Coker Equipment Co., Inc. v. Citiwest Structures (California), Inc.

366 F. App'x 729
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 16, 2010
Docket08-16359, 08-16362
StatusUnpublished
Cited by6 cases

This text of 366 F. App'x 729 (Coker Equipment Co., Inc. v. Citiwest Structures (California), Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coker Equipment Co., Inc. v. Citiwest Structures (California), Inc., 366 F. App'x 729 (9th Cir. 2010).

Opinion

MEMORANDUM **

Coker Equipment Co., Inc. appeals the district court’s judgment, following partial summary judgment and a bench trial in favor of Citiwest Structures (California), Inc. Citiwest cross-appeals on the amount of its attorney fees and costs awarded. This court has jurisdiction under 28 U.S.C. § 1291. We affirm in part, and reverse and remand in part for further proceedings.

I.

The district court did not err by granting Citiwest summary judgment on Coker’s breach of contract claim. We review the district court’s grant of summary judgment de novo. See Northrop Grumman Corp. v. Factory Mut. Ins. Co., 563 F.3d 777, 783 (9th Cir.2009).

Coker leased a crane to Citiwest, with an option to purchase, for use on the Pinnacle Museum Tower project. At issue is whether the district comb correctly interpreted the contract as providing for specified crane usage over the life of the lease term, rather than per month, and whether Citiwest exceeded its allotted usage. Coker contends that the contract unambiguously limits Citiwest’s basic usage to 250 hours monthly.

It is reasonable to interpret the contract to mean that 250 hours per month is the basis for the rental rate, not a monthly limit. See Caldwell v. Consol. Realty & Mgmt. Co., 99 Nev. 635, 668 P.2d 284, 287 (1983) (requiring the Court to seek a reasonable interpretation for an ambiguous contract). Because there is more than one reasonable interpretation of the contract, the contract is ambiguous, and the district court properly considered parol evidence. See Glenbrook Homeowners v. Glenbrook Co., 111 Nev. 909, 901 P.2d 132, 137 (1995). Ambiguity is construed against the drafter, Coker. See Williams v. Waldman, 108 Nev. 466, 836 P.2d 614, 619 (1992). The contract did not provide for objectively timing crane usage. Coker did not provide a meter to track monthly usage and there was evidence that Coker represented to Citiwest that usage hours would be considered in the aggregate. Parol evidence supports Citiwest’s interpretation, and we agree with the district court’s interpretation that the contract provided Citiwest with 4,875 hours of usage aggregated over the 19.5 months it leased the crane.

Citiwest did not exceed its 4,875 hours of allotted crane usage. The operator logs show 4,420 hours of usage. Once the payroll logs are corrected to exclude the time when the operator was at work but not using the crane, they show 4,305 hours of use. Because Citiwest did not exceed its allotted usage, the district court correctly granted Citiwest’s motion for summary judgment.

II.

The district court correctly found after a bench trial that Coker breached the contract, because Citiwest had reasonable grounds for insecurity and Coker failed to provide to Citiwest an adequate assurance of due performance. We review for clear error the district court’s factual findings in a bench trial. See Saltarelli v. Bob Baker Group Med. Trust, 35 F.3d 382, 384 (9th Cir.1994).

*732 In August 2004, Citiwest notified Coker that it intended to exercise the option and pay Coker $109,924.76 to purchase the crane in September 2004. Citi-west became insecure as to whether the crane was encumbered and sought adequate assurance from Coker. See Nev. Rev.Stat. §§ 104.2312, 104.2609. Coker argues that Citiwest did not have a reasonable basis for insecurity, since Coker provided Citiwest with a UCC-1 filing from G.E. Capital, showing that its security interest in the crane had been released. The district court did not commit clear error in finding that Citiwest was reasonably insecure, despite the release, based on events that occurred during the parties’ relationship. The crane was not Cal/ OSHA certified when delivered to the job site and was consequently inoperable for three weeks. 1 Further, Coker breached its contractual obligation to provide monthly maintenance on the crane. In January 2004, the crane’s hoist motor, the motor by which items are raised and lowered, seized up and ceased functioning. In May 2004, the swing motor, which powers the turning of the crane, ceased functioning. Although Citiwest had completed many projects requiring tower cranes, it had never had a hoist or swing motor blow on any other crane during a lease. Viewing Coker’s repeated delinquencies as cumulative, the district court correctly determined that Ci-tiwest had reasonable grounds for insecurity. See Nev.Rev.Stat. § 104.2609, Comment 4.

Coker breached the contract by failing to provide an adequate assurance of due performance. Citiwest requested that Coker provide it with the paperwork needed to transfer title, including title documents and a bill of sale. Coker never provided a bill of sale and never informed Citiwest that title documents do not normally accompany the sale of cranes. Citi-west’s counsel discovered several UCC filings listing Coker as the debtor, as well as a California tax lien filed against Coker, which Citiwest reasonably believed encumbered the crane. Coker asserts on appeal that the UCC filings and tax lien did not encumber the crane, but did not communicate that position to Citiwest before the expiration of the option. Citiwest had reason for concern, because it understood a California tax lien to encumber “all personal and real property in the county” and believed that its knowledge of UCC filings against Coker would prevent Citiwest from being a buyer in the ordinary course of business. See Cal. Rev. & Tax.Code § 2191.4; Cal. Com.Code § 9320, Comment 3. Even if Citiwest’s belief that the crane was encumbered was incorrect (which is unclear), it was not unreasonable, arbitrary, or capricious. The district court did not err by finding that Citiwest had reasonable grounds for insecurity and that Coker breached the contract by failing to provide an adequate assurance of due performance.

III.

The district court correctly determined that Coker abused process and was liable for punitive damages. Under Nevada law, the two elements of abuse of process are “(1) an ulterior purpose by the defendant ] other than resolving a legal dispute, and (2) a willful act in the use of the legal process not proper in the regular conduct of the proceeding.” LaMantia v. Redisi, 118 Nev. 27, 38 P.3d 877, 879 (2002).

After the expiration of the option, Coker began billing Citiwest for “double shifting” of the crane, asserting that Citi-west had been using the crane for sixteen hours per day.

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Bluebook (online)
366 F. App'x 729, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coker-equipment-co-inc-v-citiwest-structures-california-inc-ca9-2010.