Aljabban v. Fontana Indoor Swap Meet, Inc. (2020)

Citation: Aljabban v. Fontana Indoor Swap Meet, Inc. (2020)
Parent Document: Aljabban v. Fontana Indoor Swap Meet, Inc. (2020)
Jurisdiction: California (state)
Effective Date: 2020-09-10
Original Source: https://www.courtlistener.com/opinion/4784084/aljabban-v-fontana-indoor-swap-... ↗

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222 Cal.App.3d 1371, 1394.) “[I]t has been suggested the covenant has both a
subjective and an objective aspect—subjective good faith and objective fair
dealing. A party violates the covenant if it subjectively lacks belief in the
validity of its act or if its conduct is objectively unreasonable.” (Carma
Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2
Cal.4th 342, 372.) “To the extent the implied covenant claim seeks simply to
invoke terms to which the parties did agree, it is superfluous.” (Guz v.
Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 352.) Here, the evidence does not
support a finding of bad faith or unfair dealing beyond a breach of the
contractual agreement itself. Indeed, all of the evidence indicates that
FISM’s breach was unknowing and unintentional, caused by a
misunderstanding of the permissible uses of the security deposit in light of
the language of the vendor’s permit.
      Further, there is no basis to find Shapiro liable for the withholding of
$680.00 from the security deposit. Aljabban did not sue Shapiro for
conversion, and although Aljabban named Shapiro as a defendant in the
breach of contract cause of action, the vendor’s permit was entered into by
FISM as a corporate entity. Absent a successful attempt to pierce FISM’s
corporate veil—which Aljabban did not attempt to undertake at trial—
Shapiro’s role as FISM’s president does not subject him to liability for FISM’s
breach of contract. (Sonora Diamond Corp. v. Superior Court (2000) 83
Cal.App.4th 523, 538 [“Ordinarily, a corporation is regarded as a legal entity,
separate and distinct from its stockholders, officers and directors, with
separate and distinct liabilities and obligations,” but “[a] corporate identity
may be disregarded—the ‘corporate veil’ pierced—where an abuse of the
corporate privilege justifies holding the equitable ownership of a corporation
liable for the actions of the corporation”].)

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