Himc Corporation v. Prem Ramchandani , 385 F. App'x 632 ( 2010 )

FILED
NOT FOR PUBLICATION JUN 21 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
HIMC CORPORATION, a Washington No. 09-35605
corporation,
D.C. No. 3:07-CV-05342-FDB
Plaintiff - Appellee,
v. MEMORANDUM *
PREM RAMCHANDANI; SHAI BAR
LAVI; ANNA SACHS BAR-LAVI; AVI
SIVAN; and AVRAHAM OVAIDIA,
Defendants - Appellants.
Appeal from the United States District Court
for the Western District of Washington
Franklin D. Burgess, Senior District Judge, Presiding
Submitted June 11, 2010 **
Seattle, Washington
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: CALLAHAN and IKUTA, Circuit Judges, and BENITEZ, District
Judge.***
Because summary judgment as to the existence of a contract is proper under
Washington law only where reasonable minds could not disagree that the parties
intended a binding agreement, see Scott Galvanizing, Inc. v. Nw. EnviroServices,
Inc., 844 P.2d 428, 433 (Wash. 1993) (en banc); Swanson v. Liquid Air Corp., 826
P.2d 664, 670–71 (Wash. 1992) (en banc), the district court erred by granting
summary judgment based on its sua sponte finding that no enforceable agreement
existed between HIMC Corp. (“HIMC”) and either Veripay, Inc. (“Veripay”) or
Pasa, Inc. (“Pasa”). Assuming without deciding that the appellants here stand in
the shoes of either Veripay or Pasa for purposes of enforcing the alleged
agreements, there are genuine issues of material fact as to whether the parties
intended the Letter of Intent or Memorandum of Understanding (or both) to
constitute binding agreements. Additionally, there are genuine issues of material
fact as to whether the HIMC Board of Directors’ resolution setting a higher price
for the shares was binding on the parties. Contrary to the district court’s finding, a
document labeled as a “letter of intent” may constitute an enforceable contract
under Washington law, see Loewi v. Long, 136 P. 673, 674 (Wash. 1913), and a
***
The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
stock agreement may be enforceable even if it lacks a price term, see Zalud v.
Boltz, No. 45377-7-I, 2000 WL 1346678, at *2–3 (Wash. Ct. App. Sept. 18, 2000).
Moreover, there are genuine issues of material fact as to whether the
appellants are entitled to the release of restrictive conditions on HIMC securities
issued to appellants. Although Rule 144 of the Securities Act, 17 C.F.R.
§ 230.144(d)(1)(iii), allows holders to sell restricted stocks that are fully paid for
and held for the required period, testimony before the district court was in sharp
conflict regarding whether the stock at issue here had been fully paid for. Thus,
summary judgment on these claims was inappropriate. Appellants’ contentions
regarding possible ratification and waiver likewise present issues of fact
inappropriate for summary judgment. See Poweroil Mfg. Co. v. Carstensen, 419
P.2d 793, 796 (Wash. 1966); Hoke v. Stevens-Norton, Inc., 375 P.2d 743, 745
(Wash. 1962).
REVERSED and REMANDED.