Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01853/USCOURTS-caed-2_05-cv-01853-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1330 Breach of Contract

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

SRI JOHANI SDN. BHD, a Malaysia 

corporation, 

 Plaintiff, 

v. 

INTERNATIONAL MANUFACTURING 

GROUP, INC., a California 

corporation, DEEPAL 

WANNAKUWATTE, an individual, 

and DOES 1 THROUGH 25, 

inclusive 

 Defendants. /

No. Civ. S-05-cv-1853 DFL EFB 

Memorandum of Opinion

and Order

Plaintiff Sri Johani Sdn. Bhd. (“SRI”) is suing defendants 

International Manufacturing Group, Inc. (“IMG”) and Deepal 

Wannakuwatte for breach of contract. SRI supplied IMG with 

latex gloves. Wannakuwatte is IMG’s majority shareholder. 

Wannakuwatte now moves for summary judgment on SRI’s claims 

against him. For the reasons below, the court GRANTS 

Wannakuwatte’s motion. 

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I. 

In 1997, SRI and IMG entered into an agreement for SRI to 

supply IMG with latex gloves. (Def.’s SUF 1.) Wannakuwatte is 

the majority shareholder, president, and chief executive officer 

of IMG. (Def’s. SUF 3.) 

During the course of their dealings, IMG often had problems 

arranging funding for the gloves. (Ex. 1, 4, 9, 10.) In 1998, 

the parties discussed a stock deal in which Wannakuwatte would 

sell a percentage of his IMG stock to SRI to pay the outstanding 

balance. (Ex. 3, 11.) The parties, however, never came to an 

agreement. In early 1999, IMG tried to pay part of its mounting 

debt with bank checks. (Ex. 9.) SRI accepted the checks only 

after Wannakuwatte guaranteed them personally. (Ex. 9.) 

In November 1999, IMG’s debt exceeded $3,000,000. (Ex. 

10.) Wannakuwatte and SRI resumed discussions on a stock deal 

to settle IMG’s debt. (Ex. 11.) The parties, however, again 

failed to come to an agreement. SRI alleges that Wannakuwatte 

agreed to guarantee personally IMG’s debt. After both IMG and 

Wannakuwatte failed to pay off the debt, SRI brought suit in 

September 2005. 

II. 

SRI contends that Wannakuwatte is liable for IMG’s debt 

because: (1) Wannakuwatte was a party to the 1997 agreement; (2) 

Wannakuwatte personally guaranteed IMG’s debt; and (3) IMG was 

Wannakuwatte’s alter ego. In moving for summary judgment, 

Wannakuwatte alleges that SRI has failed to present any evidence 

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that shows he is liable for IMG’s debt under any of these legal 

theories.1 

The only evidence that SRI has submitted that suggests 

Wannakuwatte was a party to the 1997 agreement, or that he 

guaranteed personally IMG’s debt, is a declaration from one of 

its directors, Lim Ho Peng. In his declaration, Peng states, 

“Defendants International Manufacturing Group, Inc. and Deepal 

Wannakuwatte began purchasing gloves from [SRI] in approximately 

January 1997.” (Peng Decl. ¶ 2.) Peng also contends that 

“[p]ursuant to the discussion in Sacramento, [SRI] agreed not to 

bring legal action against IMG or [Wannakuwatte] based on 

[Wannakuwatte’s] personal promises and guarantees that the debt 

would be paid.” (Peng Decl. ¶ 16.) 

Peng’s conclusory statements, however, fail to meet the 

requirements of Fed. R. Civ. P. 56(e).2 See Fed. R. Civ. P. 56(e) 

(“Supporting and opposing affidavits shall be made on personal 

knowledge, shall set forth such facts as would be admissible in 

evidence, and shall show affirmatively that the affiant is 

competent to testify to the matters stated therein.”) In his 

 

1 Wannakuwatte also moves to strike SRI’s opposition 

because it was filed late. Because oral argument was held 

almost a month after the originally scheduled date, the court 

finds that Wannakuwatte did not suffer any harm from the late 

filing and, therefore, declines to strike SRI’s opposition. 

2 Ordinarily, the court would allow a party to supplement a 

deficient declaration. In this case, however, SRI had ample 

time to bolster the declaration before oral argument. Moreover, 

SRI’s attorney failed to offer a satisfactory explanation as to 

why he submitted a declaration with such obvious deficiencies. 

Finally, the court notes that this is the second declaration 

from Peng that SRI has submitted. The first declaration was 

unsigned. 

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declaration, Peng gives no explanation as to how he has 

knowledge of these events. The only information Peng offers 

about himself is that he is over the age of 18 and is a director 

at SRI. Because Peng “stated only conclusions, and not ‘such 

facts as would be admissible in evidence,’” his statements are 

not “cognizable” and fail to establish a genuine issue of 

material fact. 3 United States v. Shumway, 199 F.3d 1093, 1104 

(9th Cir. 1999) (citation omitted). 

Finally, SRI also has failed to establish a genuine issue 

of material fact that IMG was Wannakuwatte’s alter ego. To 

pierce the corporate veil, courts must find: “(1) that there be 

such unity of interest and ownership that the separate 

personalities of the corporation and the individual no longer 

exist and (2) that, if the acts are treated as those of the 

corporation alone, an inequitable result will follow.” Say &

Say, Inc. v. Ebershoff, 20 Cal. App. 4th 1759, 1768 (1993). 

Here, the only evidence of a unity of interest between IMG and 

Wannakuwatte is one letter in which Wannakuwatte referred to 

IMG’s growth as “my growth,” and Wannakuwatte’s offer to sell 

his IMG stock to settle IMG’s debt. Given that courts may 

pierce the corporate veil only in exceptional circumstances, the 

court finds that SRI’s claim cannot survive summary judgment 

based on this paltry evidence alone. See Sonora Diamond Corp. 

 

3 SRI also submitted letters in which Wannakuwatte 

personally guaranteed various invoices that are not at issue 

here. (Ex. 9.) How these letters are relevant to this case is 

unclear. And even when viewed in a light most favorable to SRI, 

these letters, without an admissible, supporting declaration 

from Peng, do not create a genuine issue of material fact. 

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v. Superior Court, 83 Cal. App. 4th 523, 539 (2000) (“The alter 

ego doctrine does not guard every unsatisfied creditor of a 

corporation but instead affords protection where some conduct 

amounting to bad faith makes it inequitable for the corporate 

owner to hide behind the corporate form.”) 

III. 

For the reasons above, the court GRANTS Wannakuwatte 

summary judgment. 

IT IS SO ORDERED. 

Dated: May 18, 2007 

 /s/ David F. Levi___________

 DAVID F. LEVI 

 United States District Judge 

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