Court Opinion

ID: 204868
Source: CourtListenerOpinion
Date Created: 2011-02-16 01:04:06+00
Date Added: 2024-06-11T17:27:45.945265
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             FEB 15 2011

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

KELOMAR, INC., a California                      No. 09-56929
corporation,
                                                 D.C. No. 3:09-cv-00353-BTM-
              Plaintiff - Appellant,             PCL

  v.
                                                 MEMORANDUM *
DARRELL KULOW,

              Defendant - Appellee.

                   Appeal from the United States District Court
                       for the Southern District of California
                   Barry T. Moskowitz, District Judge, Presiding

                           Submitted February 11, 2011 **
                               Pasadena, California

Before: PREGERSON, WARDLAW, and BEA, Circuit Judges.

       Kelomar, Inc. (“Kelomar”) appeals from the district court’s grant of Darrell

Kulow’s (“Kulow”) motion for judgment on the pleadings. We affirm.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      Kelomar contends that Kulow owed a personal duty to ensure that

Kelomar’s melons were properly labeled. The law imposes no general duty to

label melons correctly independent of a contract. See Stop Loss Ins. Brokers, Inc.

v. Brown & Toland Med. Group, 49 Cal. Rptr. 3d 609, 612 (Ct. App. 2006) (stating

that the duty to “promptly process another’s data” arises from a contract, and is not

comparable to a general duty to avoid injuring others). Thus, if Kulow had such a

duty, it could only arise from Hebberd-Kulow Enterprise’s (“HKE”) contract with

Kelomar.

      But even assuming HKE’s contract with Kelomar imposed a duty on Kulow,

Kelomar could not recover in tort for the breach of that contractual duty. See Aas

v. Superior Court, 101 Cal. Rptr. 2d 718, 729 (2000) (“A person may not

ordinarily recover in tort for the breach of duties that merely restate contractual

obligations.”). As the district court stated, Kelomar should seek its remedy in a

breach-of-contract suit against HKE.

      Kelomar argues that the deterioration of the melons resulted in property

damage as opposed to purely economic injury, thus elevating the breach-of-

contract claim to a tort claim. Assuming without deciding that the existence of

property damage may convert a breach of contract into a tort, we nonetheless

disagree that the defective labels damaged the melons. The defective labels

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arguably precluded sale of the melons temporarily until the error was corrected.

The labels did not “directly cause[] physical injury.” Erlich v. Menezes, 87 Cal.

Rptr. 2d 886, 891 (1999). Any damage to the melons resulted from natural

deterioration, not from any defect in the labels.

       Kelomar does not dispute that the loss of profits from a decline in value of

non-perishable goods is adequately addressed by remedies in contract. See S.M.

Wilson & Co. v. Smith Intern., Inc., 587 F.2d 1363, 1376 (9th Cir. 1978) (“Where

the suit is between a non-performing seller and an aggrieved buyer and the injury

consists of . . . a loss of profits that the deal had been expected to yield to the

buyer, it would be sensible to limit the buyer's rights to those provided by the

Uniform Commercial Code.”). We see no reason to create a special rule for

perishable goods, nor does Kelomar cite to any case suggesting we should.

       Kelomar objects that if it can recover only for breach of contract, then

Kelomar has no remedy against Kulow, who is not a party to the contract. But this

is the nature of limited liability, and this case presents no reason to question a

fundamental concept of the law of corporations. See United States Liab. Ins. Co. v.

Haidinger-Hayes, Inc., 83 Cal. Rptr. 418, 423 (1970) (“Directors and officers are

not personally liable on contracts signed by them for and on behalf of the

corporation unless they purport to bind themselves individually.”).

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AFFIRMED.

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