Careau & Co. v. Security Pacific Business Credit, Inc.

*1379 Opinion

This appeal involves two consolidated actions: Careau & Co. and Richard Carrott v. Security Pacific Business Credit, Inc., Security Pacific National Bank, Security Pacific Corporation and Raymond C. Torres (the Carrott action); and the Careau Group v. Raymond Torres, Security Pacific Business Credit, Inc., Security Pacific National Bank, and Security Pacific Corporation (the Careau Group action). They arise out of a dispute as to (1) whether the bank defendants had made a binding commitment to provide debt financing to the plaintiffs for the leveraged (i.e., debt-financed) buyout of a business and (2) whether the plaintiffs justifiably relied thereon. These two actions allege numerous parallel and nearly identical claims based upon both contract and tort. (See fn. 8, post.)

Plaintiffs appeal from a judgment which was based upon an order sustaining demurrers without leave to amend and an order granting defendants’ motion for judgment on the pleadings. In this appeal we are asked to decide the propriety of such orders as well as the trial court’s denial of a motion for reconsideration of the order sustaining the demurrers. For the reasons discussed below, we have determined that the trial court should have overruled the demurrers as to two causes of action pled in the second amended complaints and granted to plaintiffs the right to amend as to certain other causes of action. We therefore will affirm in part and reverse in part.

Procedural Background

The Carrott action was filed in November of 1983. The Careau Group action was filed in October of 1985. First amended complaints were filed in both actions in August 1987. The parties engaged in discovery both before and after the first amended complaints were filed. Ultimately, the two cases were consolidated pursuant to a stipulation and order, dated September 4, 1987.

On October 6, 1987, the defendants filed demurrers to the first amended complaints. Specifically, defendants demurred to the first through fifth and the eighth, tenth and eleventh causes of action in the Carrott action and to the first through fifth and eighth, ninth, and tenth causes of action in the Careau Group action. On October 30, 1987, all the demurrers were sustained without leave to amend. On November 9, 1987, plaintiffs moved for reconsideration of the “without leave to amend” portion of the order sustaining the demurrers, submitting, with their motion for reconsideration, *1380 proposed second amended complaints for both of the actions. 1 Their motion was denied on December 4, 1987. A statement of the grounds for ruling upon the demurrers was signed and filed January 8, 1988.

In November 1987, defendants had filed an answer to the remaining causes of action in the two cases. This was shortly followed by a motion for judgment on the pleadings as to all but one of those counts. The motion sought dismissal of the sixth (fraud) and seventh (negligent misrepresentation) causes of action in both of the first amended complaints, as well as the ninth (interference with prospective business advantage) cause of action in the Carrott action. The motion was granted on March 11, 1988.

A judgment, based on that motion and the orders sustaining the demurrers was entered on July 13, 1988. Pursuant to a stipulation, the 12th cause of action in the Carrott first amended complaint (breach of oral contract not to disclose confidential information, which had not otherwise been specifically addressed by the trial court) was dismissed without prejudice in August 1988. The judgment was then amended nunc pro tunc on August 30, 1988, to reflect such voluntary dismissal. Plaintiffs filed a timely appeal from that judgment.

Factual Background

At the heart of these consolidated actions is the effort to finance the purchase of an egg production facility in Moorpark, California, known as Julius Goldman’s Egg City (Egg City). Plaintiffs, or at least one of the plaintiffs, sought to purchase Egg City and sought funding of $13 million from defendants. This financing never materialized and plaintiffs were allegedly unable to make the purchase until a new lender was found. They eventually obtained the necessary funding elsewhere, but on less desirable terms. Plaintiffs filed these actions, contending, inter alia, that defendants (1) breached oral and written contracts, (2) breached the implied covenant of good faith and fair dealing, (3) denied in bad faith the contract’s existence, (4) engaged in fraud and negligent misrepresentations, and (5) interfered with plaintiffs’ contractual and business relationships and prospective economic advantages.

