N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
JOSHUA SALAZAR , an individual,

Pla i ntiff-Appe lla

nt,
v. GER ARD DANIEL W O RLDW IDE, INC .; e t a l., De fe nda

n ts-Appe lle e s. No. 16-56817 D.C . No. 5:16-c v-00641-R -KK
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia M anue l L. R e a l , Distric t Judge , Pre siding Subm itte d

April 9, 2018 * * Pa sa de n a , C a l ifornia B e fore : B OGGS, * ** B YB E E, a nd WATFORD, C irc uit Judge s . 

# FIL ED APR 24 2018 M OLLY C. DW Y ER, CLERK U
. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t 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.

* * The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without ora l a

rgum e nt. Se e Fe d. R . App. P. 34(a )(2).

* * * The Honora

ble Da nny J. B oggs, Unite d

Stat e s C irc uit Judgefor the U.S. C ourt of Appe a l s for the Sixth C irc uit, sitting by de signa t ion.Pa ge 2 of 4

1. The distric t c ourt e rre d in gra n t ing sum m ary judgm e nt for Ge ra rd Da

nie l W orldwide , Inc
. (GDW ) on Joshua Sa la z ar’ s c la im

tha t the c om p any bre a c he d his
e m ploy m e nt c ontra c t with re spe c t to the a pplic at ion of the prim e inte re st rat e in de te rm i ning Sa la z ar’ s qua rte rly inc e ntive pa

ym e nt. As to a ll othe r issue s re late d to Sa la z ar’ s bre a c h-of-c ontra c t c la im , the distric t c ourt prope rly gran t e d sum m ary judgm e nt. The Em p l oym e nt Agre e m e nt provide s tha t the “ inte re st c ha

rge . . . will be ba se d on the Em

ploy e r’ s inve stm e nt in theB usine ss Unit’ s working c a pita l a nd
e quipm e nt tim e s the prim e inte re st rate in e ffe c t at the e nd of e a c h qua rte r.” The pa rtie s a gre e tha

t the a p plic a ble prim e inte re st rate a t a ll re l e va nt tim e s wa s 3.25 pe rc e nt, but disa gre e a s to how tha t inte re st c ha

rge should ha

ve be e n a sse sse d. In his opposition to sum

m ary judgm e n t, Sa la z ar argue d tha t “ the y e arly

inte re s t rate
on a qua rte rly ba sis”

— i.e
. , 0.8125 pe rc e nt— should ha ve be e n use d, whe re a s GDW
argue d tha t the ra te of 3.25 pe rc e nt should ha v e be e n a s se sse d e a c h qua rte r. B e c a use the distric t c ourt did not a ddre ss this issue in its sum

m ary judgm e nt orde r, we va c a te and re m and for the distric t c ourt, in thefirst insta nc e , to de te rm ine the prope r am ount of inte re st to be c ha rge d in a c c orda

nc e with the Agre e m e nt. Apa rt from the inte re st c ha

rge , the distric t c ourt prope rly grante d sum m ary judgm e nt on Sa la z ar’ s bre a c h-of-c ontra c t c la im . Sa la z a r a rgue s tha t GDWPa ge 3 of 4

wrongly inc lude d e xpe nse s in c a lc u lating his busine ss unit’ s ope ra ting inc om e , but the t e rm s of the Agre e m e nt m a k e c le ar tha t suc h e xpe nse s we re prope rly inc lude d. The Agre e m e nt de fine s “ ope ra t ing inc om e ” a s the unit’ s “ sa le s le ss its Dire c t
m anufa c turing c osts of goods sold, its Dire c t ope ra ting e xpe nse s a

nd a n im pute d inte re s t c h arge .” The de finition of “ D ire c t,” in turn, inc lude s “ c osts a nd e xpe nse s dire c tly re late d to” t

he unit’ s ope ra tions, but e xc lude s “ g e ne ra l c orporate
ove rhe a d .” C osts a

nd e xpe nse s a ssoc iate d with inve ntory , taxe s, re p a irs,
e m ploy e e s, a d

v e rtising, a

nd the like , we re a ll spe c ific a lly a ttributa ble to Sa la z ar’ s unit a nd, thus, prope rly

c ounte d in c a lc u l a ting the unit’ s ope ra ting inc om e . R e nt e xpe n se wa s like wise prope rly inc lude d whe n de riving the unit’ s ope ra t ing inc om e . Pe r the Agre e m e nt, GDW ha d a n obliga tion to provide Sa la z ar’ s unit with housing a t its Fonta n a fa c ility or a nothe r sim ila

r fa c ility
. That obliga tion, howe ve r, doe s not fore c lose GDW from c ounting re nt e xpe nse a s a dire c t e xpe nse of the unit a nd the re fore inc luding it in the ope rating inc om e form ula
. The re nt e xpe nse wa s the re fore prope rly de duc te d from

the unit’ s sa le s
a m ount. Sa la z ar a lso a

rgue s tha t GDW bre a c he d the Agre e m e nt whe n it “ m arke d up the c ost for its wire c loth or . . . wire m e sh,” but he fa ils to provide an y e vide nc e inPa ge 4 of 4

support of this c la i m . The distric t c ourt the re fore prope rly de te rm ine d tha t Sa la z ar c ould not m a i nta in his bre a c h-of-c ontra c t c la im a s to this issue
. 2. The distric t c ourt prope rly grante d sum

m ary judgm e nt for GDW

on Sa la z ar’ s c l a im

for bre a c h of the im

p lie d c o ve na

n t of good fa i th a

nd fa ir de a ling. B e c a use this “ i m

plie d c ove na

nt c la im se e ks sim

ply to invokete rm s to whic h the pa rtie s did a g re e , it is supe rfluous.” Guz v . Be c hte l N a t’l, Inc
. , 8 P.3d 1089, 1112 (C a l. 2000). To the

e xte nt Sa la z ar argue s tha t GDW ’ s a lle ge d bre a c h c onstitute s a tort, this c la im

fa ils be c a

use “ the re is no tort of ‘ ba d fa ith bre a c h’ of a n e m ploy m e nt c ontra c t.” Id
. 3. The distric t c ourt prope rly grante d sum

m ary judgm e nt for GDW

on Sa la z ar’ s inte ntiona l a

nd ne glige nt m isre pre se n tation c la im s. B oth of the se c la im s re quire tha

t the pla intiff a l le ge a

m i sre pre se ntation. Se e C hapman v . Sk

y pe Inc
. , 220 C a l. App. 4th 217, 230–31 (2013). Sa la z ar fa ile d to do so. In fa c t, Sa la z ar te stifie d at his deposition tha t ne ithe r of the GDW e m

ploy e e s with whom

he spoke during the proc e ss of se lling his c om pa ny m a de any

fa lse sta t e m e nts. AFFIRM E D in par t, V ACAT E D in par t, and RE M ANDE D . The pa rtie s sha ll be ar the ir own c osts on a ppe a l.