Ruling Out the Alternatives

Macguire v. More-Gas Investments, LLC, No. C067865 (D3 Oct. 15, 2013)

The court of appeal reverses an order granting summary judgment because the moving defendant failed to meet its initial burden. The defendant had moved on the ground that the provision of a contract upon which the plaintiff was suing was an unenforceable penalty clause and not a clause permitting reasonable liquidated damages. But there is a third possibility depending on the circumstances of the case: The provision could have been a valid clause provision for alternative performance. Because the motion did not address this possibility, the defendant had not met its burden under Code of Civil Procedure § 437c(p)(2) to show that the cause of action cannot be established because the clause at issue was an unenforceable penalty provision. Thus—although the procedural aspect merits little discussion—the case nonetheless stands for the proposition that when a plaintiff can prevail on more than one alternate legal theory on a cause of action, a moving defendant must come forward with evidence that would establish that the plaintiff could not prevail under either theory. 

Reversed.