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The Impact of COVID 19 on Small Businesses and the Force Majeure (Act of God) Clause
Apr 02, 2020

During these times of uncertainty in the business sector, issues pertaining to contractual obligations are arising.  With many companies being forced to reduce or completely shut down business due to governmental limitations, businesses across the country are concerned about meeting and keeping their existing contracts.  Force Majeure provisions and the Act of God clause are used in many contracts to consider the possibility of unexpected circumstances. Normally a Force Majeure clause is triggered when the occurrence of an unexpected event, also known as an Act of God, inhibits completion of the contract so it is excused.  In many states across the country, the Act of God clause is enabled to excuse or delay contracts due to natural disasters, pandemics, or any event that inhibits contractual obligations from being met due to factors beyond the party’s control.

The phrase “Act of God” is arguable due to the many interpretations of it.  In relation to the COVID-19 outbreak, the virus may not have been man-made, but the spread of the virus and the resulting global spread of the virus is man-made and, therefore, may not be seen as an act of God in the traditional sense.  However, in California, the test to determine if an event is an act of God is dependent upon if there was “an insuperable interference… as could not have been prevented by the exercise of due diligence.” Pac. Vegetable Oil Corp. v. C.S.T., Ltd. (Cal. 1946) 29 Cal.2d 238.  In addition, the California Civil Code section 1511 states that a contractual obligation is excused when it is prevented or delayed by “an irresistible, superhuman cause, or by the act of public enemies of the state or of the United States, unless the parties have expressly agreed to the contrary.”

Although there is code prepared for situations similar to the COVID-19 outbreak, some contracts may not include consideration for a pandemic situation.  In some cases where the parties’ written contract states an intent to plan for unforeseen scenarios, those terms will generally control and be enforced by the courts.  Specific language is necessary to enforce the act of God clause within a contract.  In addition, when there is no contract language or Force Majeure provision, contract law in California still recognizes and accommodates situations where contractual performance is made impossible due to unforeseeable circumstances; as stated, “an unwritten event can still fit within the act of God provision if it is unforeseeable at the time of contracting.” Autry v Republic Productions (1947) 30 Cal.2d 144.

Not being able to work during times of government mandated shut down does not by itself excuse the obligation to the contract.  A party to the contract who knows it will not be able to perform an obligation, has the right to bring an action for declaratory relief first.  Furthermore, the filing party holds the responsibility to frame the issues for the judge.  The party bearing the burden must prove that there has been “extreme and unreasonable difficulty, expense, injury, or loss involved.” Metzler v. Thye (1912) 163 Cal. 95, 98.  Companies must also prove that they made sufficient or reasonable efforts to avoid consequences of the force majeure event. Butler v. Nepple (1960) 54 Cal.2d 589. 599.

In the coming months, the court system will begin processing and hearing contract disputes that developed during the COVID-19 shutdowns.  In California, the laws may be more favorable when extending consideration for Force Majeure, as California Civil Code section 3526 states, “no (wo)man is responsible for that which no (wo)man can control.”

If your business is being impacted by the COVID 19 pandemic and the resultant shelter-in-place directives, and you want to discuss options please give us a call at 925-574-0100.  Although we are working from home, we are regularly receiving phone messages and promptly returning phone calls. We offer free 15-minute phone consultations.

