Background: Hospital brought claim against medical group for anticipatory breach
of contract, relating to letter of intent giving hospital an option to purchase
rural health clinics from medical group. Medical group cross-complained for
injunction to protect confidential information it disclosed to hospital during due
diligence period. After voluntary reference, the referee found for medical group
on hospital's claim and on medical group's cross-complaint. The Superior Court,
No. 02CECG02396, Fresno County, M. Bruce Smith, J., granted medical group's motion
for injunction. Hospital appealed.
Holdings: The Court of Appeal, Dawson, J., held that:
(1) a party to a contract does not lose the right to treat an implied
repudiation of the contract as an anticipatory breach by failing to seek damages
immediately after learning of the events that constitute the implied repudiation;
(2) existence of executory covenants that hospital did not perform before
treating the purported repudiation, by medical group, of letter of intent as an
anticipatory breach of contract, did not bar hospital from pursuing a damages
claim based on anticipatory breach; and
(3) California's version of Uniform Trade Secrets Act permits injunctive relief
to be based on threatened misappropriation of trade secrets.
Reversed and remanded.
75 Cal.Rptr.3d 771, 08 Cal. Daily Op. Serv. 5105
Court of Appeal, Fifth District, California.
CENTRAL VALLEY GENERAL HOSPITAL, Plaintiff, Cross-defendant and Appellant,
v.
Brenton SMITH et al., Defendants, Cross-complainants and Respondents;
Adventist Health Systems/West et al., Cross-defendants and Appellants.
No. F050590.
April 28, 2008.
Certified for Partial Publication. [FN*]
FN* Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this
opinion is certified for publication with the exception of subparts E.-G. of
part V. and parts VI. and VII.
