1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 JACOBSON WAREHOUSE COMPANY, INC. d/b/a XPO LOGISTICS SUPPLY 12 CHAIN, No. 2:19-cv-01889-TLN-AC
13 Plaintiff, 14 ORDER 15 v. 16 LINDT & SPRUNGLI (NORTH AMERICA) INC., 17 Defendant, 18 19 20 This matter is before the Court on Defendant Lindt & Sprungli (North America) Inc.’s 21 (“Defendant”) Motion to Compel Arbitration and Dismiss. (ECF No. 18.) Plaintiff Jacobson 22 Warehouse Company, Inc. d/b/a XPO Logistics Supply Chain (“Plaintiff”) filed an opposition. 23 (ECF No. 28.) Defendant filed a reply. (ECF No. 35.) For the reasons set forth below, the Court 24 GRANTS Defendant’s motion. The Court also DENIES Plaintiff’s Application for Right to 25 Attach Order and Motion for Issuance of Writ of Attachment as moot. (ECF No. 14.) 26 /// 27 /// 28 1 I. FACTUAL AND PROCEDURAL BACKGROUND 2 This case arises out of a dispute between the parties concerning the operation of a 3 warehouse in Tracy, California in which Plaintiff alleges Defendant failed to compensate Plaintiff 4 for services rendered in 2018 and 2019. (ECF No. 13.) Before the breakdown in the parties’ 5 business relationship, they and their predecessors and subsidiaries had worked together for nearly 6 twelve years. (ECF No. 32 at 7; ECF No. 28 at 9.) During that period, the parties operated 7 pursuant to a document titled “Services Agreement” signed by Plaintiff’s predecessor and 8 Defendant’s subsidiary in November 2007, later amended to include Plaintiff and Defendant, and 9 a letter of intent (“LOI”), later amended. (See generally ECF No. 32 at 7–10.) The arbitration 10 provision in the Services Agreement requires the parties submit “any disagreement concerning 11 the existence, interpretation or application” of the Services Agreement to JAMS in San Francisco 12 for binding arbitration. (Id. at 9.)1 13 Despite this broad arbitration provision, Plaintiff filed a lawsuit in this Court on 14 September 18, 2019, alleging breach of contract and open book account claims against 15 Defendant. (ECF No. 1.) Shortly thereafter, Plaintiff amended its complaint, removing any 16 mention of a prior written agreement between the parties and dropping its breach of contract 17 claim. (ECF No. 13.) Defendant filed the instant motion to compel arbitration on October 24, 18 2019. (ECF No. 18.)2 19 II. STANDARD OF LAW 20 The parties agree the Federal Arbitration Act (“FAA”) applies. (See ECF Nos. 32, 28, 21 35); 9 U.S.C. §§ 1–14. Generally, in deciding whether a dispute is subject to an arbitration 22 agreement covered by the FAA, the Court must determine: “(1) whether a valid agreement to 23 arbitrate exists[;] and, if it does, (2) whether the agreement encompasses the dispute at issue.” 24 Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “To evaluate 25
26 1 The Services Agreement defines JAMS as “the Judicial Arbitration and Mediation Service, Inc., a provider of alternative dispute resolution services.” (ECF No. 26 at 4.) 27 2 Subsequent citations in this Order will be to the unredacted version of Defendant’s motion 28 filed December 9, 2019. (ECF No. 32.) 1 the validity of an arbitration agreement, federal courts should apply ordinary state-law principles 2 that govern the formation of contracts.” Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1170 3 (9th Cir. 2003) (internal quotation marks and citation omitted). The party seeking to compel 4 arbitration has the burden of proving the existence of an agreement to arbitrate by a 5 preponderance of the evidence. Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 (9th Cir. 6 2014). Such a showing may be made by extrinsic evidence to the complaint. See Sanford v. 7 MemberWorks, Inc., 483 F.3d 956, 963 n.9 (9th Cir. 2007). 8 With respect to the first consideration under the FAA, district courts in the Ninth Circuit 9 have reviewed conflicting evidence as to whether a valid agreement to arbitrate exists under the 10 Federal Rule of Civil Procedure 56 standard applicable to motions for summary judgment. See, 11 e.g., Coup v. Scottsdale Plaza Resort, LLC, 823 F. Supp. 2d 931, 939 (D. Ariz. 2011); Gonzalez 12 v. Citigroup, Inc., No. CIV. S-11-0795 LKK/GGH, 2011 WL 5884250, at *2 (E.D. Cal. 2011); 13 Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004). Although the Ninth 14 Circuit has not expressly adopted the standard, it has suggested such a standard applies. See 15 Sanford, 483 F.3d at 963 n.9; Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., Inc., 925 16 F.2d 1136, 1141 (9th Cir. 1991) (quoting Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., Ltd., 17 636 F.2d 51, 54 (3d Cir. 1980)); but cf. Hamilton v. Shearson-Lehman Am. Exp., Inc., 813 F.2d 18 1532, 1535 (9th Cir. 1987) (holding a motion to compel arbitration is not the equivalent of a 19 motion for summary judgment for the purposes of disallowing a plaintiff to voluntarily dismiss 20 her action). As the parties provide no alternative evidentiary standard, the Court will determine 21 whether there is a genuine dispute as to the existence of a valid arbitration provision. 