Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-01759/USCOURTS-cand-3_13-cv-01759-8/pdf.json

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

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

WAYNE GOLDMAN, et al.,

Plaintiffs,

v.

SEAWIND GROUP HOLDINGS PTY LTD, 

et al.,

Defendants.

Case No. 13-cv-01759-SI 

ORDER RE: CROSS-MOTIONS FOR 

SUMMARY JUDGMENT

Re: Dkt. Nos. 85, 89

INTRODUCTION

This lawsuit is the latest in a series of legal proceedings involving the parties. The saga 

began in 2007 when plaintiffs entered into a contract with a company called Corsair Marine, Inc. 

for the construction of a custom-built sailboat. For reasons disputed by the parties, plaintiffs' 

sailboat was never completed, and over the years the parties have been involved in litigation and 

arbitration in Vietnam, Singapore, and this Court. Plaintiffs have obtained default judgments in 

Singapore, and both sides have initiated proceedings in Singapore that are currently stayed due, in 

part, to this litigation. At different times the parties have attempted to settle their disputes by 

entering into agreements such as the "Mareva agreement" and an August 2012 settlement 

agreement, but unfortunately those efforts subsequently fell apart and became the subject of 

further litigation, including this lawsuit.

As set forth in this order, the Court grants summary judgment in favor of defendants on all 

claims alleged in the first amended complaint. The Court finds that plaintiffs' claim for 

promissory fraud in executing the Mareva agreement is precluded by plaintiffs' failure to rescind 

that agreement. The Court also concludes that plaintiffs' claims for breach of the 2007 sales 

contract and breach of the implied covenant of good faith and fair dealing are precluded by the 

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Mareva agreement, while plaintiffs' claims arising out of an alleged breach of the Mareva

agreement must, pursuant to that agreement, proceed in Singapore. In addition, based upon the 

undisputed evidence, the Court concludes that defendants did not breach the parties' August 21, 

2012 settlement agreement, and the Court finds that plaintiffs have not raised a triable issue of fact 

on their conversion claim. 

BACKGROUND

I. Factual Background1

Plaintiffs, a husband and wife, filed this lawsuit against defendants alleging a breach of 

contract for the construction of a custom-built sailboat. Defaulted defendant Paul Koch resides in 

Vietnam and is the former director of Corsair Marine, Inc.2and defendant Corsair Marine Sales 

Pte Ltd. ("CMSPL"). First Amended Complaint ("FAC") ¶ 5. Defendant Richard Ward is a 

citizen of Australia, and is the sole shareholder of defendant Seawind Group Holdings ("SWGH"), 

an Australian corporation. Ward Decl. ¶ 6 (Dkt. 88).

3

In 2010, Seawind Group Holdings became 

the sole shareholder of Corsair Marine International Pte Ltd. ("CMIPL"), a Singapore corporation 

that acts as a holding company. Id. ¶¶ 9, 12. CMIPL is the sole shareholder of Corsair Marine 

International Co. Ltd. ("CMICL"), a Vietnamese corporation that manufactures sailboats, and 

Corsair Marine Sales Pte Ltd. ("CMSPL"), a Singapore corporation that sells the boats that 

CMICL makes. Id. ¶ 9. Plaintiffs allege that Ward "conducts his personal business activities by 

and through a variety of entities, including but not limited to Seawind Catamarans Pty Ltd, 

Shipcove Pty Ltd, Seawind Group Holdings Pty Ltd, and Seawind Catamarans, which are his alter 

egos." FAC ¶ 4.

In June 2007, plaintiffs entered into a written Sales Contract with dismissed defendant

 

1

 The parties have raised various evidentiary objections. The Court only rules on those objections 

to the extent this order discusses the evidence at issue.

2

 Plaintiffs voluntarily dismissed Corsair Marine, Inc. from this action on July 11, 2013. Dkt. 33. 

3

 Plaintiffs object that there is no evidence aside from Ward's statement that the various corporate 

defendants are "corporations" under foreign law. The Court finds that this issue is irrelevant to the 

resolution of plaintiffs' claims on summary judgment.

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Corsair Marine, Inc. to purchase a Corsair 50 catamaran sailboat (a "C50"). Kagay Decl. Ex. B 

(Dkt. 87-2). Plaintiffs deposited $520,000 toward the purchase. Kagay Decl. Ex. C (Dkt. 87-3). 

The Sales Contract specified “[d]elivery foreseen as Aug 30th 2008,” but the boat was not 

completed by that date. Dkt. 87-2 ¶ 25. In November 2009, in an Addendum, several other 

corporate entities were added to the Sales Contract, including defendant CMSPL. Kagay Decl. Ex. 

D (Dkt. 87-4). Two other C50 sailboats were ordered, by Frank and Lisa Coale, and by Tony 

Fowler. Ward Decl. ¶ 27 (Dkt. 88).

In 2010, the Australian Seawind group of companies, which manufactures and sells 

sailboats, became interested in acquiring the Corsair companies’ business. Id. ¶¶ 12, 27. However, 

in September 2010, plaintiffs filed a legal action in Singapore to enforce the 2007 Sales Contract 

against CMIPL, CMSPL, and CMICL, seeking damages and a worldwide “Mareva” injunction to 

keep these corporations from alienating their assets. FAC ¶ 35, Kagay Decl. Ex. C (Dkt. 87-3). On 

September 17, 2010, the Singapore court issued the Mareva injunction. Kagay Decl. Ex. E (Dkt. 

