1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 12 CONTOUR-SIERRA INC., aka No. 2:22-cv-00414-JAM-JDP CONTOUR-SIERRA AEBI TERRA 13 TRAC, LLC, 14 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S 15 v. MOTION FOR PARTIAL SUMMARY JUDGMENT 16 AEBI SCHMIDT INTERNATIONAL, AG, 17 Defendant. 18 19 Before the Court is Defendant AEBI Schmidt International, 20 AG’s motion for partial summary judgment. ECF No. 75. This 21 matter is fully briefed and was originally set for hearing on 22 January 27, 2026. See ECF Nos. 80-87. After the Court denied 23 Defendant’s attorneys’ request to appear at the hearing by video 24 conferencing, the parties filed a stipulation to have this matter 25 decided without oral argument; the matter was then submitted 26 pursuant to Local Rule 230(g). ECF Nos. 90, 93-94. For the 27 reasons detailed below, Defendant’s motion is granted in part and 28 denied in part. 1 I. OPINION 2 Plaintiff imports, distributes, and is a dealer of 3 Defendant’s machines, vehicles, and equipment, including tractors 4 and farm equipment, in the Western United States. See ECF Nos. 5 75-15, Defendant’s Statement of Undisputed Facts and Supporting 6 Evidence (D. SUF), and 82, Plaintiff’s Response to D. SUF 7 (collectively “St. of Facts”) Nos. 2-3. Central to the 8 litigation in this case is a 2013 contract the parties entered 9 into, which was terminated in 2019, then reinstated in 2021, with 10 some modifications. See, e.g., St. of Facts Nos. 21, 22, 25, 98; 11 Defendant’s Memorandum of Points and Authorities (“Mot.”) at pg. 12 9; Plaintiff’s Memorandum or Law and Authorities (“Opp’n) at pg. 13 3-4. 14 Plaintiff filed its complaint in March 2022, asserting four 15 causes of action for breach of contract, breach of the implied 16 covenant of good faith and fair dealing, a violation of section 17 22902(d) of the California Fair Practices of Equipment, 18 Manufacturers, Distributors, Wholesalers, and Dealers Act 19 (“CFPEA”), and a claim for attorneys’ fees under section 22925 of 20 the same act. ECF No. 1 (“Compl.”). All four claims are 21 challenged in Defendant’s pending motion to the extent they are 22 based on the right to sell “successor products,” to acquire or 23 use dealer networks to subvert the parties’ 2013 contract, or 24 include Canadian provinces in Plaintiff’s exclusive territory. 25 See ECF No. 75. Defendant also moves for summary judgment on 26 Counts Two through Four, including in part to the extent they are 27 based on Defendant’s alleged failure to bring a specific tractor 28 model into emissions complaints. Id. The Court first addresses 1 Defendant’s motion as to Counts Two, Three, and Four, before 2 addressing Defendant’s partial motion as to all counts, below. 3 A. Legal Standard 4 Summary judgment is appropriate when the record, read in 5 the light most favorable to the non-moving party, indicates 6 “that there is no genuine dispute as to any material fact and 7 the movant is entitled to judgment as a matter of law.” Fed. R. 8 Civ. P. 56(a); Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 9 (1970); U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). A 10 genuine dispute of fact exists only if “there is sufficient 11 evidence favoring the nonmoving party for a jury to return a 12 verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 13 U.S. 242, 249 (1986). If the nonmoving party fails to make this 14 showing, “[t]he moving party is entitled to a judgment as a 15 matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 16 (1986) (quotations omitted); see also Matsushita Elec. Indus. 