NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SUNDAY'S CHILD, LLC; et al.,
Plaintiffs

- counter

defendants,

v. IRONGATE AZREP BW LLC,
Defendant

- counter

- claimant

Appellee,

v. J. PATRICK FLEMING, Jr.,

Movant

- Appellant. No. 18

- 16253 18

- 16844
D.C. No. 1:13

- cv - 00502

- DKW

- RLP

MEMORANDUM *

SUNDAY'S CHILD, LLC; et al.,
Plaintiffs

- counter

defendants

- Appellants,

v. IRONGATE AZREP BW LLC,
Defendant

- counter

- claimant

Appellee. No. 18

- 16789
D.C. No. 1:13

- cv - 00502

- DKW

- RLP

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED

FEB 24 2020
MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2 Appeal from the United States District Court for the District of Hawaii Derrick Kahala Watson, District Judge, Presiding Argued and Submitted February 3, 2020

Honolulu, Hawaii Before: FARRIS, McKEOWN, and BADE, Circuit Judges.
Plaintiffs /C ounter

- D efendants Sunday’s Child, LLC, et al., 1 appeal the district court’s entry of summary judgment in favor of Defendant /C ounter

C l aimant Irongate AZREP BW LLC (“Irongate”) on the claims asserted in Sunday’s Child’s First Amended Complaint (“FAC”) involving certain sales
contracts executed in 2006 (“Sales Contracts”) , and on Irongate’s counterclaim based on a settlement agreement exe cuted in 2011 (“ Settlement Agreement”)

. Sunday’s Child also appeals the district court’s entry of sanctions against its sole member, non - party Ingrid Wang , and Sunday’s Child’s former counsel, J. Patrick Fleming, appeals the same sanctions order.
We have jurisdiction under 28 U.S.C. § 1291. We review the district court’s
grant of summary judgment de novo, see Mull ex rel. Mull v. Motion Picture Indus.
Health Plan , 865 F.3d 1207, 1209 (9th Cir. 2017), and its sanctions order for an abuse of discretion, see Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 40 9

1 Plaintiffs /C ounter

- D efendants are four limited liability companies sharing the same sole member and are collectively referred to as “Sunday’s Child.”3

(1990). We reverse the district court’s entry of summary judgment on Sunday’s
Child’s claims, affirm the entry of summary judgment on Irongate’s counterclaim,
and vacate the entry of sanctions against Wang and Fleming.

I.
This is the second time this case has bee n before this court

. In our first decision, we recounted the contract provisions at the heart of this appeal

— S ection
D.37 of the Sales Con tracts and S ections 4 and 8 of the Settlement A greement

— and held that certain language in S ection 8 was ambiguous and that certain language in S ection 4 was “at least ambiguous .” See Sunday’s Child , LLC v. Irongate AZREP BW LLC , 666 F. App’x 587 , 589

- 91 (9th Cir. 2016). On remand , the district court considered extrinsic evidence and interpreted th o se sections as a
matter of law

. We conclude that it erred in doing so. Under Hawaii law, “[w]hen an a mbiguity exists so that there is some doubt as to the intent of the parties, intent is a question for the trier of fact.” Found. Int’l, Inc. v. E.T. Ige Constr., Inc. , 78 P.3d 23, 33 (Haw. 2003). S ummary judgment is
thus generally improper in cases involving an ambiguous contract. See, e.g. , Courbat v. Dahana Ranch, Inc. , 141 P.3d 427, 436 (Haw. 2006) ; Wittig v. Allianz,
A.G. , 145 P.3d 738, 744 (Haw. Ct. App. 2006)

. I n the light most favorable to Sunday’s Child, the reco rd reflects several disputes of material fact preclud ing summary judgment

.4

First, genuine dispute s exist as to whether Sunday’s Child intended to (1) release all future claims for excess deposits i f Irongate terminated the S ales
C ontracts and (2) convert its original deposits to non