22 Under summary judgment practice, the Court examines the parties’ evidence to determine 23 whether the opposing party has established a genuine issue as to any material fact exists. 24 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585–87 (1986); First Nat’l 25 Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288–89 (1968). The opposing party must tender 26 evidence of specific facts in the form of affidavits, and/or admissible discovery material in 27 support of its contention a dispute exists. Fed. R. Civ. P. 56(c). The evidence of the opposing 28 party is to be believed and all reasonable inferences that may be drawn from the facts pleaded 1 before the court must be drawn in favor of the opposing party. Anderson v. Liberty Lobby, Inc., 2 477 U.S. 242, 255 (1986). Nevertheless, inferences are not drawn out of the air, and it is the 3 opposing party’s obligation to produce a factual predicate from which the inference may be 4 drawn. Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244–45 (E.D. Cal. 1985), aff’d, 5 810 F.2d 898 (9th Cir. 1987). 6 With respect to the second consideration under the FAA, the party resisting arbitration 7 bears the burden of proving the dispute does not fall within the scope of the valid arbitration 8 agreement. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000). The FAA requires 9 “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” 10 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983). A motion to 11 compel arbitration should be granted unless “it may be said with positive assurance that the 12 arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T 13 Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986). If a court determines that an 14 arbitration clause is enforceable and the plaintiff’s claims are subject to arbitration, it has the 15 discretion to either stay the case pending arbitration or dismiss the complaint. Luna v. Kemira 16 Specialty, Inc., 575 F. Supp. 2d 1166, 1176 (C.D. Cal. 2008). 17 III. ANALYSIS 18 The parties dispute both prongs of the test. The parties primarily disagree whether the 19 arbitration provision in the Services Agreement was binding at the time of the dispute. (ECF No. 20 32 at 12–13, 15–19; ECF No. 28 at 13–23.) In addition, the parties dispute whether the 21 arbitration provision is “broad[]” and encompasses Plaintiff’s claims (ECF No. 32 at 13), or 22 “narrow” such that Plaintiff’s claims fall outside its scope (ECF No. 28 at 24). 23 The Court will first address Plaintiff’s evidentiary objections to Defendant’s evidence (see 24 ECF Nos. 28-2, 42), and then address the parties’ core arguments regarding the existence and 25 scope of the arbitration agreement. 26 A. Evidentiary Objections 27 Plaintiff objects to nearly every piece of evidence submitted by Defendant in support of its 28 motion. (ECF Nos. 28-2, 42.) The Court will address only those objections to evidence upon 1 which the Court relies. 2 i. Services Agreement 3 Plaintiff objects to the Services Agreement attached as Exhibit A to Christopher Wood’s 4 first declaration (ECF No. 26 at 1–17) on lack of foundation and best evidence rule grounds. 5 (ECF No. 28-2 at 2.) In response, Defendant argues Mr. Wood’s first declaration includes 6 adequate foundation of personal knowledge and the best evidence rule objection is frivolous. 7 (ECF No. 39 at 2–3.) Plaintiff fails to provide any explanation as to why Mr. Wood’s testimony 8 that the attached Services Agreement is a true and correct copy of the Services Agreement 9 between the parties does not fall into one of the express examples provided by the Federal Rules 10 of Evidence that satisfy the rule. See Fed. R. Evid. 901(b)(1) (providing testimony of a witness 11 with knowledge “that an item is what it is claimed to be” satisfies the requirement of 12 authenticating or identifying evidence). Similarly, Plaintiff fails to explain why the copy of the 13 Services Agreement does not fall into the exception to the best evidence rule permitting 14 admission of copies absent a genuine question of the original’s authenticity. See Fed. R. Evid. 15 1003. Plaintiff does not attempt to raise a genuine question as to the authenticity of the Services 16 Agreement. Therefore, the Court overrules Plaintiff’s objections to the admissibility of the 17 Services Agreement. 18 ii. Letter of Intent & Amendment 19 Plaintiff objects to the LOI and its amendment attached as Exhibits C and D to Mr. 20 Wood’s first declaration (ECF No. 26 at 22–31) on lack of foundation grounds. (ECF No. 28-2 at 21 4–5.) In response, Defendant argues Mr. Wood has personal knowledge of and can provide a 22 foundation for the LOI and amendment because he was personally involved with them as part of 23 his job. (ECF No. 39 at 6.) As with Plaintiff’s objection to the Services Agreement on the same 24 grounds, its objection here is meritless. Mr. Wood states he has been personally involved in all 25 contract negotiations concerning the management of the distribution center. (ECF No. 20 ¶ 2.) 