. With regard to false representations, I agree with the district court that there was insufficient admissible evidence of such representations to forestall summary judgment in favor of Sanders.
I also agree with the district court that there was insufficient evidence to support a claim that Sanders had misappropriated confidential information. It is still not clear to me, as it was not to the district court, just what information was taken, whether it was proprietary or confidential, and what use was made of it. The district court did not err in granting summary judgment to Sanders on this claim.
Finally, I agree with the majority that CCT’s statutory claims for antitrust violations under the Cartwright Act and for unfair business practices were properly dismissed, for reasons stated in the majority opinion. In the light of my conclusions on all of the claims, therefore, I would affirm the judgment of the district court in all respects.