Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-02072/USCOURTS-azd-2_06-cv-02072-2/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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 1See LRCiv 56.2; LRCiv 7.2(f); Lake at Las Vegas Investors Group, Inc. v. Pacific

Malibu Dev. Corp., 933 F.2d 724, 728-29 (9th Cir. 1991) (“When a party has an adequate

opportunity to provide the trial court with evidence and a memorandum of law, there is no

prejudice” when oral arguments are not held on motions for summary judgment.)

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Graham Wollaston, d.b.a. Scrap

Computer.Com, 

Plaintiff, 

vs.

E-Scrap Technologies, Inc., et al., 

Defendants. 

E-Scrap Technologies, Inc., et al.,

Counterclaimants,

vs.

Graham Wollaston, d.b.a. Scrap

Computer.Com,

Counter-defendant. _________________________________

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No. CV 06-2072-PHX-SMM

ORDER

Pending before the Court is the Motion for Partial Summary Judgment1

 (Doc. 28)

filed by Plaintiff Graham Wollaston d.b.a. Scrapcomputer.com ("Scrapcom") against E-Scrap

Case 2:06-cv-02072-SMM Document 37 Filed 04/12/07 Page 1 of 5
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Technologies, et al. ("E-Scrap"). Plaintiff seeks summary judgment on the counterclaims

filed against him on the grounds that the language of the Agreement clearly and

unambiguously creates an obligation in Defendant to pay for all "commercial transport"

charges. After careful consideration, the Court issues the following ruling.

BACKGROUND

Scrapcom seeks summary judgment on the issue of who is responsible for the shipping

costs in connection with the business as outlined in the Agreement between the parties.

Scrapcom contends that the shipping costs are E-Scrap's obligation pursuant to the plain

language of the Agreement. In contrast, E-Scrap avers that the language in the Agreement

setting forth the obligation is ambiguous and therefore cannot be decided on summary

judgment.

On or about April 7, 2005, the E-Scrap Technologies, Inc and ScrapComputer.Com

USA Inc., entered into an agreement ("Agreement") to embark on a joint venture to create

the Chicago Branch of Scrapcom. Pursuant to the Agreement, E-Scrap paid an initial

$50,000 investment to Scrapcom. On February 16, 2006, E-Scrap sent a letter to Scrapcom

complaining that Scrapcom had failed to deliver various items they were obligated to deliver

pursuant to the Agreement. Thereafter, on August 9, 2006, E-Scrap terminated its

relationship with Scrapcom in a letter from John J. Chitowski, Esq. 

On August 29, 2006, Scrapcom filed a Complaint against E-Scrap asserting claims for

breach of contract, violation of the Uniform Trade Secrets Act, conversion, and unjust

enrichment. In response, on September 18, 2006, E-Scrap filed an Answer denying all

allegations and a Counterclaim asserting claims for unjust enrichment, breach of contract,

breach of the covenant of good faith and fair dealing, intentional interference with business

relations, and conversion. In the Counterclaim, E-Scrap contends that Scrapcom failed to

provide support services and equipment to E-Scrap, failed to pay money due and owing

within the agreed upon time period, and billed E-Scrap for shipping and drayage charges the

parties previously agreed would be paid by Scrapcom. 

Case 2:06-cv-02072-SMM Document 37 Filed 04/12/07 Page 2 of 5
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STANDARD OF REVIEW

A court must grant summary judgment if the pleadings and supporting documents,

viewed in the light most favorable to the nonmoving party, “show that there is no genuine

issue as to any material fact and that the moving party is entitled to judgment as a matter of

law.” FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);

Jesinger v. Nevada Federal Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive

law determines which facts are material. See Anderson v. Liberty Lobby, 477 U.S. 242, 248

(1986); see also Jesinger, 24 F.3d at 1130. “Only disputes over facts that might affect the

outcome of the suit under the governing law will properly preclude the entry of summary

judgment.” Anderson, 477 U.S. at 248. The dispute must also be genuine, that is, the

evidence must be “such that a reasonable jury could return a verdict for the nonmoving

party.” Id.; see Jesinger, 24 F.3d at 1130.

A principal purpose of summary judgment is “to isolate and dispose of factually

unsupported claims.” Celotex, 477 U.S. at 323-24. Summary judgment is appropriate

against a party who “fails to make a showing sufficient to establish the existence of an

element essential to that party's case, and on which that party will bear the burden of proof

at trial.” Id. at 322; see also Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir.