26 Therefore, his statement that the attached LOI and amendment are what Defendant claims them to 27 be is made by a witness with knowledge. See Fed. R. Evid. 901(b)(1). The Court accordingly 28 overrules Plaintiff’s objection to the admissibility of the LOI and its amendment. 1 iii. First Declaration of Christopher Wood 2 a. Paragraph 5 3 Plaintiff objects to paragraph 5 of Mr. Wood’s first declaration (ECF No. 20 ¶ 5) on lack 4 of personal knowledge, hearsay, and legal conclusion grounds. (ECF No. 28-2 at 4–5.) In 5 response, Defendant argues Mr. Wood has personal knowledge of the facts in paragraph 5 6 because he was involved with the LOI and amendment as a part of his job. (ECF No. 39 at 6.) 7 Defendant argues Mr. Wood’s personal knowledge authenticates the documents under Federal 8 Rule of Evidence 901(b)(1). (Id.) Defendant asserts the hearsay objection is meritless because 9 there is not an out of court statement. (Id.) Finally, Defendant argues any opinion or conclusory 10 statements fall within the limits of Federal Rule of Evidence 701. (Id.) 11 In paragraph 5 of his first declaration, Mr. Wood states the reference in the LOI 12 amendment to the Services Agreement between the parties, dated May 1, 2017, is to the Services 13 Agreement dated November 2007. (ECF No. 20 ¶ 5.) According to Mr. Wood, the May 1, 2017 14 date is an error. (Id.) The Court addressed Mr. Wood’s personal knowledge of the LOI 15 amendment immediately above. Plaintiff fails to explain its hearsay objection. There does not 16 appear to be any statement by an out-of-court declarant. In addition, Plaintiff characterizes Mr. 17 Wood’s statements as “legal conclusions” while citing Federal Rule of Evidence 701 on opinion 18 testimony. It is not clear whether Plaintiff is urging the Court to disregard Mr. Wood’s 19 statements as conclusory or whether Plaintiff is asserting Mr. Wood’s statements are barred by 20 Federal Rule of Evidence 701. Regardless, the Court overrules both objections. Mr. Wood’s 21 statement he believes the May 1, 2017 date on the LOI amendment to be an error is not 22 conclusory because he provides specific facts as to how he has reached that belief. Mr. Wood 23 states the date appears to be an error because he knows of only one “Services Agreement” 24 between the parties, and, as a participant in contract negotiations between the parties, he has 25 understood the LOI amendment to refer to the November 2007 Services Agreement. (ECF No. 26 20 ¶¶ 2, 5.) Mr. Wood does not purport to base his statement on specialized knowledge. Rather, 27 the statements in his declaration are based on his experience as a participant in interactions 28 between the parties. (Id. at ¶ 2.) The Court overrules Plaintiff’s objections. 1 b. Paragraph 9 2 Plaintiff objects to paragraph 9 of Mr. Wood’s first declaration on lack of personal 3 knowledge and hearsay grounds. (ECF No. 28-2 at 7.) In response, Defendant argues Mr. Wood 4 has personal knowledge based on his job and Plaintiff has failed to identify what about Mr. 5 Wood’s declaration is hearsay. (ECF No. 39 at 9.) In paragraph 9 of his declaration, Mr. Wood 6 states in early 2019 the parties measured Plaintiff’s performance at the Tracy warehouse against 7 the “Key Performance Indicators” defined in the Services Agreement. (ECF No. 20 ¶ 9.) 8 Plaintiff again fails to explain its hearsay objection, and the Court does not see how this 9 paragraph can be read to contain a statement by an out-of-court declarant. Plaintiff’s lack of 10 personal knowledge objection is well-taken — in his first declaration Mr. Wood does not provide 11 any evidence as to how he knows of the parties’ performance in Tracy, only that he is familiar 12 with the contract negotiations. (See id. at ¶¶ 2, 9.) However, Mr. Wood’s supplemental 13 declaration provides ample evidence of his familiarity with Plaintiff’s performance in Tracy. 14 (ECF No. 36 ¶¶ 4–6, 8.) Therefore, the Court overrules Plaintiff’s objections. 15 iv. Second Declaration of Christopher Wood3 16 a. Paragraph 8 17 Plaintiff objects to paragraph 8 of Mr. Wood’s supplemental declaration (ECF No. 36 ¶ 8) 18 on lack of personal knowledge, relevance, and hearsay grounds. (ECF No. 42 at 3–4.) As stated 19 immediately above, Mr. Wood’s supplemental declaration contains sufficient evidence of his 20 personal knowledge of the facts in paragraph 9, including in the paragraph itself. (See ECF No. 21 36 ¶¶ 4–6, 9.) As discussed more fully below, the parties’ continued performance under the terms 22 of the Services Agreement is clearly relevant to whether they created an implied-in-fact 23
