Overview

HOLDINGS: [1]-The appellate court held that a gas company had to bear all of the costs of relocation of its pipelines. The PUC is a governmental entity with the authority to acquire, construct, maintain, and operate public transit systems. It necessarily followed that, when PUC demanded that the company relocate its pipeline to make way for an extension of its existing rail line, it had a proper governmental purpose; [2]-The appellate court also held that at those points where the company held licenses for its pipelines, once PUC terminated the licenses, the company could be held liable for trespass; [3]-The opinion in Bello v. ABA Energy Corp., which is the leading authority concerning the scope of a local government's power to allow a utility to use the local government's right-of-way over a third party's land, was fully applicable to this dispute, even though PUC is a railroad.

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Outcome

The trial court's order summarily adjudicating the PUC's trespass cause of action was reversed. In all other respects, the orders on the cross-motions for summary adjudication were affirmed. The judgment was reversed, and the matter was remanded for further proceedings on the trespass cause of action.

Procedural Posture

Plaintiff gas company appealed the judgment of the Superior Court of Los Angeles County (California), which granted defendant oil company's motion for nonsuit in the gas company's lawsuit for breach of contract arising from the oil company's refusal to deliver oil demanded by the gas company during certain months.

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Overview

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The gas company and the oil company entered into a contract in which the oil company agreed to sell and deliver to the gas company a sufficient quantity of crude oil to operate all plants to be operated by the gas company in its business of manufacturing gas and electricity. The gas company alleged breach of contract after the oil company notified the gas company that it was no longer bound by the contract and refused to deliver oil as requested and demanded. The trial court granted the oil company's motion for nonsuit on the basis of the gas company's lack of evidence showing that it had demanded a quantity of oil sufficient to operate its plants. On appeal, the court held that the contract was to be construed as entire and not severable. Therefore, the gas company could not recover for a failure to deliver without alleging and showing either performance or a sufficient excuse for the nonperformance of its obligation to take all of the oil required to operate its gas and electric plants.

Outcome

The court affirmed the trial court's judgment granting the oil company's motion for nonsuit against the gas company's breach of contract claim.