*1381 This is an appeal from a judgment of dismissal entered after demurrers were sustained to plaintiffs’ first amended complaints. 2 “Therefore, under settled law, we assume the truth of all properly pleaded material allegations of the complaint [citations] and give it a reasonable interpretation by reading it as a whole and its parts in their context. [Citation.]” (Phillips v. Desert Hospital Dist. (1989) 49 Cal.3d 699, 702 [263 Cal.Rptr. 119, 780 P.2d 349].) If the demurrer was sustained, as it was in this case, our function is to determine whether the complaint states sufficient facts to state a cause of action; and if it was sustained, as it was here, without leave to amend, “we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff. [Citation.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [216 Cal.Rptr. 718, 703 P.2d 58]; see also, Maheu v. CBS, Inc. (1988) 201 Cal.App.3d 662, 669-670 [247 Cal.Rptr. 304]; Von Batsch v. American Dist. Telegraph Co. (1985) 175 Cal.App.3d 1111, 1117 [222 Cal.Rptr. 239].) In accordance with these rules, we set forth the following facts as disclosed by plaintiffs’ second amended pleadings. 3

During the summer of 1983 the plaintiffs Richard Carrott (Carrott) 4 and Careau & Co. (Careau), a California corporation, negotiated a leveraged purchase of Egg City. It was then owned by the Kroger Company (Kroger), one of the largest grocery chain store owners in the United States. These negotiations led to the execution of a letter of intent between Careau and the defendant Security Pacific Business Credit, Inc. (SPEC) 5 on July 19, 1983. By this letter, SPEC expressed an interest in lending to Careau the sum of $12 million (to provide financing for the purchase of Egg City) upon certain terms and conditions and subject to certain specified contingencies.

*1382 The letter was signed on behalf of SPEC by the defendant Raymond C. Torres (Torres) who was a vice-president of SPEC and, at all times, “was acting in and within the scope of that capacity, and under the control and agency of’ SPEC.

The terms of the letter of intent required Careau to make a good faith deposit of $10,000 which would be used by SPEC to cover the costs and expenses incurred by SPEC in reviewing and evaluating Careau’s loan application. This sum was paid to SPEC on July 27, 1983, by a check apparently written on a personal account of Carrott.

The conditional and tentative nature of the letter was emphasized by several phrases which made clear that no loan commitment had been made. Specifically, (1) the terms of the proposed loan were introduced with the disclaimer that the letter should “in no way should be considered a commitment to provide financing”-, (2) a list of “conditions precedent” was preceded by the sentence, “The following are some, but obviously not all of the conditions precedent to any loan approval. . . and finally, (3) the letter concluded with a further caution, “Since this letter is not a commitment to make a loan, it should not be relied upon by any third party”

Thereafter, SPEC had discussions with Kroger, the party from which Egg City would be purchased, and an audit of that property and business was completed by SPEC and distributed internally by August 10, 1983. Two weeks later, on August 25, Torres, on behalf of SPEC, and Carrott, on behalf of Careau, executed a revised letter relative to the proposed loan which the second amended complaints allege was “a written commitment contract for the acquisition of Egg City.” 6

It was identical to the letter of July 19 except for four specific changes:

1. The total amount of the proposed loan was increased to $13 million (including an increase, from $4 million to $5 million, of the advances to be secured by accounts receivable);

*1383 2. The conditional and tentative language quoted and italicized above in the next preceding paragraph was deleted;

3. Three contingencies that had not been included in the July 19 letter (numbered as 8.4, 8.5 and 8.6) were added. The proposed loan, as described in the letter of August 25, was thus made subject to the eight specific conditions precedent; 7 and finally,

4. The letter concluded with the statement, “Since this letter is subject to all of the above conditions and specifically the receipt of the acceptable appraisal with a guarantee from an acceptable insurance company and the confirmed commitment from seller, it should not be relied upon by any third party as a final commitment to make a loan.”