24 3 In addition to paragraphs 8 and 9, Plaintiff objects to paragraph 6 of Mr. Wood’s supplemental declaration on lack of personal knowledge, improper opinion, and inadmissible 25 hearsay grounds. (ECF No. 42 at 2.) Although Plaintiff fails to explain these objections, they 26 seem relevant only to the latter half of paragraph 6. Mr. Wood’s statements as to the cause of the deterioration in the business relationship between the parties is not relevant to the narrow 27 question considered here. Accordingly, the Court relies only on the first two sentences of paragraph 6 and need not consider Plaintiff’s objections. 28 1 agreement after June 30, 2018. Plaintiff’s hearsay objection is unexplained and seemingly 2 frivolous — this portion of Mr. Wood’s supplemental declaration does not contain a statement by 3 an out-of-court declarant. The Court overrules Plaintiff’s objections. 4 b. Paragraph 9 5 Finally, Plaintiff objects to paragraph 9 of Mr. Wood’s supplemental declaration (ECF 6 No. 36 ¶ 9) on lack of personal knowledge, conclusory, and best evidence rule grounds. (ECF 7 No. 42 at 4.) Plaintiff is correct Mr. Wood’s statement that Plaintiff’s practice of invoicing for its 8 services continued in substantially the same manner after June 30, 2018 is conclusory because 9 Mr. Wood does not provide the Court with specific facts as to how he determined Plaintiff’s 10 invoicing practices remained unchanged. However, paragraph 9 contains non-conclusory facts as 11 well: (1) Mr. Wood, pursuant to his duties as Director of Warehouse Operations in 2018, 12 reviewed invoices from Plaintiff; and (2) Plaintiff regularly sent invoices to Defendant prior to 13 June 30, 2018. (ECF No. 36 ¶ 9.) The Court sustains Plaintiff’s objection only as to Mr. Wood’s 14 statements regarding the similarity in Plaintiff’s invoicing practices before and after June 30, 15 2018. 16 Plaintiff’s additional objections, however, are meritless. Mr. Wood’s statement that he 17 personally reviewed invoices from Plaintiff as a function of his job is sufficient evidence of 18 personal knowledge. Plaintiff’s best evidence rule objection seems to be left over from its 19 objections to Mr. Wood’s first declaration. There are no documents attached to Mr. Wood’s 20 supplemental declaration at which a Federal Rule of Evidence 1002 objection may be levied. See 21 Fed. R. Evid. 1002, notes of advisory committee on proposed rules (explaining the rule only 22 applies to documentary evidence). Accordingly, these objections are overruled. 23 B. Existence and Scope of Arbitration Agreement 24 The Court now turns to the parties’ arguments regarding the existence and scope of the 25 arbitration agreement. The parties disagree whether the arbitration provision in the Services 26 Agreement was binding at the time of the present dispute and whether it applied to the parties’ 27 conduct in Tracy. (ECF No. 32 at 12–13, 15–19; ECF No. 28 at 13–23.) In addition, the parties 28 disagree whether the scope of the arbitration provision is broad enough to encompass this action. 1 (ECF No. 32 at 13; ECF No. 28 at 24). 2 i. Existence 3 First, the parties dispute whether the LOI amendment extended the term of the Services 4 Agreement to June 30, 2018 and applied the Services Agreement to the parties’ dealings in Tracy. 5 Defendant argues the terms of the Services Agreement were incorporated into the LOI through its 6 subsequent amendment. (ECF No. 32 at 12–13.) In opposition, Plaintiff asserts the terms of the 7 amendment to the LOI extending the Services Agreement and applying that agreement to the 8 parties’ operations in Tracy should be disregarded because “[t]he LOI and its First Amendment 9 are separate agreements from the Services Agreement and govern different aspects of [the 10 parties’] business relationship.” (ECF No. 28 at 17.) In reply, Defendant points to the express 11 terms of the LOI amendment, arguing they clearly extend both the term and scope of the Services 12 Agreement to apply to warehousing services provided by Plaintiff to Defendant through June 30, 13 2018. (ECF No. 35 at 3–4.) 14 The language of the amendment to the LOI is open only to one reasonable interpretation. 15 Section 2 of the LOI amendment expressly extends the terms of the Services Agreement through 16 June 30, 2018 and applies those terms to the parties’ relationship at the Tracy facility. (ECF No. 17 26 at 26.) The amendment states, “the Services Agreement . . . shall be deemed extended, with 18 effect between the Parties, through the LOI Term . . . . The Agreement shall apply to any services 19 performed by [Plaintiff] at the Tracy Warehouse . . . .” (Id.)4 Plaintiff fails to convince the Court 20 the clear language of the LOI amendment should be disregarded. To the extent Plaintiff attempts 21 to argue this language means something other than what it says, Plaintiff provides no reasonable 22 alternative interpretation for the Court to consider. Furthermore, the declaration of Plaintiff’s 23 employee, Charles Michael Hopkins, directly contradicts Plaintiff’s argument here. (See ECF 24 No. 28-1 ¶ 11 (“In the First Amendment to the LOI, [the parties] agreed . . . to extend the 25 termination date . . . of the Services Agreement to June 30, 2018.”). 26 4 The LOI amendment identifies the Services Agreement as the document signed May 1, 27 2017. (ECF No. 26 at 26.) Defendant presented uncontroverted evidence this date was a typographical error. (ECF No. 20 ¶ 5.) 