Mohamed Poonja v. Chandrakant Shah

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 6, 2020
• Docket: 18-15629
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 6 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

In re: SAN JOSE AIRPORT HOTEL, LLC, No. 18-15629 DBA Holiday Inn San Jose, ______________________________ D.C. No. 5:17-cv-00858-EJD

MOHAMED POONJA, Chapter 7 Trustee, MEMORANDUM* Plaintiff-Appellee,

v.

CHANDRAKANT SHAH,

Defendant-Appellant.

Appeal from the United States District Court for the Northern District of California Edward J. Davila, District Judge, Presiding

Argued and Submitted October 25, 2019 San Francisco, California

Before: MELLOY,** BYBEE, and N.R. SMITH, Circuit Judges.

Chandrakant Shah appeals the district court’s order affirming the judgment

of the bankruptcy court, which found Shah liable to Plaintiff Mohamed Poonja,

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Michael J. Melloy, United States Circuit Judge for the U.S. Court of Appeals for the Eighth Circuit, sitting by designation. trustee for the debtor San Jose Airport Hotel, LLC, for breach of contract in the

amount of $11,648,758.00. Having jurisdiction under 28 U.S.C. § 158, we affirm.

The district court found that Shah’s breach of his guaranty of the underlying

sale was a proximate cause of Poonja’s damages, and that the amount of damages

was established with reasonable certainty. “We review a district court’s decision

in an appeal from the bankruptcy court de novo.” Northbay Wellness Grp., Inc. v.

Beyries, 789 F.3d 956, 959 (9th Cir. 2015). We apply the same standard of review

to the bankruptcy court’s decision as did the district court—findings of fact are

reviewed for clear error and conclusions of law de novo. Id.

The context of the sale, Pac. Gas & Elec. Co. v. G. W. Thomas Drayage &

Rigging Co., 442 P.2d 641, 644–45 (Cal. 1968), and the ordinary meaning of the

contract terms, Cal. Civ. Code § 1644, establish that Shah’s contractual obligations

were broad. Giving effect to the mutual intention of the parties at the time of

contracting, id. § 1636, it is clear that Shah breached his obligations when he failed

to cooperate and provide updated financial information.

Since Shah’s cooperation was essential to the sale, Shah’s breach was, at

least, a “substantial factor” in causing the damages. US Ecology, Inc. v. State, 28

Cal. Rptr. 3d 894, 909–10 (Ct. App. 2005). For the same reason, the damages

awarded were reasonably foreseeable at the time the parties contracted. 999 v.

C.I.T. Corp., 776 F.2d 866, 872 (9th Cir. 1985).

2 Further, based on the evidence offered at trial, the amount of damages was

properly established with reasonable certainty. Cal. Civ. Code §§ 3301, 3307.

Shah’s liability could not have been limited by the liquidated damages provision in

the sales contract because that provision never operated to limit Shah’s individual

liability. Nor could his liability have been limited by California’s statutory

protections for guarantors because Shah expressly waived those protections in his

guaranty.

AFFIRMED.