Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-01769/USCOURTS-cand-3_14-cv-01769-11/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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Case No. 14-cv-01769 NC 

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CARSON INDUSTRIES, INC.,

Plaintiff,

v.

AMERICAN TECHNOLOGY 

NETWORK, CORP.,

Defendant.

Case No. 14-cv-01769 NC 

ORDER GRANTING PLAINTIFF’S 

SUPPLEMENTAL MOTION FOR 

SUMMARY JUDGMENT

Re: Dkt. No. 116

In this contract dispute over payment for night vision goggle kits, plaintiff Carson 

moves for summary judgment on the remainder of the disputed transactions in the case. 

Because defendant ATN has not presented evidence to create a triable issue of material 

fact as to Carson’s claims or its own proposed counterclaims, and instead openly states its 

strategic decision not to litigate in front of this Court but instead to seek appellate review,

the Court GRANTS Carson’s motion for summary judgment.

I. BACKGROUND

This case is about the sale of night vision goggle kits between two parties, Carson 

Industries Inc. and American Technology Network Corp. Carson sold night vision goggle 

kits to ATN. Carson shipped 880 goggle kits to ATN in December 2010. The price of the 

kits was $599.45 per unit. The parties agree that ATN paid $50,000 for the goggle kits. 

ATN returned parts of some of the goggle kits to Carson, asserting that the goggles were 

defective.

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The Court granted partial summary judgment to Carson on its sale to ATN of 463 

goggle kits and 10 lenses in the total amount of $280,795.35, “because ATN did not give 

Carson notice of breach.” Dkt. No. 81, 9/25/2015 order. Subsequently, the Court granted 

summary judgment in favor of Carson on ATN’s counterclaim asserting that ATN paid for 

but did not receive 90 goggle kits in September 2010. Dkt. No. 103, 10/6/2015 order.

The remaining issues are as follows. First, there is a dispute about the number of 

kits that ATN returned to Carson. See Dkt. No. 111 at 2, 10/9/2015 order Defining Issues 

to Be Tried And Setting Briefing Schedule. Carson claims that ATN returned parts of 327 

kits to Carson. Id. ATN claims that it returned parts of 419 kits to Carson. 

Second, there is a dispute over the value of the parts of the kits that ATN returned 

and did not return to Carson. Carson credited $75,778.98 to ATN for the parts of the 

returned kits. As to the 327 goggle kits it says ATN returned, Carson claims that ATN still 

owes $120,241.17 [$196,020.15 minus $75,778.98]. Therefore, the total contract damages 

that Carson still seeks from ATN is $120,241.17, plus interest. Id.

On the other hand, ATN denies that it owes Carson any money for the partially 

returned goggle kits. ATN has filed a counterclaim against Carson.

First, ATN asserts that the goods provided by Carson were defective, so Carson 

breached the warranty and is not entitled to payment from ATN on the 419 kits ATN says 

it returned. Second, ATN claims that it is entitled to damages of a still unknown amount

as an offset for the losses it suffered in repairing the defective goggle kits. Carson denies 

that ATN is entitled to damages as an offset.

In the October order granting summary judgment solely as to 90 goggle kits ATN 

claimed it paid for but did not receive, the Court stated, “the Court finds that ATN both 

received and paid for the goods it ordered. Finally, while ATN has not presented 

admissible facts to rebut summary judgment, it has made repeated arguments that the 

evidence presented by Carson is fraudulent . . . In the absence of a genuine factual dispute, 

summary judgment is appropriate.” Id. at 2. The Court therefore granted partial summary 

judgment in favor of Carson and against ATN on ATN’s counterclaim that it paid for but 

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did not receive 90 goggle kits referenced in invoice number 3245 in September 2010. Id.

The Court also set a briefing schedule on the current supplemental motion for summary 

judgment by Carson. Dkt. No. 111. Carson filed its motion as scheduled. Dkt. No. 116. 

ATN’s opposition was due October 23. ATN did not filed a response, a statement of nonopposition, or a motion requesting leave to modify the schedule. The Court accordingly 

issued an order to show cause on October 27, warning ATN that if it did not respond by 

October 28, it was forewarned that the Court may grant Carson’s motion. Dkt. No. 119 at 

1. On November 2, 2015, ATN filed a motion for leave to file a late opposition to 

Carson’s supplemental motion for summary judgment as well as 13 Exhibits related to 

ATN’s need for more time, an opposition brief, and proffered evidence to support its 

claims. Dkt. No. 123, Exhibits 1-13.