87-5). On October 1, 2010, the Singapore court entered a default judgment against CMIPL and 

CMSPL in the amount of $969,195. Kagay Decl. Ex. F (Dkt. 87-6). 

The Singapore Mareva injunction would have prevented the Seawind group from acquiring 

the Corsair companies. Plaintiffs and the Australian corporation Seawind Catamarans Pty Ltd. (a 

subsidiary of SWGH), entered into a contract known as the Mareva Agreement, dated October 6, 

2010, addressing the Singapore legal action. Kagay Decl. Ex. G (Dkt. 87-7). This contract 

provided that plaintiffs “will stand down the Singapore Court substantive action and advise the 

Singapore Court to release the worldwide Mareva injunction” on certain conditions, including the 

following:

(a) The sale of the Corsair Group of Companies to Seawind shall 

proceed as soon as possible . . . .

(b) The original sales contract[] for [plaintiffs] . . . (as amended by 

the addendum[] therefor) shall remain in full force and effect. 

Seawind shall assume full responsibility for the completion of the 

catamaran[] of Goldman . . . .

(h) Seawind agrees to pay . . . the amount of $US50,000 to Fowler, 

Goldman and Coale collectively . . . .

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(k) Any dispute hereunder shall be dealt with by way of arbitration 

in Singapore . . . .

(l) On completion of the agreement, . . . Goldman agree[s] that [he] 

will not pursue any other legal action, or make any further claims, 

against Seawind or the Corsair Group of Companies . . . except in so 

far as such legal claims arise from the non performance by any party 

under this agreement.

Id. 

The Mareva Agreement contemplated that Seawind Catamarans Pty Ltd., SWGH’s 

subsidiary, would acquire the assets of the Corsair companies. Id. ¶ 5. An Addendum to the 

Agreement, also dated October 6, 2010, raised the payment to plaintiffs and the other C50 

purchasers from $50,000 to $90,000. Dkt. 87-8 ¶ 2. Seawind Catamarans made this payment. 

Goldman Depo. 62:16-23, Kagay Decl. Ex. I (Dkt. 87-9). After the lifting of the Mareva

injunction, SWGH acquired all of the stock of CMIPL and became the indirect owner of CMSPL 

and CMICL. Ward Decl. ¶ 26 (Dkt. 88).

The October 2010 Mareva Agreement provided that Seawind would complete the boats of 

plaintiffs and Mr. Fowler “within a reasonable time of 6 to 9 months,” or by July 2011. Dkt. 87-7 

¶ 9(c). Plaintiffs’ boat was not completed by July 2011 for reasons disputed by the parties. On 

October 25, 2011, plaintiffs’ solicitor sent Seawind Catamarans a notice terminating the Mareva

Agreement and the Sales Contract. Ward Decl. ¶ 41, Ex. M (Dkt. 88-13).

In February 2012, plaintiffs initiated arbitration in Singapore against Seawind Catamarans 

Pty Ltd., pursuant to the Mareva agreement. Ward Decl. ¶ 44 (Dkt. 88). Plaintiffs sought to have 

Ward and Seawind Group Holdings Pty made parties to the arbitration, but the arbitrator ruled that 

neither could be added as parties because they were not signatories to the underlying agreement. 

Id.

4

In August 2012, SWGH entered into administration under Australian law. Administration 

is a form of bankruptcy under which a company’s debts are settled so that it can continue in 

business. Id. ¶¶ 20-21. SWGH's manufacturing subsidiary Seawind Catamarans Pty Ltd., then 

known as Shipcove Pty Ltd., went into liquidation. Id. 

 

4

 It is unclear from the parties' papers when the arbitrator made this ruling.

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In August and September 2012, plaintiffs entered into a Settlement Agreement and 

Clarification Addendum with defendants CMICL, CMIPL, and CMSPL. Kagay Decl. Ex. J and K

(Dkt. 87-10, 87-11). Those agreements, dated August 21, 2012 and September 5, 2012, provided 

that the Corsair companies would prepare plaintiffs’ partially completed boat for pickup in 

Vietnam, where it was being built; that plaintiffs would arrange for a barge to pick it up; that “all 

actions and disputes” between the parties, including the Singapore default judgments and thenpending arbitration, would be settled when the boat left Vietnam waters; and that time was of the 

essence. Id.

After the parties executed the September 5, 2012 Clarification Addendum, the parties 

exchanged a series of e-mails. On September 6, 2012, Paul Koch, on behalf of defendants, wrote 

to plaintiffs’ solicitor stating, “I have been advised by the Administrator of the Seawind Group 

that I must withdraw the agreement that I signed” unless he received a letter or addendum making 

certain statements regarding the pending Singapore arbitration. Matz Decl. Ex. 32 at JS0248 (Dkt. 

95-4). After an exchange of several e-mails, on September 7, 2012, plaintiffs’ solicitor wrote to 

Mr. Koch and informed him that "I am instructed by Wayne Goldman to confirm that provided 

performance of the settlement agreement signed (amended by addendum) proceeds then the 

Claimant will suspend the application to join Richard Ward and Seawind Group Holdings to the 

Goldman v[.] Shipcove arbitration. . . . Kindly confirm by return . . . that this is an end to 

exchanges and that focus is now entirely on arranging departure of the vessels from Vietnam."

Matz Decl. Ex. 34 (Dkt. 95-4). Mr. Koch responded the same day, "I am happy to confirm that we 

will move forward as fast as possible to ship the boat. Please advise when and where the ship will 

be available to load the boat onto it." Id. 

