NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 31 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
PONTILER S.A., a Uruguay corporation, No. 19-55849
Plaintiff-Appellant, D.C. No. 2:18-cv-10772-R-SK
v. MEMORANDUM* OPI PRODUCTS INC., a California corporation; COTY INC., a New York Corporation,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding
Submitted July 10, 2020** Pasadena, California
Before: BALDOCK,*** BERZON, and COLLINS, Circuit Judges.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Bobby R. Baldock, United States Circuit Judge for the U.S. Court of Appeals for the Tenth Circuit, sitting by designation. Plaintiff argues the district court erred in dismissing its claims for breach of
contract and breach of the implied covenant of good faith and fair dealing. Plaintiff
concedes its promissory fraud, unfair competition, and intentional interference with
prospective economic advantage claims were insufficiently pled but contends the
district court erred in denying leave to amend. Finally, Plaintiff argues the district
court erred in dismissing its claims as time-barred. We review a district court’s order
dismissing a complaint for failure to state a claim de novo. Faulkner v. ADT Sec.
Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013). We need not reach the issue of
whether Plaintiff’s claims are timely because Plaintiff fails to state a claim upon
which relief can be granted and any amendment would be futile. Exercising
jurisdiction under 28 U.S.C. § 1291, we affirm.
1. To state a claim for breach of contract under California law, a plaintiff must
allege: (1) the existence of a valid contract; (2) the plaintiff’s performance or excuse
for nonperformance; (3) the defendant’s breach; and (4) damage resulting from the
breach.1 Oasis West Realty, LLC. v. Goldman, 250 P.3d 1115, 1121 (Cal. 2011).
While we construe the pleadings in favor of the plaintiff, if “the allegations of a
pleading are inconsistent with the terms of a written contract attached as an exhibit,
1 The contract between Plaintiff and Defendants contains a choice of law provision which provides the agreement “has been made and shall be performed with reference to the laws of the State of California . . . .”
2 19-55849 the terms of the latter, fairly construed, must prevail over the averments differing
therefrom.” Ott v. Home Sav. & Loan Ass’n, 265 F.2d 643, 646 n.1 (9th Cir. 1958).
In this case, Plaintiff alleges Defendants breached the contract by terminating
it without cause. But the contract, which was attached to the complaint, plainly
states it can be terminated by “notice given by either party to the other party
addressed in writing of its intention not to renew [the] agreement at least one
calendar month prior to the expiration of the . . . period.” It is undisputed Defendants
provided written notice of their intent not to renew the contract on September 4,
2014—more than three months prior to the expiration of the relevant period. Thus,
the agreement expressly provided for Defendants’ method of termination, and
Plaintiff’s claim that Defendants needed good cause to terminate the contract is
without merit.
2. Plaintiff further argues Defendants breached the contract by selling OPI
products to other distributors in Uruguay. This argument is similarly without merit.
The agreement states, “OPI hereby grants to [Plaintiff], and [Plaintiff] hereby
accepts, the non-exclusive right to warehouse and sell ‘OPI Products’ . . . .”
(emphasis added). This language makes clear that the contract was intended to be
non-exclusive. Moreover, while Defendants agreed to “refrain from selling,
distributing or consigning any of the ‘OPI Products’ covered by [the] agreement to
department, drug, food or variety stores[,]” Defendants never agreed not to sell to
3 19-55849 other distributors. (emphasis added). Accordingly, Plaintiff’s claim that Defendants
breached the contract by selling OPI products to other distributors is foreclosed by
the contract’s plain language. Plaintiff’s breach of contract claim therefore fails as
a matter of law.
3. Nor did the district court err in dismissing Plaintiff’s claim for breach of
the covenant of good faith and fair dealing. Again, we review the district court’s
order de novo. Faulkner, 706 F.3d at 1019. Under California law, the covenant of
good faith and fair dealing “cannot impose substantive duties or limits on the
contracting parties beyond those incorporated in the specific terms of their
agreement.” Guz v. Bechtel Nat’l, Inc., 8 P.3d 1089, 1110 (Cal. 2000).
Here, Plaintiff bases its breach of the implied covenant of good faith and fair
dealing claim on the fact that Defendants (1) terminated the contract without cause
and (2) sold OPI products to other distributors in Uruguay. But as we have
explained, this conduct was permitted under the plain language of the contract.
