NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS OCT 3 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
G.P.P. INC., D/B/A Guardian Innovative No. 18-15179
Solutions,
D.C. No.
Plaintiff-Appellant, 1:15-cv-00321-SKO
v.
MEMORANDUM*
GUARDIAN PROTECTION PRODUCTS,
INC.; RPM WOOD FINISHES GROUP
INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of California
Sheila K. Oberto, Magistrate Judge, Presiding
Argued and Submitted September 13, 2019
San Francisco, California
Before: GOULD, BEA, and FRIEDLAND, Circuit Judges.
Distributor G.P.P. Inc., d/b/a Guardian Innovative Solutions (“GIS”),
appeals the district court’s (1) denial of GIS’s motion for summary judgment as to
its claim that manufacturer Guardian Protection Products, Inc. (“Guardian”)
wrongfully terminated three distribution agreements, (2) partial grant of
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Guardian’s motion for summary judgment as to Guardian’s counterclaim for
declaratory relief regarding electronic warranties (known as “EFPPs”) with respect
to three distribution agreements, and (3) grant of Guardian’s motion for judgment
as a matter of law as to Guardian’s alleged breach of the purported agreement to
pay a 5% commission (the “Bob’s Commission”) with respect to three distribution
agreements.
(1) The district court, in its order denying GIS’s motion for summary
judgment, erred in determining that the Florida, Alabama, and Tennessee
Agreements require GIS to meet per-territory purchase quotas. California law
required the district court to consider the evidence offered by GIS to show the
parties’ course of performance with respect to the purchase quotas when
interpreting the Agreements. See Pac. Gas & Elec. Co. v. G. W. Thomas Drayage
& Rigging Co., 442 P.2d 641, 644 (Cal. 1968); see also Cal. Com. Code § 1303(f);
Cal. Civ. Proc. Code § 1856(c) (West). The district court refused to consider this
evidence and instead relied on language in the Florida Agreement (which was
located in an addendum executed four months after the Agreement itself) that
stated merely what the purchase quota would be, upon the addition of the
remaining counties in Florida, for representing the whole State of Florida. And, in
interpreting the Alabama and Tennessee Agreements, the district court mistook
GIS’s right to represent Guardian in those States with an obligation to satisfy
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purchase quotas specifically allocated to them. In short, the contractual provisions
cited by the district court do not impose a per-territory purchase requirement on
GIS. Because the written terms of the Agreements do not exclude an interpretation
that the purchase quotas are calculated in the aggregate, the undisputed facts of the
parties’ course of performance is evidence of the parties’ expressed intent as to
what constitutes performance, and the district court should have interpreted the
Agreements to require that GIS meet only aggregate purchase quotas. See Pac.
Gas & Elec. Co., 69 Cal. 2d at 37–38. Nonetheless, given that there was at least a
triable issue on the amount of any damages suffered by GIS, the district court
correctly denied GIS’s motion for summary judgment. Fed. R. Civ. P. 56(a); see
also Dep’t of Indus. Relations v. UI Video Stores, Inc., 64 Cal. Rptr. 2d 457, 464
(Ct. App. 1997). Still, the district court’s denial of summary judgment should not
have foreclosed GIS from proffering evidence and arguing at trial that the
Agreements permit aggregate quotas. Accordingly, we reverse and remand to the
district court for trial on GIS’s claim that Guardian breached the three Agreements.
(2) The district court also erred in granting partial summary judgment to
Guardian on its argument that EFPPs were not covered under the Florida, Mid-
Atlantic, and Cook County Agreements. The district court reasoned that EFPPs
were not listed on any of the “Exhibit[s] which [were] attached [t]hereto” or on any
“mutually agreed upon Addend[a] [t]hereto.” Neither party raised this language in
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its briefing to support its motion for summary judgment because the exhibits
attached to those Agreements are copies of Guardian’s product list that was current
at the time the Agreements were executed in 1988—before EFPPs were invented.
As with the purchase quotas issue, California law required the district court to
consider the evidence offered by GIS at summary judgment showing that the
parties impliedly modified the Agreements to cover EFPPs. Because GIS should
have the opportunity to present this evidence to a jury, we therefore reverse the
district court’s partial grant of summary judgment to Guardian on its EFPPs
counterclaim and remand it for trial.
(3) The district court also erred in granting judgment as a matter of law to
Guardian on Guardian’s argument that the purported agreement to pay the Bob’s
Commission was not supported by consideration in the territories covered by the
Florida, Mid-Atlantic, and Cook County Agreements. The district court made this
determination on the same grounds it ruled on the EFPPs: that, because a product
known as “Bob’s Goof Proof” was not on the originally attached Exhibits to these
Agreements or any Addenda, they did not provide GIS the exclusive right to sell it,
and thus GIS’s permission for Guardian to sell it to Bob’s Discount Furniture
Stores in these three territories could not constitute valid consideration. First, even
if the district court were ultimately correct in determining that GIS did not have the
exclusive right to sell Bob’s Goof Proof under these Agreements, this would not
4
mean that the agreement to pay the Bob’s Commission was not supported by
consideration: Under California law, the relinquishment of a legal claim at the time
an agreement is made is valid consideration for that agreement. See, e.g., In re
Estate of Bennett, 78 Cal. Rptr. 3d 435, 441–42 (Ct. App. 2008). Guardian
conceded in the district court that the Bob’s Commission was intended “to
accommodate GIS’s gripe.” Second, the district court erred as a matter of law to
the extent that it ruled on the validity of GIS’s consideration on a per-territory
basis. So long as GIS made a single valid promise not to assert its exclusivity
rights, this would constitute valid consideration for a promise made by Guardian to
pay the Bob’s Commission. See Martin v. World Sav. & Loan Ass’n, 112 Cal. 2d
225, 229 (Ct. 2001). We therefore reverse the district court’s grant of judgment as
a matter of law to Guardian as to this issue and remand it for retrial.1
REVERSED and REMANDED FOR TRIAL.
1
We deny as moot Guardian’s motion to strike portions of GIS’s opening brief and
excerpts of record.
5
G.P.P., Inc. v. Guardian Protection Products
Combined Opinion