17 Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (“Where the 18 record taken as a whole could not lead a rational trier of fact 19 to find for the nonmoving party, there is no ‘genuine issue for 20 trial.’”) (citing and quoting First Nat. Bank of Ariz. v. Cities 21 Service Co., 391 U.S. 253, 289 (1968)). 22 B. Count Two: Breach of the Implied Covenant of Good 23 Faith and Fair Dealing 24 Defendant avers summary judgment should be granted on Count 25 Two because Plaintiff cannot show more than a contractual breach 26 and there is no evidence of bad faith. See Mot. at pg. 16-19. 27 Plaintiff argues Defendant’s 2019 termination of the parties’ 28 contract is evidence of bad faith, and that Defendant’s failure 1 to supply a specific tractor, the TT281, as well as successor 2 products, support the denial of summary judgment as to Count Two. 3 See Opp’n at pg. 16-18. 4 Plaintiff’s claim for breach of the implied covenant of good 5 faith and fair dealing is governed by California law. “Every 6 contract imposes on each party a duty of good faith and fair 7 dealing in each performance and in its enforcement.” Careau & 8 Co. v. Security Pacific Business Credit, Inc., 222 Cal.App.3d 9 1371, 1393 (1990) (internal quotations and other citations 10 omitted). “A breach of the implied covenant . . . involves 11 something beyond breach of the contractual duty itself and it has 12 been held that bad faith implies unfair dealing rather than 13 mistaken judgment.” Id. at 1394 (quoting Congleton v. Nat’l 14 Union Fire Ins. Co., 189 Cal.App.3d 51, 59 (1987) (internal 15 quotations and citations omitted). As the California Supreme 16 Court explained in Careau:
17 [A plaintiff] must show that the conduct of the defendant, whether or not it also constitutes a breach 18 of a consensual contract term, demonstrates a failure or refusal to discharge contractual responsibilities, 19 prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate 20 act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations 21 of the other party thereby depriving that party of the benefits of the agreement. . . . If the allegations 22 do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply 23 seek the same damages or other relief already claimed in a companion contract cause of action, they may be 24 disregarded as superfluous as no additional claim is actually stated. 25 26 Id. at 1395; see also Martinez v. Infinity Ins. Co., 714 F.Supp. 27 2d 1057, 1063 (C.D. Cal. May 20, 2010) (“Plaintiff must establish 28 that Defendant’s actions both breached the contract and the 1 actions, taken in bad faith, frustrated the actual benefits of 2 the contract.”). 3 Although Plaintiff contends in its opposition to this motion 4 Defendant’s termination of the parties’ contract as a basis for 5 its implied covenant cause of action surviving summary judgment, 6 Defendant is correct – Plaintiff did not plead this as part of 7 its claim and the conduct underlying Count Two. Moreover, 8 Plaintiff does not direct the Court to any evidence of bad faith 9 to support its two other theories of breach of the implied 10 covenant. Instead, Plaintiff cites Defendant’s alleged failures 11 to satisfy portions of the contract as evidence of “wrongful acts 12 [] support[ing Plaintiff’s] claim for breach of the implied duty 13 of good faith and fair dealing [].” See Opp’n at pg. 17-18. 14 Since “the allegations do not go beyond the statement of a mere 15 contract breach and, relying on the same alleged acts, simply 16 seek the same damages or other relief already claimed in a 17 companion contract cause of action,” Careau, 222 Cal.App.3d at 18 1395, Defendant’s motion for summary judgment on Count Two is 19 granted. 20 C.