The parties continued to exchange e-mails regarding implementing the settlement 

agreement. In an e-mail dated September 12, 2012, Mr. Ward stated it was "Corsair's intention to 

immediately fulfill the requirements of the Agreements pending . . . instructions from Goldman 

regarding the availability of a barge," and that in turn, defendants required confirmation that the 

Singapore arbitration was suspended and that upon fulfillment of the settlement agreement, all 

litigation against defendants would be withdrawn and ceased. Matz Decl. Ex. 35 (Dkt. 95-4). 

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That same day, Mr. Goldman e-mailed Mr. Koch and CMICL's factory manager James Sganzerla 

and wrote:

Hi Paul and James;

Thank you both for facilitating the agreement to have my boat 

shipped from Vietnam. Although I understand that there [are] still 

some issues to be resolved with Richard, I am hoping that we can 

progress on shipping my boat in a timely manner and appreciate 

your help during these trying and difficult times with Richard.

I have been working on my end to try to arrange shipping and have 

been having difficulties arranging reasonably pr[i]ced shipping. Is it 

possible for you to check on your end to see about having my boat 

shipped to Phuket? Also, it seems advantageous to place all of the 

loose equipment into a container, rather than into the boat. Could 

you also check on having a container dropped at your location for 

loading?

Since it appears that the cost of shipping may be extremely high, I 

would like to explore the possibility of having you install the 

engines and steering, windows and doing the bottom paint. That 

way, I could motor the boat to Phuket and put the money into the 

engines and steering rather than shipping. I would only want to do 

what is absolutely necessary to make the boat seaworthy and propel 

the boat. I would arrange to have the engines and steering shipped to 

you as soon as possible. Could you give me an estimate of time and 

cost to do these things?

Again, I greatly appreciate your help and assistance with all of this. 

Please let me know your thoughts.

Best;

Wayne

Kagay Decl. Ex. K (Dkt. 93-11). 

The next day, September 13, 2012, Mr. Sganzerla responded:

Hi Wayne,

I have had some quotes on shipping and I cannot get the boat 

shipped from here to Phuket directly the nearest port is Songkhla in 

Thailand which is on the opposite side of the peninsula. I am not 

familiar with the port there but I would imagine it could be trucked 

from there to Phuket. It does not look far on the map. The prices I 

have gotten to this port are about $23,000.

As far as putting the remaining things into a container is no problem.

As far as making the boat ready to motor away I would need some 

information first to know where to start. To make the boat motorable 

we would need engines; batteries; fuel filters; props; engine 

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controls; cabling; all steering parts; thru hulls and filters for engines; 

windows; bottom paint.

To motor the boat away, the boat needs to be registered and will 

need a minimal amount of safety equipment for the authorities to 

allow the boat to leave. Also I do not know how they will feel about 

the boat being incomplete so I don't know what they might say but 

suspect with a little cash money in their pocket they will cooperate.

Can you please indicate what you are providing and what we are to 

provide other than the labor. The steering I would have thought was 

better for us to supply as we have the supplier set to make this 

already.

Regards

James

Id. 

Mr. Goldman responded on September 20, 2012:

Hi James;

Sorry that I haven't responded sooner. I have been anxiously waiting 

to see what was going to happen with Richard and Seawind. 

Considering the current situation, the shipping of my boat is on hold, 

as I am in discussions with Paul and Richard to try to work 

something out. I will let you know as soon as I have a clear path 

forward.

I appreciate your efforts and truly hope that we can have a final 

resolution to this mess that will allow you and Paul to also make the 

best of the situation.

Best;

Wayne

Id. Later that same day, Mr. Goldman sent Mr. Sganzerla another e-mail:

Hey James;

Just wanted to know if anything has been done to get the boat ready 

to ship and to get the equipment ready to go into a container. If not, 

how long will it take to do that? Thanks.

Wayne

Id. Ex. M (Dkt. 93-13). The same day, Mr. Sganzerla responded:

Hi Wayne,

Your parts are already packed onto a pallet (I think it is only 1 

pallet). The boat furniture has not been packed up yet but I suspect 

this could be done in a couple of days. Sealing up the boat probably 

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another couple of days. Moving the boat and getting it to port will 

be the hardest job. It takes about one day to move it to the end of the 

building and another day to get it out through the doorway. There 

would be another day to prepare for loading and a 4th day to put it 

on a truck. Because it is so large it can only travel late at night. So I 

guess to prepare it and move it in total is probably 1 1/2 to 2 weeks.

Regards

James

Id. Defendants have submitted the undisputed testimony of Mr. Sganzerla, in which he states that 

Mr. Goldman never responded to the questions in his September 13, 2012 e-mail regarding what 

was needed in order to make the boat motorable. Sganzerla Depo. at 58:2-19 (Dkt. 87-12). Mr.

Sganzerla also provided the following testimony regarding why, as of September 20, 2012, he had 

not progressed further with regard to doing the work called for in the August 2012 settlement 

agreement:

Well, we had these conflicting e-mails – I don't know whether you 

call them "conflicting," but there seem to be some suggestion from 

Wayne that he was considering other options to have his vessel 

removed. And one of them, of course, we already talked about, 

having it in a container. And another one was to fit motors and 

equipment in order to motor the vessel away.

So, obviously, it was not in our interests to put anything in the vessel 

that was then going to have to be removed and create a huge amount 

of work, then to move in a different direction.

Id. at 65:9-20. 

