Billon, Inc. v. James Slatin

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 29 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

BILLON, INC. dba OMEGA PRODUCTS No. 17-56790 INTERNATIONAL, D.C. No. 8:16-cv-00788-CJC-JPR Plaintiff-Appellant,

v.

JAMES SLATIN, EDNA CORLEY, JOHN VINZANT, AND MARTIN KNIGHT; MEMORANDUM* DOES, 1-100, inclusive,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California Cormac J. Carney, District Judge, Presiding

Submitted April 9, 2019** Pasadena, California

Before: TASHIMA and PAEZ, Circuit Judges, and KATZMANN,*** Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

** The panel unanimously concludes that this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).

*** The Honorable Gary S. Katzmann, Judge for the United States Court of International Trade, sitting by designation. Plaintiff Billon, Inc., (“Billon”) doing business as Omega Products

International (“Omega”), alleged various causes of action against James Slatin, Edna

Corley, John Vinzant, and Martin Knight (“Defendants”) arising from the business

relationship between Omega and Defendants’ company Universal-Products

International, LLC (“Universal”). Billon alleged that Defendants promised, but did

not actually intend, to abide by the terms and conditions included in a signed but

denied application for credit from Omega (“Credit Application”). According to

Billon, by signing the Credit Application without intending to adhere to its terms,

Defendants committed promissory fraud and negligent misrepresentation.

Defendants moved for summary judgment, and Billon sought leave to amend its

complaint. The district court granted summary judgment to Defendants and denied

Billon’s motion for leave to amend as futile because California’s litigation privilege

precluded Billon’s causes of action. Subsequently, the district court awarded

attorney’s fees to Defendants. Billon appeals the denial of leave to amend its

complaint.1 Largely for the reasons set forth in the district court’s memorandum

decision and order, we affirm.

1 Billon initially sought to appeal the district court’s award of attorney’s fees; however, Billon did not argue this issue in its opening brief. Consequently, Billon waived its challenge to the attorney’s fees award. See Fed. R. App. Proc. 28(a)(8)(A); see also Sekiya v. Gates, 508 F.3d 1198, 1200 (9th Cir. 2007) (“When writing a brief, counsel must provide an argument which must contain ‘appellant’s

2 California’s litigation privilege, California Civil Code § 47(b), attaches to

“any communication (1) made in judicial or quasi-judicial proceedings; (2) by

litigants or other participants authorized by law; (3) to achieve the objects of the

litigation; and (4) that have some connection or logical relation to the action.”

Silberg v. Anderson, 50 Cal. 3d 205, 212 (1990) (citations omitted). Billon contends

that the litigation privilege does not bar its claims because the relevant

misrepresentation was made when Defendants signed the Credit Application and

well in advance of any contemplated litigation. We do not find this argument

persuasive.

The amended complaint alleged that Defendants committed promissory fraud

or negligent misrepresentation by signing the Credit Application without intending

to abide by its terms and conditions. Both torts require plaintiffs to prove that their

actual and justifiable reliance on the misrepresentation caused harm. See Rossberg

v. Bank of Am., N.A., 219 Cal. App. 4th 1481, 1498, as modified on denial of reh’g

(Sept. 26, 2013); Ragland v. U.S. Bank Nat’l Assn., 209 Cal. App. 4th 182, 196

(2012).

Here, Billon’s only alleged damages arose out of the underlying litigation in

state court. Universal’s state court arguments and deposition testimony were

contentions and the reasons for them, with citations to the authorities and parts of the record on which the appellant relies.’”) (emphasis original) (quoting Fed. R. App. Proc. 28(a)(9)(A) (recodified at Fed. R. App. Proc. 28(a)(8)(A) (2013)).

3 communications made in a judicial proceeding by litigants to achieve the objective

of the state court litigation and were logically related to bringing that lawsuit.

Navellier v. Sletten, 106 Cal. App. 4th 763, 770 (2003). In sum, Billon is correct

that the Credit Application itself is not protected by the litigation privilege; however,

Billon seeks to impose tort liability for the underlying litigation, which the district

court correctly determined is barred by California’s litigation privilege. See id. at

772 (holding that, while the alleged tortious conduct occurred prior to litigation, the

plaintiffs’ damages were caused by activities protected by the litigation privilege and

that plaintiffs thus could not prevail on their tort claim).

Because California’s litigation privilege bars Billon’s claims, “no set of facts

can be proved under the amendment to the pleadings that would constitute a valid

and sufficient claim,” and Billon’s proposed amendments are futile. Sweaney v. Ada

Cty., Idaho, 119 F.3d 1385, 1393 (9th Cir. 1997) (quoting Miller v. Rykoff-Sexton,

Inc., 845 F.2d 209, 214 (9th Cir. 1988)). We thus affirm the district court’s denial

of the motion for leave to amend the complaint.

AFFIRMED.