In order to demonstrate that the conditions were satisfied, excused or waived, plaintiffs alleged that:

1. On September 7, 1983, Torres orally informed Carrott that “the loan commitment had been approved by SPBC” (apparently referring to *1384 contingency 8.7). This statement was repeated to Carrott by Torres the next day, September 8, when the two met to conduct a telephone conference with the seller, Kroger. Kroger was advised by Torres in that telephone call that, “This is a verbal commitment. It has been cleared to the level of Vice Chairman, and he has cleared me to make this call to you”;

2. Torres “had previously stated to Carrott that the vice chairman was the last and remaining person from the Senior Credit Committee who had to approve the commitment, as the other persons on the loan committee who need to approve the commitment had previously done so ... . [T]he Senior Credit Committee approval was serial, i.e., each member approved independently, without a formal vote at a meeting”;

3. Torres stated to both Carrott and Kroger on September 8, “that conditions precedent 8.1, 8.3, 8.4, 8.5 and 8.7 of the written commitment contract had been met and satisfied and defendants were fully satisfied that the conditions had been met”;

4. On September 23, Kroger advised Carrott that the sale was approved based upon the terms of the August 25 letter (plaintiffs claim that this satisfied condition 8.6);

5. Based upon the conversations of September 7 and 8, “defendants waived . . . the need to satisfy any of the conditions, numbered 8.1 through 8.8 inclusive .... Thus all Conditions Precedent of the written commitment contract had either been met and satisfied or waived or excused

6. Condition 8.5 “had thereby been met and satisfied and Kroger and SPEC were fully satisfied that the conditions had been met”;

7. On or about September 26, 1983, the written loan commitment was orally modified to provide that (a) the closing of the Egg City purchase would occur in December 1983 as an accommodation to Kroger and (b) the party which would buy Egg City and receive the purchase financing from defendants was to be a new corporation with the name, “The Careau Group.” This latter change was required by SPEC because Careau was “involved in many other activities.” This new corporation (hereafter the “Careau Group”) was formed and incorporated by Carrott on or about September 26;

8. “All Conditions Precedent of the written commitment contract were satisfied not later than September 23, 1983 except 8.2 and 8.8 which would have been satisfied at closing”; and

*1385 9. Since the defendants gave notice between October 4 and 6, 1983, that they would not perform the commitment to make the loan, conditions 8.2 and 8.8 were excused.

Plaintiffs further allege that they relied upon the representations and commitments made by SPEC in that they (1) desisted from loan negotiations in which they had been engaged with other institutions, (2) incurred the expense of forming the new corporation, Careau Group and (3) expended $4,000 for the initial preparation of a business plan.

Following SPEC’s decision not to provide the financing to purchase Egg City, plaintiffs allege that they were finally able, in June of 1985, to obtain the necessary funds from another source, but on less advantageous terms and at additional cost. Plaintiffs claim that the damages which they suffered include, (1) past and future lost profits from the Egg City business, (2) the time, expense and cost of obtaining replacement financing and (3) the reduction in the value of Egg City between December 1983 and June 1985, including physical deterioration of the premises, diminution of the flock of laying chickens, destruction of the hatchery and chicken replacement program and loss of goodwill associated with the trade name, “Julius Goldman’s Egg City.”

The two consolidated complaints which have been filed assert the same 12 counts, plus 2 additional theories which are alleged only in the Carrott action (i.e., intentional infliction of emotional distress (count 11) and breach of an oral agreement to keep certain information confidential (count 12)). 8

Discussion

1. The Basis of Review in This Case

On appeal, plaintiffs challenge only the fact that the trial court sustained demurrers to the first amended complaints without leave to amend and then, in spite of the allegations in the proposed second amended complaints, *1386 refused to reconsider that order. We therefore presume that the demurrers to their first amended complaints were properly sustained.

As we have already noted, it is an abuse of discretion to sustain demurrers without leave to amend if there is a reasonable possibility that the plaintiff can amend the complaint to cure its defects. (Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636 [75 Cal.Rptr. 766, 451 P.2d 406]; Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [75 Cal.Rptr. 766, 451 P.2d 406].) To meet the plaintiff’s burden of showing abuse of discretion, the plaintiff must show how the complaint can be amended to state a cause of action. (Goodman v. Kennedy, supra, 18 Cal.3d at p. 349.) However, such a showing need not be made in the trial court so long as it is made to the reviewing court. (Code Civ. Proc., § 472c; Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 939 [101 Cal.Rptr. 568, 496 P.2d 480]; Schultz v. Steinberg (1960) 182 Cal.App.2d 134, 140-141 [5 Cal.Rptr. 890].)

Here, the record does not show that plaintiffs specified to the trial court, at the original hearing on the demurrers, how they would amend their first amended complaints so as to cure the defects which the trial court found in them. However, they did make such a showing by way of their later motion for reconsideration.