On September 23, 2012, Mr. Ward wrote plaintiffs’ solicitor:

I refer to your letter of demand below relating to the Judgement in 

Default obtained by your client in October 2010. Action Number 

S714/2010/A.10.5

I refer you to Mr. Goldman & Ms. Scannon's agreement with the 

Corsair companies of 21st of August 2012 in which Goldman & 

Scannon have agreed to cease all litigation (including this 

judgement) on performance of this agreement.

Corsair is waiting on advice from Goldman/Scan and on the 

provision of a barge to take delivery of the C50 Catamaran as per 

 

5

The letter of demand to which Mr. Ward referred was dated September 3, 2012, which was prior 

to the parties' execution of the September 5, 2012 Clarification and Addendum to the August 2012 

settlement agreement. It is unclear from the record why Mr. Ward responded to this letter of 

demand on September 23, 2012.

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the Agreement. Corsair has advised Goldman that it stands ready to 

deliver the vessel on receipt of this advice. 

I believe this latest letter of demand is further evidence that your 

Clients have not entered into negotiations with Corsair in good faith 

as should be required under any negotiations leading to an 

agreement.

I request that you immediately respond to advise:

1. Do your clients intend fulfilling their latest agreement of 21st of 

August.

2. If so, please advise details of the provision of the barge under this 

agreement.

3. Do your clients intend pursuing litigation against Corsair, 

Seawind & Richard Ward despite this Agreement of 21st of August 

and your very clear assurances to the contrary to both myself & Mr. 

Paul Koch, Gen. Director of Corsair.

Regards

Richard Ward

Ward Decl., Ex. G (Dkt. 88-7). 

On October 1, 2012, plaintiffs’ solicitor e-mailed Ward and Koch and stated: 

We attach a letter terminating the 21 August 2012 Settlement 

Agreement.

We attach hereto your latest draft of a further revised Settlement 

Agreement. We have made some minor changes. This is a 

Settlement Agreement that our client would sign. Please confirm 

with Mr. Ward whether he will do so.

If we are unable to sign off on a Settlement Agreement that Corsair 

will perform then we are instructed to progress the Shipcove 

Arbitration, commence a separate arbitration against Seawind Group 

Holdings, enforce the Singapore High Court Judgement and pursue 

Mr. Ward personally for misrepresentation. We trust that this will 

not be necessary. We require a response the close of business 

Wednesday 3rd of October 2012.

Ward Decl., Ex. H (Dkt. 88-8). The enclosed letter purporting to terminate the August 2012 

settlement agreement stated,

///

///

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Dear Sirs,

Re: Letter of Termination of 21 August 2012 Settlement 

Agreement

We refer to the Settlement Agreement between Messrs. Goldman 

and Corsair Group companies dated 21 August 2012 (amended by 

addendum dated 5 September 2012).

The terms of the agreement were to be performed pursuant to the 

addendum "as expeditiously as possible" and time for performance 

was stated to be "of the essence".

We have been informed by our client that many of the terms to be 

performed by the Corsair companies have not yet been performed. It 

is now 26 days since the addendum was signed. We consider the 

delay unacceptable and a breach of the requirement to perform the 

Settlement Agreement as expeditiously as possible, with time being 

of the essence. We accordingly confirm on behalf of our client 

Messrs. Goldman that the agreement is hereby terminated because 

of your repudiatory breach.

We now intend to continue with the on-going arbitration against 

Ship Cove and to continue with applications to join RW and 

Seawind Group Holdings. In the event that the arbitrator will not 

order that they are joined to the present arbitration then we will 

commence a separate arbitration in Singapore against them. We are 

also instructed to proceed to enforce the Judgment obtained in the 

Singapore Court without delay.

Id. (emphasis in original).

In 2012, plaintiffs instituted legal action in Singapore to enforce the default judgments 

against CMIPL and CMSPL. Ward Decl. Ex. I (Dkt. 88-9). In April 2013, CMIPL, CMSPL, and 

CMICL instituted suit in Singapore against plaintiffs to enforce the August 2012 Settlement 

Agreement. Ward Decl. Ex. J (Dkt. 88-10). Plaintiffs filed this lawsuit on April 18, 2013. On 

August 12, 2013 and November 9, 2013, the Singapore court stayed the actions pending before it, 

in part because of the pendency of this action. Ward Decl. Exs. K and L (Dkt. 88-11, 88-12).

II. Procedural Background

On July 3, 2013, defendants moved to dismiss the complaint on numerous grounds. In an 

order filed August 29, 2013, the Court granted in part and denied in part defendants' motion. As 

relevant to the pending motions for summary judgment, the Court held that (1) plaintiffs' claim for 

breach of the 2007 Sales Agreement was not precluded by the subsequent Mareva agreement 

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because plaintiffs had alleged that the Mareva agreement was unenforceable because it was 

procured by promissory fraud; (2) plaintiffs' claim for breach of the Mareva agreement could not 

proceed in this court because the Mareva agreement provided that any breach of contract claim 

under that agreement is subject to arbitration in Singapore. Dkt. 50.

The FAC asserts seven causes of action: (1) breach of contract – the 2007 Sales Agreement 

and 2009 Addendum, (2) breach of contract – the 2012 Settlement Agreement, (3) conversion, (4) 

unfair competition in violation of California Business and Professions Code section 17200, (5) 

fraud, (6) promissory fraud, and (7) breach of the implied covenant of good faith and fair dealing. 

