Court Opinion

ID: 619933
Source: CourtListenerOpinion
Date Created: 2011-12-28 17:49:21+00
Date Added: 2024-06-11T17:50:50.226038
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                   ________

                                 Nos. 10-4495, 10-4496
                                       ________

         DAEWOO ELECTRONICS AMERICA, INC., a Florida Corporation;
            DAEWOO ELECTRONICS CORP., a (Korea) Corporation,
                                                      Appellants

                                           v.

                 T.C.L. INDUSTRIES (H.K.) HOLDINGS LIMITED;
                  O.P.T.A. CORPORATION f/k/a Lotus Pacific, Inc.

                                       ________

                    On Appeal from the United States District Court
                   for the District of New Jersey (No. 3-08-cv-02287)
                         District Judge: Honorable Joel A. Pisano
                                         ________

                      Submitted Under Third Circuit LAR 34.1(a)
                                  October 26, 2011
                                     ________

               Before: SLOVITER, GREENAWAY, JR., Circuit Judges,
                           and POLLAK,* District Judge.

                          (Opinion filed: December 28, 2011)

                                        ______

                                       OPINION

*
 Honorable Louis H. Pollak, Senior Judge, United States District Court for the Eastern
District of Pennsylvania, sitting by designation.
                                            ______
POLLAK, District Judge.

                                               I.

       Because we write primarily for the parties, who are familiar with the factual and

procedural history of the case, we provide only a brief summary here.

       The lawsuit that gives rise to this litigation is the third of three lawsuits:

       The first was a suit brought by Daewoo Electronics America, Inc. (“Daewoo”)

against O.P.T.A. Corporation (“Opta”) in August 2005 in the California Superior Court

for San Mateo County. Daewoo was a manufacturer of electronic equipment. GoVideo,

a subsidiary of Opta, purchased DVD and VHS combination player and recorder units

from Daewoo and sold them to retailers. Daewoo’s initial suit against Opta was based

upon a guaranty bearing the date December 4, 2003, in which Opta—under its former

name, Lotus Pacific—and T.C.L. Industries (H.K.) Holdings (“TCL”), a minority

shareholder in Opta, guaranteed payment to Daeweoo of up to $5,000,000 of GoVideo

invoices accruing, unpaid, in “the 12 month period from the date of execution of this

Guaranty (the “Term”).” (APP0631.) The guaranty further provided that “Guarantors

shall have no liability whatsoever for any Obligations incurred by the Debtor after the

expiration of the Term.” (Id.)

       In November 2005, GoVideo sued Daewoo in the United States District Court for

the District of New Jersey, alleging that items supplied to GoVideo by Daewoo were, in a

variety of ways, defective, unlicensed, or counterfeit. Daewoo counterclaimed for unpaid
                                               2
invoices and, when GoVideo did not defend, the District Court, on April 27, 2007,

entered a default judgment in Daewoo’s favor and against GoVideo, in the sum of

$7,775,670.98.1

      On May 13, 2008, a year after entry of the default judgment in Daewoo’s favor,

Daewoo filed suit in the New Jersey District Court against Opta and T.C.L. The suit was

predicated on the same guaranty that had been at issue in the California suit. Daewoo

contended that the “date of execution” of the guaranty—the date commencing the “12

month period”—was February 5, 2004, the date the guaranty, signed by officials of

T.C.L. and Lotus Pacific (the former name of Opta), was transmitted to Daewoo. Opta

and T.C.L. contended that the “date of execution” was December 4, 2003, since the only

date appearing in the guaranty was “December 4th, 2003.”

      The District Court filed an opinion on August 19, 2010 in which, applying New

Jersey law,2 the court addressed the parties’ cross-motions for summary judgment:

      A Court must seek the meaning and intention of the parties when
      interpreting the terms of a contract. In re S.A. Holding Co., LLC,
      357 B.R. 51, 58 (Bankr. D.N.J. 2006). However, when the intention
      and meaning of the parties is “complete, clear, and unambiguous” on
      the face of a contract, extrinsic and parol evidence will not be
      permitted to create an ambiguity. Wellington v. Estate of Wellington,

