Automotive Global Technologies, Ltd. v. Alto Products Corp.

134 F. App'x 119
Court of Appeals for the Ninth Circuit·Decided April 29, 2005·No. Nos. 03-15877, 03-15885; D.C.No. CV-99-00065-RAM·Published·Cited by 1 cases

Opinion

MEMORANDUM**

Automotive Global Technologies, Ltd. (“AGT”), a Nevada corporation, appeals the district court’s decision to grant partial summary judgment and dismiss tort-based fraud claims asserted by AGT and its Chief Executive Officer, Bruce Palmbaum, against Sonnax Industries, Inc. (“Sonnax”), a Vermont corporation.

AGT and Palmbaum also appeal, and Sonnax cross-appeals, a second set of decisions issued by the district court following a bench trial on the remaining breach of contract issues.

We have jurisdiction pursuant to 28 U.S.C. §§ 1291 and 1332(a), and we affirm in part and reverse in part. The facts in this case are familiar to the parties and need not be recited here.

I.

We affirm the district court’s dismissal of the tort-based fraud claims.1 The parties do not dispute the district court’s decision to apply Nevada law to these claims. AGT offered no evidence from which a rational trier of fact could find that Sonnax made representations known at the time of entering the contract to be false or without sufficient basis.

II.

The district court did not err by denying AGT and Palmbaum a hearing on the motion for partial summary judgment. The denial of a request for oral argument constitutes reversible error only when prejudice can be established. See Partridge v. Reich, 141 F.3d 920, 926 (9th Cir.1998) (“When a party has [had] an adequate opportunity to provide the trial court with evidence and a memorandum of law, there is no prejudice [in a refusal to grant oral argument] since any error can be rectified by an appeal of the summary judgment.”) (internal quotation omitted). AGT has not established prejudice. The proceedings below provided ample opportunity for creation of a thorough record, and AGT had the opportunity to appeal the partial summary judgment.

III.

The district court properly refused to award AGT the remaining sales price on the Purchase Agreement in cash rather than through part credits.2 The Purchase Agreement does not provide for the unused credits to be converted into cash under any circumstances, including termination of the agreement. See Roy’s Orthopedic, Inc. v. Lavigne, 145 Vt. 324, 487 [122] A.2d 173, 175 (1985) (stating that courts are required to enforce contracts as they are written and cannot ignore their provisions). AGT can recover the remaining balance only through the use of the credits unless Sonnax refuses to provide payment in the form of goods. Consequently, there has been no breach of the Purchase Agreement; any failure of delivery of discounted parts was simply due to the inability of AGT to purchase them.

The district court did not clearly err when it found that the contract was never terminated. This factual finding and the district court’s determination that AGT was not ready, willing, and able to pay. for the parts available to it under the agreement resolve AGT’s arguments regarding the Vermont U.C.C. and unjust enrichment. See 9A Vt. Stat. Ann. §§ 2-610, 206-7(1) & 2-709; Mercia v. Billings, 127 Vt. 77, 238 A.2d 636, 637-38 (1968).

rv.

The district court erred in awarding Sonnax $90,000 for withheld inventory because Sonnax waived the right to contest the value of the inventory.3 Section 3.5.1 of the Purchase Agreement unambiguously constitutes the parties’ agreement with respect to the sale of inventory, and we are bound to enforce the plain language of the agreement. See Vt. State Colls. Faculty Fed’n v. Vt. State Colls., 141 Vt. 138, 446 A.2d 347, 350 (1982). By waiting fifteen months to raise the issue, Sonnax failed to comply with the Purchase Agreement’s requirement that contests concerning the inventory be raised within thirty (30) days. See also 9A Vt. Stat. Ann. § 2-607(3)(a) (“[T]he buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.”). Accordingly, we reverse.

V.

The district court improperly awarded $74,300 to Sonnax for AGT’s alleged failure to deliver or convey machinery. Sonnax waived its right to raise the issue of imperfect tender by failing to provide seasonable notification to AGT. See id. We reverse because we find it unreasonable that Sonnax failed to raise the issue of missing machinery until fifteen months had passed.

VI.

The district court did not abuse its discretion by limiting the award of attorneys’ fees to Palmbaum for Sonnax’s breach of the Consulting Agreement.4 Paragraph 9.4 of the Consulting Agreement limits the award of attorneys’ fees to “default under this Agreement” (emphasis added) and makes no mention of fees for breach of the Purchase Agreement. See Blodgett Supply Co. v. P.F. Jurgs & Co., 159 Vt. 222, 617 A.2d 123, 129 (1992) (“The trial court should compute the fee award on the basis of time spent on issues on which plaintiffs prevailed.”).

VII.

The district court did not abuse its discretion by denying attorneys’ fees and costs to AGT and Christo Bardis after their successful defense of a suit brought pursuant to the Covenant not to Compete. The Covenant does not provide for attorneys’ fees for the successful defense of a [123] suit. See DJ Painting, Inc. v. Baraw Enters., Inc., 172 Vt. 239, 776 A.2d 413, 419 (2001) (noting that a party’s fees and costs are not recoverable unless statutorily or contractually authorized).

VIII.

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Automotive Global Technologies, Ltd. v. Alto Products Corp., 134 F. App'x 119 (9th Cir. 2005).

134 F. App'x 119 (Automotive Global Technologies, Ltd. v. Alto Products Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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