P.E.R. Asset Management Trust v. International Fruit Genetics

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 12 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
INTERNATIONAL FRUIT GENETICS No. 16-56090
LLC,
D.C. No.
Plaintiff-Appellee, 2:14-cv-05273-ODW-MRW
v.
MEMORANDUM*
P.E.R. ASSET MANAGEMENT TRUST; et
al.,
Defendants-Appellants.
INTERNATIONAL FRUIT GENETICS No. 16-56419
LLC,
D.C. No.
Plaintiff-Appellee, 2:14-cv-05273-ODW-MRW
v.
PIETER EDUARD RETIEF
REDELINGHUYS N.O., In His Capacity as
Trustee for the Time Being of the P.E.R.
Asset Management Trust and DEBORAH
MARY REDELINGHUYS N.O., In Her
Capacity as Trustee for the Time Being of
the P.E.R. Asset Management Trust,
Defendants-Appellants.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Appeal from the United States District Court
for the Central District of California
Otis D. Wright II, District Judge, Presiding
Submitted February 8, 2018**
Pasadena, California
Before: GRABER and HURWITZ, Circuit Judges, and MARBLEY,*** District
Judge.
The P.E.R. Asset Management Trust and Peter and Deborah Redelinghuys
(collectively “PER”) appeal a summary judgment in favor of International Fruit
Genetics (“IFG”) in this diversity action arising out of IFG’s termination of licensing
agreements with PER. We have jurisdiction under 28 U.S.C. § 1291 and affirm.
1. PER concedes that it imported Sugar Crisp grapes outside of South Africa’s
quarantine processes and self-sourced several other varieties of IFG grapes. These
were Events of Default under PER’s agreements with IFG, giving IFG the
contractual right to terminate. Even assuming arguendo that termination could be
premised only on material breaches of the agreements, these breaches were material.
The violations at issue involved some 6,800 plants and related to IFG’s protection
of its intellectual property, “the core and crux of the contract” for IFG. Wilson v.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Algenon L. Marbley, United States District Judge for
the Southern District of Ohio, sitting by designation.
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Corrugated Kraft Containers, Inc., 256 P.2d 1012, 1016 (Cal. Ct. App. 1953).
2. IFG did not waive its right to terminate the agreements because of PER’s
self-sourcing, as the agreements expressly disclaim waiver.
3. The parties’ course of conduct did not modify the agreements to permit self-
sourcing. PER did not proffer evidence that IFG had “full knowledge” of its breach
or engaged in “unequivocal conduct” demonstrating an intent to modify the
agreements. See Union Pac. R. Co. v. Zimmer, 197 P.2d 363, 368 (Cal. Ct. App.
1948).
4. IFG’s acceptance of royalties on self-sourced grapes did not estop it from
enforcing the agreements. PER could not reasonably have relied on that conduct
given the agreements’ clear prohibition on self-sourcing and the no-waiver clauses.
See Aceves v. U.S. Bank, N.A., 120 Cal. Rptr. 3d 507, 514 (Ct. App. 2011) (requiring
reasonable reliance for estoppel).
5. IFG was not required to give PER the opportunity to cure before terminating
the agreements. The agreements provide that certain violations, including self-
sourcing, are not curable. IFG therefore did not engage in bad faith by rejecting
PER’s cure attempts. “[T]he duty to act in good faith does not alter the specific
obligations of the parties under [a] contract.” PMC, Inc. v. Porthole Yachts, Ltd., 76
Cal. Rptr. 2d 832, 836 (Ct. App. 1998) (quoting Balfour, Guthrie & Co. v. Gourmet
Farms, 166 Cal. Rptr. 422, 427 (Ct. App. 1980)).
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6. The district court’s passing statement that it “weighed all of the evidence”
does not establish that it failed to follow Federal Rule of Civil Procedure 56 in
evaluating the summary judgment motion. The court’s order, taken as a whole,
makes clear that the court correctly concluded that there was no genuine issue of
material fact and that PER was entitled to judgment as a matter of law.
AFFIRMED.
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