Because the covenant of good faith and fair dealing cannot impose duties on
Defendants beyond those contained in the contract, Plaintiff’s claim fails as a matter
of law.
4. Finally, the district court did not err in denying Plaintiff leave to amend its
promissory fraud, unfair competition, and interference with prospective economic
advantage claims. We review the district court’s denial of leave to amend for an
4 19-55849 abuse of discretion. Smith v. Pac. Props. & Dev. Corp., 358 F.3d 1097, 1100 (9th
Cir. 2004). Dismissal without leave to amend is appropriate when it is clear the
complaint could not be saved by amendment. Somers v. Apple, Inc., 729 F.3d 953,
960 (9th Cir. 2013).
In this case, Defendants’ initial motion to dismiss alerted Plaintiff to the legal
defects in its original complaint. While Plaintiff filed an amended complaint in
response to that motion, Plaintiff did not substantively revise its claims to address
the deficiencies identified. Even when confronted with a second motion to dismiss,
Plaintiff did not propose an amendment which would save its claims. And in its
briefing to this Court, Plaintiff still fails to provide any legal or factual basis by
which its promissory fraud, unfair competition, or interference with prospective
economic advantage claims could survive dismissal. Because Plaintiff fails to
proffer a legally adequate basis for its claims—and from our review there is none—
we conclude the district court did not abuse its discretion in denying leave to amend.
5.
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 31 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
PONTILER S.A., a Uruguay corporation, No. 19-55849
Plaintiff-Appellant, D.C. No. 2:18-cv-10772-R-SK
v. MEMORANDUM* OPI PRODUCTS INC., a California corporation; COTY INC., a New York Corporation,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding
Submitted July 10, 2020** Pasadena, California
Before: BALDOCK,*** BERZON, and COLLINS, Circuit Judges.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Bobby R. Baldock, United States Circuit Judge for the U.S. Court of Appeals for the Tenth Circuit, sitting by designation. Plaintiff argues the district court erred in dismissing its claims for breach of
contract and breach of the implied covenant of good faith and fair dealing. Plaintiff
concedes its promissory fraud, unfair competition, and intentional interference with
prospective economic advantage claims were insufficiently pled but contends the
district court erred in denying leave to amend. Finally, Plaintiff argues the district
court erred in dismissing its claims as time-barred. We review a district court’s order
dismissing a complaint for failure to state a claim de novo. Faulkner v. ADT Sec.
Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013). We need not reach the issue of
whether Plaintiff’s claims are timely because Plaintiff fails to state a claim upon
which relief can be granted and any amendment would be futile. Exercising
jurisdiction under 28 U.S.C. § 1291, we affirm.
1. To state a claim for breach of contract under California law, a plaintiff must
allege: (1) the existence of a valid contract; (2) the plaintiff’s performance or excuse
for nonperformance; (3) the defendant’s breach; and (4) damage resulting from the
breach.1 Oasis West Realty, LLC. v. Goldman, 250 P.3d 1115, 1121 (Cal. 2011).
While we construe the pleadings in favor of the plaintiff, if “the allegations of a
pleading are inconsistent with the terms of a written contract attached as an exhibit,
1 The contract between Plaintiff and Defendants contains a choice of law provision which provides the agreement “has been made and shall be performed with reference to the laws of the State of California . . . .”
2 19-55849 the terms of the latter, fairly construed, must prevail over the averments differing
therefrom.” Ott v. Home Sav. & Loan Ass’n, 265 F.2d 643, 646 n.1 (9th Cir. 1958).
In this case, Plaintiff alleges Defendants breached the contract by terminating
it without cause. But the contract, which was attached to the complaint, plainly
states it can be terminated by “notice given by either party to the other party
addressed in writing of its intention not to renew [the] agreement at least one
calendar month prior to the expiration of the . . . period.” It is undisputed Defendants
provided written notice of their intent not to renew the contract on September 4,
2014—more than three months prior to the expiration of the relevant period. Thus,
the agreement expressly provided for Defendants’ method of termination, and
Plaintiff’s claim that Defendants needed good cause to terminate the contract is
without merit.
2. Plaintiff further argues Defendants breached the contract by selling OPI
products to other distributors in Uruguay. This argument is similarly without merit.
The agreement states, “OPI hereby grants to [Plaintiff], and [Plaintiff] hereby
accepts, the non-exclusive right to warehouse and sell ‘OPI Products’ . . . .”