Under Rains v. Superior Court (1984) 150 Cal.App.3d 933, 943-944 [198 Cal.Rptr. 249], plaintiffs were entitled to submit proposed second amended complaints by way of a motion for reconsideration. If those second amended complaints stated any causes of action, then the trial court was obligated to (1) vacate its order which sustained the demurrers without leave to amend and (2) make a different order granting plaintiffs leave to file an amended complaint, which would include the causes of action which the trial court, in deciding the merits of the motion for reconsideration, determined were valid. (Id., at p. 945.)

Although it does not appear from the record before us that the trial court specifically considered the changes made by the plaintiffs in their proposed second amended complaints before denying the motion to reconsider, 9 we do not believe it to be in the interest of judicial economy to return *1387 the case to the trial court for such a review. We have the second amended pleadings before us, and we can make a determination as to whether any viable causes of action are stated and, if not, whether further amendment should be permitted. Thus, although one of plaintiffs’ principal claims of error is that they were not given the opportunity to file amended pleadings, we will decide the case as though the court had received them and had sustained demurrers without leave to amend. 10

Plaintiffs argue that the second amended complaints do allege viable causes of action but, even if we also find them deficient, they have a right to the opportunity of further amendment. The general rule is that allegations of a complaint are to be liberally construed with a view to substantive justice between the parties. (King v. Central Bank (1977) 18 Cal.3d 840, 843 [135 Cal.Rptr. 771, 558 P.2d 857].) An order sustaining a demurrer without leave to amend will constitute an abuse of discretion if there is any reasonable possibility that the defect can be cured by an amendment. This rule is liberally applied to permit further amendment not only where the defect is one of form but also where it is one of substance, provided the pleader did not have “ ‘a fair prior opportunity to correct the substantive defect.’ ” (Leach v. Drummond Medical Group, Inc. (1983) 144 Cal.App.3d 362, 368 [192 Cal.Rptr. 650], quoting Lanvin-Southern California, Inc. v. JGB Investment Co. (1979) 101 Cal.App.3d 626, 635 [162 Cal.Rptr. 52].)

On the other hand, there is nothing in the general rule of liberal allowance of pleading amendment which “requires an appellate court to hold *1388 that the trial judge has abused his discretion if on appeal the plaintiffs can suggest no legal theory or state of facts which they wish to add by way of amendment.” (HFH, Ltd. v. Superior Court (1975) 15 Cal.3d 508, 513, fn. 3 [125 Cal.Rptr. 365, 542 P.2d 237].) The burden is on the plaintiffs to demonstrate that the trial court abused its discretion and to show in what manner the pleadings can be amended and how such amendments will change the legal effect of their pleadings. (Goodman v. Kennedy, supra, 18 Cal.3d 335, 349; Sullivan v. City of Sacramento (1987) 190 Cal.App.3d 1070, 1081 [235 Cal.Rptr. 844]; Von Batsch v. American Dist. Telegraph Co., supra, 175 Cal.App.3d 1111, 1117-1118.)

With such general principles in mind we will examine each of the causes of action alleged by the plaintiffs.

3. Whether the Complaints Plead Sufficient Facts to State a Cause of Action on Any Theory

a. Claims Based on Contract

(1) Written or Oral Contract

In their first two counts plaintiffs have attempted to plead the breach of both the written and an oral contract. However, they rely upon the same allegations for each and we see no need to distinguish between them.

A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830 [69 Cal.Rptr. 321, 442 P.2d 377].) What plaintiffs have failed to do here is adequately allege the due satisfaction of several conditions precedent to the formation of a binding contract.

Plaintiffs assert that the letter of August 25 sets forth the terms of a contractual commitment to provide financing. While they acknowledge that the letter contains some conditions, they argue that they have alleged sufficient facts to demonstrate, at least for pleading purposes, that each of *1389 such conditions has been satisfied, waived or excused. Defendants, on the other hand, argue that the letter is tentative and nothing more than an expression of intent subject to many conditions, the satisfaction of which plaintiffs have not alleged.

