Court Opinion

ID: 4652844
Source: CourtListenerOpinion
Date Created: 2021-01-20 21:00:44.03037+00
Date Added: 2024-06-11T08:01:50.548475
License: Public Domain

NOT FOR PUBLICATION                            FILED
                    UNITED STATES COURT OF APPEALS                         JAN 20 2021
                                                                       MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, USA on                No.    20-15383
behalf of RURAL UTILITIES SERVICE
("RUS"), an agency of the Department of         D.C. No.
Agriculture,                                    1:18-cv-00145-JMS-RT

                Plaintiff-Appellee,
                                                MEMORANDUM*
 v.

SANDWICH ISLES
COMMUNICATIONS, INC.,

                Defendant-Appellant,

and

ALBERT S.N. HEE; et al.,

                Defendants.

                   Appeal from the United States District Court
                            for the District of Hawaii
               J. Michael Seabright, Chief District Judge, Presiding

                           Submitted January 15, 2021**
                             San Francisco, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: WALLACE and M. SMITH, Circuit Judges, and LASNIK,*** District
Judge.

      Sandwich Isles Communications, Inc. (SIC) appeals from the district court’s

grant of summary judgment in the United States’ favor and of the United States’

motion to dismiss SIC’s counterclaims. The district court entered final judgment,

pursuant to Federal Rule of Civil Procedure 54(b), on its order granting summary

judgment. Because the parties are familiar with the facts, we do not recount them

here, except as necessary to provide context to our ruling. We have jurisdiction

pursuant to 28 U.S.C. § 1291 to review the order granting summary judgment, and

we affirm. We lack jurisdiction to review SIC’s counterclaims.

      1. Federal contract law controls the interpretation of the parties’ contract. See

United States v. Seckinger, 397 U.S. 203, 209 (1970); see also Kennewick Irrigation

Dist. v. United States, 880 F.2d 1018, 1032 (9th Cir. 1989). An “ordinary contract

principle . . . is that when a contract is ambiguous, courts can consult extrinsic

evidence to determine the parties’ intentions.” CNH Indus. N.V. v. Reese, 138 S. Ct.

761, 765 (2018) (citing M & G Polymers USA, LLC v. Tackett, 574 U.S. 427, 443

(2015) (Ginsburg, J., concurring)). “[A] contract is not ambiguous unless, after

applying established rules of interpretation, it remains reasonably susceptible to at

      ***
            The Honorable Robert S. Lasnik, United States District Judge for the
Western District of Washington, sitting by designation.

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least two reasonable but conflicting meanings.” Id. (internal quotations and

alterations omitted).

      SIC does not argue the contract is ambiguous. Instead, SIC argues that

“governing law” requires the court to consider “evidence outside of the writing . . .

to determine the true intent of the parties.”       This, however, is an incorrect

characterization of the law. Before considering extrinsic evidence, we must

conclude that the contractual language is ambiguous. See CNH Indust., 138 S. Ct.

at 765.

      The contractual language is unambiguous—SIC’s loan payments are not

conditioned on SIC receiving payments of $14,000 per line from the Universal

Service Fund. The contractual language that SIC quotes to argue otherwise does not

concern conditions to SIC’s repayment—it establishes conditions precedent to the

disbursement of the loan.

      Furthermore, the continuation of the Universal Service Fund’s payments (at

the same amount per-line) was not a basic assumption of the parties’ contract. Under

§ 261 of the Second Restatement of Contracts, “[t]he continuation of existing market

conditions and of the financial situation of the parties are ordinarily not [basic]

assumptions” of contracts, unlike the continued existence “of a person or . . . a

specific thing necessary for performance.” Relying on § 231, the Supreme Court

in United States v. Winstar Corp. explained that, given the “fluctuations” of rules in

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“highly regulated industry[ies],” “it would be absurd to say that the nonoccurrence

of a change in the regulatory . . . rules [is] a basic assumption” upon which contracts

are made. 518 U.S. 839, 891, 907 (1996) (citations omitted). SIC, however, is

requesting us to hold the contrary.

         The absence of language in the contract concerning the contractual effect of

University Service Fund decreasing its payments “gives rise to the inference that the

risk was assumed” by SIC. Id. at 905. Accordingly, the district court properly

granted summary judgment in favor of the United States as to its breach of contract

claim.

         2. We lack jurisdiction to review SIC’s counterclaims. Pursuant to Federal

Rule of Civil Procedure 54(b), “any order or other decision, however designated,

that adjudicates fewer than all the claims or the rights and liabilities of fewer than

all of the parties does not end the action as to any to the claims or parties,” unless

“the court expressly determines” otherwise. Here, the United States has many other

claims pending in the district court, and the district court expressly determined that

only its order on the United States’ breach of contract claim was a final judgment

within the meaning of 28 U.S.C. § 1291.

         AFFIRMED.

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