28 1 Next, Defendant argues that despite the expiration of the Services Agreement on June 30, 2 2018, the parties created an implied-in-fact contract through continued performance under the 3 Services Agreement. (ECF No. 32 at 17.) Plaintiff responds by arguing the parties’ continued 4 performance did not create an implied contract for three reasons. First, in a footnote, Plaintiff 5 argues an implied contract cannot be created when there is an existing express contract for the 6 same subject matter. (ECF No. 28 at 19 n.5 (citing O’Connor v. Uber Techs., Inc., 58 F. Supp. 3d 7 989, 1000 (N.D. Cal. 2014); Lance Camper Mfg. Corp. v. Republic Indem. Co. (Lance Camper), 8 44 Cal. App. 4th 194, 203 (1996)).) Second, Plaintiff argues the termination provisions in the 9 Services Agreement and LOI precluded any implied-in-fact extension of the Services Agreement 10 based on the parties’ continued performance. (Id. at 20 (citing Citizens for Amending Proposition 11 L v. City of Pomona, 28 Cal. App. 5th 1159, 1189–90 (2018)).) Finally, Plaintiff argues no 12 contract incorporating terms of the earlier agreements can be implied from the parties’ conduct 13 after June 30, 2018 because the parties did not engage in the same course of conduct as under the 14 prior agreement. (Id. at 21 (citing Indus. Advanced Techs., Inc. v. Matthews Studio Equip., Inc., 15 No. CV 17-4962-GW(RAOx), 2018 WL 6131228, at *18 (C.D. Cal. July 30, 2018)).) Plaintiff’s 16 third argument is essentially that Defendant has failed to present sufficient evidence of continued 17 performance under the Services Agreement after its expiration. The Court will first address this 18 argument and Defendant’s evidence, and then it will turn to a consideration of Plaintiff’s 19 remaining points. 20 Under California law,5 an implied-in-fact contract requires the same elements as an 21 express contract but is “manifested by conduct” rather than words. See Cal. Civ. Code § 1621. 22 Thus, “[a]n implied contract . . . must be founded upon an ascertained agreement of the parties to 23
24 5 The parties do not discuss what jurisdiction’s contract law the Court should look to in determining whether the parties created an implied-in-fact contract. However, both cite 25 California cases in their arguments over whether such a contract existed. (See ECF No. 32 at 17 (citing British Motor Car Distribs., Ltd. v. New Motor Vehicle Bd., 194 Cal. App. 3d 81, 91 26 (1987)); ECF No. 28 at 21 (citing Citizens, 28 Cal. App. 5th at 1189–90).) The parties also cite 27 federal cases applying California contract law. (See ECF No. 32 at 17 (citing U.S. ex rel. Oliver, 195 F.3d 457); ECF No. 28 at 19 n.5 (citing O’Connor, 58 F. Supp. 3d at 1000).) The Court will 28 do the same. 1 perform it, the substantial difference between [express and implied contracts] being the mere 2 mode of proof.” Gorlach v. Sports Club Co., 209 Cal. App. 4th 1497, 1507 (2012). When parties 3 continue to perform after an agreement has expired, “an implication arises that they have 4 mutually assented to a new contract containing the same provisions as the old.” Autohaus 5 Brugger, Inc. v. Saab Motors, Inc., 567 F.2d 901, 915 (1978) (quoting Martin v. Campanaro, 156 6 F.2d 127, 129 (2nd Cir. 1946)); see also U.S. ex rel. Oliver v. Parsons Co., 195 F.3d 457, 462 7 (9th Cir. 1999) (holding the same principle applies under California law); Indus. Advanced, 2018 8 WL 6131228, at *18 (same). The terms of the new contract may include an agreement to 9 arbitrate present in the old. Jones v. Deja Vu, Inc., 419 F. Supp. 2d 1146, 1150 (N.D. Cal. 2005) 10 (quoting Ajida Techs., Inc. v. Roos Instruments, Inc., 87 Cal. App. 4th 534, 545–46 (2001)) 11 (citing 2 Williston on Contracts § 6:42 (4th ed. 2004)). 12 Here, both parties have submitted evidence of continued performance under the terms of 13 the Services Agreement after June 30, 2018. After the Services Agreement and LOI expired, 14 Plaintiff continued to provide the same warehousing services to Defendant at the Tracy 15 warehouse as specified under the LOI. (Compare ECF No. 28-1 ¶ 16 with ECF No. 26 at 26–27.) 16 The parties measured Plaintiff’s performance providing these services against the “Key 17 Performance Indicators” contained in the Services Agreement in the latter half of 2018 and early 18 2019. (ECF No. 20 ¶ 9; ECF No. 36 ¶¶ 6, 8.) Plaintiff invoiced Defendant for Plaintiff’s services 19 before and after the expiration of the written agreements between the parties. (ECF No. 36 ¶ 9; 20 ECF No. 14-3 ¶ 10; ECF No. 14-5.) This evidence of continued performance under the Services 21 Agreement as modified by the LOI amendment demonstrates the parties manifested an agreement 22 to continue the terms of the express agreements beyond June 30, 2018. See British Motor Car 23 Distribs., Ltd., 194 Cal. App. 3d at 91 (evidence one party provided notice of termination 24 pursuant to the termination provision of the expired express contract was sufficient to show 25 implied-in-fact extension of express agreement). 26 The only evidence presented by Plaintiff rebutting the evidence of performance after June 27 30, 2018 is paragraph 15 of Mr. Hopkins’s declaration. Mr. Hopkins’s declaration states in 28 relevant part, “[between July 1, 2018 and May 17, 2019, the parties] . . . agreed to a business 1 arrangement whereby [Defendant] would reimburse [Plaintiff] for the unpaid balance of costs and 2 expenses [Plaintiff] incurred in providing its services to [Defendant] at the Tracy [w]arehouse.” 