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1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 12 CONTOUR-SIERRA INC., aka No. 2:22-cv-00414-JAM-JDP CONTOUR-SIERRA AEBI TERRA 13 TRAC, LLC, 14 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S 15 v. MOTION FOR PARTIAL SUMMARY JUDGMENT 16 AEBI SCHMIDT INTERNATIONAL, AG, 17 Defendant. 18 19 Before the Court is Defendant AEBI Schmidt International, 20 AG’s motion for partial summary judgment. ECF No. 75. This 21 matter is fully briefed and was originally set for hearing on 22 January 27, 2026. See ECF Nos. 80-87. After the Court denied 23 Defendant’s attorneys’ request to appear at the hearing by video 24 conferencing, the parties filed a stipulation to have this matter 25 decided without oral argument; the matter was then submitted 26 pursuant to Local Rule 230(g). ECF Nos. 90, 93-94. For the 27 reasons detailed below, Defendant’s motion is granted in part and 28 denied in part. 1 I. OPINION 2 Plaintiff imports, distributes, and is a dealer of 3 Defendant’s machines, vehicles, and equipment, including tractors 4 and farm equipment, in the Western United States. See ECF Nos. 5 75-15, Defendant’s Statement of Undisputed Facts and Supporting 6 Evidence (D. SUF), and 82, Plaintiff’s Response to D. SUF 7 (collectively “St. of Facts”) Nos. 2-3. Central to the 8 litigation in this case is a 2013 contract the parties entered 9 into, which was terminated in 2019, then reinstated in 2021, with 10 some modifications. See, e.g., St. of Facts Nos. 21, 22, 25, 98; 11 Defendant’s Memorandum of Points and Authorities (“Mot.”) at pg. 12 9; Plaintiff’s Memorandum or Law and Authorities (“Opp’n) at pg. 13 3-4. 14 Plaintiff filed its complaint in March 2022, asserting four 15 causes of action for breach of contract, breach of the implied 16 covenant of good faith and fair dealing, a violation of section 17 22902(d) of the California Fair Practices of Equipment, 18 Manufacturers, Distributors, Wholesalers, and Dealers Act 19 (“CFPEA”), and a claim for attorneys’ fees under section 22925 of 20 the same act. ECF No. 1 (“Compl.”). All four claims are 21 challenged in Defendant’s pending motion to the extent they are 22 based on the right to sell “successor products,” to acquire or 23 use dealer networks to subvert the parties’ 2013 contract, or 24 include Canadian provinces in Plaintiff’s exclusive territory. 25 See ECF No. 75. Defendant also moves for summary judgment on 26 Counts Two through Four, including in part to the extent they are 27 based on Defendant’s alleged failure to bring a specific tractor 28 model into emissions complaints. Id. The Court first addresses 1 Defendant’s motion as to Counts Two, Three, and Four, before 2 addressing Defendant’s partial motion as to all counts, below. 3 A. Legal Standard 4 Summary judgment is appropriate when the record, read in 5 the light most favorable to the non-moving party, indicates 6 “that there is no genuine dispute as to any material fact and 7 the movant is entitled to judgment as a matter of law.” Fed. R. 8 Civ. P. 56(a); Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 9 (1970); U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). A 10 genuine dispute of fact exists only if “there is sufficient 11 evidence favoring the nonmoving party for a jury to return a 12 verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 13 U.S. 242, 249 (1986). If the nonmoving party fails to make this 14 showing, “[t]he moving party is entitled to a judgment as a 15 matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 16 (1986) (quotations omitted); see also Matsushita Elec. Indus. 17 Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (“Where the 18 record taken as a whole could not lead a rational trier of fact 19 to find for the nonmoving party, there is no ‘genuine issue for 20 trial.’”) (citing and quoting First Nat. Bank of Ariz. v. Cities 21 Service Co., 391 U.S. 253, 289 (1968)). 22 B. Count Two: Breach of the Implied Covenant of Good 23 Faith and Fair Dealing 24 Defendant avers summary judgment should be granted on Count 25 Two because Plaintiff cannot show more than a contractual breach 26 and there is no evidence of bad faith. See Mot. at pg. 16-19. 27 Plaintiff argues Defendant’s 2019 termination of the parties’ 28 contract is evidence of bad faith, and that Defendant’s failure 1 to supply a specific tractor, the TT281, as well as successor 2 products, support the denial of summary judgment as to Count Two. 3 See Opp’n at pg. 16-18. 4 Plaintiff’s claim for breach of the implied covenant of good 5 faith and fair dealing is governed by California law. “Every 6 contract imposes on each party a duty of good faith and fair 7 dealing in each performance and in its enforcement.” Careau & 8 Co. v. Security Pacific Business Credit, Inc., 222 Cal.App.3d 9 1371, 1393 (1990) (internal quotations and other citations 10 omitted). “A breach of the implied covenant . . . involves 11 something beyond breach of the contractual duty itself and it has 12 been held that bad faith implies unfair dealing rather than 13 mistaken judgment.” Id. at 1394 (quoting Congleton v. Nat’l 14 Union Fire Ins. Co., 189 Cal.App.3d 51, 59 (1987) (internal 15 quotations and citations omitted). As the California Supreme 16 Court explained in Careau:
