Strong Trading, Inc. v. Unique Designs, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 20, 2024
• Docket: 22-55759
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 20 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

STRONG TRADING, INC., a California No. 22-55759 Corporation, D.C. No. Plaintiff-counter- 2:21-cv-04206-RGK-PVC defendant-Appellee,

v. MEMORANDUM*

UNIQUE DESIGNS, INC., a New Jersey Corporation, DBA SDIL Kiran Jewels,

Defendant-counter-claimant- Appellant,

v.

KURT CHEN, an individual,

Counter-defendant-Appellee.

Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding

Submitted February 14, 2024** Pasadena, California

* 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). Before: TALLMAN and CALLAHAN, Circuit Judges, and LASNIK,*** District Judge.

Unique Designs, Inc. appeals the district court’s denial of its motion for

judgment as a matter of law and motion for a new trial following a jury verdict

finding Unique Designs liable for damages in the amount of $369,441.12. We

presume the parties’ familiarity with the facts and accordingly we do not discuss

them in detail here. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we

affirm.

We review de novo the district court’s denial of a motion for judgment as a

matter of law. Colony Cove Properties, LLC v. City of Carson, 888 F.3d 445, 450

(9th Cir. 2018). In doing so, we view the evidence in the light most favorable to the

nonmoving party and draw all reasonable inferences in that party’s favor. Id.

“Judgment as a matter of law is proper when the evidence permits only one

reasonable conclusion and the conclusion is contrary to that reached by the jury.”

Id. (citations and quotations omitted). “We review for abuse of discretion a district

court’s denial of a Rule 59 motion for a new trial.” Smith v. City and Cnty. of

Honolulu, 887 F.3d 944, 949 (9th Cir. 2018). “The district court’s denial of the

motion for a new trial is reversible only if the record contains no evidence in support

*** The Honorable Robert S. Lasnik, United States District Judge for the Western District of Washington, sitting by designation.

2 22-55759 of the verdict.” Molski v. J.J. Cable, Inc., 481 F.3d 724, 728 (9th Cir. 2007). Here,

Unique Designs was not entitled to judgment as a matter of law, and the district court

did not abuse its discretion in denying Unique Designs’ motion for a new trial.

1. Unique Designs argues that Strong Trading cannot establish its breach

of contract claim because there is no evidence showing that Strong Trading was

harmed by the nonpayment of invoices. According to Unique Designs, Strong

Trading was not harmed because all the disputed invoices were sent from Strong

Jewelry (H.K.) Co., Ltd., and all payment was required to be remitted to Strong

Jewelry.

This argument fails because the evidence at trial showed that payments sent

to Strong Jewelry were actually paid to Strong Trading. Indeed, Strong Trading’s

CFO, Amy Chu, testified that, prior to September 2020, Unique Designs remitted

nearly $2 million to Strong Trading through Strong Jewelry. Chu explained that the

contract required invoices for international shipments to be printed on Strong

Jewelry letterhead, and payments to be remitted to Strong Jewelry, because of

customs laws and regulations, see 18 C.F.R. § 141.86, but that invoices were still

“issued from” Strong Trading. Strong Jewelry simply helps Strong Trading with

shipping jewelry into the United States. So, while Strong Jewelry might print out

the final invoice, ship the merchandise, and receive the initial payment, it is still

Strong Trading that receives final payment. Unique Designs even concedes that

3 22-55759 “[Strong Trading] surely made money off of sales from Strong Jewelry to

customers.” It follows that Unique Designs’ nonpayment of invoices to Strong

Jewelry did in fact harm Strong Trading.

2. Unique Designs next cites to California Code of Civil Procedure § 367

to argue that Strong Trading is not “the real party in interest” and thus does not have

standing to sue. Section 367, which is concerned with a party asserting the “rights

or interests belonging solely to others,” is inapplicable here. See Yvanova v. New

Century Mortg. Corp., 365 P.3d 845, 856 (Cal. 2016). Here, Unique Designs

entered a contract with Strong Trading (and not Strong Jewelry). Further, even

though invoices were sent on Strong Jewelry letterhead, the underlying contract

provides that “[i]f payment duties are not fulfilled, Strong Trading (Chong Chong

Jewelry Group) reserves the right to take legal action or appoint for debt collect

agency to resolve the matter.” Strong Trading is therefore asserting its own “rights

and interests” arising under this contract and has standing to sue. See Shulman v.

Kaplan, 58 F.4th 404, 408 (9th Cir. 2023) (holding that an injury in fact may be “one

arising out of contract”). It is for these very same reasons that Unique Designs’ res

judicata concerns are unfounded. The contract at issue explicitly provides that

Strong Trading (and not Strong Jewelry) has the right to sue for nonpayment, and

the contract provides that it is for “transacting business between [Unique Designs]

and Strong Trading.” Accordingly, Strong Jewelry would have no right to enforce

4 22-55759 the terms of the contract as there is no indication that the “motivating purpose” of

the contract was for the benefit of a third party. See Goonewardene v. ADP, LLC,

434 P.3d 124, 132-34 (Cal. 2019). The district court properly entered judgment in

favor of Strong Trading in the exact amount that Strong Trading demanded.

AFFIRMED.

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