ATN also failed to identify the evidence (expected witness testimony and proposed 

trial exhibits) to support its proposition that it returned 419 (rather than 327) goggle units 

to Carson, as required by October 23. Dkt. No. 119 at 1. Because no response had been 

filed by October 27, the Court gave ATN the opportunity to respond by October 28 or run 

the risk of having its evidence excluded. Id. Currently before the Court are Carson’s 

motion for summary judgment on the remainder of the case and the November 2 filings 

that ATN considered responsive to Carson’s motion and the Court’s October 27 order to 

show cause.

II. LEGAL STANDARD

Summary judgment may be granted only when, drawing all inferences and 

resolving all doubts in favor of the nonmoving party, there is no genuine dispute as to any 

material fact. Fed. R. Civ. P. 56(a); Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014); 

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under 

governing substantive law, it could affect the outcome of the case. Anderson v. Liberty 

Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if “the 

evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. 

Bald assertions that genuine issues of material fact exist are insufficient. Galen v. Cnty. of 

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L.A., 477 F.3d 652, 658 (9th Cir. 2007).

The moving party bears the burden of identifying those portions of the pleadings, 

discovery, and affidavits that demonstrate the absence of a genuine issue of material fact. 

Celotex, 477 U.S. at 323. Once the moving party meets its initial burden, the nonmoving 

party must go beyond the pleadings, and, by its own affidavits or discovery, set forth 

specific facts showing that a genuine issue of fact exists for trial. Fed. R. Civ. P. 56(c); 

Barthelemy v. Air Lines Pilots Ass’n, 897 F.2d 999, 1004 (9th Cir. 1990) (citing Steckl v. 

Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983)). All justifiable inferences, however, 

must be drawn in the light most favorable to the nonmoving party. Tolan, 134 S. Ct. at 

1863 (citing Liberty Lobby, 477 U.S. at 255). 

III. DISCUSSION

Following the Court’s previous orders granting summary judgment in favor of 

Carson on (1) Carson’s sale to ATN of 463 goggle kits and 10 lenses in the total amount of 

$280,795.35, and (2) on ATN’s counterclaim that it paid for but did not receive 90 goggle 

kits referenced in invoice number 3245 in September 2010, Carson now moves for 

summary judgment on the remainder of the disputed transactions in the case. Specifically, 

Carson seeks: “(1) an order adjudicating in Carson’s favor ATN’s counterclaim for 

$230,000 for its alleged repair costs for 920 goggle kits at $250 per unit; (2) for avoidance 

of doubt, an order confirming that Carson is entitled to payment on all 880 goggle kits it 

shipped to ATN on December 15, 2010 and invoiced ATN for $527,516 on December 17, 

2010, invoice number 3402; and (3) an order that there is no triable issue as to ATN’s 

remaining counterclaim for $50,000, because the $50,000 ATN paid in February 2012 was 

credited to invoice number 3402 for the 880 units.” Dkt. No. 116 at 2.

A. Carson’s Contract Claim

This Court has granted summary judgment for Carson on its sale to ATN of 463 

goggle kits and 10 lenses in the total amount of $280,795.35 because Carson produced 

admissible evidence that ATN contracted to purchase the goods and accepted them without 

returning them. Dkt. No. 103. Carson now moves for summary judgment on the 

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“remainder of the 880 shipment of kits, for a total liability of $527,516, plus prejudgment 

interest, less payments and credits.” Dkt. No. 116 at 2. 

ATN does not argue that it did not receive these goods. The Court’s order granting 

Carson’s earlier motion for partial summary judgment makes clear that without rejecting 

the goods or providing notice that it found the goods deficient, ATN is not excused from 

paying for them. Dkt. No. 81 at 9 (“defenses and counterclaims as to the 463 kits and 10 

lenses fail as a matter of law because ATN did not give Carson notice of breach”). 