On its face, the August 25 letter is a conditional agreement to provide financing if certain “conditions precedent” are met. The conditions listed are both specific and substantial. In addition, the letter refers to financial, legal and collateral investigations which remain to be completed and expressly anticipates the possibility that a loan will not be made; 12 and, as already discussed, the letter expressly cautions that since it is subject to so many conditions which obviously had not been satisfied as of August 25, “it should not be relied upon by any third party as a final commitment to make a loan.” As the court noted in Kruse v. Bank of America (1988) 202 Cal.App.3d 38 [248 Cal.Rptr. 217], “Preliminary negotiations or an agreement for future negotiations are not the functional equivalent of a valid, subsisting agreement. ‘A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.’ [Citation.]” (Id., at p. 59.)

Where contractual liability depends upon the satisfaction or performance of one or more conditions precedent, the allegation of such satisfaction or performance is an essential part of the cause of action. (4 Witkin, Cal. Procedure (3d ed. 1985) Pleading, §479, pp. 515-516.) This requirement can be satisfied by allegations in general terms. It is sufficient for a plaintiff to simply allege that he has “duly performed all the conditions on his part.” (Code Civ. Proc., § 457.) However, this rule is subject to two important caveats, both of which are applicable here.

First, where the condition is an event, as distinguished from an act to be performed by the plaintiff, a specific allegation of the happening of the condition is a necessary part of pleading the defendant’s breach. (Clack v. State of California ex rel. Dept. Pub. Wks. (1969) 275 Cal.App.2d 743, 748 [80 Cal.Rptr. 274]; Byrne v. Harvey (1962) 211 Cal.App.2d 92, 113 [27 Cal.Rptr. 110].) Second, general pleadings are controlled by specific allegations. Thus, a general allegation of due performance will not suffice if the *1390 plaintiff also sets forth what has actually occurred and such specific facts do not constitute due performance. (Willis v. Page (1937) 19 Cal.App.2d 508, 512 [65 P.2d 944].)

For example, where plaintiff alleges a permissible conclusion of law such as the due performance of a condition precedent but also avers specific additional facts which either do not support such conclusion, or are inconsistent therewith, such specific allegations will control “and a complaint which might have been sufficient with general allegations alone may be rendered defective . . . .” (4 Witkin, Cal. Procedure, supra, Pleading, § 404, at p. 453; see also, Stowe v. Fritzie Hotels, Inc. (1955) 44 Cal.2d 416, 422 [282 P.2d 890]; Clack v. State of California ex rel Dept. of Pub. Wks., supra, 275 Cal.App.2d at p. 748.)

When we apply these rules to plaintiffs’ pleadings we are forced to conclude that they have failed to state a cause of action for breach of contract. There are no specific allegations of the performance of any of the conditions. Although this is their third pleading effort, all plaintiffs have alleged is that conditions “had been met and satisfied” and “defendants were fully satisfied that the conditions had been met” and “all conditions precedent . . . had either been met and satisfied or waived or excused . . . .” These are simply general conclusions. However, since at least six of the eight conditions were events which had to exist or occur, and not simply acts to be performed by plaintiffs, such general allegations are not adequate. (Clack v. State of California ex rel. Dept. of Pub. Wks., supra, 275 Cal.App.2d at p.748; Byrne v. Harvey, supra, 211 Cal.App.3d at p. 113.)

Nor are plaintiffs’ contract claims saved by the allegations of the oral statements attributed to Torres, the officer of SPEC with whom they were dealing. Plaintiffs rely on Torres’s statements as a sufficient specific allegation of due performance but unfortunately all that plaintiffs have done is beg the question.

While those statements may be some evidence that one or more conditions were satisfied, they do not constitute the direct, specific allegation of performance which is required. A complaint must allege the ultimate facts necessary to the statement of an actionable claim. It is both improper and insufficient for a plaintiff to simply plead the evidence by which he hopes to prove such ultimate facts. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212 [197 Cal.Rptr. 783, 673 P.2d 660].) Here, plaintiffs rely heavily on their allegations that Torres had stated to Carrott and others that “the loan commitment had been approved by SPBC” (and other conclusionary state *1391 ments as to the satisfaction of one or more conditions). These allegations do not demonstrate due performance. If at trial a jury were to find that Torres had indeed made such statements, that would not be the equivalent of a finding that any of the conditions in the August 25 letter had been satisfied, excused or waived. It would only mean that it was true that Torres had said certain things about them.

