N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
HIDDEN HILLS M ANAGEM ENT, LLC , a W a shington lim

ite d lia bility c om pa ny ; 334TH PLAC E 2001, LLC ,

Pla i ntiffs-Appe lla

nts,
v. AM T AX HOLDINGS 114, LLC , a n Ohio lim i te d lia bility c om pa ny ; AM TAX HOLDINGS 169, LLC ,

De fe nda n ts-Appe lle e s. No. 19-35861 D.C . No. 3:17-c v-06048-R B L
M EM O R ANDUM *

HIDDEN HILLS M ANAGEM ENT, LLC , a W a shington lim

ite d lia bility c om pa ny ; 334TH PLAC E 2001, LLC ,

Pla i ntiffs-Appe lle e s,
v. AM T AX HOLDINGS 114, LLC , a n Ohio lim i te d lia bility c om pa ny ; AM TAX HOLDINGS 169, LLC ,

De fe nda n ts-Appe lla

nts. No. 19-35862

D.C . No. 3:17-c v-06048-R B L 

# FIL ED MAR 24 2021 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.Appe a l from the Unite d

Stat e s Distric t C ourt for the W e ste rn Distric t of W a shington R o n a ld B
. Le ighton, Distric t Judge , Pre siding Argue d a nd Subm itte d M a

rc h 4, 2021 Se attle , W a s hington B e fore : R

AW LINSON a

n d B YB EE, C irc uit Judge s, a nd ENGLAND, ** Se nior Distric t Judge
. The se c ross-a

ppe a ls a rise from dispute s in two W a shington pa rtne rships: (1) the H idde n Hills Pa

rtne rship, with ge

ne ra l pa rtne r Hidde n Hills M ana ge m e nt, LLC (HHM ) and lim i te d pa

rtne r AM TAX 114, LLC ; a nd (2) the Parkway Partne rship, with ge ne ra l pa

rtne r 334th Pla c e , LLC and lim ite d pa rtne r AM TAX 169, LLC
. The distric t c ourt ha d origina l jurisdic tion unde r 28 U.S.C . § 1332. W e have jurisdic tion unde r 28 U.S.C
. § 1291. W e re vie w the distric t c ourt’ s sum m ary judgm e nt de te rm ination de novo. J o ne s v . Roy al Admin. Se rv

s., Inc
. , 887 F.3d 443, 447 (9th C i r. 2018). The distric t c ourt’ s le ga l c onc lusions following a be nc h tria l
a lso re c e i ve de novo re vie w, while its findings of fac t a re re vie we d for c le ar e rror. Be rte lse n v . Harris , 537 F.3d 1047, 1056 (9th C ir. 2008). W e a ffirm
.

* * The Honora

ble M orrison C . Engla

nd, Jr., Se n ior Unite d State s Distric t Judge for the Ea ste rn Distric t of C a lifornia , sitting by de signa tion. 21. The distric t c ourt c orre c tly de te rm ine d tha

t the Hidde n Hills
e nvironm e nta l inde m

nity a gre e m e nt a

pplie d to the option proc e s s se t out in § 7.4(J) of the pa

rtne rship a gre e m e nt. Our goa l in inte rpre ting a c ontra c t ua l provision is to a sc e rta in the pa rtie s’ inte nt. Be rg v . Hude sman , 801 P.2d 222, 226 (W a sh. 1990) (e n ba

nc ). W e do so by

e xam ining thete xt a

n d the pa rtie s’ obje c tive
m anife s tations. He arst C ommc ’ns, Inc
. v . Se attle

Time s C o. , 115 P.3d 262, 267 (W a sh. 2005) (e n ba

nc ). The te xt of the inde m nity a gre e m e nt is c le ar that the pa rtie s inte nde d to inde m

nify AM TAX 114 a ga i nst “ any and a ll . . . loss[e s] ”
re late d to the known soil c onta m ination. Tha

t inde m nity is not lim

ite d to distributions be

twe e n AM TAX 114 a

nd the Hidde n Hills Pa

rtne rship itse lf. The distric t c o urt did not err in finding tha t the inde m

nity a gre e m e nt prohibite d de duc ting c onta

m ination c osts from

the a ppra isa l. 1 2. W e re

je c t the AM TAX e ntitie s’ c la im that the ge ne ra l pa rtne rs’ de la

y in providing the

2018 fina

nc ia l sta te m e nts re q

uire s the ir re m ova l. W e ne e d not
re solve the pa

rtie s’ disputeove r the a

pplic a ble sta nda rd of re vie w for the se
re m ova l proc e e d ings be c a use the re sult is the sam e unde r e i the r sta nda rd. The re is no disputetha