The fraud claim is alleged solely against defaulted defendant Koch and thus is not at issue in the 

parties' cross-motions for summary judgment.6

LEGAL STANDARD

Summary judgment is proper if the pleadings, the discovery and disclosure materials on 

file, and any affidavits show that there is no genuine issue as to any material fact and that the 

movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). The moving party 

bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex 

Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party, however, has no burden to 

disprove matters on which the non-moving party will have the burden of proof at trial. The 

moving party need only demonstrate to the Court that there is an absence of evidence to support 

the non-moving party’s case. Id. at 325.

Once the moving party has met its burden, the burden shifts to the non-moving party to 

“set out ‘specific facts showing a genuine issue for trial.’” Id. at 324 (quoting then-Fed. R. Civ. P. 

56(e)). To carry this burden, the non-moving party must “do more than simply show that there is 

some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith 

Radio Corp., 475 U.S. 574, 586 (1986). “The mere existence of a scintilla of evidence . . . will be 

insufficient; there must be evidence on which the jury could reasonably find for the [non-moving 

 

6

 The parties' cross-motions for summary judgment only address plaintiffs' claims, and do not 

address defendants' cross-claims. 

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party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

In deciding a summary judgment motion, the court must view the evidence in the light 

most favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255. 

“Credibility determinations, the weighing of the evidence, and the drawing of legitimate 

inferences from the facts are jury functions, not those of a judge . . . ruling on a motion for 

summary judgment.” Id. However, conclusory, speculative testimony in affidavits and moving 

papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill 

Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). The evidence the parties 

present must be admissible. Fed. R. Civ. P. 56(c)(2).

DISCUSSION

As an initial matter, plaintiffs contend that the appearing defendants may not litigate this 

case because dismissed defendant Corsair Marine, Inc. has had its corporate powers, rights and 

privileges suspended in California pursuant to California Revenue and Taxation Code section 

23301. Plaintiffs assert that the appearing defendants are "closely related" to Corsair Marine, Inc., 

and thus that those defendants may not file their motion for summary judgment or oppose 

plaintiffs' motion for summary judgment.

The Court finds that plaintiffs have not cited any authority in support of this position, and 

that the cases plaintiffs rely upon are inapposite. Kaufman & Broad Communities, Inc. v. 

Performance Plastering, Inc., 136 Cal.App.4th 212, 218 (2006), and AMESCO Exports, Inc. v. 

Associated Aircraft Mfg. & Sales, Inc., 977 F. Supp. 1014, 1015 (C.D. Cal. 1997), both hold that if 

a suspended corporation cannot sue or defend itself, another entity cannot step in and sue or 

defend on the Corporation's behalf. Here, the appearing defendants are not trying to defend or sue

on behalf of Corsair Marine, Inc., but rather are litigating this case on behalf of themselves. 

Accordingly, the Court DENIES plaintiffs' blanket request to strike defendants' papers and 

evidence.

///

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I. First Cause of Action, Breach of the June 15, 2007 Sales Agreement (Against Corsair

Companies, Seawind Group Holdings Pty Ltd, and Ward)

Both parties move for summary judgment on this claim. Although plaintiffs frame the first 

cause of action as one for breach of the 2007 Sales Agreement and the November 2009 

Addendum, defendants correctly note that much of plaintiffs' motion for summary judgment on 

this claim is actually premised upon a breach of the Mareva Agreement based upon defendants' 

failure to deliver the boat by July 2011.

Defendants' argument is two-fold: (1) To the extent plaintiffs' claim is based upon a 

breach of the 2007 Sales Agreement and the November 2009 Addendum, those claims are 

precluded by the subsequent Mareva agreement; and (2) To the extent plaintiffs' claim is based 

upon a breach of the Mareva agreement, that claim cannot proceed in this court because, as this 

Court has previously held, claims for breach of the Mareva agreement are subject to arbitration in 

Singapore.

The Court agrees with defendants. The Mareva agreement states: “The original sales 

contracts for [plaintiffs] . . . (as amended by addendums thereto) shall remain in full force and 

effect.” Kagay Decl. Ex. G, ¶ 9(k). However, this provision was limited by a later provision 

stating that plaintiffs “agree that they will not pursue any other legal action, or make any further 

claims, against Seawind or the Corsair Group of companies. . ., except in so far as such legal 

action [or] claims arise from the non performance of any party under this agreement.” Kagay Decl. 

Ex. G, ¶ 9(l). Thus, although plaintiffs are still entitled to performance of the Sales Contract’s 

provisions, the only legal action they can pursue to enforce that right is for non-performance under 

the Mareva Agreement. Plaintiffs argue that paragraph 9(l) never came into effect because it only

becomes operative “upon completion and delivery of the vessel.” Opp. at 33. However, the 

Agreement says that restriction on plaintiffs’ future legal actions becomes effective “upon 

completion of the agreement.” Kagay Decl. Ex. G, ¶ 9(l) (emphasis added).

Plaintiffs also contend that their claims for breach of the Sales Agreement and Addendum 

are not precluded because the Mareva Agreement was procured by fraud. However, a contract 

induced by fraud is voidable, but it is not void. See Fed. Deposit Ins. Corp. v. Dureau, 212 Cal. 

App. 3d 956, 964 (1989); Sw. Administrators, Inc. v. Rozay’s Transfer, 791 F.2d 769, 774 (9th 

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Cir. 1986). If a party believes it has been fraudulently induced to enter into a contract, "[i]n order 

to escape from its obligations the aggrieved party must rescind.” Vill. Northridge Homeowners 

Ass’n v. State Farm Fire & Cas. Co., 50 Cal. 4th 913, 921, (2010), quoting Rosenthal v. Great 

Western Fin. Securities Corp., 14 Cal.4th 394, 415 (1996). Plaintiffs have never rescinded the 

Mareva contract, and to the contrary, they have sued twice to enforce it – once by bringing an 

arbitration proceeding in Singapore, and once by basing their original Second Cause of Action in 

this case on the Mareva Agreement.