(emphasis added). This language makes clear that the contract was intended to be
non-exclusive. Moreover, while Defendants agreed to “refrain from selling,
distributing or consigning any of the ‘OPI Products’ covered by [the] agreement to
department, drug, food or variety stores[,]” Defendants never agreed not to sell to
3 19-55849 other distributors. (emphasis added). Accordingly, Plaintiff’s claim that Defendants
breached the contract by selling OPI products to other distributors is foreclosed by
the contract’s plain language. Plaintiff’s breach of contract claim therefore fails as
a matter of law.
3. Nor did the district court err in dismissing Plaintiff’s claim for breach of
the covenant of good faith and fair dealing. Again, we review the district court’s
order de novo. Faulkner, 706 F.3d at 1019. Under California law, the covenant of
good faith and fair dealing “cannot impose substantive duties or limits on the
contracting parties beyond those incorporated in the specific terms of their
agreement.” Guz v. Bechtel Nat’l, Inc., 8 P.3d 1089, 1110 (Cal. 2000).
Here, Plaintiff bases its breach of the implied covenant of good faith and fair
dealing claim on the fact that Defendants (1) terminated the contract without cause
and (2) sold OPI products to other distributors in Uruguay. But as we have
explained, this conduct was permitted under the plain language of the contract.
Because the covenant of good faith and fair dealing cannot impose duties on
Defendants beyond those contained in the contract, Plaintiff’s claim fails as a matter
of law.
4. Finally, the district court did not err in denying Plaintiff leave to amend its
promissory fraud, unfair competition, and interference with prospective economic
advantage claims. We review the district court’s denial of leave to amend for an
4 19-55849 abuse of discretion. Smith v. Pac. Props. & Dev. Corp., 358 F.3d 1097, 1100 (9th
Cir. 2004). Dismissal without leave to amend is appropriate when it is clear the
complaint could not be saved by amendment. Somers v. Apple, Inc., 729 F.3d 953,
960 (9th Cir. 2013).
In this case, Defendants’ initial motion to dismiss alerted Plaintiff to the legal
defects in its original complaint. While Plaintiff filed an amended complaint in
response to that motion, Plaintiff did not substantively revise its claims to address
the deficiencies identified. Even when confronted with a second motion to dismiss,
Plaintiff did not propose an amendment which would save its claims. And in its
briefing to this Court, Plaintiff still fails to provide any legal or factual basis by
which its promissory fraud, unfair competition, or interference with prospective
economic advantage claims could survive dismissal. Because Plaintiff fails to
proffer a legally adequate basis for its claims—and from our review there is none—
we conclude the district court did not abuse its discretion in denying leave to amend.
5. Plaintiff’s only remaining claims are for declaratory and injunctive relief.
Because all of Plaintiff’s claims fail as a matter of law, Plaintiff is not entitled to any
relief—declaratory, injunctive, or otherwise. For the reasons provided below,
Plaintiff’s arguments to the contrary are without merit.
With respect to declaratory relief, Plaintiff asks us to declare “the parties’
rights, duties and obligations” under the contract. But a complaint
5 19-55849 for declaratory relief must show “the existence of an actual controversy relating to
the legal rights and duties of the parties under a written instrument . . . .” Wellenkamp
v. Bank of Am., 582 P.2d 970, 972 (Cal. 1978). Here, the contract between Plaintiff
and Defendants terminated in 2014. Thus, the parties have no ongoing rights, duties,
or obligations under the agreement. And insofar as Plaintiff asks us to declare
Defendants breached the contract, we have already held they did not. Accordingly,
Plaintiff is not entitled to declaratory relief.
Plaintiff is similarly not entitled to the permanent injunction it requests. A
permanent injunction is an equitable remedy that may issue if, among other things,
a plaintiff’s lawsuit “turns out to be meritorious.” Grupo Mexicano de Desarrollo,
S.A. v. All. Bond Fund, Inc., 527 U.S. 308, 314 (1999). In this case, Plaintiff’s claims
are wholly without merit. Therefore, Plaintiff is not entitled to injunctive relief.
For the reasons provided herein, the judgment of the district court is
AFFIRMED.2
2 Plaintiff’s pending motion to supplement the record [DE 25] is GRANTED.
6 19-55849