Bailey

The City of Imperial Beach (City) filed a complaint for declaratory relief requesting a determination whether the city council (Council) could renew or extend a contract it had with Gary and Hazel Bailey doing business as Imperial Beach Concession (Concession). The court granted City’s motion for summary judgment and ruled City could not contract with Concession.

Factual Background

In June 1963, City entered into a contract with Eva Herron for the construction and operation of a concession stand on the municipal pier for the purpose of selling bait, fishing tackle and refreshments. The term of the contract was for ten years with options for renewal by Concession for two additional terms of five years each. In July 1973, the Council amended the contract to approve Gary and Hazel Bailey as the operators of Concession pursuant to an assignment to them by Herron. The amendment also provided: “On the fifteenth anniversary of the agreement (June 26, 1978) ownership of the building shall pass to the City. Operator agrees to execute all documents necessary to transfer the ownership of the building to the City. At the end of said fifteen year period City may reasonably adjust…