Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00393/USCOURTS-caed-2_05-cv-00393-4/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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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

LIVINGSTON & MATTESICH LAW

CORPORATION

NO. CIV. S-05-0393 WBS DAD

Plaintiff, 

v. MEMORANDUM AND ORDER RE:

PLAINTIFF’S MOTION FOR SUMMARY

JUDGMENT

ARIZONA BEVERAGE COMPANY LLC,

a New York limited liability

company; BEVERAGE MARKETING

USA, INC., a New York business

corporation; FEROLITO AND

VULTAGGIO LTD., a New York

business corporation;

FEROLITO, VULTAGGIO & SONS, a

business entity of unknown

form; and HORNELL BREWING

COMPANY, INC., a New York

business corporation,

Defendants.

----oo0oo----

Plaintiff law firm seeks payment from defendants, whom

plaintiff alleges are its former clients. Jurisdiction is proper

due to the diversity of citizenship of the parties. See 28

U.S.C. § 1332. Plaintiff filed five causes of action against

defendants: (1) breach of written contract; (2) breach of express

Case 2:05-cv-00393-WBS-DAD Document 24 Filed 07/15/05 Page 1 of 8
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1 Defendants state that Ferolito, Vultaggio & Sons is a

“dba” of Hornell. (Cunningham Decl. ¶ 11).

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oral contract; (3) breach of implied contract; (4) quantum

meruit; and (5) fraud. (Compl.). Plaintiff now seeks summary

judgment on all causes of action except its claim for fraud. 

Disputed material facts abound in this case, which was filed in

February 2005 and in which discovery has barely begun. (See June

8, 2005 Scheduling Order). Therefore, plaintiff’s motion will be

denied.

I. Factual and Procedural History

This case revolves around two contracts, one written

and one oral. The written contract was a retainer agreement

dated June 1, 2000 and executed by Gene Livingston of plaintiff

law firm and by Lisa Lane of Synnestvedt & Lechner LLP,

purportedly on behalf of “Beverage Marketing.” (Livingston Decl.

Ex. A (retainer agreement)). The document states that “You have

retained this firm to represent Beverage Marketing with respect

to the California Department of Health Services embargo of

Arizona herbal tea drink.” (Id. Ex. A at 1). Livingston in his

declaration contends that the term “Beverage Marketing” in the

retainer agreement refers to not only the defendant known as

Beverage Marketing USA, Inc. (“BMUSA”), but also to defendant

Hornell Brewing Company, Inc. (“Hornell”)1 and defendant Arizona

Beverage Company LLC (“Arizona”). (Id. ¶ 4). Martin Cunningham,

general counsel for Hornell, disputes that reading, stating “The

only identified party to a June, 2000 written (retainer

agreement) contract with Plaintiff . . . was Beverage Marketing. 

Neither Arizona Beverage, nor Hornell, were ever parties to any

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written (retainer agreement) contract with Plaintiff Livingston.” 

(Cunningham Decl. at ¶ 5).

The retainer agreement has a clause stating that

“[t]his Agreement may be modified by . . . an oral agreement to

the extent the parties carry it out.” (Livingston Decl. Ex. A at

3). Plaintiff contends that the Arizona, Hornell, and BMUSA

entities all orally contracted with plaintiff for legal services

on matters beyond the California embargo. (Id. ¶¶ 8, 14). 

Defendants do not dispute that plaintiff represented Hornell in

an action brought by the District Attorney of Los Angeles (the

“D.A. L.A. action”), but do dispute that plaintiff represented

either Arizona or BMUSA in that action. (Defs.’ Separate

Statement of Undisputed Facts ¶ 4; Cunningham Decl. ¶ 7). 

Hornell’s Cunningham states that the settlement of the

D.A. L.A. action “cost the company $138,000.” (Cunningham Decl.

¶ 14). Cunningham states that plaintiff law firm told him that

the settlement of the D.A. L.A. action would have a res judicata

effect on civil suits, and that he relied on that statement of

the law in choosing to settle. (Id. ¶¶ 12-14). Gene Livingston

states that he never advised anyone associated with the

defendants that the settlement would provide res judicata

protection. (Supp. Livingston Decl. ¶ 11).

In fact, the D.A. L.A. action did not have a res

judicata effect on civil suits such that those suits were easily

dismissed. (Id. ¶ 13). In January or February 2003, Hornell was

served in the case of Dorothy Singleton, et al. v. Ferolito,

Vultaggio & Sons et al. (Id. ¶ 11; Livingston Decl. ¶ 13). 

Plaintiff law firm contends that it represented all defendants in

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the Singleton action. (Livingston Decl. ¶ 15). Defendants

dispute that any party other than Hornell was represented in the

Singleton action. (Cunningham Decl. ¶ 11). 

It is undisputed that Cunningham contacted Gene

Livingston by telephone to arrange for representation of Hornell

in the Singleton action. (Id. ¶ 12). However, the terms of that

oral agreement are very much in dispute. Defendants contend that

Hornell retained plaintiff’s services for the limited purpose of

filing a motion to dismiss. (Id.). Plaintiff contends that the

arrangement was not limited to such a motion. (Livingston Decl.

¶¶ 13-20).