By Lubna Jahangiri 09 Oct, 2023
By Lubna Jahangiri 03 Sep, 2023
When a Property May be Partitioned A partition action is a lawsuit in which a co-owner requests that the court divide the property or its sale proceeds. Three types of partition are: · Physical division of the property. (Code Civ. Proc. §§873.210 – 873.290.); · Sale of the property and division of the proceeds. (Code Civ. Proc. §§873.510 – 873.850.); and · Partition by appraisal under which any of the parties may acquire the interests of others at their value as assessed in a court-ordered appraisal. (Code Civ. Proc. §§ 873.910 – 873.980.) A partition proceeding is statutory in origin but it is one in which the trial court makes its ruling based on equitable considerations. Any partition must comply with any applicable laws, regulations, or ordinances governing the division of property. (Code Civ. Proc. §872.040). There is essentially only one basic requirement for a partition: That the property is co-owned. The only evidence that a plaintiff in a partition will need is evidence that they are a co-owner. The most common form of evidence of co-ownership is a deed recorded in the county recorder where the property is located identifying the grantee (transferee/buyer/recipient) as the co-owner. Regardless of whether your co-owner rented out the property, occupies it themselves, runs a business at the property, or the property suffers from some serious detriment, each co-owner has the right to a partition. The court in a partition will not weigh whether or not the partition seems “fair” for the parties. A co-owner of real property may file an action for partition, severing unity of possession in that property. This process is governed by Code Civ. Proc. §872.010, et seq. Accounting and Compensatory Adjustments The court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity. (Code Civ. Proc., §872.140.) The Court in Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1036 states: “Every partition action includes a final accounting according to the principles of equity for both charges and credits upon each co-tenant’s interest. Credits include expenditures in excess of the co-tenant’s fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages, and other liens, insurance for the common benefit, and protection and preservation of title.” Is the Cotenant Not In Possession Entitled to the Fair Rental Amount Each tenant in common has a right to occupy the property and one cannot collect rent from another who has exercised that right. (Nevarov v. Nevarov (1953) 117 Cal.App.2d 581, 585.) Generally, a claim for the implied rental value of exclusive possession by one co-owner depends upon a showing of actual ouster. “In order for a cotenant who is not in possession to recover the rents and profits, or the value of possession, from the cotenant in possession, they must establish that there has been an ouster….” (Estate of Hughes (1992) 5 Cal. App. 4th 1607, 1612.) An ouster, in the law of tenancy in common, is the wrongful dispossession or exclusion by one tenant of his cotenant or cotenants from the common property of which they are entitled to possession. The ouster must be proved by acts of an adverse character, such as claiming the whole for himself, denying the title of his companion, or refusing to permit him to enter. Actual or constructive possession of the ousted tenant in common at the time of the ouster is not necessary. (Zaslow v. Kroenert (1946) 29 Cal. 2d 541, 548.) Tenants in common have the right to occupy the subject property. (Brunscher v. Reagh (1958) 164 Cal.App.2d 174, 176.) When one tenant in common occupies the property, the out-of-possession cotenant is generally not entitled to recover the rental value of the property from the cotenant in possession. (Id. at pages 176–177.) Attorney’s Fees and Costs of Partition The court shall not apportion the costs of partition to any party that opposes the partition unless doing so is equitable and consistent with the purposes of this chapter. (Code Civ. Proc. §874.321.5) The costs of partition include reasonable attorney’s fees incurred or paid by a party for the common benefit. (Code Civ. Proc. §874.010.)  Code Civ. Proc. §874.040 states that the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable. JAHANGIRI LAW GROUP handles trials and appeals in the areas of business, corporate, commercial, and real estate litigation, and transactional law. We offer services in Urdu, Hindi, Punjabi and Spanish. We are located in San Ramon. We are open from 9:00 a.m. to 5:00 p.m., Monday to Friday. To make an appointment please call 925-574-0100.
By Lubna Jahangiri 23 Jun, 2023
An essential element of an enforceable contract is consideration. Consideration is any benefit conferred, or agreed to be conferred, upon the promisor [a person who makes a promise] by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the time of consent lawfully bound to suffer, as an inducement to the promisor, is a good consideration for a promise. (Civ. Code, § 1605)
04 Apr, 2023
Jahangiri Law Group is an engaging and a very busy business and real estate litigation firm and is seeking an attorney with 1 - 3 years of civil litigation experience.
By Lubna K. Jahangiri, Esq. 17 Jan, 2023
