Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-01078/USCOURTS-casd-3_12-cv-01078-1/pdf.json

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

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

EDU-SCIENCE (USA), INC.,

Plaintiff,

Case No. 12cv01078 BTM (WMC)

ORDER DENYING MOTION

FOR JUDGMENT ON THE

PLEADINGS

v.

INTUBRITE, LLC,

Defendant.

INTUBRITE, LLC,

Counterclaimant,

v.

EDU-SCIENCE (USA), INC.; and

EDU-SCIENCE (HK) LTD.,

Counterdefendants.

This case wastransferred fromthe Eastern District of California on May 2, 2012

(see ECF No. 16). On September 28, 2013, Defendant IntuBrite, LLC (“IntuBrite”)

filed a motion for judgment on the pleadings(ECF No. 28). For the reasons below, the

motion is hereby DENIED.

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I. BACKGROUND

On February 16, 2012, Edu-Science (USA), Inc. (“EDU-USA”) brought this

action against IntuBrite for breach of contract (ECF No. 2). The Court must accept all

factual allegations in the Complaint as true for the purposes of this motion.

IntuBrite contacted EDU-USA around early 2009 for a price quotation on

stylettes, which are used in tracheal intubation to open someone’s airway. EDU-USA

gave IntuBrite a quotation on May 11, 2009. On July 17, 2009, IntuBrite issued a

purchase order in the amount of $134,000 for three different sizes of stylettes, plus

$6,000 for tooling costs. The parties later agreed to eliminate some of the stylettes

ordered, and EDU-USA ultimately manufactured $128,000 in stylettes.

In the purchase order, see Compl., Ex. B, it states that product releases are to be

determined (“TBD”), which appears to refer to when the product would be shipped. 

According to the Complaint, EDU-USA was shipping the stylettes in accordance with

IntuBrite’s product releases, and completed manufacturing the stylettes by early 2010. 

However, EDU-USA only shipped $13,945.60 in stylettes before IntuBrite stopped

issuing product releases. EDU-USA issued a new invoice for the balance of

$114,054.40 on September, which has not been paid.

In addition to the stylettes, IntuBrite had also contacted EDU-USA for a price

quotation for laryngoscopes with pouches in late 2008 or early 2009. EDU-USA gave

IntuBrite a quotation on August 19, 2009, which included tooling costs to be amortized

with purchases over time. The quotation also required that EDU-USA have the

“[e]xclusive product supply right” until August 14, 2012. See Compl., Ex. D at 2.

On September 10, 2009, IntuBrite issued four purchase orders for the

laryngoscopes: 1) purchase order 0001000 for $51,980.00; 2) purchase order 0001001

for $212,476.52; 3) purchase order 0001002 for $271,403.32; and 4) purchase order

0001004 for $531.180.86, for a total of $1,066,950.70. While each purchase order

includes a delivery date, see Compl., Ex. E-H, EDU-USA alleges that “[t]he delivery

date could not be confirmed at that time as Defendant Intubrite wasstill developing the

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specifications for the laryngoscopes. . . .” Compl. ¶ 12. According to EDU-USA, it

accepted all four purchase orders as the Original Equipment Manufacturer (“OEM”),

see id., although this does not appear to be reflected on the quotation or purchase

orders themselves.

EDU-USA shipped $162,610.24 in laryngoscopes to IntuBrite before IntuBrite

ordered the shipments be stopped. However, EDU-USA had already manufactured

additional laryngoscopes for IntuBrite, which are currently being held in inventory in

China. EDU-USA alleges that IntuBrite stopped buying the laryngoscopes fromEDUUSA because it found a cheaper supplier in Pakistan. In any event, EDU-USA had

bought capital equipment worth approximately $200,000 to produce the laryngoscopes,

which it alleges that it cannot use for any other purpose. 

EDU-USA further alleges that IntuBrite “never attempted to terminate the

exclusive purchase agreement for [the laryngoscopes], but rather ordered the shipping

stopped and ceased paying. . . .” Compl. ¶ 15. According to EDU-USA, when

IntuBrite ordered the shipping stopped, there was already a shipment en route that had

to be re-routed to a warehouse in Los Angeles, and other items were in various stages

of production. IntuBrite ceased all payments in May 2011.

II. LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(c), “[a]fter the pleadings are

closed—but early enough not to delay trial—a party may move for judgment on the

pleadings.”

“Judgment on the pleadings is proper when the moving party clearly establishes

on the face of the pleadings that no material issue of fact remains to be resolved and

that it is entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard

Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). A motion for judgment on the

pleadings is “functionally identical” to a motion to dismiss. Dworkin v. Hustler

Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989).

