NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SUNFARMS, LLC, a Delaware Limited 

Liability Company; MITCH DMOHOWSKI, 

Plaintiffs-Appellants, 

 v. 

EURUS ENERGY AMERICA 

CORPORATION, a Delaware Corporation; 

TOYOTA TSUSHO AMERICA, INC., AKA 

Toyota Tsusho America, a New York 

Corporation, 

Defendants-Appellees, 

and 

EE WAIANAE SOLAR PROJECT, LLC; 

TOYOTA TSUSHO CORPORATION; 

ROBERT EISEN; SATOSHI TAKAHATA; 

EURUS ENERGY AMERICA, INC. 

Defendants.

No. 22-56049 

D.C. No. 

3:18-cv-00058-L-AGS 

MEMORANDUM*

Appeal from the United States District Court

for the Southern District of California

M. James Lorenz, District Judge, Presiding

Argued and Submitted January 8, 2024

Pasadena, California

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

JAN 26 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

Before: RAWLINSON, MELLOY,** and H.A. THOMAS, Circuit Judges.

Appellant Mitch Dmohowski and his company, Sunfarms, LLC 

(collectively, “Sunfarms”), appeal the district court’s grant of summary judgment 

to Eurus Energy America Corporation (“Eurus”) and Toyota Tsusho America, Inc. 

(“TTAI”) on claims arising from alleged breaches of a Consulting Services 

Agreement (“CSA”). We have jurisdiction under 28 U.S.C. § 1291. We review the 

district court’s grant of summary judgment de novo, S.R. Nehad v. Browder, 929 

F.3d 1125, 1132 (9th Cir. 2019). We affirm.

1. Sunfarms claims that Eurus breached the royalty agreement in the CSA by 

substituting itself in the place of the EE Waianae Solar Project, LLC Project 

Company. To prevail on a breach of contract claim, an appellant must provide

“competent evidence of actual damages suffered, as opposed to speculative 

damages.” Cal. Shoppers, Inc. v. Royal Globe Ins. Co., 175 Cal. App. 3d 1, 42 

(1985). Sunfarms fails to provide evidence that it has or is likely to suffer actual 

damages. Since 2018, Eurus has fully paid, and Sunfarms has accepted, all annual 

royalty payments pursuant to the terms of the royalty agreement. And Eurus 

** The Honorable Michael J. Melloy, United States Circuit Judge for the 

U.S. Court of Appeals for the Eighth Circuit, sitting by designation.
3 

conceded at oral argument that a breach of contract action will lie against it if it 

fails to make such payments.

2. Sunfarms argues that Eurus breached the implied covenant of good faith 

and fair dealing during precontractual negotiations by requesting that Sunfarms 

waive the implied covenant. But the implied covenant does not apply during noncompulsory contract negotiations, Copeland v. Baskin Robbins U.S.A., 96 Cal. 

App. 4th 1251, 1260 (2002). And the record does not indicate that negotiations

between Sunfarms and Eurus were compulsory. As such, the covenant of good 

faith and fair dealing did not attach until the contract was formed, which was after 

the request had been made. Id.

3. Sunfarms also argues that Eurus breached the CSA by refusing to provide 

Sunfarms with a $500,000 termination payment because the Palehua Wind & Solar 

Project was allegedly “shortlisted” for a Power Purchase Agreement with the 

Hawaiian Electric Company (“HECO”) at the time the CSA was terminated. A 

contract’s words are to be understood “in their ordinary and popular sense,” Cal. 

Civ. Code § 1644, and “evidence of usage and custom may be introduced as an 

instrument of interpretation,” Shenson v. Cnty. of Contra Costa, 89 Cal. App. 5th 

1144, 1172 (2023). Here, the district court did not err in determining that Eurus 

was not shortlisted.
4 

4. Finally, Sunfarms argues that Eurus breached the implied covenant of 

good faith and fair dealing by pursuing bilateral negotiations with HECO.

Sunfarms has waived this argument by failing to raise it in district court. Thus, we 

decline to review it, People v. Lowery, 43 Cal. App. 5th 1046, 1054 (2020).

Because we hold that Eurus did not breach the CSA, TTAI cannot be held 

vicariously liable for Eurus’s conduct.

AFFIRMED.