Following its order granting Carson’s motion for partial summary judgment as to 

the 463 goggle kits and 10 lenses at docket 103, the Court issued an order Defining Issues 

to Be Tried And Setting Briefing Schedule. See Dkt. No. 111 at 2, 10/9/2015 order. In the 

order, the Court explained that “the total contract damages that Carson seeks from ATN is 

$120,241.17,” because “Carson credited $75,778.98 to ATN for the parts of the returned 

kits. As to the 327 goggle kits it says ATN returned, Carson claims that ATN still owes 

$120,241.17 [$196,020.15 minus $75,778.98].” Id.

The Court also ordered ATN to identify “the evidence (expected witness testimony 

and proposed trial exhibits) that support the proposition that it returned 419 (rather than 

327) goggle units to Carson.” Id. at 3. ATN has failed to produce evidence that it returned 

419 goggle kits or the value of the parts of the kits it returned, and the Court accordingly 

GRANTS Carson’s motion for summary judgment on its claims for the remaining 

$120,241.17. Dkt. No. 111 at 2.

B. ATN’s Counterclaims

Carson also moves for summary judgment on ATN’s two declared counterclaims. 

First, Carson requests that “the Court issue an order denying ATN’s counterclaim for a 

$230,000 offset for alleged repairs of 920 goggle kits by Hitek International.” Dkt. No. 

116 at 8. ATN’s counsel suggested at a hearing on October 7, 2015, before the Court that 

ATN did not return the 880 units because “Carson insisted that we get an RMA number 

and that they had to agree to pay for the cost of the return before we shipped them.” 

DeGroot Decl., Ex. 2 at 22:11-19. However, ATN has not provided admissible evidence 

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to support this assertion. Moreover, Carson puts forward evidence that “ATN’s Munn 

specifically contradicted it when he testified that ATN never asked to return these units 

and was never told that they could not return the units.” Id.; see DeGroot Decl., Ex. 1 at 

118:25-119:10 and 120:15-121:3. 

Second, Carson requests summary judgment against ATN on ATN’s claim for 

$50,000 for a payment ATN made towards the goggle kits. Dkt. No. 116 at 2. ATN’s 

counsel stated at the October 7, 2015 hearing that ATN had two affirmative claims, one for 

$230,000 in alleged repair costs and one for return of the $50,000 payment it made. 

DeGroot Decl., Ex. 2 at 32:7-11 and 42:5-15. Carson argues that there is no remaining 

issue “because Carson has already credited ATN’s February 2012 payment of $50,000 

against the overdue invoice number 3402 toward the 880 units.” Dkt. No. 116 at 8. 

Accordingly, “ATN would not be entitled to recover that payment again, because it already 

received a credit for money it actually owed. Thus, ATN would have no damages on its 

remaining counterclaims because the only damages it asserts is for the return of that 

payment.” Id. Carson argues that because it already credited the $50,000 payment to 

ATN’s overdue balance, there is no live dispute for trial. Id. The Court agrees with 

Carson.

ATN has responded with a series of emergency requests for stays and continuances. 

See Dkt. Nos. 120, 23, 124, 130, 134, 138. ATN did file an opposition to Carson’s 

supplemental motion for summary judgment, which is filed as Exhibit 2 to a motion for an 

extension of time to file a response. See Dkt. 123-2. In the opposition, ATN directs the 

Court to various inapposite cases and attempts to reargue that it sufficiently revoked the 

880 kits, but does not present admissible evidence that could cause a reasonable jury to 

find in its favor at trial. Dkt. No. 123, 123-2.

Additionally, John Hartford, attorney for ATN, has filed multiple notices stating his 

inability to attend a scheduled settlement conference and the pretrial conference, 

requesting a continuance of trial, stating that he does not have access to a working 

telephone or the internet, and stating that he is not “able to prepare and file any more 

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documents herein, though it is important for Defendant to file a series of motions to vacate 

or modify various orders and file a motion for sanctions.” Dkt. Nos. 124 at 7; 138. In an 

emergency declaration, Hartford also stated that his client “decided that it was futile to 

oppose the supplemental motion for summary judgment.” Dkt. No. 124 at 3.

