Diamond v. University of Southern California
1970 Cal. App. LEXIS 1710, 89 Cal. Rptr. 302, 11 Cal. App. 3d 49 (1970)
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Rule of Law:
The doctrine of breach by anticipatory repudiation does not apply to contracts that are unilateral in their inception or have become unilateral through the complete performance of one party.
Facts:
- The University of Southern California (defendant) offered to sell 'economy' season football tickets for its 1968 season.
- The offer included a promise that each ticket buyer would be given an option to purchase a Rose Bowl ticket if the team were selected to play.
- Diamond (plaintiff) and approximately 600 other 'first time' economy season ticket holders purchased these tickets, thus fully performing their side of the agreement.
- After the team was selected for the Rose Bowl, on or about December 4, 1968, the university sent a note to Diamond and his class informing them they could not be furnished with Rose Bowl ticket applications.
- On December 17, 1968, after discovering that not all other season ticket holders had exercised their options, the university mailed Rose Bowl ticket applications to Diamond and the other members of his class.
Procedural Posture:
- Diamond filed a class action complaint against the University of Southern California in the superior court (trial court).
- The trial court overruled the university's demurrer.
- The university subsequently filed a motion for summary judgment against Diamond.
- The superior court granted the motion for summary judgment, and a final judgment was entered in favor of the university.
- Diamond, the plaintiff-appellant, appealed the judgment to the Court of Appeal.
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Issue:
Does the doctrine of anticipatory repudiation apply to a contract that has become unilateral, where one party has fully performed its obligations and is merely awaiting performance from the other party?
Opinions:
Majority - Kaus, P. J.
No, the doctrine of anticipatory repudiation does not apply to a contract that has become unilateral. The court reasoned that when the university sent its notice on December 4, the contract had already become unilateral because Diamond and the other class members had fully performed their obligation by paying for the season tickets. Under the established rule, a party who has fully performed and has no future obligations is not prejudiced by having to wait for the counterparty's time for performance to arrive before suing for breach. Therefore, the university's notice was not an actionable anticipatory breach, and the lawsuit filed on December 9 was premature.
Analysis:
This decision reaffirms the established, though often criticized, exception to the doctrine of anticipatory repudiation for unilateral contracts. It serves as a significant precedent illustrating that a plaintiff who has fully performed cannot sue for an anticipatory breach and must wait until performance is actually due and fails to occur. The court's refusal to award attorney's fees underscores that a legally premature lawsuit, even if it prompts the defendant to perform, does not create a right to compensation. The opinion explicitly leaves the door open for a future court to reconsider this rule in a case with more compelling public policy considerations.
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