1
 The California Superior Court had stayed the California suit in March 2006, pending the
resolution of the suit brought by GoVideo in New Jersey. After the entry of the New
Jersey default judgment in Daewoo=s favor, Daewoo withdrew the California suit.
2
 The guaranty specified that it “shall be a contract under, and be governed by, and
construed and interpreted in accordance with, the law of the State of New Jersey, United
States of America.” (APP0635.)
                                            3
      359 N.J. Super. 484, 495 (N.J. App. Div. 2003) (citations omitted).
      When a contract is clear on its face, the actual intent of the parties is
      ineffective because it is “the intent expressed or apparent in the
      writing that controls.” See Newark Publishers’ Ass’n v. Newark
      Typographical Union, No. 103, 22 N.J. 419, 427 (N.J. 1956).
              Daewoo argues that the guaranty did not become effective
      until February 5, 2004, and has submitted evidence to show that the
      parties continued to negotiate the terms of the guaranty into January
      2004, and that the signed guaranty was not delivered to Daewoo by
      T.C.L. and Opta until February 5, 2004. Declaration of Tai Cho [a
      Lawyer for Daewoo] in Support of Motion for Summary Judgment
      (“Cho Declaration”). In this case, the date that the guaranty became
      effective is a central issue. If the guaranty was in effect from
      December 4, 2003 through December 3, 2004, Daewoo cannot
      recover under the guaranty. If the guaranty was effective from
      February 5, 2004 through February 4, 2005, however, Daewoo may
      be able to recover $5,000,000 of the [$]7,775,670.98 default
      judgment it currently has against GoVideo.
              Opta and T.C.L. agreed to guaranty GoVideo’s obligations to
      Daewoo incurred during “the 12 month period from the date of
      execution of this Guaranty.” The only date that appears on the fully
      executed guaranty is December 4, 2003. . . . The date appears at the
      top of the document, not on the signature page, and there is no space
      on the signature page for the signors to insert the execution date.
      The court finds that by including only one date at the top of the
      guaranty, and leaving no space to insert a date on the signature page,
      the parties have demonstrated their intent that the guaranty take
      effect on December 4, 2003. Had the parties intended a date other
      than December 4, 2003 as the effective date, they could have omitted
      that date at the top of the guaranty and included a space on the
      signature page for insertion of an execution date. The court
      concludes that the 12-month term of the guaranty began on
      December 4, 2003 and expired on December 3, 2004. The Court
      rejects . . . Daewoo’s evidence, submitted after the fact, that the
      guaranty was not executed until February 5, 2004 because the
      guaranty is clear on its face and it appears that the Cho Declaration is
      offered in an effort to raise questions of fact.

Daewoo Elecs. Am., Inc. v. T.C.L. Indus. (H.K.) Holdings Ltd., No. 08-2287, 2010 WL

                                             4
3311839, at *3 (D.N.J. Aug. 19, 2010).

       The District Court held that “T.C.L. and Opta are, therefore, not contractually

obligated to pay Daewoo under the guaranty, and Daewoo cannot maintain a cause of

action against either defendant.” Id. at *4.

       In conformity with its holding, the District Court entered orders denying Daewoo’s

motion for summary judgment and granting the cross-motion of T.C.L. and Opta for

partial summary judgment.

       Daewoo filed a motion for reconsideration. The motion was denied on November

4, 2010.

                                               5
                                               II.

       Daewoo appeals from the District Court’s orders denying its summary judgment

motion, granting T.C.L. and Opta’s cross-motion for partial summary judgment, and

denying Daewoo’s motion for reconsideration. The District Court had jurisdiction under

28 U.S.C. § 1332. We have jurisdiction under 28 U.S.C. § 1291, and we will affirm.

       Our review of a district court’s decision on summary judgment is plenary: we view

the facts in the light most favorable to the nonmoving party, draw all inferences in that

party’s favor, and affirm only if “there is no genuine issue as to any material fact and . . .

the movant is entitled to judgment as a matter of law.” Spence v. ESAB Group, Inc., 623

F.3d 212, 216 (3d Cir. 2010) (internal quotation marks and citation omitted). Whether a

contract is clear or ambiguous is a question of law, over which our review is plenary.

Arnold M. Diamond, Inc. v. Gulf Coast Trailing Co., 180 F.3d 518, 521 (3d Cir. 1999).

       The crux of the parties’ dispute is whether the date printed at the top of the

guaranty document is its “date of execution”—the date on which the guaranty’s 12-month

term began to toll. “In interpreting a contract, [i]t is not the real intent but the intent

expressed or apparent in the writing that controls.” Flanigan v. Munson, 818 A.2d 1275,

1280 (N.J. 2003) (internal citations and quotation marks omitted). A court may look to

extrinsic evidence to “uncover the true meaning of contractual terms,” but not to vary an

unambiguous contract. Conway v. 287 Corp. Cntr. Assocs., 901 A.2d 341, 347 (N.J.

2006). “[A] contract is unambiguous if it is reasonably capable of only one construction.”

                                                6
Inter Med. Supplies, Ltd. v. EBI Med. Sys., Inc., 181 F.3d 446, 457 (3d Cir. 1999)

(internal quotation marks and citation omitted). That is the case here.3 Since “December

4th, 2003” appears at the top of the guaranty document, no other date appears on the

document, and the signature page does not contain a space for a date, there is only one

reasonable construction of the guaranty’s date of execution: December 4, 2003.

                                              III.

         For the reasons stated above, we will affirm the challenged orders of the District

Court.

         3
      The first page of the guaranty—the only portion of the document containing a
date—and the guaranty’s signature page are reproduced in an appendix to this opinion.

                                               7
                                APPENDIX

The first page of the guaranty is reproduced here:

                                      8
Page 5 of the guaranty, which includes the signatures, is reproduced here:

                                     9