Port of Vancouver, USA v. Pacific Coast Shredding, LLC

FILED
NOT FOR PUBLICATION
SEP 30 2020
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
PORT OF VANCOUVER, USA, a No. 19-35954
Washington port district,
D.C. No. 3:17-cv-05571-RBL
Plaintiff-Appellee,
v. MEMORANDUM*
PACIFIC COAST SHREDDING, LLC, a
Washington limited liability company;
METRO METALS NORTHWEST, INC.,
an Oregon corporation,
Defendants-Appellants.
Appeal from the United States District Court
for the Western District of Washington
Ronald B. Leighton, District Judge, Presiding
Argued and Submitted September 1, 2020
Seattle, Washington
Before: BYBEE and COLLINS, Circuit Judges, and STEARNS,** District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Richard G. Stearns, United States District Judge for
the District of Massachusetts, sitting by designation.
Metro Metals Northwest, Inc. and its sole member Pacific Coast Shredding,
LLC (collectively “Metro Metals”) appeal the district court’s grant of summary
judgment in favor of the Port of Vancouver, USA. We review the district court’s
grant of summary judgment and its award of damages de novo. Brunozzi v. Cable
Commc’ns, Inc., 851 F.3d 990, 995 (9th Cir. 2017) (summary judgment is
reviewed de novo); Mackie v. Rieser, 296 F.3d 909, 916–17 (9th Cir. 2002)
(whether the district court applied the correct legal standard in computing damages
is reviewed de novo). We affirm the district court’s judgment inasmuch as it
determined Metro Metals was liable for the damage it caused to the concrete dock
but vacate the district court’s award of damages and remand for further
proceedings.
1. The district court did not err in finding that the parties’ 2009 Shred Berm
Expansion and Repair Agreement imposed a duty on Metro Metals to repair the
concrete dock area then and in the future. The Agreement required Metro Metals
to “[r]epair damage to the terminal areas used for scrap steel operations” subject to
the Port’s evaluation of the extent of the damages. Metro Metals argues that
several ambiguities in the Agreement render that clause unenforceable.
Washington law endorses the “context rule” over the so-called “plain
meaning rule” to ascertain contracting parties’ intent. Berg v. Hudesman, 801 P.2d
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222, 229 (Wash. 1990) (en banc). The context rule allows the court to consider
certain extrinsic evidence to interpret the contract’s written terms. Hearst
Comm’ns, Inc. v. Seattle Times Co., 115 P.3d 262, 267 (Wash. 2005) (en banc).
However, extrinsic evidence may only be used “to determine the meaning of
specific words and terms used and not to show an intention independent of the
instrument or to vary, contradict or modify the written word.” Id. (quoting Hollis
v. Garwall, Inc., 974 P.2d 836, 843 (Wash. 1999) (en banc) (internal quotations
omitted)).
Both the context and plain language of the parties’ Agreement demonstrate
that Metro Metals was responsible for repairing damage to the concrete dock area.
The clause “[r]epair damage to the terminal areas used for scrap steel operations”
can only be reasonably read one way: Metro Metals was responsible for repairing
any damage that its scrap steel operation caused to the Port’s terminal area,
including the concrete dock. The absence of language spatially or temporally
limiting Metro Metals’ responsibility does not render the clause ambiguous.
Moreover, extrinsic evidence of the parties’ relationship and course of dealing
further supports Metro Metals’ duty to repair. The basis for the parties’ 2009
Agreement was Metro Metals’ expansion and increased volume that had already
begun to affect the concrete dock surface. Limiting Metro Metals’ duty to repair
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the terminal to damage existing in 2009 or to exclude the concrete dock surface
would be inconsistent with the context of the parties’ relationship and the terms of
the agreement. This is especially so given that Metro Metals was already using the
concrete dock, which was particularly vulnerable to the scrap steel export
operation. The district court did not err in granting summary judgment on the
Port’s breach of contract claim.
2. The district court did err, however, in awarding the Port damages. The
question of damages is generally left to the jury unless “reasonable minds could
not differ.” C 1031 Props., Inc. v. First Am. Title Ins. Co., 301 P.3d 500, 503
(Wash. Ct. App. 2013). Here, reasonable minds could disagree on the extent of the
repairs attributable to Metro Metals’ scrap steel operation. Metro Metals’ expert
witness submitted a declaration that the Port’s repairs exceeded the damage that the
scrap steel operation caused to the dock. The district court did not consider that
testimony. Therefore, there is a genuine issue of fact regarding whether the Port
proved its damages to a reasonable certainty.
Accordingly, we AFFIRM IN PART, REVERSE IN PART, and REMAND
for further proceedings. Each party to bear its own costs.
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