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III. DISCUSSION

Defendant IntuBrite moves for judgment on the pleadings on the grounds that

EDU-USA lacks standing and, in the alternative, that it has failed to state a cause of

action.

A. Whether EDU-USA Has Standing

IntuBrite’s first argument is that EDU-USA lacks standing to bring this action

because the contracts for the stylettes and laryngoscopes are between IntuBrite and

EDU-HK, not EDU-USA. This argument is based on the fact that the price quotations

state toward the bottom, “For and on behalf of Edu-Science (H.K.) Ltd.” See Compl.,

Ex. A & D.

The Court findsthis argument unpersuasive. First, while the price quotations do

contain that statement, they are on EDU-USA’s letterhead. More importantly, all the

negotiations and arrangements were made between IntuBrite and EDU-USA: IntuBrite

contacted EDU-USA forthe quotations,EDU-USA gave themthe quotations, IntuBrite

sent the purchase orders to EDU-USA, with EDU-USA noted as the vendor on all of

the purchase orders, see Compl., Ex. B & E-H, and EDU-USA shipped the products

and issued the invoicesfor IntuBrite’s outstanding balance. Therefore, the Court holds

that EDU-USA has standing to bring this suit.

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B. Whether EDU-USA Has Stated a Cause of Action

IntuBrite’s second argument is that EDU-USA failed to plead facts sufficient to

state a breach of contract claim against IntuBrite. To prove a breach of contract under

California law, the plaintiff must show: (1) the existence of the contract; (2) plaintiff’s

performance or excuse for nonperformance; (3) the defendant’s breach; and (4)

damages to plaintiff as a result of the breach. Conder v. Home Sav. of Am., 680 F.

There is some argument in the papers as to whether the price quotation or 1

purchase order constitutes the offer, but the Court finds it unnecessary to reach that

issue at this time.

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Supp. 2d 1168, 1174 (C.D. Cal. 2010).

With regard to the contract for stylettes, IntuBrite argues that EDU-USA has not

stated a cause of action for breach of contract because EDU-USA “fail[ed] to show how

IntuBrite’s actions constitute a breach.” D’s Mot. for Entry of Judgment on Pleadings

(ECF No. 28-1) at 7. According to the purchase order, 50% of the purchase price was

“Due at Approval ofDrawings, Tolerances, MaterialCertifications, and color samples”

and the balance was “Due upon Approval of 1 Article,” Compl., Ex. B, and EDU- st

USA did not allege any facts showing that either approval took place. Without those

approvals, IntuBrite argues, EDU-USA has not shown that IntuBrite owed EDU-USA

any payments under the purchase order and therefore has not alleged a breach of

contract.

As to the contract for the laryngoscopes, IntuBrite argues that EDU-USA cannot

show that EDU-USA performed its duties under the contract – as required by the

second element for a breach of contract – because it “fail[ed] to plead that it met the

strict delivery deadlines” in the purchase orders. Id. at 8. While EDU-USA alleged in

the Complaint that it produced and shipped the laryngoscopes in accordance with the

purchase orders “asrevised between the parties,” Compl. ¶11, IntuBrite argues that the

reference to revisionsis wholly conclusory and inadequately pled to overcome the stark

delivery dates in the purchase orders.

However, as the moving party, the burden is on IntuBrite to show that no

material issue of fact remains to be resolved and that it is entitled to judgment as a

matter of law. The parties’ course of conduct or prior course of dealing could easily

account for the discrepancy between the contracts as written and the performance

thereof, and IntuBrite has not alleged any facts that demonstrate otherwise. The Court

is also mindful that under Federal Rule of Civil Procedure 8, only a “short and plain

statement of the claim” is needed, Fed. R. Civ. P. 8(a)(2), as long as factual allegations

are “enough to raise a right to relief above the speculative level.” Bell Atlantic v.

Twombly, 550 U.S. 544, 555 (2007). The Court holds that EDU-USA has met this

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standard. EDU-USA has alleged the existence of contracts with IntuBrite, that it was

fulfilling its duties under the contracts, that IntuBrite breached the contracts by, inter

alia, refusing to pay for goods it had already ordered, and that EDU-USA suffered

damages as a result, including the lost profits and buying capital equipment that cannot

be used for anything else. Therefore, IntuBrite’s motion for judgment on the pleadings

is DENIED.

IV. CONCLUSION

For the reasons above, IntuBrite’s motion for judgment on the pleadings (ECF

No. 28) is hereby DENIED.

IT IS SO ORDERED.

DATED: July 9, 2013

BARRY TED MOSKOWITZ, Chief Judge

United States District Court

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