Singleton was not dismissed early on. Plaintiff

contends that it opened a file on the Singleton action in

February 2003, and proceeded to work on the case through August

2003. (Livingston Decl. ¶¶ 16, 29). Plaintiff contends that the

monthly statements it sent to defendants remained unpaid during

that period, and that defendants now owe $159,246.23 for legal

services and $43,081.45 in late fees. (Id. ¶¶ 20, 29, 32).

Defendants view the Singleton arrangement differently. 

Cunningham of Hornell states that, after learning that civil

suits like Singleton would not be barred by res judicata, he

called Livingston in March 2003 to tell him that plaintiff’s

legal malpractice insurance carrier should be put on notice. 

(Cunningham Decl. ¶ 17). Cunningham states that his

understanding of the agreement was that any legal services

provided by plaintiff were a gift, voluntarily provided for the

purposes of rectifying plaintiff’s alleged misrepresentation that

the L.A. D.A. action would have a res judicata effect. (Id. ¶

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2 Plaintiff argues that defendants’ understanding that

the legal services were provided as a gift was unexpressed and

therefore has no legal effect. Defendants do not admit that they

never expressed their understanding of the contract to the

plaintiff, and therefore the court cannot find as a matter of law

that defendants’ understanding was not the understanding of the

parties. The court notes that plaintiff’s case may become

stronger (or weaker) as defendant’s representatives are deposed

on this issue.

Plaintiff also contends that if defendants had held the

view that plaintiff was providing legal services free of charge,

defendants would have been disabused of that notion by the first

billing statement. As discussed below, a billing statement is

not conclusive evidence of mutual intent. Defendants may have

thrown out the statements without reading them, knowing that

plaintiff was providing free legal services. Defendants may also

have interpreted the statements as a demonstration of the extent

of the charity plaintiff was conferring on defendants. Once

again, the process of discovery will likely bring more facts to

light. 

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21).2 Gene Livingston, on the other hand, states that Cunningham

never told him to put the firm’s malpractice carrier on notice

and that, if Cunningham had, plaintiff would have withdrawn from

representing defendant(s) at that time. (Supp. Livingston Decl.

¶ 12).

II. Discussion

The court must grant summary judgment to a moving party

“if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, 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). Where the non-moving party avers specific

facts that contradict specific facts averred by the moving party,

factual disputes must be resolved in favor of the non-moving

party. Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990). 

“A party seeking summary judgment always bears the initial

responsibility of informing the district court of the basis for

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its motion,” and pointing the court to the evidence that it

believes show that there are no genuine issues of material fact

remaining. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 

If the party moving for summary judgment has the burden of

persuasion at trial, as plaintiff does in this case, it “must

establish beyond controversy every essential element” of its

claim. S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 888

(9th Cir. 2003)(citation omitted). Defendant in this case “can

defeat summary judgment by demonstrating the evidence, taken as a

whole, could lead a rational trier of fact to find in its favor.” 

See id.

Defendants have designated specific facts showing that

there remain genuine issues for trial at this early stage in the

litigation. Plaintiff has not shown that the written retainer

agreement was executed on behalf of Arizona or Hornell. The

written retainer agreement only states that it is executed on

behalf of “Beverage Marketing,” and defendant vigorously argues

that the retainer agreement was executed only by BMUSA. 

(Cunningham Decl. ¶ 5). Plaintiff’s only evidence for the

proposition that the defendants were all represented by

plaintiff, other than the bald assertions of Gene Livingston, is

a check made out to plaintiff, drawn on an account held in the

name of Ferolito, Vultaggio & Sons, and dated January 10, 2003. 

(See Livingston Decl. Ex. B (check)). This is simply not enough

to establish unequivocally that all of the defendants were

represented by plaintiff. See Cal. Civ. Code § 1487(“An offer of

performance must be made by the debtor, or by some person on his

behalf and with his assent.”)(emphasis added).

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Further, the identities of the parties that entered

into any subsequent oral agreements and the terms of those oral

agreements remain in dispute. At this early stage of discovery,

the dispute in this regard is essentially a swearing match. 

Plaintiff might argue that its preparation and delivery of

billing statements show that the terms of the oral agreement are

not in dispute. However, California law is clear in holding that

a unilateral act cannot establish the existence of a contract. 

There must be evidence of mutual intent. Long v. Rumsey, 12 Cal.

2d 334, 345 (1938)(“It is essential to the existence of every

contract that there should be a reciprocal assent to a definite

proposition.”)(citation omitted). The billing statements in this

case would not be enough, on their own, to prove the terms of any

oral agreement. See India Paint & Lacquer Co. v. United Steel

Prod. Corp., 123 Cal. App. 2d 597, 608 (1954)(“An invoice, as

such, is no contract.”). 

Likewise, plaintiff’s claim in quantum meruit has not

been established beyond controversy. Quantum meruit applies

where services were “performed under circumstances disclosing

they were not gratuitously rendered.” Huskinson & Brown, LLP v.

Wolf, 32 Cal. 4th 453, 458. Here, there is a dispute about

whether the services were or were not gratuitously rendered. On

the scant evidence in the record, the court is unable to find as

a matter of law that quantum meruit applies.

For the foregoing reasons, the court cannot find, as a

matter of law, that no genuine issues remain as to plaintiff’s

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3 Defendants did not bring a motion pursuant to Federal

Rule of Civil Procedure 56(f).

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first four causes of action.3

IT IS THEREFORE ORDERED that plaintiff’s motion for

partial summary judgment be, and the same hereby is, DENIED.

DATED: July 12, 2005

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