Respondents, the governmental entities (the entities), filed an action against appellant, the association, for breach of a settlement agreement. The entities tried the case on the theory that there the parties had a valid option contract. The jury returned a special verdict. The Superior Court County of Ventura, California, entered a judgment in favor of the entities. The association appealed.
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All of the parties engaged the services of the same investment adviser. That adviser participated in fraudulent transactions causing the entities to suffer substantial losses. The entities claimed the adviser transferred funds from their accounts to the accounts of the association and other clients. The entities sued the association and the other clients for restitution. The entities alleged the parties had agreed on a settlement. However, after the trial court entered summary judgment as to one party, the association alleged there was no settlement. The entities lost their action for restitution and filed another suit for breach of the settlement agreement. The entities were awarded damages. The court of appeals held that: (1) the parties’ oral option contract was enforceable; (2) the purpose of the statutes and public policy supported the validity of the oral option contract; (3) the association was estopped from denying the validity of the oral option contract; (4) because the oral option contract was enforceable, the association was bound by the settlement agreement formed when the entities accepted the offer; and (5) the doctrine of election of remedies was inapplicable.
The judgment was affirmed.