Reading International, Inc. v. the Malulani Group, Limited

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
JUL 26 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
READING INTERNATIONAL, INC., a No. 14-16827
Nevada corporation,
D.C. No.
Plaintiff-Appellant, 1:13-cv-00133-JMS-KSC
v.
MEMORANDUM*
THE MALULANI GROUP, LIMITED, a
Hawaii corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Hawaii
J. Michael Seabright, Chief Judge, Presiding
Argued and Submitted June 15, 2017
Honolulu, Hawaii
Before: FISHER, PAEZ and NGUYEN, Circuit Judges.
Reading International appeals the judgment in favor of The Malulani Group
on its claims for breach of contract. We have jurisdiction under 28 U.S.C. § 1291,
and we reverse in part, affirm in part and remand.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
1. The district court erred in concluding the Mortgage afforded Malulani an
opportunity to cure its alleged breach of the Settlement Agreement. Based on the
alleged breach of the Settlement Agreement, Reading sought to accelerate the
maturity of the indebtedness under the Note, a default remedy available under only
the Mortgage. Unlike the Pledge Agreements, the Mortgage does not cross
reference the cure provision in making breach of the Settlement Agreement an
Event of Default. Moreover, although the Mortgage permits cure for breach of a
“Loan Document,” the Settlement Agreement is not a Loan Document under the
Mortgage.
Nor does § 7.11(x) of the Mortgage create a general right to cure any Event
of Default under the Mortgage. Rather than modifying all the preceding Events of
Default, the plain language of § 7.11(x) creates an additional Event of Default for
breach of “any of the other obligations . . . of this Mortgage or any other Loan
Document not otherwise referred to in this Section,” if that breach is not cured
within a specified period. (emphasis added). Malulani’s reading, when applied to
the identical language in the Pledge Agreements, would render meaningless the
Pledge Agreements’ cross reference to the cure provision in making breach of the
Settlement Agreement an Event of Default. Accordingly, the plain language of the
Mortgage does not permit Malulani to cure a breach of the Settlement Agreement.
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Malulani is correct that Hawaii law looks to the overall context in
determining a contract’s meaning, see Haw. Med. Ass’n v. Haw. Med. Serv. Ass’n,
Inc., 148 P.3d 1179, 1194 (Haw. 2006), but Malulani has not shown the parties’
intent to permit cure under the Pledge Agreements shows their intent to permit cure
under the Mortgage. We therefore give effect to the differences in language
between the agreements. See Stanford Carr Dev. Corp. v. Unity House, Inc., 141
P.3d 459, 470 (Haw. 2006) (explaining that contracts should be interpreted to give
meaning and effect to each term). The district court erred in concluding otherwise.
The district court, however, did not reach the question of whether Malulani
materially breached the Settlement Agreement when two individual Defendant
Parties failed timely to certify their compliance with § 5.2(b) of the Settlement
Agreement. We therefore remand for the district court to address this issue.
2. The district court correctly granted summary judgment on Reading’s
remaining claims. First, the Hawaii Uniform Mediation Act does not apply
retroactively to the parties’ 2009 mediation. Although the Act applies retroactively
to mediation agreements, it governs mediations themselves only prospectively. See
Haw. Rev. Stat. § 658H-13; see also United Pub. Workers AFSCME, Local 646,
AFL-CIO v. Dawson Int’l, Inc., 149 P.3d 495, 511-12 (Haw. 2006) (adopting the
same interpretation of the analogous provision in the Hawaii Uniform Arbitration
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Act). Thus, the district court correctly concluded Bronster’s mediation statements
were not privileged.
Second, the district court did not abuse its broad discretion in denying
Reading’s request to supplement the summary judgment record. See Navellier v.
Sletten, 262 F.3d 923, 941 (9th Cir. 2001) (“We review . . . challenges to trial court
management for abuse of discretion.”). Reading could have disclosed its evidence
of Bronster’s mediation statements to the district court in camera without
terminating the privilege. See United States v. Zolin, 491 U.S. 554, 568 (1989)
(“[D]isclosure of allegedly privileged materials to the district court for purposes of
determining the merits of a claim of privilege does not have the legal effect of
terminating the privilege.”); Panatronic USA v. AT&T Corp., 287 F.3d 840, 846
(9th Cir. 2002) (To show an abuse of discretion in denying a request to reopen
discovery, “the movant [must have] diligently pursued its previous discovery
opportunities.” (quoting Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151, 1161 n.6
(9th Cir. 2001))).
Third, the district court correctly granted summary judgment on Reading’s
claim that the records Malulani produced for inspection were inadequate. With
one exception, Reading has not offered evidence that more detailed records
actually exist. The district court concluded that Reading waived any argument
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based on the one item for which it offered evidence, and Reading does not
challenge that conclusion on appeal.
REVERSED IN PART, AFFIRMED IN PART AND REMANDED. The
parties shall bear their own costs on appeal.
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