Plaintiffs' only response on this point is to assert that this argument “is unavailing because 

Defendants rely exclusively on California law even though the Mareva Agreement calls for the 

application of English law.” Opp. at 34. However, neither party has cited English law regarding 

fraudulent inducement to this Court, and the Ninth Circuit has held that when the parties cite only 

local law on a point to which foreign law arguably applies, the parties "have acquiesced in the 

application of that [local] law." See Hatfield v. Halifax PLC, 564 F.3d 1177, 1184 (9th Cir. 2009) 

("Under California's choice of law rules, a California court 'will apply its own rule of decision 

unless a party litigant timely invokes the law of a foreign state.' Although this court could 

undertake an independent investigation of English law, we are not experts on such law. Moreover, 

by citing only California tolling law, the parties have acquiesced in the application of that law." 

internal citation omitted).

Plaintiffs also assert that Ward and SWGH are judicially estopped from arguing that 

plaintiffs' claim is precluded by the Mareva agreement because those defendants took the position 

in Singapore that they could not be brought into the Singapore arbitration because they were not 

parties to the Mareva agreement. The Court finds that there is nothing inconsistent in defendants' 

position that they cannot be required to participate in the Singapore arbitration because they are 

not signatories to the Mareva agreement, and their position in this court that plaintiffs' claim for 

breach of the 2007 sales contract cannot proceed against them because, inter alia, those defendants 

are not signatories to the sales contract, and because the sales agreement was superseded by the 

Mareva agreement. 

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II. Second Cause of Action, Breach of August 12, 2012 Settlement Agreement and

September Addendum Thereto (Against Corsair Defendants and Mr. Ward)

The FAC alleges that defendants breached the August 21, 2012 settlement agreement and 

the September 5, 2012 addendum to that settlement agreement. The FAC alleges,

Corsair Marine International Co. Ltd., Corsair Marine International 

Pte Ltd, and Corsair Marine Sales Pte Ltd (and, by extension, Mr. 

Ward and Mr. Koch) breached these written agreements by failing to 

as expeditiously as possible, and in an manner that was consistent 

with their agreement that time was of the essence, secure all 

equipment and parts that have been fabricated either installed or 

below deck, failing to close and secure all openings by installing 

available windows and, for those openings with no windows, 

covering them with plywood or other waterproof material such that 

all coverings of openings would be leak proof, securing all openings 

with locks or other means to prevent unauthorized entry, failing to 

arrange for a crane to place Mr. Goldman and Ms. Scannon’s 

uncompleted Corsair 50 on a barge, failing to transporting [sic] Mr. 

Goldman and Ms. Scannon’s uncompleted Corsair 50 to the water’s 

edge at a location that is accessible by a barge, failing to arrange for 

all necessary paperwork to export Mr. Goldman and Ms. Scannon’s 

uncompleted Corsair 50, failing to clear all liens and encumbrances 

on Mr. Goldman and Ms. Scannon’s uncompleted Corsair 50, and 

failing to supply Mr. Goldman and Ms. Scannon with all drawings, 

lists, and specifications for the Corsair 50.

FAC ¶ 86. The FAC alleges that plaintiffs performed all or substantially all of their obligations 

under the settlement agreement and addendum, and seeks damages for defendants' breach. Id. 

¶¶ 87-88. 

Defendants move for summary judgment on this claim, contending that defendants did not 

breach the agreement and addendum. Plaintiffs did not move for summary judgment on this 

claim, and their opposition to defendants' motion asserts – contrary to the allegations of the FAC –

that the agreement is not enforceable because plaintiffs properly terminated the agreement under 

Singapore law.7 At the hearing on this matter, the Court questioned plaintiffs' counsel about the 

apparent inconsistency between the theory alleged in the complaint and plaintiffs' position in their 

summary judgment opposition. In response, plaintiffs' counsel stated that this claim was amenable 

to summary judgment, and that plaintiffs now seek a summary judgment ruling that plaintiffs 

 

7

The Court notes that, as with the first cause of action, plaintiffs’ theories and claims as presented 

in their summary judgment papers are different from what is alleged in the FAC. 

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properly terminated the settlement agreement pursuant to Singapore law and thus that the 

agreement is unenforceable.

8

 However, plaintiffs did not move for summary judgment on this 

claim, and plaintiffs’ claim as framed in the summary judgment opposition is inconsistent with the 

allegations of the FAC. 

In any event, the Court finds that the undisputed record shows that defendants did not 

breach the August 21, 2012 settlement agreement and September 5, 2012 addendum, and thus that 

defendants are entitled to summary judgment on plaintiffs’ claim. The evidence shows that after 

the parties executed those agreements, Koch stated that he needed to withdraw the agreement 

unless he received certain assurances regarding the Singapore arbitration. Although plaintiffs now 

argue that Koch’s September 6, 2012 e-mail was a repudiation of the settlement agreement and 

addendum, the evidence shows that on September 7, 2012, plaintiffs’ solicitor responded to 

Koch’s email by providing the requested assurances and asking for confirmation that the “focus is 

now entirely on arranging departure of the vessels from Vietnam.” Matz Decl. Ex. 34 (Dkt. 95-4). 