WRIT OF SUPERSEDEAS How to request a stay of a judgment or order issued by a trial court pending an appeal if you believe that, without a stay, you will suffer serious harm? Your opponent obtains a judgment or order in the trial court, and you appeal. Normally, the trial court order is not stayed automatically and by the time your appeal is decided, your opponent may have already enforced the judgment or order against you. This may result in severe prejudice to you if you ultimately prevail on your appeal and the judgment or order is overturned.  What is the Writ of Supersedeas? The writ of supersedeas is issued by appellate court to lower court, directing that enforcement of judgment be stayed pending appeal, when relief is necessary to protect appellant from serious injury in case of reversal, and will not cause respondent disproportionate injury in case of affirmance. [1] A petition for a writ of supersedeas is presented to the court of appeal to request that the court maintain the subject of the action in status quo until final determination of the appeal. Purpose of writ of supersedeas is to maintain status quo. [2] An appellate court may grant a writ of supersedeas when a denial of a stay of enforcement would deprive the appellant of the benefit of a reversal of the judgment against him or her, provided, of course, that a proper showing is made. [3] Appellate court has inherent power to issue process necessary to protect its appellate jurisdiction and to insure that rights of appellant will not be destroyed by mere passage of time necessary to prosecute appeal. [4] The writ of supersedeas has long been recognized to be an attribute of the inherent power of the courts to preserve their own jurisdiction. The power to issue the writ is implied from the power to hear appeals. [5] What is the Process of Applying for a Writ of Supersedeas? Stay proceedings may be initiated by filing a petition for writ of supersedeas in the court of appeal. [6] Appellant prepares, serves, and files a verified petition for writ of supersedeas with the court of appeal in which the appeal is pending. [7] The petition bears the same title as the appeal and contains a statement of the necessity for the writ and supporting memorandum. [8] The cover must bear the conspicuous notation "STAY REQUESTED," and identify the nature and date of the proceeding or act sought to be stayed. [9] The writ will not issue until respondent has had an opportunity to file a memorandum and a statement of any material facts in opposition. Unless otherwise ordered, any opposition must be filed within 15 days after the petition and supporting points and authorities are filed. [10] If the record on appeal has not yet been filed in the court of appeal, the petition must contain a copy of the judgment, the date of its entry, the fact and date of filing of the notice of appeal, and a statement of the subject matter of the appeal sufficient to advise the reviewing court of the question involved. [11] Issuance of writ of supersedeas is precluded if appeal is no longer pending and judgment has become final. [12] Under What Conditions is a Writ of Supersedeas Issued? Appellate courts may grant supersedeas when the denial of a stay would deprive appellant of benefit of a reversal of judgment. [13] An appellate court may issue a writ of supersedeas on any conditions that that court deems just or appropriate under the circumstances. [14] The most common condition imposed on granting a writ of supersedeas is that an undertaking be filed, and the practice is to require approval of the sufficiency of the bond by the presiding judge of the lower court. [15] As a practical matter, it is very difficult to obtain a writ of supersedeas and they are rarely granted. At a minimum, you must be able to demonstrate that you cannot afford a bond, that the issues in the appeal are significant, and that there is a strong likelihood of obtaining a reversal. JAHANGIRI LAW GROUP handles appeals in the areas of business, corporate, commercial, and real estate litigation, and transactional law. We offer services in Urdu, Hindi, Punjabi and Spanish. We are located in San Ramon. We are open from 9:00 a.m. to 5:00 p.m., Monday to Friday. To make an appointment please call 925-574-0100. [1] California Table Grape Com. v. Dispoto (1971) 14 Cal. App. 3d 314, 316 [2] Dry Cleaners & Dyers Institute v. Reiss (1936) 5 Cal. 2d 306, 310 ; Sacramento Newspaper Guild v. Sacramento County Bd. of Supervisors (1967) 255 Cal. App. 2d 51, 53 [3] Deepwell Homeowners' Protective Asso. v. City Council of Palm Springs (1965) 239 Cal. App. 2d 63, 65-66 [4] Adoption of Pierce (1970) 5 Cal. App. 3d 316, 320 [5] People ex rel. S. F. Bay etc. Com. v. Town of Emeryville (1968) 69 Cal. 2d 533, 538 [6] Cal. Rules of Ct., Rule 8.112 [7] Cal. Rules of Ct., Rule 8.112 [8] Cal. Rules of Ct., Rule 8.112 [9] Cal. Rules of Ct., Rules 8.40(c) , 8.116 [10] Cal. Rules of Ct., Rule 8.112 [11] Cal. Rules of Ct., Rules 8.40(c) , 8.112 [12] In re Christy L. (1986) 187 Cal. App. 3d 753, 758-759, 232 Cal. Rptr. 184 [13] People ex rel. S. F. Bay etc. Com. v. Town of Emeryville (1968) 69 Cal. 2d 533, 537 ; Deepwell Homeowners' Protective Asso. v. City Council of Palm Springs (1965) 239 Cal. App. 2d 63, 65-66 [14] Kane v. Superior Court (1995) 37 Cal. App. 4th 1577, 1587 n. 6 [15] Sandell, Inc. v. Bailey (1961) 193 Cal. App. 2d 518, 520
