Klistoff v. Superior Court

In Klistoff v. Superior Court (2007) 157 Cal.App.4th 469, the complaint alleged that Michael Klistoff and his company, All City Services, bribed a city official in exchange for the official's efforts to ensure that another company in which Klistoff was vice president and manager, Klistoff & Sons, obtained a lucrative, long-term franchise agreement from the city to provide refuse collection and recycling services. (157 Cal.App.4th at p. 474.) The city's complaint alleged in the first cause of action that Klistoff had violated section 1090 because he had a financial interest in and received benefits from the contract between the city and Klistoff & Sons. (Klistoff, supra, 157 Cal.App.4th at p. 476.) In the second cause of action, the city alleged that Klistoff and his shell company, All City Services, conspired to violate section 1090. (Klistoff, supra, 157 Cal.App.4th at p. 476.) When the trial court overruled the demurrers of Klistoff and All City Services to the second cause of action for conspiracy to violate section 1090, those defendants filed a petition for writ of mandate directing the trial court to enter a new order sustaining the demurrer. (Klistoff, supra, 157 Cal.App.4th at pp. 477-478.) The Court of Appeal in Klistoff granted the petition on the grounds that (i) Klistoff and All City Services were not legally capable of violating section 1090 because they were not public officials or employees and, therefore, could not be liable for conspiracy to violate that section (Klistoff, supra, 157 Cal.App.4th at p. 479), and (ii) the remedy in section 1092, avoidance of the tainted contract, did not apply to Klistoff and All City Services because they were not parties to the agreement and did not receive payments from the city under the agreement. (Klistoff, supra, 157 Cal.App.4th at p. 481.)