T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3.

T he pa ne l una ni m ous l y c onc l ude s thi s c a s e i s s ui t abl e f orde c i s i on ** w ith o u t o r a l a r g u m e n t. See F ed. R . A pp . P . 34 (a )( 2). NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T K E L O M A R , I N C ., aC a lif o rn ia c orpor a t i on, P la in tif

f - A p p e lla n t, v. D A R R E L L K U L O W, D ef

endant- A pp el l ee . N o. 09- 56929 D . C . N o . 3 : 0 9 - c v - 0 0 3 5 3 - B T MPCL ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e S o u th e rn D is tr ic t o f C a lif o rn ia B a rry T . M os kow i t z , D i s tr i c tJ udge , P r e s i di ng S ubm i tt e d F e brua ry 11, 2011 ** P a s a d e n a , C a lif

o rn ia B efo re: P R E G E R S O N , W A R D L A W , an d B E A , C i rcu i tJu d g es. K e lo m a r , I n c . ( “K e lo m a r ” ) ap p e a ls f r o m th e d is tr ic t c o u rt’s g r a n t o f D a rr e ll K u l o w ’ s ( “ K u l o w ” ) mo t i o n f o rj u d g me n to n th e p l e a d i n g s . W e a f f i rm. 

# FI LED FEB 15 2 011 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS2

K el om arcont ends thatK ul ow ow ed a pers on al du ty t o ensure that K e lo m a r ’s m e lo n s w e r e p r o p e r ly lab e le d . T h e la w im p o s e s n o g e n e r a l d u ty to lab e l m e lo n s c o rr e c tly in d e p e n d e n t o f ac o n tr a c t. See Stop L oss I ns. B roke rs , Inc. v . B r ow n & T

oland Me d. G r oup , 49 C a l . Rptr . 3d 609, 612 ( C t . A pp. 2006) ( s t a t i ng tha tthe duty t o “ pr om pt l y pr oc e s s a nothe r ’ s da t a ” a r i s e s f r om ac ontr a c t , a nd i s not c om pa r abl e t o age ne r a l duty t o a voi d i nj ur i ng othe r s ) . T hus , i f K ul ow ha d s uc h a d u ty , it c o u ld o n ly a r is e f r o m H e b b e r d - K u lo w E n te rp r is e ’s ( “H K E ” ) c o n tr a c t w ith K el om ar . B u te v e n a s s u m i n g HK E ’ s c o n tr a c twi th Ke l o m a ri m p o s e d ad u ty o n Ku l o w, K e lo m a rc o u ld n o t r e c o v e rin to rt f o rth e b r e a c h o f

th a t c o n tr a c tu a l d u ty . Se e A as v. Su p eri o r C o u rt , 101 C a l . R ptr . 2d 718, 729 ( 2000) ( “ A pe r s on m a y not ordi nari l y r ec ov eri n t ortfor the breac h o f dut i es thatm er el y r es t at e c on tra ctual obl i ga t i ons . ” ) . A s the di s tr i c tc ourts t a t e d, K e l om a rs houl d s e e k i t s r e m e dy i n a b r e a c h - o f

- c o n tr a c ts u i ta g a i n s tHK E. K e lo m a ra r g u e s th a t th e d e te r io r a tio n o f th e m e lo n s r e s u lte d in p r o p e rty dam age a s opp osed t o p urel y e cono m i c i nj ury, thu s e l evat i ng the breac h-ofc ontr a c tc l a i m t o at ortc l a i m . A s s um i ng w i thoutde c i di ng tha tthe e xi s t e nc e of p ro p erty d am ag e m ay co n v erta b reach o f co n tracti n t o a t o rt , w e n o n eth el ess d is a g r e e th a t th e d e f

e c tiv e lab e ls d a m a g e d th e m e lo n s . T h e d e f e c tiv e lab e ls3

a r g u ab ly p r e c lu d e d s a le o f th e m e lo n s te m p o r a r ily u n til th e e rr o rw a s c o rr e c te d . T he l abel s di d n ot“ di re ct l y c ause [] ph ys i ca l i nj ury. ” E rl i ch v. Menez es , 8 7 C a l. R ptr. 2d 88 6, 89 1 (19 99 ). A ny dam age t o the m el on s r es ul t ed fr om natural d et eri o rat i o n , n o tfro m an y d efecti n th e l ab el s. K e l om a rdoe s notdi s put e tha tthe l os s of pr of i t s f r om ade c l i ne i n va l ue of n o n - p e r is h ab le g o o d s is a d e q u a te ly a d d r e s s e d b y r e m e d ie s in c o n tr a c t. Se e S. M. W i l son & C o. v. Sm i th Int ern. , Inc. , 58 7 F . 2d 13 63 , 13 76 (9th C i r. 19 78 ) ( “ W here the sui ti s betw ee n a no n-perf orm i ng se l l erand an agg ri eved bu ye r and the i nj ury c ons i s t s of

. . . al os s of

pr of i t s tha tthe de a l ha d be e n e xpe c t e d t o y i e l d t o the buy e r , i tw oul d be s e ns i bl e t o l i m i tthe buy e r ' s r i ght s t o thos e pr ovi de d by the U ni f orm C om m e r c i a l C ode . ” ) . W e s e e no r e a s on t o c r e a t e as pe c i a l rul e f or pe r i s habl e goods , nordoe s K e l om a rc i t e t o a ny c a s e s ugge s t i ng w e s houl d. K el om arobj ec t s thati f i tcan rec ov eron l y f or breac h o f c on tra ct , then K e lo m a rh a s n o r e m e d y a g a in s t K u lo w , w h o is n o t ap a rty to th e c o n tr a c t. B u t th is i s the na tur e of

l i m i t e d l i abi l i ty , a nd thi s c a s e pr e s e nt s no r e a s on t o que s t i on a f u n d a m e n ta l c o n c e p t o f

th e la w o f

c o rp o r a tio n s . See U

ni ted Stat es L i ab . Ins. C o. v. H ai di ng er -H

ayes , Inc. , 83 C al . R ptr. 41 8, 42 3 (19 70 ) ( “ D i re ct ors and offi ce rs ar e notpe r s ona l l y l i abl e on c ontr a c t s s i gne d by the m f ora nd on be ha l f

of the corporat i on un l es s they purpo rtt o b i nd them se l ves i nd i vi du al l y. ”) .4

AF F I RME D.