Court of Appeal Enforces Clear Terms of Exclusive Negotiating Agreement

December 2, 2015

Goldfarb & Lipman recently represented a California city in defense of an action for breach of contract and related claims brought by a developer after the city elected not to proceed with negotiations under an Exclusive Negotiating Agreement. Relying upon the plain terms of the Agreement, the Monterey County Superior Court sustained a demurrer without leave to amend as to all of the plaintiff developer’s claims against the City and the Mayor, who was named individually in the lawsuit.

 

On November 20, 2015, in an unpublished opinion, the California Court of Appeal for the Sixth Appellate District affirmed the trial court’s dismissal of all claims against the City and the mayor. The Court held that the City acted within its discretion in terminating the agreement because the developer had failed to produce a term sheet by the date called for in the Agreement. The Court also held that the Mayor was immune from liability pursuant to Government Code section 820.2 and Civil Code section 47.