Although the parties continued to exchange e-mails regarding a possible modification of the 

settlement agreement, the parties did not agree on a modification and continued to act as if the 

agreement was in place. The FAC alleges that defendants breached the settlement agreement and 

addendum by failing to take various steps to prepare the boat for shipment. However, the record 

shows that defendants repeatedly stated their intention to ready the boat to ship. The evidence is 

also undisputed that on September 12, 2012, Goldman asked Sganzerla about readying the boat for 

motoring from Vietnam, a change that would have required significantly different preparations 

than preparing the boat for shipment by barge, as indicated by Sganzerla’s September 13, 2012 

response to Goldman. Dkt. 93-11. Plaintiffs do not dispute that Goldman never responded to the 

questions in Sganzerla’s September 13, 2012 e-mail. Instead, Goldman sent Sganzerla several e-

 

8

Plaintiffs' counsel stated that plaintiffs sought such a ruling because they intended to submit that 

ruling to the court presiding over the currently-stayed litigation pending in Singapore.

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mails on September 20, 2012, stating that the shipping of the boat was “on hold,” and also asking 

what had been done to ready the boat for shipment (to which Sganzerla responded the same day).

Dkt. 93-11, 93-13. The record does not support plaintiffs’ claim that defendants breached the 

settlement agreement and addendum at any point prior to plaintiffs’ October 1, 2012 letter 

purporting to terminate the agreement.9

III. Third Cause of Action, Conversion (Against Corsair Defendants and Ward)

Defendants move for summary judgment on plaintiffs’ conversion claim. The FAC alleges 

that defendants intentionally and substantially interfered with plaintiffs' property by cutting the 

hull of the boat at the stern, thereby "seriously compromising the integrity of the hull," adding 

different transoms than the original transoms that were designed, and then attaching these new 

transoms onto the remaining hull. FAC ¶ 91. The FAC also alleges that "to further profit from 

[plaintiffs'] catamaran without their consent," defendants caused molds to be taken from the hull 

of the boat. Id. ¶ 92. The FAC alleges that defendants have interfered with plaintiffs' boat by 

failing to deliver it despite their demand for its return, and continuing to possess it at a location 

that is inaccessible.

The elements of a claim for conversion of are (1) the plaintiff's ownership or right to 

possession of the property at the time of the conversion; (2) the defendant's conversion by a 

wrongful act of disposition of property rights; and (3) damages. See Farmers Insurance Exchange 

v. Zerin, 53 Cal. App. 4th, 445, 451 (1997).

The Court concludes that plaintiffs have not raised a triable issue of fact on this claim and 

that defendants are entitled to summary judgment. Defendants have submitted undisputed 

evidence of the following: The first Corsair C50 (the Coales') that was launched experienced 

steering and balance problems that caused it to “round up” – i.e., head into the wind – in certain 

 

9

Plaintiffs also assert that they learned that shipment by barge was impossible under Vietnam law. 

However, the only evidence in support of this assertion is Goldman’s inadmissible hearsay 

statement that “In or around August or September 2012, I was told by representatives of shipping 

companies that, under Vietnamese law, barges are not allowed to transport goods outside 

Vietnamese waters.” Goldman Decl. ¶ 8 (Dkt. 95-6). 

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conditions of high winds and rough seas. Ward Decl. ¶ 37 (Dkt. 88); Sganzerla Depo. 18:8-18 

(Kagay Decl. Ex. L, Dkt. 87-12). Defendants worked with the designer of the boat, Reichel Pugh, 

to correct this problem. Ward Decl. ¶ 38 (Dkt. 88); Sganzerla Depo. 18:19-19:14 (Kagay Decl. 

Ex. L, Dkt. 87-12). Reichel Pugh's solution was to replace the transom and rudder system with a 

different one, and this was done on all three Corsair C50s, including plaintiffs’. Ward Decl. ¶ 38

(Dkt. 88); Sganzerla Depo. 40:16-41:9 (Kagay Decl. Ex. L, Dkt. 87-12). 

Plaintiffs assert that the modification was “wrongful” because “the evidence shows that the 

boat could have been fixed by simply moving the dagger boards into the correct position.” Dkt. 

95 at 35-36. However, plaintiffs do not submit any evidence to show that the solution devised by 

Reichel Pugh was harmful. The evidence before the Court shows that Ward had CMICL modify 

the transoms because that was the remedy that the boat designer Reichel Pugh prescribed for the 

rounding-up problem, and that this type of modification is not uncommon and does not 

compromise the boat’s integrity. Ward Reply Decl. ¶¶ 4-6 (Dkt. 98); Reichel Depo. 160:1-162:6, 

Sganzerla Depo. 42:19-45:1 (Kagay Reply Decl. Exs. FF and GG; Dkt. 97-4, 97-5).10

In response to defendants' argument that plaintiffs never demanded the return of the boat, 

plaintiffs assert that "the August 21, 2012 Settlement Agreement was an express demand by 

Plaintiffs for the return of the boat. While Defendants seek to blame Plaintiffs for putting the 

shipping of the boat on hold, the evidence shows it was Defendants that repudiated the agreement . 

. . and that the shipping was put on hold because the parties could not reach agreement on the 

additional terms Defendants wanted to impose on Plaintiffs." Dkt. 95 at 36. However, as 

discussed above, the Court finds that defendants did not repudiate or breach the August 21, 2012

Settlement Agreement prior to plaintiffs' October 1, 2012 letter purporting to terminate that 

agreement, and thus plaintiffs cannot rely on that agreement as a "demand" for the return of the 

boat. 

