# Donovan v. RRL Corp. > California Supreme Court · September 12, 2001 · 109 Cal. Rptr. 2d 807 URL: https://www.frixlaw.com/law-library/cases/9788307 ## Case - **Full name:** BRIAN J. DONOVAN, Plaintiff and Appellant, v. RRL CORPORATION, Defendant and Respondent - **Court:** California Supreme Court - **Decided:** September 12, 2001 - **Citations:** 109 Cal. Rptr. 2d 807; 26 Cal. 4th 261; 27 P.3d 702 - **Precedential status:** Published - **Opinion:** Dissent by Werdegar - **Judges:** George, Werdegar - **Cited by:** 152 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9788307 ## How later opinions describe it (automated extraction) - stating that “[t]his court has not previously applied the common law rules upon which defendant relies, including the rule that advertisements generally constitute invitations to negotiate rather than offers,” observing that “such rules ... have been criticized on the ground t… - holding that a licensed automobile dealer’s advertisement regarding a particular vehicle at a specific price constituted an offer in light of the California Vehicle Code, which rendered illegal the failure to sell the vehicle at the advertised price to any person while it rema… ## Opinion text WERDEGAR, J., Dissenting. Although I agree with the majority’s conclusion that an enforceable contract was formed between the parties, I respectfully dissent from the majority’s grant of contractual rescission to defendant RRL Corporation, relief that is both unsolicited and procedurally irregular. As the majority implicitly acknowledges, defendant did not seek in the trial court to rescind its contract with plaintiff. (Maj. opn., ante, at p. 278, fn. 5.) But the majority neglects to note, further, that at no point on appeal or on review in this court has defendant argued for rescission; defendant’s position throughout has been, instead, that no contract was formed between plaintiff and itself. Thus, neither the petition for review nor the answer, which ordinarily delimit the issues to be briefed in this court (Cal. Rules of Court, rule 29.3(c)), so much as mentions rescission. Even at oral argument, counsel for defendant resisted the suggestion that he was seeking rescission, viewing that position as a concession that a contract had been formed, although counsel did eventually agree he “would be pleased to prevail on any theory.” The possibility of rescission appears to have been raised first by amici curiae. Because amici curiae are, like the parties, expected to restrict their *295 briefs to the issues on review (see Cal. Rules of Court, rule 14(b)), plaintiff justifiably limited his response to a few lines, noting only that defendant had not sought rescission and that the case of M. F. Kemper Const. Co. v. City of L. A. (1951) 37 Cal.2d 696 [ 235 P.2d 7 ], upon which amici curiae (like the majority) chiefly relied, appeared distinguishable. At oral argument, when questioning from the bench made clear the court’s interest in rescission, counsel for plaintiff requested the opportunity to brief the question if it was “significant to the court’s consideration” of the case. The majority nevertheless decides the issue in favor of defendant, rather than giving plaintiff an opportunity to brief it by transferring the case to the Court of Appeal. Rescission may be asserted in an answer or cross-complaint, or by other notice to the nonrescinding party. (Civ. Code, §§ 1691, 1692.) But the party seeking to rescind must give such notice “promptly upon discovering the facts which entitle him to rescind.” (Civ. Code, § 1691.) Delay in giving notice is grounds for denying relief if the nonrescinding party has been substantially prejudiced. (Civ. Code, § 1693.) Defendant here, of course, has never given any actual notice of rescission, by pleading or otherwise. To the extent defense counsel’s oral expression of willingness to accept rescission is deemed equivalent to notice, plaintiff should, at the least, be permitted to brief the question of prejudice on transfer to the Court of Appeal. Although I cannot predict what briefing would reveal, prejudice may lie, for example, in the costs of maintaining this suit and appeal, which could presumably have been resolved more expeditiously had defendant earlier asserted the single defense to which the majority now holds it was entitled. (See Citicorp Real Estate, Inc. v. Smith (9th Cir. 1998) 155 F.3d 1097 , 1103 [unexcused delay in pleading rescission, during litigation over contract, bars relief under Civ. Code, §§ 1691 and 1693]; Doctor v. Lakeridge Const. Co. (1967) 252 Cal.App.2d 715, 720 [ 60 Cal.Rptr. 824 ] [same].) 1 As analyzed by the majority, the question of defendant’s equitable entitlement to rescission turns principally on two subsidiary questions: whether defendant should be deemed to bear the risk of an error in the advertisement; and whether enforcement of the contract as formed would be unconscionable. (Maj. opn., ante, at pp. 283-288, 291-292.) Although the parties have *296 tried and argued the effect of the mistake—because it related to defendant’s claim the mistake vitiated its intent to contract—they have neither tried nor argued the question of unconscionability. (The trial court’s statement of decision does not mention unconscionability.) The majority’s apparent assumption (maj. opn., ante, at pp. 278-279, fn. 5) that all evidence significant to rescission was presented below is, therefore, unfounded. Again, it is not the place of a reviewing court to speculate on what evidence and argument might have been presented had the parties litigated different issues than they did, but presumably additional evidence could have been presented as to the (probably slight) economic impact enforcement would have on defendant, as well as any lost opportunities or other costs suffered by plaintiff resulting from his seeking to hold defendant to performance of the contract. (See Civ. Code, § 1670.5, subd. (b) [parties shall be afforded reasonable opportunity to present evidence relating to unconscionability].) Finally, under Civil Code section 1692, a court ordering rescission “may require the party to whom such relief is granted to make any compensation to the other which justice may require and may otherwise in its judgment adjust the equities between the parties.” Needless to say, the parties have not addressed this equitable question in their briefs, and the majority makes no provision for such compensation. I acknowledge the principle that a judgment is to be affirmed if correct on any ground. I do not, however, believe that rule is properly applied where, as here, (1) the affirmance is based on a factual theory that was not raised at trial and as to which the trial court’s statement of decision contains no supportive findings; (2) affirmance would involve the granting of equitable relief that no party has sought and that is subject to unsatisfied procedural requirements; (3) the opposing party has not had a fair opportunity to brief the availability of such equitable relief; and (4) the record does not contain all the facts relevant to such relief. In the present circumstance we should, rather than reverse the Court of Appeal’s judgment and thereby reinstate the trial court’s judgment for defendant, either affirm the judgment of the Court of Appeal or, at most, transfer the case to that court for briefing and decision on the rescission issue, with a remand for trial on that issue to follow if necessary. For these reasons, I dissent. Baxter, J., concurred. Appellant’s petition for a rehearing was denied September 12, 2001, and the opinion was modified to read as printed above. Baxter, J., and Werdegar, J., were of the opinion that the petition should be granted. The majority, citing Wilson v. Lewis (1980) 106 Cal.App.3d 802 [ 165 Cal.Rptr. 396 ], argues that defendant gave oral notice of rescission when its employees told plaintiff the advertised price was erroneous. (Maj. opn., ante, at p. 279, fn. 5.) Wilson , in which an owner of real property signed a written agreement to sell, but telephoned the buyer’s agent the next day to “repudiate]” the agreement (Wilson, supra, at p. 807 ), is clearly distinguishable. Here, while plaintiff wished to conclude a contract, defendant’s agents repeatedly told him they would not sell him the vehicle at the advertised price. In any event, the majority’s invention of an oral rescission theory unaddressed by the parties illustrates my principal objection to its approach, that it decides debatable issues regarding the propriety of rescission relief without full briefing and informed deliberation. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9788307. Public record. Not legal advice.