Morrow Equipment Company, LLC v. Stonebridge, Inc. ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 15 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MORROW EQUIPMENT COMPANY, No. 20-35945
LLC, foreign Limited Liability Company,
D.C. No. 6:19-cv-01738-MC
Plaintiff-Appellant,
v. MEMORANDUM*
STONEBRIDGE, INC., a foreign
Corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Oregon
Michael J. McShane, District Judge, Presiding
Argued and Submitted February 18, 2022
San Francisco, California
Before: GOULD and RAWLINSON, Circuit Judges, and ZIPPS,** District Judge.
Morrow Equipment Company, LLC, appeals the district court’s dismissal of
its First Amended Complaint with prejudice for failure to state a breach of contract
claim. The district court found that no express contract had been formed because
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Jennifer G. Zipps, United States District Judge for the
District of Arizona, sitting by designation.
Morrow did not allege in its complaint that Stonebridge had accepted its offer in
the manner specified in the Equipment Lease Agreement (ELA)—that is by
payment of a deposit. The district court further found that the parties’ single prior
transaction was insufficient to establish a course of dealing that would support an
implied contract. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we
reverse.
We review de novo the district court’s dismissal of a complaint for failure to
state a claim. Edwards v. Marin Park, Inc., 356 F.3d 1058, 1061 (9th Cir. 2004).
When reviewing the district court’s dismissal, “[a]ll allegations of material fact are
taken as true and construed in the light most favorable to the nonmoving party.”
Burgert v. Lokelani Bernice Pauahi Bishop Tr., 200 F.3d 661, 663 (9th Cir. 2000).
We review de novo the district court’s interpretation and meaning of contract
provisions. Conrad v. Ace Prop. & Cas. Ins. Co., 532 F.3d 1000, 1004 (9th Cir.
2008). Under Oregon law, which applies here, the determination whether a
contract was formed is a question of law for the court. Real Estate Loan Fund Or.,
Ltd. v. Hevner, 709 P.2d 727, 731 (Or. Ct. App. 1985) (citing Quillin v. Peloquin,
391 P.2d 603 (1964)).
1. The district court erred in holding Morrow failed to state a claim for
breach of contract. Morrow was not required to allege that Stonebridge paid the
contract deposit to show the formation of an express contract. Under Oregon law,
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“[a]n offeror may restrict the manner of acceptance, provided [the offeror’s]
intention to do so is clearly expressed.” Cochran v. Connell, 632 P.2d 1385, 1387
(Or. Ct. App. 1981). Here, the ELA did not expressly limit or mandate the manner
of acceptance. The relevant contract provision states that “[a] deposit retained
until project completion . . . shall be paid upon acceptance of order,” which does
not expressly provide that payment of the deposit is the exclusive means of
accepting the agreement. See Cochran, 632 P.2d at 1387–88 (concluding contract
had been formed on oral acceptance because the signature clause in addendum,
while requiring signatures for incorporation of the addendum, did not
expressly require a signature for acceptance of the agreement).1
2. Further, under Oregon law, because the lease agreement did not expressly
limit the mode of acceptance to payment of the deposit, “any action . . . amounting
to a manifestation of intent to accept,” including Stonebridge’s signing of the lease
agreement and Morrow’s invoicing Stonebridge for the deposit, “would complete
the contract.” Cochran, 632 P.2d at 1388; see also Or. Rev. Stat. § 72A.2060
(“Unless otherwise unambiguously indicated by the language or circumstances, an
offer to make a lease contract must be construed as inviting acceptance in any
manner and by any medium reasonable in the circumstances.”); D’Angelo v.
1
Morrow raised this argument in district court proceedings and, therefore, did
not waive it.
3
Schultz, 823 P.2d 997, 1000 (Or. Ct. App. 1992) (“Unless a different requirement
is prescribed in the offer, one may accept an offer merely by signifying assent by
signing a document[.]”); Trienco, Inc. v. Applied Theory, Inc., 756 P.2d 66, 67 (Or.
Ct. App. 1988) (finding acceptance as a matter of law where party invoiced for
deposit).
3. In the First Amended Complaint, Morrow alleged facts which, taken as
true and construed in the light most favorable to Morrow, are sufficient to state a
claim for breach of contract. These allegations include the following facts.
Stonebridge signed the ELA and Morrow countersigned the agreement. Morrow’s
usual practice is to send an invoice for the deposit if the deposit is not paid
immediately, and Stonebridge is familiar with Morrow’s policy from its prior
dealings with Morrow. About three months later, Stonebridge, while
acknowledging the existence of the agreement, notified Morrow that Stonebridge
was not going to perform under the contract.
4. Because we conclude that the district court erred in holding Morrow
failed to state a claim for breach of an express contract, we do not address its
further finding—that the parties’ single prior transaction was insufficient to
establish a course of dealing that would support an implied contract.
REVERSED AND REMANDED.
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