H.P. Automotive and Tow v. City of Huntington Park CA2/8

CourtCalifornia Court of Appeal
DecidedDecember 6, 2022
DocketB306213
StatusUnpublished

This text of H.P. Automotive and Tow v. City of Huntington Park CA2/8 (H.P. Automotive and Tow v. City of Huntington Park CA2/8) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
H.P. Automotive and Tow v. City of Huntington Park CA2/8, (Cal. Ct. App. 2022).

Opinion

Filed 12/6/22 H.P. Automotive and Tow v. City of Huntington Park CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

H.P. AUTOMOTIVE AND TOW, B306213 INC., Plaintiff and Appellant, Los Angeles County Super. Ct. No. VC066929 v.

THE CITY OF HUNTINGTON PARK, Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, Margaret Miller Bernal, Judge. Affirmed.

Yacoubian & Powell and Stewart J. Powell for Plaintiff and Appellant.

Olivarez Madruga Lemeiux O’Neill, Terence J. Gallagher and Edward B. Kang for Defendant and Respondent.

_______________________ Appellant H.P. Automotive and Tow, Inc. (HP Tow) contracted with the City of Huntington Park (the City) to provide vehicle towing and storage services. After a federal grand jury indicted HP Tow, it entered into a Deferred Prosecution Agreement (DPA) with the United States Attorney’s Office. As part of the resolution of the federal charges, HP Tow expressly admitted to a Statement of Facts attached to the DPA which showed HP Tow had corruptly paid a City Councilmember to obtain a rate increase. When the City learned of the allegations, it terminated the contract. HP Tow then brought this action against the City for breach of contract and breach of the implied covenant of good faith and fair dealing. In granting the City’s motion for summary judgment, the trial court found no triable issue of material fact as to whether HP Tow engaged in conduct in violation of the contract. The court also found no violation of the implied covenant of good faith and fair dealing, which was based on the same conduct as the breach of contract claim. HP Tow appeals, contending there were triable issues of material fact as to a myriad of issues. But we find it unnecessary to address every issue as we conclude HP Tow’s express adoption of the factual allegations set out in the Indictment, DPA and Statement of Facts conclusively establish HP Tow breached the contract by violating the law. We affirm the judgment.

BACKGROUND Since 1999, HP Tow provided vehicle tow and storage services to the City of Huntington Park by written contract. The contract set out the rights and responsibilities of the parties under the agreement. Paragraph 7 of the contract, entitled “EMPLOYEE STANDARDS,” provides “TOW SERVICE agrees to

2 see that all its units and employees shall conduct their business in an orderly, ethical, businesslike manner and use every means to obtain and keep the confidence of the motoring public.” Paragraph 14, entitled “RATES AND CHARGES,” permits HP Tow to apply for a rate adjustment annually and provides: “TOW SERVICE shall make no payments for this contract and shall give no gifts to any of CITY’s officers or employees.” Paragraph 16 permits the City to terminate the contract if HP violates the contract and fails to cure the violation within 90 days. On August 19, 2013, HP Tow proposed a rate increase for its services. The five-member City Council voted on the request, which did not pass. City Councilmember Valentin Amezquita and two other members voted against the request. According to the admitted Statement of Facts attached to the DPA, Sigrid Lopez, a lobbyist for HP Tow, contacted Amezquita the day after the vote to set up a meeting. Unbeknownst to Lopez or HP Tow, Amezquita was acting as a cooperating source for the FBI.1 The meeting took place on August 29, 2013, and was attended by Lopez, Sukhbir Singh, a co-owner and officer of HP Tow, and Councilmember Amezquita. Singh asked Amezquita for his “support” and “blessing” to move the rate increase measure forward. Lopez told Amezquita that she and Singh would be there to help Amezquita if he needed help with any “kick off or remaining [campaign] debts” or future campaign events. She said, “You don’t have to ask [for support] because we will be there, ok, . . . and that’s because you make it natural for us to want to help.”

1 The Statement refers to Cooperating Source 1 or CS-1. There is no dispute this was Amezquita.

3 The Statement of Facts details additional meetings between Singh and Amezquita from October 2013 through January 2014. Singh gave Amezquita eight checks totaling $2000 over the course of the meetings. These checks were from Singh and his friends and family. During the meetings, Singh made clear he wanted Amezquita’s help in passing a rate increase measure. He also wanted Amezquita to pressure the City’s police chief to tow and impound more vehicles. On January 21, 2014, the City Council unanimously approved the rate increases proposed by HP Tow. Amezquita was not present and did not vote. On October 5, 2015, the federal government filed a federal criminal complaint against Singh and Jimmy Sandhu, another co-owner of HP Tow. The complaint alleged that between August 2013 and March 2015, the men conspired to commit federal program bribery in violation of title 18 of the United States Code section 666. The complaint expressly incorporates an affidavit from FBI Special Agent Jason Dalton. The affidavit sets forth the federal government’s case against the men, which involved payments to City Councilmember Amezquita. The affidavit sets out verbatim conversations between Amezquita and Singh which were recorded by Amezquita with equipment supplied by the FBI. The Statement of Facts, which was later attached to the DPA, is a condensed and redacted version of this affidavit. On December 23, 2015, the City Council held a special meeting and voted to terminate HP Tow’s contract. It is not clear from the record whether the City was aware of the investigation or complaint at that time. The termination letter sent the same day states the City was terminating the contract effective March 31, 2016, and indicates the termination was due to the high cost

4 of HP Tow’s services. On February 16, 2016, the City rescinded the termination but voted again to terminate the contract on the ground that HP Tow had violated the law and thereby also violated the contract. On February 22, 2016, City sent a second letter to HP Tow. This letter states HP Tow had been found in breach of the contract. The letter states the City is aware of a criminal complaint against Singh and Sadhu alleging a conspiracy to commit bribery, and of the supporting affidavit of FBI Special Agent Jason Dalton which states that offers of payment were made to a member of the City Council. The letter states that this information showed conduct in violation of Paragraph 14 of the contract. The letter also advises there is an implied provision in the contract that HP Tow must comply with all federal, state and local laws, and that the current criminal charge “places into question HP Tow’s compliance with such implied terms of the [contract].” The City later indicated that in the letter it was referring to Paragraph 7 of the contract, which required HP Tow to conduct its business in an ethical, businesslike and orderly manner. On February 26, 2016 the U.S. Attorney’s Office (USAO) filed a two-count Indictment against HP Tow and Singh.2 The Indictment alleges HP Tow and Singh committed one count of bribery in violation of title 18 of the United States Code section 666(a)(2) and Singh made a false statement to the FBI in violation of title 18 of the United States Code section 1001(a)(2).

2 Co-owner Sandhu was not named in the Indictment.

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H.P. Automotive and Tow v. City of Huntington Park CA2/8, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hp-automotive-and-tow-v-city-of-huntington-park-ca28-calctapp-2022.