Opinion ID: 526531
Heading Depth: 1
Heading Rank: 3

Heading: standard of review

Text: 6 The clearly erroneous standard applies to findings of fact. F.R.Civ.P. 52(a); Cataphote Corp. v. DeSoto Chem. Coatings, Inc., 356 F.2d 24 (9th Cir.), cert. denied, 385 U.S. 832, 87 S.Ct. 71, 17 L.Ed.2d 67 (1966). Issues of law are reviewed de novo. United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). 7 The question of what standard of review applies to contract matters is not always so clearcut because [t]he interpretation of a contract and the determination as to its breach are a mixed question of fact and law. Libby, McNeill, and Libby v. City Nat'l Bank, 592 F.2d 504, 512 (9th Cir.1978). In general, factual findings as to what the parties said or did are reviewed under the clearly erroneous standard while principles of contract interpretation applied to the facts are reviewed de novo. Id. 8 In Culinary and Serv. Employees Union, AFL-CIO Local 555 v. Hawaii Employee Benefit Admin., Inc., 688 F.2d 1228 (9th Cir.1982), we stated that if the district court relies upon extrinsic evidence to interpret an ambiguous contract, that interpretation is a factual determination reversible only if the district court's construction is clearly erroneous or if the court applied an incorrect legal standard. Furthermore, In re U.S. Fin.Sec.Litig., we held that 9 [t]he determination of whether contract language is ambiguous is a matter of law.... When the interpretation includes a review of factual circumstances surrounding the contract, the principles of contract interpretation applied to those facts present issues of law which this court can freely review. Libby. When the inquiry extends beyond the words of the contract and focuses on related facts, however, the trial court's consideration of extrinsic evidence is entitled to great deference and its interpretation of the contract will not be reversed unless it is clearly erroneous. Culinary. 10 729 F.2d 628, 632 (9th Cir.1984). 11 More recently, in Kern Oil & Ref. Co. v. Tenneco, we again discussed the standard of review for contract cases: 12 Our standard of review in matters of this kind is not simple. Our position is as follows: When the district court's decision is based on an analysis of the contractual language and an application of the principles of contract interpretation, that decision is a matter of law and reviewable de novo. When the inquiry focuses on extrinsic evidence of related facts, however, the trial court's conclusions will not be reversed unless they are clearly erroneous. The question of waiver of a contractual right is also a question of fact and subject to the clearly erroneous standard. 13 840 F.2d 730, 736 (9th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 378, 102 L.Ed.2d 367 (1988) (citations omitted). 14 It is clear that when a district court interprets a contract without using extrinsic evidence, the standard of review is de novo. But: 15 [w]hen the inquiry focuses on extrinsic evidence of related facts, ... the trial court's consideration of extrinsic evidence will not be reversed unless they are clearly erroneous. 16 Kern Oil, 840 F.2d at 736. Thus, if the contract interpretation includes a review of factual extrinsic evidence, the findings of fact themselves are reviewed under the clearly erroneous standard, Libby, 592 F.2d at 512, but the principles of contract law applied to those facts are reviewed de novo. U.S. Financial Securities, 729 F.2d at 632. 17