(no subject)
Citation: FREEMAN & MILLS, INCORPORATED, Plaintiff and Appellant, v. BELCHER OIL COMPANY, Defendant and Appellant.
No. S042831.
SUPREME COURT OF CALIFORNIA
11 Cal. 4th 85; 900 P.2d 669; 44 Cal. Rptr. 2d 420; 1995 Cal. LEXIS 4963; 95 Cal. Daily Op. Service 6935; 95 Daily Journal DAR 11851
August 31, 1995, Decided
Facts: In June 1987, defendant Belcher Oil Company (Belcher Oil) retained the law firm of Morgan, Lewis & Bockius (Morgan) to defend it in a Florida lawsuit. Pursuant to a letter of understanding signed by Belcher Oil's general counsel (William Dunker) and a Morgan partner (Donald Smaltz), Belcher Oil was to pay for costs incurred on its behalf, including fees for accountants. In February 1988, after first obtaining Dunker's express authorization, Smaltz hired plaintiff, the accounting firm of Freeman & Mills, Incorporated (Freeman and Mills), to provide a financial analysis and litigation support for Belcher Oil in the Florida lawsuit.
In April 1988, Bowman, who took over Dunker’s position, became dissatisfied with Morgan's efforts and the lawyers were discharged. Bowman asked Morgan for a summary of the work performed by Freeman & Mills and, at the same [***422] time, directed Smaltz to have Freeman & Mills stop their work for Belcher Oil. Smaltz did as he was asked. Freeman & Mills's final statement was for $ 70,042.50 in fees, plus $ 7,495.63 for costs, a total of $ 77,538.13.
Freeman & Mills billed Morgan, but no payment was forthcoming. Freeman & Mills then billed Belcher Oil directly.
In August 1989, Smaltz finally told Freeman & Mills that Belcher Oil refused to pay their bill. Freeman & Mills then wrote to Bowman asking that the matter be resolved. In September 1989, Bowman responded, complaining that Belcher Oil had not been consulted about the extent of Freeman & Mills's services and suggesting Freeman & Mills should look to [**671] Morgan for payment of whatever amounts were claimed due.
Issue: Were Belcher Oil’s actions tortuous, and should the company be charged for punitive damages?
Decision: NO
Reason: Belcher Oil should not be charged for punitive damages because intentional breach of contract and the assertion of a bad faith defense have consistently not to been held as tortious.
No. S042831.
SUPREME COURT OF CALIFORNIA
11 Cal. 4th 85; 900 P.2d 669; 44 Cal. Rptr. 2d 420; 1995 Cal. LEXIS 4963; 95 Cal. Daily Op. Service 6935; 95 Daily Journal DAR 11851
August 31, 1995, Decided
Facts: In June 1987, defendant Belcher Oil Company (Belcher Oil) retained the law firm of Morgan, Lewis & Bockius (Morgan) to defend it in a Florida lawsuit. Pursuant to a letter of understanding signed by Belcher Oil's general counsel (William Dunker) and a Morgan partner (Donald Smaltz), Belcher Oil was to pay for costs incurred on its behalf, including fees for accountants. In February 1988, after first obtaining Dunker's express authorization, Smaltz hired plaintiff, the accounting firm of Freeman & Mills, Incorporated (Freeman and Mills), to provide a financial analysis and litigation support for Belcher Oil in the Florida lawsuit.
In April 1988, Bowman, who took over Dunker’s position, became dissatisfied with Morgan's efforts and the lawyers were discharged. Bowman asked Morgan for a summary of the work performed by Freeman & Mills and, at the same [***422] time, directed Smaltz to have Freeman & Mills stop their work for Belcher Oil. Smaltz did as he was asked. Freeman & Mills's final statement was for $ 70,042.50 in fees, plus $ 7,495.63 for costs, a total of $ 77,538.13.
Freeman & Mills billed Morgan, but no payment was forthcoming. Freeman & Mills then billed Belcher Oil directly.
In August 1989, Smaltz finally told Freeman & Mills that Belcher Oil refused to pay their bill. Freeman & Mills then wrote to Bowman asking that the matter be resolved. In September 1989, Bowman responded, complaining that Belcher Oil had not been consulted about the extent of Freeman & Mills's services and suggesting Freeman & Mills should look to [**671] Morgan for payment of whatever amounts were claimed due.
Issue: Were Belcher Oil’s actions tortuous, and should the company be charged for punitive damages?
Decision: NO
Reason: Belcher Oil should not be charged for punitive damages because intentional breach of contract and the assertion of a bad faith defense have consistently not to been held as tortious.