3 (ECF No. 28-1 ¶ 15.) If taken as true, this statement suggests the parties altered their relationship 4 after June 30, 2018 by changing the agreed-upon pricing. (See ECF No. 37 ¶ 8.) However, 5 because Mr. Hopkins’s statement is internally inconsistent, conclusory, unsupported, and offered 6 without evidence of personal knowledge, it is insufficient to create a genuine dispute of material 7 fact. 8 The statement is internally inconsistent because it is partially contradicted by the prior two 9 paragraphs, which state in relevant part, “[a]fter the negotiations failed, [Defendant] terminated 10 [Plaintiff’s] services at the Tracy [w]arehouse . . . and transition[ed] [Plaintiff’s] services there to 11 [Defendant]” (id. at ¶ 13), and “the negotiations for the fourth amendment [to the Services 12 Agreement], the LOI and First Amendment, as well as the Services Agreement, terminated on 13 June 30, 2018” (id. at ¶ 14). It cannot both be true that the parties terminated their relationship 14 (id. at ¶¶ 13–14), but then continued their relationship on different terms (id. at ¶ 15). Thus, Mr. 15 Hopkins contradicts himself and the Court cannot determine which of the two statements are to be 16 taken as true. 17 The statement is unsupported because Plaintiff offers no other evidence from which an 18 inference that the parties changed their business arrangement may be drawn. The only 19 documentary evidence Plaintiff submits are the three amendments to the Services Agreement and 20 Defendant’s request for proposal to run the warehouse operation in Tracy, none of which have 21 anything to say about the parties’ conduct after June 30, 2018. (ECF Nos. 44, 45.) In paragraph 22 16 of his declaration, Mr. Hopkins details the services Plaintiff provided to Defendant at the 23 Tracy facility after June 30, 2018. (ECF No. 28-1 ¶ 16.) However, these services are lifted 24 verbatim from the amendment to the LOI, which, as noted above, modified the Services 25 Agreement by postponing its termination date and expanding its scope to apply to the parties’ 26 dealings in Tracy. (Compare id. with ECF No. 26 at 26–27.) Thus, rather than providing 27 evidence of materially different performance after June 30, 2018, Mr. Hopkins’s declaration, 28 aside from the single statement quoted above, provides evidence Plaintiff continued to perform 1 the same contractually obligated services after the expiration of the Services Agreement. 2 The statement is conclusory because it does not provide specific facts detailing how the 3 parties agreed. See Hansen v. United States, 7 F.3d 137, 138 (9th Cir. 1993) (finding no genuine 4 issue of when an IRS form was sent when the supporting declaration only contained a conclusory 5 statement that the form was never received). Mr. Hopkins’s assertion that the parties entered into 6 an agreement with a different term from the contract codified in the Services Agreement, without 7 providing any factual support as to how, when, or between which employees the agreement was 8 made, is a conclusion insufficient to create a genuine dispute. Cf. Robb v. Conn. Bd. of 9 Veterinary Med., 157 F. Supp. 3d 130, 143 (D. Conn. 2016) (“[P]laintiff may not simply allege 10 that ‘the parties agreed.’ . . . [A]ny conclusory allegation of an ‘agreement’ is not to be accepted 11 as true; the plaintiff must allege facts affirmatively demonstrating such an agreement.”) (emphasis 12 in original). Because Plaintiff provides no further evidence to corroborate Mr. Hopkins’s 13 conclusory statements, his declaration is insufficient to create a genuine issue of material fact. 14 See Obesity Research Inst., LLC v. Fiber Research Int’l, LLC, 310 F. Supp. 3d 1089, 1104 (S.D. 15 Cal. 2018) (“[D]eclarations that contain only conclusory statements, instead of specific facts, are 16 insufficient unless accompanied by other evidence to corroborate the statements.”). 17 Finally, Mr. Hopkins’s declaration contains no facts as to how he knows the parties 18 entered into a new agreement after June 30, 2018. In paragraph 1, Mr. Hopkins identifies himself 19 as Plaintiff’s “Divisional Commercial Officer.” (ECF No. 28-1 ¶ 1.) Mr. Hopkins states he has 20 served in this role since January 27, 2019, and, as a function of being in that role, he is “familiar 21 with the transactions between [Plaintiff] and [Defendant]. (Id.) However, the relevant period 22 begins July 1, 2018, nearly seven months before Mr. Hopkins began his role as “Divisional 23 Commercial Officer” and before he acquired the knowledge of the parties’ transactions pursuant 24 to that role. Mr. Hopkins may have become acquainted with the prior dealings of the parties after 25 he assumed his current role or served in a role that allowed him to observe the parties’ business 26 relationship during the relevant period. Without evidence of such, however, the Court declines to 27 draw these inferences out of thin air. See Richards, 602 F. Supp. at 1244–45. Furthermore, as 28 discussed above, Mr. Hopkins fails to provide the Court with any facts showing how, when, or 1 between which employees the agreement was made. In sum, Mr. Hopkins has failed to provide 2 evidence he had “an opportunity to observe, and . . . actually observed” the facts to which he 3 swears in his declaration. 