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Goonewardene v. ADP, LLC

6 Cal. 5th 817, 434 P.3d 124, 243 Cal. Rptr. 3d 299 (2019)

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Goonewardene v. ADP, LLC

California Supreme Court
6 Cal. 5th 817, 434 P.3d 124, 243 Cal. Rptr. 3d 299 (2019)

Facts

Sharmalee Goonewardene (plaintiff) was employed by Altour International, Inc. (Altour) (defendant). ADP, LLC (defendant) was a vendor that handled Altour’s payroll tasks, including preparing paychecks and pay stubs. Goonewardene sued Altour and ADP, alleging they had issued paychecks and pay stubs that did not accurately reflect the wages she was legally due. Among other claims, Goonewardene brought a breach-of-contract claim alleging that: (1) ADP and Altour had a contract, (2) the contract was made to benefit both Altour and its employees, (3) ADP had breached its contractual obligation to Altour by failing to provide accurate paychecks, and (4) as an intended third-party beneficiary, Goonewardene could sue ADP for damages caused by the breach. ADP demurred, arguing that Goonewardene had no right to sue over a contract solely between ADP and Altour. The trial court sustained the demurrer and dismissed the breach-of-contract claim. Goonewardene appealed. The court of appeal reversed, holding that Goonewardene was an intended third-party beneficiary of the ADP–Altour contract and could sue ADP. The California Supreme Court granted review.

Rule of Law

Issue

Holding and Reasoning (Cantil-Sakauye, C.J.)

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