ATN’s decision not to oppose Carson’s latest motion for summary judgment is 

premised on “the fact that the Court did not vacate its original order granting partial 

summary judgment to Plaintiff on Issue #1. As a result, any legal argument to be 

presented by Defendant with regard to the notice requirements of UCC Sections 2-607 and 

2-717 would be futile because Plaintiff’s legal argument in support of the supplemental 

motion is predetermined by the Court’s prior ruling while exposing Defendant to larger 

damages.” Id. at 3-4. As such, ATN concedes that much of this case has been resolved in 

Carson’s favor already. ATN goes on to object to the Court’s previous ruling, see docket 

103, as violating ATN’s “right to due process that is analogous to issuing a default 

judgment exceeding the amount requested in a complaint . . . [also,] allowing Plaintiff to 

file a supplemental motion for summary judgment is too indefinite in violation of 

Defendant’s right to due process, which has resulted in Plaintiff’s definition of issues 

presented by its supplemental motion for summary judgment to be unintelligible.” Dkt. 

No. 124 at 4; see also Dkt. No. 123-1 at 4 (Declaration of Marc Vayn) (describing this 

Court’s orders as “an unbroken chain of rulings which were one-sided in favor of Plaintiff 

and revealed such a degree of favoritism to Plaintiff and/or its counsel as to make fair 

judgment impossible for Defendant”). 

As a result, ATN’s stated strategy is that “opposing the supplemental motion for 

summary judgment would be futile and [instead ATN will] rely on the court of appeal in 

the likely event the supplemental motion is granted.” Dkt. No. 124 at 4. ATN goes on to 

describe this Court’s treatment of the parties as “not evenhanded but arbitrary and onesided,” and states that it will “give this Court an opportunity to demonstrate its ability to 

overcome any prejudice it may have against Defendant by presenting to the Court the 

evidence and legal arguments which would enable the Court to reconsider its rulings and 

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correct errors, if any, regardless of what happened in prior proceedings.” Id. at 6.

As the nonmoving party, it is ATN’s responsibility to go beyond the pleadings, and, 

by its own affidavits or discovery, set forth specific facts showing that a genuine issue of 

fact exists for trial. Fed. R. Civ. P. 56(c). ATN has made clear its strategy to decline to 

oppose Carson’s motion for summary judgment. ATN states, “[u]nder the circumstances, 

it seemed that having a new erroneous order on the supplemental summary judgment 

motion would bring Defendant closer to a successful appeal.” Declaration of Marc Vayn

at 4. While ATN has been reluctantly “convinced to give this Court an opportunity to 

reverse itself . . . [q]uite honestly, [ATN has] no reason yet to trust this Court will change 

its prejudice to Defendant.” Id. at 4-5. Because the filings by ATN have been 

unresponsive to the Court’s orders to produce evidence it intends to put on at trial, it has 

failed to set forth a triable issue of material fact left in this case. Its inability or 

unwillingness to bring forward evidence to support its claims leads to the conclusion that 

ATN apparently seeks: judgment in favor of Carson, which ATN may appeal.

In sum, ATN has not presented facts establishing a material dispute in regards to 

Carson’s claim for the remaining $120,241.17, or for ATN’s stated counterclaims that it is 

entitled to (1) $230,000 for its alleged repair costs for 920 goggle kits at $250 per unit and 

(2) $50,000 that ATN paid to Carson in February 2012. Accordingly, the Court GRANTS 

Carson’s motion for summary judgment as to all three claims.

This is the Court’s third and final summary judgment order in this case. Carson has 

successfully moved for $280,795.35. Dkt. No. 81. The Court then narrowed the 

remaining issues in the case for trial, including the remaining contract claim for Carson of 

$120,241.17. Dkt. No. 111 at 2. Carson’s present motion for summary judgement 

presents evidence to support its contract claim for the remainder of the case that would 

have been presented at trial. However, it does not give evidence of a contractual term for 

prejudgment interest or propose what prejudgment interest should be. Therefore, the final 

judgment award for Carson will be $401,036.52. ATN is not entitled to judgment on any 

of its counterclaims. The Court hereby terminates the case and orders the clerk of court to

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enter final judgment.

IT IS SO ORDERED.

Dated: December 24, 2015 _____________________________________

NATHANAEL M. COUSINS

United States Magistrate Judge

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