Jeffery Etter v. Thetford Corporation

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 2 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JEFFERY ETTER, et al., individually and on No. 21-55242
behalf of all others similarly situated,
D.C. No. 8:13-cv-00081-JLS-RNB
Plaintiffs-Appellees,
v. MEMORANDUM*
NORCOLD, INC., THETFORD
CORPORATION, and THE DYSON-
KISSNER-MORAN CORPORATION,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Josephine L. Staton, District Judge
Argued and Submitted February 18, 2022
Pasadena, California
Before: BRESS and BUMATAY, Circuit Judges, and LASNIK,** District Judge.
Defendants-Appellants Norcold, Inc., Thetford Corporation, and the Dyson-
Kissner-Moran Corporation (collectively “Norcold”) seek reversal of the district
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Robert S. Lasnik, United States District Judge for the
Western District of Washington, sitting by designation.
court’s post-judgment order interpretating a Settlement Agreement between Norcold
and a class of plaintiffs (“Plaintiffs”) who purchased Norcold’s refrigerators. We
“review questions of law, including the interpretation of a settlement agreement, de
novo.” In re Volkswagen “Clean Diesel” Mktg., Sales Pracs., & Prod. Liab. Litig.,
975 F.3d 770, 775 (9th Cir. 2020). We have jurisdiction under 28 U.S.C. § 1291 to
review the district court’s post-judgment order, see Armstrong v. Schwarzenegger,
622 F.3d 1058, 1064 (9th Cir. 2010), and we affirm.
1. Norcold asserts that the Settlement Agreement bars class members
from claiming punitive damages in relation to their individual personal injury and/or
property damage claims, while Plaintiffs argue there is no such limitation. Because
the Settlement Agreement is governed by California law, “we first determine
whether the contract language is clear or ambiguous.” Navarro v. Mukasey, 518
F.3d 729, 734 (9th Cir. 2008) (applying California law). “If the contract language
is clear, we give effect to its plain meaning.” Id. Where the “contract language is
susceptible to multiple interpretations,” however, California law directs us to
“attempt to discern which interpretation the parties intended.” Id. “The whole of a
contract is to be taken together, so as to give effect to every part, if reasonably
practicable, each clause helping to interpret the other.” Cal. Civ. Code § 1641. Both
the plain meaning of the Settlement Agreement and the intentions of the parties
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indicate that claims for punitive damages in relation to reserved individual claims
are not barred.
Paragraph VI.B of the Settlement Agreement details which claims and
remedies were released by the class members (the “Released Claims”). Immediately
following this release, paragraph VI.C explains that claims for personal injury,
wrongful death, or property damage were not released (the “Reserved Claims”).
Reading paragraphs IV.B and IV.C paragraphs together, it is clear that punitive
damages in relation to the Reserved Claims were not released. Paragraph VI.B
expressly provides that claims for damages of any kind—including punitive
damages—were released in relation to the “Action”—i.e., the class-wide consumer
fraud cases. Paragraph VI.C, however, is an explicit carve-out from the Settlement,
providing that individual claims for personal injury, wrongful death, or property
damage were “excluded from the Release.” Nothing in the Settlement Agreement
suggests that punitive damages associated with Reserved Claims were in fact
released. This reading is bolstered by the introductory phrase in paragraph VI.C—
“[n]otwithstanding the foregoing”—which severs any connection between
paragraph VI.B and VI.C. See Hooks v. Kitsap Tenant Support Servs., Inc., 816 F.3d
550, 559 (9th Cir. 2016) (“‘Notwithstanding’ means ‘in spite of’” and
“‘notwithstanding clauses’ work to sweep aside potentially conflicting” provisions)
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(simplified). Thus, the release of punitive damages in paragraph VI.B does not apply
to the subject matter of paragraph VI.C.
Even if the Settlement Agreement were ambiguous, the available evidence
indicates that the parties did not intend for punitive damages in relation to the
Reserved Claims to be barred. Just before the Settlement Agreement was approved
by the district court, a group of class members requested to amend the Agreement to
expressly “include the right to seek all remedies arising [from the Reserved Claims],
including, but not limited to . . . punitive damages.” The district court denied the
request but found “that the definition of ‘Reserved Claims’ in section I.A.62 [of the
Settlement Agreement] and the carve-out from the release in section VI.C are clear
as to the question raised.” In other words, the district court effectively agreed then
that the Settlement Agreement did not bar punitive damages in relation to the
Reserved Claims (as it later held explicitly in its ruling now on review). We find
this to be probative of the parties’ intent when drafting the Agreement.1
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Norcold advances other arguments purporting to show that punitive damages
should not be assessed, e.g., “the presumption is very strong against punitive
damages,” “no obvious necessity exists to imply the right to assert punitive damage
claims,” “California law and due process prohibit multiple punitive awards for the
same conduct,” and “the purpose of punitive damages was already served here.”
These arguments do not alter our interpretation of the Settlement Agreement, and to
the extent they have any merit, Norcold may raise these considerations before the
courts hearing the individual tort actions.
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2. In parallel with its contract interpretation arguments, Norcold advances
a theory of res judicata. According to the doctrine of res judicata, a “court-approved
settlement in a prior suit precludes subsequent litigation on the same cause of
action.” Villacres v. ABM Indus. Inc., 189 Cal. App. 4th 562, 569 (2010). While
our decision upholding the district court’s interpretation of the Settlement
Agreement may have implications for any res judicata defense in any subsequent
individual case, Norcold’s res judicata arguments do not require any additional
interpretation of the Settlement Agreement by us. Therefore, any res judicata or
other preclusion arguments that Norcold may advance are best left to the courts in
the individual tort actions.
AFFIRMED.
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