4 For the foregoing reasons, Mr. Hopkins’s declaration as to this issue is both insufficient to 5 create a genuine dispute of material fact and inadmissible as lacking evidence of personal 6 knowledge. As such, the Court may disregard it. See Villiarimo v. Aloha Island Air, Inc., 281 7 F.3d 1054, 1059 n.5 (9th Cir. 2002) (uncorroborated affidavit and deposition testimony without 8 evidence of personal knowledge insufficient to create genuine dispute); F.T.C. v. Publ’g Clearing 9 House, Inc., 104 F.3d 1168, 1171 (9th Cir. 1997) (“A conclusory, self-serving affidavit, lacking 10 detailed facts and any supporting evidence, is insufficient to create a genuine issue of material 11 fact.”); Hansen, 7 F.3d at 138 (“When the nonmoving party relies only on its own affidavits to 12 oppose summary judgment, it cannot rely on conclusory allegations unsupported by factual data . 13 . . .”). Therefore, the evidence of continued performance under the terms of the written contract 14 is sufficient to create a presumption the parties operated under an implied-in-fact contract 15 containing the same terms as the Services Agreement and LOI. 16 Plaintiff presents no facts demonstrating an intent to deviate from the terms of the 17 Services Agreement and LOI amendment generally or the arbitration provision specifically which 18 may overcome the presumption created by the parties’ continued performance after June 30, 19 2018. See Thelen Reid Brown Raysman & Steiner LLP v. Marland, 319 F. App’x 676, 678–79 20 (9th Cir. 2009) (quoting Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionery Workers 21 Union, 430 U.S. 243, 255 (1977)) (arbitration provisions cannot survive expiration of an 22 agreement where there is evidence of intent to forego arbitration). The portion of Mr. Hopkins’s 23 declaration that states the parties agreed the Services Agreement would not govern the operations 24 at the Tracy warehouse is inadequate to create a genuine dispute for the same reasons paragraph 25 15 of his declaration fails to do so. (ECF No. 28-1 ¶ 9.) Specifically, the statement is 26 inconsistent with the subsequent paragraphs, which acknowledge the parties modified the 27 Services Agreement to cover a portion of their conduct in Tracy by extending its term through the 28 creation of the LOI amendment. (Compare id. with id. at ¶¶ 10–11.) The statement is conclusory 1 because it merely concludes the parties agreed without demonstrating such agreement through 2 specific facts. The statement is uncorroborated because Plaintiff submits no other evidence of 3 intent to forego the terms of the expired express agreements. Finally, Plaintiff provides no 4 evidence of Mr. Hopkins’s personal knowledge of the parties’ agreement to abandon the Services 5 Agreement. Therefore, the presumption of an implied-in-fact contract stands uncontested. 6 Plaintiff’s legal arguments are similarly unavailing. Plaintiff cites O’Connor and Lance 7 Camper for the proposition that an implied-in-fact contract cannot exist when there is an express 8 contract between the parties. (ECF No. 28 at 19 n.5.) Both cases are easily distinguishable. 9 O’Connor and Lance Camper both rejected the argument that the parties had created two 10 contradictory and co-existing contracts, one of which was express and the other implied. See 11 O’Connor, 58 F. Supp. 3d at 1001; Lance Camper, 44 Cal. App. 4th at 203. Here, the express 12 contract by its terms expired — thus ceasing to exist — and the parties’ performance along the 13 same terms created an implied-in-fact contract. Whether the implied contract is characterized as a 14 renewal of the express agreement or a new contract with identical terms is irrelevant to the 15 question here. The point is that only one contract existed at any one time. Therefore, there is no 16 contradiction between existing contracts, and O’Connor and Lance Camper are inapposite. 17 Next, Plaintiff cites Citizens for Amending Proposition L for the proposition that a 18 contract with a termination date cannot be extended or modified after its termination. (ECF No. 19 28 at 20.) However, after reasoning that the express contract between the parties could not have 20 been extended after its termination date, the Citizens court considered whether an implied-in-fact 21 contract had been formed after the expiration of the express agreement. Citizens, 28 Cal. App. 22 5th at 1189. In other words, the Citizens court analyzed whether the express contract had been 23 extended after its termination and whether the parties had created an implied-in-fact contract 24 through their performance after the termination of the express agreement as two separate 25 questions. Id. Although the court ultimately found an implied contract had not been formed, the 26 court’s acknowledgement one could have been formed under the right circumstances, despite the 27 expiration of the express agreement, directly cuts against Plaintiff’s argument. See id. 28 /// 1 Plaintiff has failed to submit evidence of facts that create a genuine dispute as to whether 2 the parties created an implied-in-fact contract containing the same terms of the Services 3 Agreement after the expiration of the parties’ express agreements. Accordingly, the Court finds 4 an implied-in-fact contract existed among the parties, the terms of which included the arbitration 5 provision from the Services Agreement. Therefore, Defendant has met its initial burden to 6 demonstrate the existence of an arbitration agreement between the parties. 