17 [A plaintiff] must show that the conduct of the defendant, whether or not it also constitutes a breach 18 of a consensual contract term, demonstrates a failure or refusal to discharge contractual responsibilities, 19 prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate 20 act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations 21 of the other party thereby depriving that party of the benefits of the agreement. . . . If the allegations 22 do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply 23 seek the same damages or other relief already claimed in a companion contract cause of action, they may be 24 disregarded as superfluous as no additional claim is actually stated. 25 26 Id. at 1395; see also Martinez v. Infinity Ins. Co., 714 F.Supp. 27 2d 1057, 1063 (C.D. Cal. May 20, 2010) (“Plaintiff must establish 28 that Defendant’s actions both breached the contract and the 1 actions, taken in bad faith, frustrated the actual benefits of 2 the contract.”). 3 Although Plaintiff contends in its opposition to this motion 4 Defendant’s termination of the parties’ contract as a basis for 5 its implied covenant cause of action surviving summary judgment, 6 Defendant is correct – Plaintiff did not plead this as part of 7 its claim and the conduct underlying Count Two. Moreover, 8 Plaintiff does not direct the Court to any evidence of bad faith 9 to support its two other theories of breach of the implied 10 covenant. Instead, Plaintiff cites Defendant’s alleged failures 11 to satisfy portions of the contract as evidence of “wrongful acts 12 [] support[ing Plaintiff’s] claim for breach of the implied duty 13 of good faith and fair dealing [].” See Opp’n at pg. 17-18. 14 Since “the allegations do not go beyond the statement of a mere 15 contract breach and, relying on the same alleged acts, simply 16 seek the same damages or other relief already claimed in a 17 companion contract cause of action,” Careau, 222 Cal.App.3d at 18 1395, Defendant’s motion for summary judgment on Count Two is 19 granted. 20 C. Counts Three and Four: CFPEA Claims 21 Defendant moves for partial summary judgment on Counts Three 22 and Four, arguing allegations of Defendant’s emissions 23 noncompliance and failure to supply a specific tractor (the TT 24 281) cannot constitute violations of the CFPEA as a matter of law 25 since: (1) its actions were negligent; (2) “resulted from a lack 26 of understanding” of emissions exemptions; (3) Plaintiff was not 27 “targeted by or discriminated against”; and (4) there “was no 28 intent to harm Plaintiff’s business.” See Mot. at 21-24. 1 Defendant urges the Court to interpret some of CFPEA’s statutory 2 language in its favor, as a matter of first impression, by 3 analogizing to other statutes and other state’s “dealer law[s].” 4 Id.; see also Reply at pg. 8-10. Plaintiff argues there are 5 issues of material fact preventing summary judgment, including 6 directing the Court to evidence that tracks the statutory 7 language of what constitutes violations of CFPEA. See Opp’n at 8 19-21. The Court finds that Plaintiff has demonstrated there are 9 sufficient issues of material fact as to Counts Three and Four 10 that require the Court to deny Defendant’s summary judgment 11 motion on these claims. Accord Liberty Lobby, 477 U.S. at 249. 12 The Court also notes there is a dearth of case law surrounding 13 CFPEA, section 22902(d), and the Court declines Defendant’s 14 invitation to interpret the statute in its favor, resulting in 15 judgment as a matter of law for the Defendant, without any direct 16 or persuasive precedent. 17 D. Successor Products, Dealer Networks, and Canadian 18 Territories 19 Defendant also moves for partial summary judgment on all 20 four of Plaintiff’s causes of action to the extent they are based 21 on a number of theories, including an alleged right to sell 22 successor products, allegations of Defendant acquiring and using 23 the dealer network of other companies in order to cut Plaintiff 24 out and avoid its contractual obligations, and alleged inclusion 25 of Canadian provinces. Mot. at pg. 10-15, 20-21. 