1994). The moving party need not disprove matters on which the opponent has the burden

of proof at trial. See Celotex, 477 U.S. at 323-24. The party opposing summary judgment

need not produce evidence "in a form that would be admissible at trial in order to avoid

summary judgment." Id. at 324. However, the nonmovant “may not rest upon the mere

allegations or denials of [the party's] pleadings, but . . . must set forth specific facts showing

that there is a genuine issue for trial.” FED.R.CIV.P. 56(e); see Matsushita Elec. Indus. Co.,

Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-88 (1986); Brinson v. Linda Rose Joint

Venture, 53 F.3d 1044, 1049 (9th Cir. 1995).

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DISCUSSION

Scrapcom seeks summary judgment on the issue of who is responsible for shipping

costs in connection with the business venture entered into between E-Scrap and Scrapcom

and pursuant to the corresponding Agreement between the parties. E-Scrap avers that

Scrapcom is not entitled to summary judgment because the provision it relies upon for its

contention is ambiguous. It is well established Arizona law that a written contract, plain and

unambiguous on its face, may not be altered or varied by parol evidence, and that its

interpretation is a matter of law for the court, and not one of fact for the jury. Chandler Imp.

Co. v. Andersen, 7 P.2d 255, 257 (Ariz.1932). Determining whether a contract is ambiguous

is a question of law for the Court to decide. Abrams v. Horizon Corp., 137 Ariz. 73, 669 P.2d

51 (1983). "If the agreement can be reasonably construed in more than one manner, the terms

are ambiguous and subject to a determination by the trier of fact about the intent of the

parties, based on extrinsic evidence." Leo Eisenberg & Co., Inc. v. Payson, 785 P.2d 49, 52

(Ariz.,1989); Leikvold v. Valley View Comm. Hosp., 688 P.2d 170, 174 (1984); United Cal.

Bank v. Prudential Ins. Co., 681 P.2d 390, 416 (App.1983).

Here, the Agreement provides in pertinent part: "Owner [E-Scrap] agrees to provide

suitable warehousing and commercial transportation at owners' expense."

In the present case, Defendant Wollaston contends that it is clear and unambiguous

that the intent of the parties was that E-Scrap was responsible for commercial transportation

charges including shipping costs. Therefore, Wollaston argues that the counterclaim relating

to shipping costs must fail as a matter of law. In contrast, E-Scrap contends that the

provision in the Agreement that Scrapcom relies upon is ambiguous because the meaning of

"commercial transportation" is not defined therein and remains unclear. E-Scrap argues that,

at the time the Agreement was executed in April 2005, it was the intent of the parties that EScrap would be responsible for finding customers and picking up the equipment from the

customers; however, once the equipment was picked up, it was the parties' expectation that

E-Scrap would contact Graham Wollaston, and Scrapcom would be responsible for shipping

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the equipment. E-Scrap's contention is supported by the declaration of Arthur Miller, an

agent and consultant of Scrapcom during all times relevant to the law suit. (Doc 36-2. Ex.

E). Furthermore, E-Scrap contends that contrary to Scrapcom's assertion otherwise, it was

the parties' intent at the time the Agreement was executed, that Scrapcom would pay for all

E-waste collected by E-Scrap and that Scrapcom would be responsible for all shipping and

drayage charges from the warehouse to the demanufacturing facility in Malaysia or any other

final destination. This contention is supported by correspondence between the parties

provided to the Court by E-Scrap. (Doc 36-2. Ex. D).

Thus, E-Scrap asserts that because the term "commercial transportation"is susceptible

to more than one plausible meaning, the contract provision is ambiguous and the matter is

not proper for summary judgment disposition. Leo Eisenberg, 785 P.2d at 52. Based on the

record, and viewing the facts and inferences in the light most favorable to the nonmoving

party, as the Court is required to do, the Court finds that "commercial transportation" is

susceptible to more than one meaning and Scrapcom's Motion for Partial Summary Judgment

(Doc. 28) is DENIED.

CONCLUSION

Accordingly, 

IT IS HEREBY ORDERED DENYING Plaintiff Graham Wollaston d.b.a.

Scrapcom's Motion for Partial Summary Judgment (Doc. 28).

DATED this 12th day of April, 2007.

Case 2:06-cv-02072-SMM Document 37 Filed 04/12/07 Page 5 of 5