Plaintiffs also argue that under the 2007 Sales Contract, defendants “should have 

reimbursed Plaintiffs for all sums they had already paid, as they were required to do under the 

 

10 Plaintiffs appear to have abandoned their allegation that defendants committed a wrongful act 

by having a mold made of the hull.

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agreement, and then asked Plaintiffs to transfer title back to them.” Dkt. 95 at 36-37. However, to 

the extent that plaintiffs' conversion claim arises out of the 2007 Sales Contract, that claim is 

either precluded or subject to arbitration as discussed in Section I supra.

IV. Fourth Cause of Action, Unfair Competition (Against Ward, Corsair Marine Sales

Pte Ltd, and Seawind Group Holdings Pty Ltd)

Plaintiffs do not oppose defendants' motion for summary judgment as to the unfair 

competition claim, Dkt. 95 at 11, and therefore the Court GRANTS defendants' motion for 

summary judgment on that claim. 

V. Sixth Cause of Action, Promissory Fraud (Against Ward)

Plaintiffs allege that defendant Ward committed promissory fraud in executing the Mareva 

agreement. Plaintiffs allege that, when Ward promised plaintiffs he would complete the 

construction of their Corsair 50 in return for a release of the Mareva injunction, he never intended 

to keep that promise. FAC ¶¶ 110-115. 

The Court agrees with defendants that this claim is legally precluded. A party may not sue 

in fraud for damages caused by the fraudulent inducement of a contract without first rescinding the 

contract. See Vill. Northridge Homeowners Ass’n, 50 Cal. 4th at 923 ("[T]he plaintiff could not 

avoid the obligation to return the consideration by 'affirm[ing]' the settlement agreement and 

seeking damages for fraud"); Taylor v. Hopper, 207 Cal. 102, 103 (1929). As discussed supra, 

plaintiffs have not rescinded the Mareva Agreement and instead have affirmed it twice by suing to 

enforce it, and therefore they cannot sue for promissory fraud. 

VI. Seventh Cause of Action, Breach of the Covenant of Good Faith and Fair Dealing 

(Against Ward)

The Seventh Cause of Action alleges that “by and through the use of various corporate 

entities, and non-existent entities, . . . Mr. Ward ha[s] been able to avoid liability for breach of the

Sales Contract.” FAC ¶ 118. In their opposition to defendants' motion for summary judgment, 

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plaintiffs elaborate on this claim: "Here, one of the benefits of the June 2007 Sales Contract is the 

right, in the event of a breach by the Seller, to be reimbursed for all sums already paid by the 

Buyer (Matz Decl., Exh. 1, ¶8.3). It has been years since Defendants breached the Sales Contract 

by failing to timely and professionally construct Mr. Goldman and Ms. Scannon’s C50, and yet 

their attempts to obtain reimbursement have been frustrated by Mr. Ward." Dkt. 95 at 38.

“The implied covenant of good faith and fair dealing is limited to assuring compliance 

with the express terms of the contract, and cannot be extended to create obligations not 

contemplated by the contract.” Pasadena Live, LLC v. City of Pasadena, 114 Cal. App. 4th 1089, 

1094 (2004). "The covenant does not exist independently of the underlying contract." Molecular 

Analytical Systems v. Ciphergen Biosystems, Inc., 186 Cal. App. 4th 696, 712 (2010). The Court 

finds that for the same reasons that plaintiffs cannot maintain a claim against Ward for breach of 

the 2007 Sales Contract, plaintiffs cannot maintain a claim against him for breaching the implied 

covenant of good faith and fair dealing with respect to the Sales Contract. The Mareva agreement 

provided that "Any dispute hereunder shall be dealt with by way of arbitration in Singapore . . . .

[and that] . . . On completion of the agreement, . . . Goldman agree[s] that [he] will not pursue any 

other legal action, or make any further claims, against Seawind or the Corsair Group of 

Companies . . . except in so far as such legal claims arise from the non performance by any party 

under this agreement." Kagay Decl. Ex. G (Dkt. 87-7). Plaintiffs' claim for breach of the implied 

covenant of good faith and fair dealing is essentially a restatement of the claim for breach of the 

2007 Sales Contract. Under the terms of the parties' Mareva agreement, plaintiffs must seek relief 

in the Singapore arbitration. Cf. Molecular Analytical Systems, 186 Cal. App. 4th at 712 (where 

contract contained arbitration clause requiring arbitration of disputes concerning interpretation or 

enforcement of contract, breach of implied covenant of good faith and fair dealing claim based on 

same facts as breach of contract claim was subject to arbitration).

CONCLUSION

For the foregoing reasons, the Court DENIES plaintiffs’ motion for summary judgment 

and GRANTS defendants’ motion for summary judgment.

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In light of the Court's resolution of the motions for summary judgment, the Court finds it 

unnecessary to reach the questions of alter ego, personal jurisdiction over defendant Ward, the 

effect of SWGH's Australian liquidation, or whether the August 2012 Settlement Agreement 

extinguished all of plaintiffs' claims. 

In addition, the parties are directed to meet and confer regarding what remains to be 

decided in this case, and to file a joint letter by February 9, 2015, informing the Court of the 

parties' views of whether the March 17, 2015 trial should proceed as scheduled, and if so, what 

claims remain to be tried.

IT IS SO ORDERED.

Dated: February 2, 2015

______________________________________

SUSAN ILLSTON

United States District Judge

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