This is obviously more than a quibble. If plaintiffs, after four years of substantial discovery and three separate pleadings, can allege nothing more than they have, then we have serious doubts that they can truthfully allege that any of the conditions were satisfied. All they have done is allege that Torres made certain statements which they contend constitute an excuse or waiver of performance. However, such conclusory allegations are not sufficient. The pleading of excuse or waiver of performance of conditions precedent requires specific not general allegations. (4 Witkin, Cal. Procedure, supra, Pleading, §§ 481-482, at pp. 517-519.) Thus, plaintiffs have failed to adequately allege a cause of action for the breach of either a written or an oral agreement. Their failure to sufficiently allege the satisfaction of several significant, if not critical, conditions precedent to any obligation on the part of SPEC to provide financing is fatal to their contract claims.

These pleading defects are at once matters of both form and substance. However, we cannot conclude, without effectively resolving a factual issue, that there is no reasonable possibility of plaintiffs making the direct allegations necessary to demonstrate the existence of a binding contract. On appeal, it is not our task to be concerned with the possible difficulty or inability of proving such allegations. (Postley v. Harvey (1984) 153 Cal.App.3d 280, 287 [200 Cal.Rptr. 354].) Therefore, it is appropriate that plaintiffs be given the opportunity to correct the specific pleading errors we have described. It was therefore error to sustain a demurrer to these contract counts without leave to amend.

*

c. Tort Claims Based on Alleged Bad Faith

Plaintiffs attempt to assert two separate causes of action based upon a claim of bad faith. Each necessarily depends upon the existence of a valid and existing contractual relationship. As we have already concluded *1392 that plaintiffs have failed to plead the existence of a contract we could dispose of these counts summarily. However, there are significant additional reasons upon which we rely to support our view that plaintiffs have not alleged a basis for relief on either theory. In addition, plaintiffs will be given a further opportunity to plead the existence of a contract. We therefore deal with these two claims in some detail.

(1) Tortious Breach of Implied Covenant of Good Faith and Fair Dealing

Arguing that it is “settled” that there is a “special relationship” between a bank and its customers, plaintiffs contend that defendants have tortiously breached the covenant of good faith implied in their contractual relationship. Pleading in conclusory language that defendants “exercised great bargaining power” over them and that the circumstances of the transaction created “a special confidential and fiduciary duty” to them, plaintiffs allege that such breach resulted from (1) the refusal to provide the financing described in the August 25 letter, (2) a “deceitful and pretextual” explanation for such refusal and (3) the disclosure of confidential financial information to third parties. 13

Although plaintiffs have characterized this count as the tortious breach of the implied covenant, it is obviously possible to state a cause of action for a breach of such covenant even though no basis for a tort recovery exists. Thus, we must consider if a cause of action has been stated on any theory, irrespective of the label attached by the pleader. (Zumbrun v. University of Southern California (1972) 25 Cal.App.3d 1, 8-9 [101 Cal.Rptr. 499, 51 A.L.R.3d 991].) After a review of the applicable law, 14 we will conclude that plaintiffs’ allegations are not sufficient to state any cause of action for a breach of the implied covenant of good faith, irrespective of the remedy sought. First, plaintiffs have not pled sufficient facts to justify a recovery in tort. Secondly, they have not even attempted to plead a basis for a recovery of anything other than ordinary contract damages and their claim is simply duplicative of their two contract causes of action and thus may be disregarded.

*1393 “Every contract imposes on each party a duty of good faith and fair dealing in each performance and in its enforcement.” (Rest. 2d, Contracts, § 205; Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 818 [169 Cal.Rptr. 691, 620 P.2d 141]; Seaman’s Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 768 [206 Cal.Rptr. 354, 686 P.2d 1158] (Seaman’s).) Simply stated, the burden imposed is “‘that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.’ ” (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 573 [108 Cal.Rptr. 480, 510 P.2d 1032], quoting Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658 [328 P.2d 198, 68 A.L.R.2d 883].) Or, to put it another way, the “implied covenant imposes upon each party the obligation to do everything that the c