- refundable payments

. Wang
attested in an affidavit that she would not have signed the Settlement Agreement on behalf of Sunday’s Child had she known that it released all of Sunday’s Child’s rights to r ecover the deposits if Irongate terminate d the Sales Contracts

. 2 Second, to the extent Sunday’s Child’s attorneys ’ understanding of the
Settlement Agreement can be imputed to Sunday’s Child to establish intent , genuine dispute s exist as to whether they un derstood the Settlement Agreement as (1) releas ing all future claims for excess deposits and (2) convert ing the original deposits to non

- refundable payments

. Wang testified that one of Sunday’s Child’s
attorneys advised her that he did not understand wha t the consequences would be
under the Settlement Agreement if Sunday’s Child failed to close

. Further, the
evidence shows that shortly after the parties executed the Settlement Agreement, a second attorney for Sunday’s Child (1) told Fleming that if Sunday’s Child
defaulted , it would need to “ proceed ” with the then

- ongoing litigation against

2 Although Sunday’s Child and Fleming submitted this affidavit only in response to Irongate’s motion for sanctions, the distri ct court had the affidavit readily before it as it simultaneously ruled on the motion for summary judgment and motion for sanctions. I n determining whether a grant of summary judgment is proper, this court “review[s] the record as a whole.” Vander v. U.S . Dep’t of Justice , 268 F.3d 661, 663 (9th Cir. 2001) (citations omitted).5

Irongate , (2) advised Irongate that Sunday’s Child had the “right” to “get back” its excess deposits less costs and fees , and (3) told Irongate that he needed a tolling agreement to protect Sunday’s Child’s claims

. Third, there are genuine dispute s as to whether Sunday’s Child knew or reasonably should have known that Irongate understood the Settlement A greement

as (1) releas ing all future claims for exce ss deposits and (2) convert ing the original deposits to non

- refundable payments

. See Found. Int’l, Inc. , 78 P.3d at 33

- 34. Fourth, a genuine dispute exists as to whether a claim for excess deposits

upon Irongate ’s termination of the S ales C ontracts and retention of all deposits
“could have been made or asserted in the Litigation ” as required for release under
Section 8

. This language has n ever been found to be ambiguous , and Section 8 should be interpreted in a manner that does not render o ther provisions meaningless. See Stanford Carr Dev. Corp. v. Unity House, Inc. , 141 P.3d 459, 470 (Haw. 2006)

. A s we previously explained , Sunday’s Child ’s claims for excess deposits “post

- date the Litigation and the signing of the Settlement Agreement

. ” See Sunday’s Child

, LLC , 666 F. App’x at 590

. We therefore reverse the district court ’s entry of summary judgment on Sunday’s Child’s claims asserted in the FAC. 3

3 We deny Fleming ’s request for judicial notice , see Dkt. 22 (No. 18

- 16253), b ecause neither document is necessary to resolve this appeal and both documents could have been submitt ed to the district court. See Lobatz v. U.S. W. Cellular of6 II. We affirm the entry of summary judgment in favor of Irongate on its
counterclaim. Sunday’s Child’s affirmative defenses of duress, unconscionability, unjust enrichment, and unclean hands either have not been legally recognized in Hawaii or are unsupported by the record.

III. Because we reverse the district court’s entry of summary judgment on Sunday’s Child’s claims, we vacate the sanctions against Wang and Fleming. Each party shall bear its own costs for this consolidated appeal. 1) The district court’s entry of summary judgment in favor of Irongate on Sunday’s Chil d’s claims is REVERSE D and REMAND ED for further proceedings
. 2) The district court’s entry of summary judgment in favor of Irongate
on its counterclaim is AFFIRM ED
. 3) The district court’s entry of sanctions against Wang and Fleming is
VACATE D
.

Cal., Inc. , 222 F.3d 1142, 1148 n.4 (9th Cir. 2000)

.