Ride the Ducks Seattle LLC v. Ride the Ducks International

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 14, 2022
• Docket: 20-35854
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 14 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

RIDE THE DUCKS SEATTLE LLC, No. 20-35854

Plaintiff-Appellant, D.C. No. 2:19-cv-01408-MJP

v. MEMORANDUM* RIDE THE DUCKS INTERNATIONAL, LLC; CHRIS HERSCHEND; JANE DOE HERSCHEND; HERSCHEND FAMILY ENTERTAINMENT CORPORATION,

Defendants-Appellees.

RIDE THE DUCKS SEATTLE LLC, No. 20-35906

Plaintiff-Appellee, D.C. No. 2:19-cv-01408-MJP

v.

RIDE THE DUCKS INTERNATIONAL, LLC; CHRIS HERSCHEND; JANE DOE HERSCHEND; HERSCHEND FAMILY ENTERTAINMENT CORPORATION,

Defendants-Appellants.

Appeal from the United States District Court for the Western District of Washington Marsha J. Pechman, District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Argued and Submitted December 10, 2021 Seattle, Washington

Before: McKEOWN, MILLER, and BADE, Circuit Judges.

Ride the Ducks Seattle, LLC (Seattle) purchased amphibious tourist

vehicles called “duck boats” from Ride the Ducks International, LLC

(International). Following a deadly crash of one of the vehicles operated by Seattle

in September 2015, Seattle and International began to wind down their business

relationship. In a 2018 agreement (the Waiver Agreement), both parties agreed to

“waive and release all rights and claims against each other to be protected,

defended, indemnified, and held harmless from any and all claims, demands,

actions, or causes of action arising from or relating in any way to the accident on

September 24, 2015.”

The agreement notwithstanding, Seattle filed a complaint in Washington

state court asserting a single claim under the Washington Consumer Protection Act

(CPA) against International; two of International’s directors, Chris and Jane Doe

Herschend; and International’s parent company, Herschend Family Entertainment

Corporation. International removed the case to federal court and asserted a

counterclaim alleging that Seattle had violated the CPA. The case was then

consolidated with a separate action, in which International alleged a CPA claim

against Seattle’s CEO, Brian Tracey.

2 The district court granted summary judgment on two alternative grounds. It

first held that the Waiver Agreement released all claims the parties had against one

another relating to the crash. It also held that the alleged deceptive acts were not of

the kind “likely to mislead a ‘reasonable’ or ‘ordinary’ consumer,” and thus did not

give rise to claims under the CPA. Seattle appeals, and International cross-appeals.

We have jurisdiction under 28 U.S.C. § 1291, and we reverse in part, dismiss in

part, and remand for further proceedings.

1. The district court concluded that the Waiver Agreement “insulates

both sides from all further claims arising out of the September 2015 accident.” But

the language of the Agreement is not broad enough to support that reading. The

parties agreed to release all rights and claims to be indemnified against each other

from “any and all claims, demands, actions, or causes of action arising from or

relating in any way to” the crash. Seattle claims that it suffered harm to its business

and property due to International’s allegedly deceptive conduct. International

claims that Seattle caused it to suffer “lost reputation” that resulted in economic

losses. Those are themselves claims arising from or relating to the crash; they are

not claims for indemnification from claims arising from or relating to the crash. Cf.

Central Wash. Refrigeration, Inc. v. Barbee, 946 P.2d 760, 764 (Wash. 1997)

(“Indemnity actions are distinct, separate causes of action from the underlying

wrong . . . .”). Accordingly, the parties did not waive those claims in the Waiver

3 Agreement.

The district court also granted summary judgment on the CPA claim because

the relevant conduct did not have the capacity to deceive “a substantial portion of

the public,” thus defeating the first element of the CPA claim. See Young v. Toyota

Motor Sales, U.S.A., 472 P.3d 990, 993–94 (Wash. 2020). But International did not

raise that theory in its motion for summary judgment, and Seattle had no

opportunity to submit evidence or to brief the issue. Although “whether [an act]

had the capacity to deceive a substantial portion of the public” is a “question of

law,” State v. LA Inv’rs, LLC, 410 P.3d 1183, 1193 (Wash. Ct. App. 2018), the

district court erred in granting summary judgment sua sponte before giving the

parties “notice and a reasonable time to respond.” Fed. R. Civ. P. 56(f).

Additionally, the district court erred in granting summary judgment on the

“public interest” element of the CPA claim. Whether an allegedly deceptive act

affects the public interest is a question of fact, and the district court erred in

granting summary judgment before either side had an opportunity to develop the

factual record. See Hangman Ridge Training Stables, Inc. v. Safeco Title Ins., 719

P.2d 531, 537–38 (Wash. 1986); Fed. R. Civ. P. 56(f). Seattle argues that

International violated two sections of the Washington Auto Dealer Practices Act,

Wash. Rev. Code §§ 46.70.005–.70.900. The Washington Legislature has declared

that a violation of that Act affects the public interest per se. Wash. Rev. Code §

4 46.70.310; see Sherwood v. Bellevue Dodge, Inc., 669 P.2d 1258, 1260–62 (Wash.

Ct. App. 1983), amended by 676 P.2d 557 (Wash. Ct. App. 1984). In granting

summary judgment on Seattle’s CPA claim sua sponte, the district court did not

consider whether Seattle could satisfy the public-interest element by proving that

International’s conduct breached either of these statutes.

We therefore reverse the district court’s grant of summary judgment and

remand for further proceedings on both Seattle’s and International’s CPA claims.

2. Finally, although it asserted a CPA claim against Tracey, International

did not name Tracey or identify the relevant portion of the district court’s order in

its notice of cross-appeal. Applying this court’s functional approach to the

interpretation of notices of appeal, we find no indication in the notice of cross-

appeal that International intended to appeal the district court’s order and judgment

dismissing its claim against Tracey. See Le v. Astrue, 558 F.3d 1019, 1022–23 (9th

Cir. 2009). International’s briefs may have provided some clarification regarding

the scope of its intended appeal, but Tracey has not had an opportunity to respond

to arguments made against him and thus would suffer prejudice if we were to

address the issue. Id. at 1023. We therefore lack jurisdiction to consider

International’s claim against Tracey. Fed. R. App. P. 3; Torres v. Oakland

Scavenger Co., 487 U.S. 312, 317 (1988) (describing Rule 3’s requirements as

jurisdictional).

5 All pending motions are denied as moot.

Each party shall bear its own costs on appeal.

REVERSED IN PART, DISMISSED IN PART, and REMANDED.