26 With respect to Defendant’s motion based on the right to 27 sell successor products, Defendant argues the term in the 28 parties’ contract, “successor products,” is unambiguous, 1 Defendant had no successor products, and therefore, Defendant is 2 entitled to judgment as a matter of law. Mot. at pg. 10-15 3 (“Plaintiff has first alleged that [Defendant] breached the 2013 4 [contract] by ‘failing to give [Plaintiff] the opportunity to 5 sell [Defendant’s] Successor Products . . . .”). Defendant 6 acknowledges the parties’ contract states it “shall apply to 7 successor products or further developments as well as other 8 modifications, including their replacement parts,” and that 9 “successor” is undefined in the contract. Id. at pg. 12 (citing 10 DSUF Nos. 26, 27, 30). Although Defendant asks the Court to 11 apply the Black’s Law Dictionary definition of “successor” to the 12 contract, Plaintiff offers a competing definition, arguing it 13 includes the “full range of products” from Defendant’s 14 subsidiary, including “those acquired as successor products,” as 15 supported by the evidence before the Court. See id. and Opp’n at 16 14-16. 17 As explained by the Ninth Circuit, “[i]n contract cases, 18 summary judgment is appropriate only if the contract or the 19 contract provision in question is unambiguous. A contract or a 20 provision of a contract is ambiguous if it is reasonably 21 susceptible of more than one construction or interpretation.” 22 Castaneda v. Dura-Vent Corp., 648 F.2d 612, 619 (9th Cir. 1981) 23 (internal and other citations omitted). Sometimes, extrinsic 24 evidence may be considered to interpret a contract as a matter of 25 law. See Cachil Band of Wintun Indians of Colusa Indian 26 Community v. California, 618 F.3d 1066, 1075-80 (9th Cir. 2010). 27 However, “when there is a material conflict in extrinsic evidence 28 supporting competing interpretations of ambiguous contract 1 language the court may not use the evidence to interpret the 2 contract as a matter of law, but must instead render the evidence 3 to the factfinder for evaluation of its credibility.” Id. at 4 1077 (citing City of Hope Nat'l Med. Ctr. v. Genentech, Inc., 43 5 Cal.4th 375 (2008) (“Interpretation of a written instrument 6 becomes solely a judicial function only when it is based on the 7 words of the instrument alone, when there is no conflict in the 8 extrinsic evidence, or a determination was made based on 9 incompetent evidence.”)). Despite Defendant’s arguments to the 10 contrary, the Court finds Plaintiff has demonstrated the contract 11 term at issue is ambiguous, and there is a material dispute 12 regarding any extrinsic evidence supporting the definition of 13 this term. Accordingly, Defendant’s motion for partial summary 14 judgment as to “successor products” is denied. 15 Defendant’s motion as to Plaintiff’s allegations or theory 16 that Defendant acquired and utilized a dealer network of other 17 third-party companies to subvert its contractual obligations 18 suffers the same fate. Because Plaintiff has demonstrated there 19 are genuine issues of material fact, Defendant’s motion for 20 partial summary judgment is also denied on this basis. 21 Lastly, Defendant moves for partial summary judgment “to the 22 extent that Plaintiff seeks any relief in connection with any 23 alleged Canadian territory under the 2013 [contract] (or 24 otherwise) . . . .” See Reply at pg. 7. Although Plaintiff 25 avers its claims are based on an implied contract, Defendant is 26 correct that “Plaintiff has not actually pleaded any violation of 27 rights which relates to this alleged exclusive [Canadian] 28 territory . . . .” See Opp’n at pg. 18-19, Reply at pg. 7. eee DEI OIE EI ne oO NE
1 Given the absence of these facts and this theory in Plaintiff's 2 complaint, which Plaintiff elected not to amend at any point, 3 Defendant’s motion for summary judgment is granted on this basis. 4 Il. ORDER 5 For the reasons set forth above, Defendant’s motion for 6 summary judgment is GRANTED IN PART and DENIED IN PART, as 7 follows: 8 1. Summary judgment is granted as to Plaintiff’s Second 9 Cause of Action, for Breach of the Implied Covenant of Good Faith 10 and Fair Dealing; 11 2. Summary judgment is granted to the extent Plaintiff’s 12 claims are based on an alleged exclusive Canadian territory; and 13 3. Summary judgment on all other claims and issues raised 14 | by Defendant is denied. 15 IT IS SO ORDERED. 16 Dated: February 19, 2026 17 HN A. MENDEZ. 1s Fee UNITED pe acl JUDGE 19 20 21 22 23 24 25 26 27 28