Weiss Residential Research v. Experian Information Solutions

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 11 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
WEISS RESIDENTIAL RESEARCH, LLC, No. 22-55111
Plaintiff-Appellant, D.C. No.
8:20-cv-00861-MCS-DFM
v.
EXPERIAN INFORMATION SOLUTIONS, MEMORANDUM*
INC., an Ohio Corporation; EXPERIAN
SERVICES CORP., a Delaware Corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Mark C. Scarsi, District Judge, Presiding
Submitted January 9, 2023**
Pasadena, California
Before: WATFORD, FRIEDLAND, and BENNETT, Circuit Judges.
Weiss Residential Research, LLC (“Weiss”) appeals from the district court’s
grant of summary judgment to Experian Information Solutions, Inc. (“Experian”)
in Weiss’s suit against Experian for consequential damages from Experian’s
*
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).
alleged breach of a Commercial Agreement between the parties and alleged
misappropriation of Weiss’s trade secrets.1 The district court determined that
Weiss lacked evidence to create a genuine dispute of fact that Experian had
engaged in any fraudulent act, which was dispositive because the Commercial
Agreement disclaims liability for consequential damages except in the case of a
party’s “fraudulent misrepresentations and/or actions.” We review the grant of
summary judgment de novo and affirm. See UMG Recordings, Inc. v. Augusto,
628 F.3d 1175, 1178 (9th Cir. 2011).
Weiss lacks evidence that it reasonably relied on any misrepresentations
about its revenue shares or ownership shares in the mortgage modules of the
Sandbox and CECL Forecaster products. See Rossberg v. Bank of Am., N.A., 162
Cal. Rptr. 3d 525, 539 (Ct. App. 2013) (explaining that a plaintiff must
demonstrate the existence of a false promise regarding a material fact and
reasonable reliance on this promise, among other elements, to establish promissory
fraud). Without such evidence, Weiss cannot show that Experian acted
fraudulently, and it cannot recover lost profits under the Commercial Agreement.
First, Experian did not make any promise that Weiss would receive a
revenue share in the mortgage modules, let alone a promise that Weiss would
receive the particular revenue percentage Weiss claims. The Commercial
1
The Commercial Agreement stipulates that California law applies.
2 22-55111
Agreement contains no such guarantee, and the representations that Experian made
to Weiss about receiving a specific revenue share were tentative suggestions about
future agreements rather than promises. Cf. Conrad v. Bank of Am., 53 Cal. Rptr.
2d 336, 351 (Ct. App. 1996). These representations were accompanied by
qualifying language or contextual signals indicating that Experian did not intend to
be bound. To the extent that Weiss argues that it relied only on an expectation of
some commensurate revenue share based on contractual language about creating a
“product amendment” including a mutually agreed upon “intended revenue share”
for each party, this contention likewise fails. It is not reasonable to rely on a
contract to negotiate a subsequent agreement for anything other than an
expectation of a good faith negotiation. See Daniels v. Select Portfolio Servicing,
Inc., 201 Cal. Rptr. 3d 390, 417 (Ct. App. 2016), abrogated on other grounds by
Sheen v. Wells Fargo Bank, N.A., 505 P.3d 625 (Cal. 2022).
Even if Weiss presented some evidence suggesting that Experian promised
to offer it a particular revenue share in a future product amendment, Experian did
not breach this obligation. Experian did in fact propose to Weiss a product
amendment containing the specific revenue share it had previously tentatively
quoted. Regardless, the parties recognized that they would have to finalize any
agreement in a separately negotiated product amendment. A promise to negotiate
in good faith does not allow for recovery of lost profit damages but rather only
3 22-55111
reliance damages in the form of negotiation costs or lost opportunity costs, which
Weiss did not request here. See Copeland v. Baskin Robbins U.S.A., 117 Cal. Rptr.
2d 875, 885-86 (Ct. App. 2002).
Second, Experian did not promise Weiss any ownership share in the
intellectual property of the mortgage modules. The Commercial Agreement’s
provision about the division of intellectual property rights is only an agreement to
negotiate in the future and did not bind the parties to any ownership share division
prior to a product amendment. Weiss, therefore, could not have reasonably relied
on receiving an ownership share. And even if Experian made a promise to
negotiate in good faith over ownership shares, the type of lost profit damages
Weiss seeks would not be available for a breach of that promise. See id.Because Experian is entitled to summary judgment due to the lack of
reasonable reliance on a false promise and to Weiss’s inability to recover lost
profits on this type of contract under California law, we need not consider
Experian’s arguments about the other elements required to establish fraud or about
the speculative nature of Weiss’s damages evidence.
AFFIRMED.
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