James v. McConnell and Margot Murphy McConnell v. Pickering Lumber Corporation

This is a diversity case involving in major part the local interpretation of section 3399 of the California Civil Code, relating to the reformation of contracts.

Appellants, citizens of New York, brought suit against appellee, a Delaware corporation with its principal offices in Kansas City, to recover upon a written contract, copy of which was attached and made a part of the complaint. As an alternative to recovery on the contract as written, reformation was asked on grounds of mutual mistake or “mistake of plaintiffs known or suspected by defendants.” The court on motion of appellee dismissed the complaint for failure to state a claim upon which relief can be granted. On application of appellants the order of dismissal was vacated and leave to amend given. An amended complaint, omitting the allegation of mutual mistake but retaining that of unilateral mistake, was then filed. Motion to dismiss was again interposed, and the court entered an order stating its belief that a ruling thereon should be deferred until trial. Appellee then answered, and thereafter, prior to trial, an order directing a dismissal was entered; and some two weeks later there followed a judgment of dismissal…