7 ii. Scope 8 Once the moving party has shown the existence of a valid agreement to arbitrate, the party 9 resisting arbitration bears the burden of proving the dispute does not fall within the scope of the 10 arbitration provision. Green Tree Fin. Corp.-Ala., 531 U.S. at 91. Arbitration provisions are 11 construed broadly, and any doubts are resolved in favor of arbitration. Moses H. Cone Mem’l 12 Hosp., 460 U.S. at 24–25. “[T]o require arbitration [an aggrieved party’s] factual allegations 13 need only touch matters covered by the contract containing the arbitration clause . . . .” Simula, 14 Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999) (internal quotation marks omitted). 15 Defendant argues the arbitration provision encompasses Plaintiff’s claims because the 16 existence of the contractual agreement between the parties bars Plaintiff’s quasi-contract claims. 17 (ECF No. 32 at 14.) Therefore, Defendant contends, Plaintiff’s claims implicate the “existence, 18 interpretation or application” of the Services Agreement and the parties’ respective obligations to 19 perform under it. (Id. at 14–15.) In opposition, Plaintiff argues the parties did not perform under 20 the Services Agreement after June 30, 2018, and therefore the arbitration provision contained in 21 the Services Agreement does not encompass this lawsuit. (ECF No. 28 at 23–25.) Defendant 22 responds by characterizing Plaintiff’s arguments as “conclusory.” (ECF No. 35 at 10–11.) 23 The arbitration provision in the Services Agreement provides that “any disagreement 24 concerning the existence, interpretation or application of this Agreement” shall be submitted for 25 binding resolution to JAMS in San Francisco. (ECF No. 25 at 15.) As the Court has already 26 determined, the parties performed in the latter half of 2018 pursuant to an implied-in-fact contract 27 containing the same terms as the Services Agreement, as modified by the LOI amendment. The 28 language of the arbitration provision is broad, covering not only the parties’ obligations under the 1 contract but also disputes over the contract’s existence. (ECF No. 25 at 15.) Resolution of 2 Plaintiff’s quasi-contractual claims requires determining whether an enforceable contract 3 covering the same services existed between the parties. See Paracor Fin., Inc. v. Gen. Elec. 4 Capital Corp., 96 F.3d 1151, 1167 (9th Cir. 1996). If so, whether Plaintiff is entitled to payment 5 for the services it alleges it rendered hinges on whether Plaintiff performed its contractual 6 obligations in a manner consistent with the agreement’s terms. See Wynn Resorts, Ltd. v. Atl.- 7 Pac. Capital, Inc., 497 F. App’x 740, 743 (9th Cir. 2012). Either question involves inquiries 8 “concerning the existence, interpretation or application” of the implied-in-fact contract. 9 Therefore, this dispute falls within the scope of the arbitration provision in the Services 10 Agreement. 11 C. Dismissal 12 As Plaintiff’s claims are subject to arbitration, the Court has discretion to stay the action 13 pending arbitration or dismiss it. Thinket Ink Info. Res., Inc., 368 F.3d at 1060 (quoting Martin 14 Marietta Aluminum, Inc. v. Gen. Elec. Co., 586 F.2d 143, 147 (9th Cir. 1978)). Defendant 15 requests the Court dismiss Plaintiff’s FAC as barred by the arbitration agreement between the 16 parties. (ECF No. 32 at 19–20.) Plaintiff, rather than providing the Court a reason it should not 17 dismiss Plaintiff’s FAC, challenges the Court’s authority to do so. (ECF No. 28 at 25.) Instead, 18 Plaintiff requests the Court stay the action pending arbitration. (Id.) As the Court has already 19 found Plaintiff’s claims arise from the parties’ obligations under the implied contract created by 20 continued performance under the Services Agreement and subsequent amendments, the Court 21 sees no reason to retain jurisdiction over this matter. Therefore, Plaintiff’s FAC is DISMISSED. 22 IV. CONCLUSION 23 For the foregoing reasons, the Court GRANTS Defendant’s Motion to Compel Arbitration 24 (ECF No. 18) and DISMISSES Plaintiff’s First Amended Complaint (ECF No. 13). As such, 25 Plaintiff’s Application for Right to Attach Order and Motion for Issuance of Writ of Attachment 26 is DISMISSED as moot. (ECF No. 14.) 27 // 28 // 1 IT IS SO ORDERED. 2 || Dated: November 1, 2021 3 /) 4 “ □ lhe ° Troy L. Nuhlep ] 6 United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18