t the 2018 sta

t e m e nts we re lat e . Howe ve r, the de la y is not grounds

1 The re fore , the distric t c ourt’ s prohibition on disc losing potentia l c onta m i nation e xpe nse s to a

future a ppra ise r and its fe e award a lso sta nd. 3for re m ova l be c a use the lim ite d pa

rtne rs c ontribute d to tha

t de l ay . Se e Re frige ration Eng’g C

o. v . Mc K ay , 486 P.2d 304, 309 (W a sh. C t. App. 1971) (party “ c annot ta

ke a d va nta ge ” of a

fa ilure tha

t it c a use d). The pa

rtne rships’ C PA te stifie d at tria l tha

t ha d AM TAX’ s e xpe rt witne ss not a c c u se d he r of m ate ria lly
m issta ting prior a

u dits, shewould ha

ve issue d the 2018 sta

te m e n ts, de spite not form a lly withdra wing until a fte r the a

udits we re due . The distric t c ourt found he r te stim ony c re dible , a de t e rm ination tha t we uphold a

bse nt c le a r e rror. Se e Earp v
. Dav is , 881 F.3d 1135, 1145 (9th C ir. 2018). TheAM TAX e ntitie s should not be ne fit from

the ir obstruc tion of thea u dit proc e ss. The de la

y e d 2018 sta

te m e nts do not support rem ova l. 3. HHM ’ s inte rfe re nc e in the Hidde n Hills a p pra isa l proc e s s did not
warran t its re m ova l be c a

use AM TAX 114 did not suffe r e c onom ic de trim e nt. The te xt of the pa

rtne rship a gre e m e nt’ s re m ova l provision doe s not support AM TAX 114’ s inte rpre tation. Se c tion 4.5(A)(iv)(2) a llows thege ne ra l pa rtne r’ s re m ova l for
a viola tion of § 7 of the

a gre e m e nt or a

ny “ m ate ria l provision of [the ] Agre e m e nt.” B ut the lim ite d pa

rtne r m ust de m onstra

te a re a sona ble e xpe c tat ion of e c o nom ic de trim e nt. AM TAX 114 did not pre se nt e v i de nc e tha t the a lle ge d bre a c he s c a

use d
e c onom ic de trim e nt. Thus, re m ova l of HHM is unwa rrante d.

44. AM TAX 169’ s de rivative c la i m s a ga inst 334th Plac e are ba rre d by the pa rtie s ’ c ontra c t

ua lly im pose d busine ss judgm e nt rule . Although the busine ss judgm e nt rule ge ne ra lly

doe s not a

pply to pa rtne rships, se e Sc ott v . Trans-Sy s. Inc
. , 64 P.3d 1, 5 (W a sh. 2003) (e n ba nc ), the pa

rtne rship a gre e m e nt shie lde d 334th Pla c e from

lia bility for good fa ith de c isions tha t da m a ge d the pa

rtne rship. As the distric t c o urt found, 334th Plac e a c te d in good fa ith to m ana ge the a ffa irs of the Parkway prope rty . The re is no e vide nc e tha t 334th Pla c e atte m

p te d to hideany

of the p artne rship’ s e xpe nse s from AM TAX 169, a

nd AM TAX 169 ha d se ve ra l opportunitie s to disc ove r and c ha lle nge the now-dispute d fe e s but did not. AM TAX 169’ s de rivative c l a im s fa il. 2 5. Fina lly , the distric t c ourt c orre c tly de te rm ine d tha

t 334th Pla c e ’ s bre a c he s of the pa

rtne rship a gre e m e nt, if a

ny , did not rise

to the le v e l of re m ova l be c a use 334th Pla c e m ana g e d the a ffa irs of the pa rtne rship throughout the
c om plia nc e pe riod in good fa

ith. AFFIRM E D. The pa

rtie s sha ll be ar the ir own c osts on a ppe a l.

2 AM TAX 169’ s a lte rnat ive argum e nt tha t the distric t c ourt ignore d va rious fe e s at tria l is be lie d by

the re c o rd. The distric t c o urt “ c onside re d e a c h of [the ] fe e s in de ta il during the tria l” but found tha t only two of the c ha lle nge d fe e s we re “ e ve n ‘ d e b a ta b le ’ on the m e rits.” 5