Interstate Specialty Marketing, Inc. v. ICRA Sapphire, Inc.

Interstate Specialty Marketing (Interstate) (plaintiff) sued ICRA Sapphire (Sapphire) (defendant) for breach of a software-conversion contract, mistakenly attaching an earlier draft letter rather than the actual signed November 26, 2002 agreement to its complaint. Sapphire, aware of the mistake from its own cross-complaint attaching the real contract, never told Interstate about the error and instead moved for summary judgment based on Interstate's reliance on the wrong document; Interstate then moved to amend its complaint with the correct agreement, which the trial court granted while denying Sapphire's summary judgment motion. The trial court also, on its own initiative, issued an order to show cause on possibly sanctioning Interstate under section 128.7 for the original error, and ultimately awarded Sapphire roughly $5,000 in fees as a sanction. Interstate appealed.