By Lubna K. Jahangiri, Esq. and Bernard Nellari, Legal Intern Co-Authors 16 Jan, 2023
An expert witness is a witness permitted to testify during a trial because of their proficiency or special knowledge in a field relevant to the case. According to California Evidence Code §720, a person is qualified to testify as an expert if he has special knowledge, skill, experience, training, or education sufficient to qualify him as an expert on the subject of his testimony. Expert witnesses are used to simplify complex topics that are relevant to a case. In practice, categories of expert witnesses have included medical experts, forensic experts, financial experts, mental health experts, securities experts, and many more. Expert witnesses must provide independent, impartial, and unbiased evidence to the court using their expertise. During a trial, experts may be called to testify whether the evidence supports testimony from other witnesses. Experts can also opine on the accuracy of certain statements made during the trial. However, expert testimony can be excluded in certain situations. Expert testimony will be excluded when the subject of inquiry is one of such common knowledge that individuals of ordinary education could reach a conclusion as intelligently as the expert witness. Furthermore, the trial court may exclude expert opinion testimony that is (1) based on matter of a type on which an expert may not reasonably rely, (2) based on reasons unsupported by the material on which the expert relies, or (3) speculative. JAHANGIRI LAW GROUP specializes in business, corporate, commercial, and real estate litigation, and transactional law. We offer services in Urdu, Hindi, Punjabi and Spanish. We are located in San Ramon. We are open from 9:00 a.m. to 5:00 p.m., Monday to Friday. To make an appointment please call 925-574-0100. References: - Thus, expert testimony will be excluded when the subject of inquiry is one of such common knowledge that men of ordinary education could reach a conclusion as intelligently as the expert witness, as held in Burton v. Sanner (2012) 207 Cal.App.4th 12, 19. - Evidence Code §801(b) and §802 - Evidence Code §801(a) holds that expert witness testimony must relate to a subject that is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact. California Evidence Code §720
01 Dec, 2022
Congratulations to this year’s recipients. Thank you for your contributions to our community. JLG is a proud member of the Chamber and believes that through community, small businesses will thrive. Are you a member?
By Lubna K. Jahangiri, Esq. and Bernard Nellari, Legal Intern Co-Authors 29 Sep, 2022
Statute of Frauds is a common law doctrine that requires certain types of contracts to be in writing to be enforceable. The Statute of Frauds is satisfied if the contract is evidenced by a writing or writings, contains the essential terms of a contract, is signed by the relevant parties against whom the contract is to be enforced, and has enough information to evidence the parties' intent to enter into a contract. As applied in California, the statute generally requires the following types of contracts to be in writing to be legally binding: Contracts that cannot be completed in less than one year. Contracts for the sale of land. Contracts for the sale of goods above a specific dollar amount, typically $500. A contract in which one person promises to pay another person’s debt. To satisfy the requirement of the Statute it is not necessary that the writing be in the form of a formal contract, as long as it contains the material terms. The Statute of Frauds applies only to breach of a contract claims when assessing the validity and enforceability of the contract. It does not apply to any other causes of action. However, in some situations, unwritten agreements that would ordinarily require a written contract under the Statute of Frauds may still be enforceable. One exception to the Statute of Frauds is partial performance. For example, if there is no written contract but the buyer in the alleged contract has paid any portion of the sale price, has begun to permanently improve the land, or has taken possession of the land, the courts will consider the contract partially performed, and this partial performance will amount to proof of the contract. JAHANGIRI LAW GROUP specializes in business, corporate, commercial, and real estate litigation, and transactional law. We offer services in Urdu, Hindi, Punjabi and Spanish. We are located in San Ramon. We are open from 9:00 a.m. to 5:00 p.m., Monday to Friday. To make an appointment please call 925-574-0100 . 
By Lubna K. Jahangiri, Esq. and Jessica Daniel, Legal Intern Co-Authors 09 Dec, 2021
A complaint is one of the most important documents in civil procedure. Complaints are served by summons and defendants must respond to the complaint.
By Lubna K. Jahangiri, Esq. and Jessica Daniel, Legal Intern Co-Authors 08 Oct, 2021
Strategic Lawsuits Against Public Participation (SLAPP) are becoming an increasingly popular tool used by individuals or corporations to intimidate or censor.
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