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Contract Law Supreme Court Opinion

by Booth, George

 

SC19574 - CCT Communications, Inc. v. Zone Telecom, Inc.("The plaintiff, CCT Communications, Inc., appeals from the judgment of the trial court rendered in favor of the defendant, Zone Telecom, Inc., on the plaintiff's complaint and the defendant's counterclaim for damages and declaratory judgment. The case arises from a purchase agreement entered into by the parties in which the plaintiff was to provide various equipment, software, and services to the defendant for a telecommunications switch room located in Los Angeles, California. On appeal, the plaintiff claims that the trial court incorrectly rendered judgment in favor of the defendant on the plaintiff's complaint and the defendant's counterclaim. Specifically, the plaintiff asserts that the trial court incorrectly (1) concluded that it breached the purchase agreement by filing a petition for bankruptcy protection under chapter 11 of the United States Bankruptcy Code (bankruptcy code); see 11 U.S.C. ยง 1101 et seq. (2012); (2) determined that a letter from the defendant dated February 5, 2007, was an effective exercise of the defendant's right to terminate the purchase agreement, (3) failed to award the plaintiff certain damages on count one of its complaint, and (4) awarded the defendant damages, costs, and attorney's fees in excess of a limitation of liability clause in the purchase agreement. We agree that the trial court incorrectly concluded that the plaintiff's bankruptcy petition constituted a breach of the purchase agreement and permitted the defendant to terminate that agreement. We therefore reverse the judgment of the trial court.")