Court Opinion

ID: 2669533
Source: CourtListenerOpinion
Date Created: 2014-04-10 22:27:45.835178+00
Date Added: 2024-06-11T09:18:03.935141
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                APR 10 2014

                                                                          MOLLY C. DWYER, CLERK
                   UNITED STATES COURT OF APPEALS                           U.S. COURT OF APPEALS

                          FOR THE NINTH CIRCUIT

ENOUGH FOR EVERYONE, INC, a                      No. 12-56489
California corporation,
                                                 D.C. No. 8:11-cv-01161-DOC-
              Plaintiff - Appellee,              MLG

  v.
                                                 MEMORANDUM*
PROVO CRAFT AND NOVELTY,
INC., a Utah corporation,

              Defendant - Appellant.

ENOUGH FOR EVERYONE, INC, a                      No. 12-57025
California corporation,
                                                 D.C. No. 8:11-cv-01161-DOC-
              Plaintiff - Appellee,              MLG

  v.

PROVO CRAFT AND NOVELTY,
INC., a Utah corporation,

              Defendant - Appellant.

                   Appeal from the United States District Court
                      for the Central District of California

        *
          This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                                                             page 2
                     David O. Carter, District Judge, Presiding

                       Argued and Submitted March 7, 2014
                              Pasadena, California

Before:      KOZINSKI, Chief Judge, GRABER, Circuit Judge, and BREYER,
             Senior District Judge.**

      1. Although the Consulting Services and Royalty Agreement (“Agreement”)

contained an arbitration clause applicable to “every dispute or difference between

them, arising under this Agreement,” it specifically excluded from its purview “any

dispute regarding . . . non-payment or late payment.” Enough for Everyone’s

operative Complaint alleges that Provo failed to make payments required by the

Agreement. See Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999)

(“[W]e must examine the factual allegations raised to determine which of Simula’s

causes of action are arbitrable.”). Provo’s eleventh-hour tender of payment in an

amount that it unilaterally determined to be owing under the Agreement does not

convert Enough for Everyone’s Complaint from one alleging non-payment to one

alleging under-payment. Even if it did, we do not find such a distinction relevant.

Indeed, under Provo’s theory, it could have made a $1 payment shortly before trial,

thereby triggering the arbitration clause and undoing nearly a year’s worth of work

       **
          The Honorable Charles R. Breyer, Senior District Judge for the U.S.
District Court for the Northern District of California, sitting by designation.
                                                                                 page 3
and expense incurred by the parties and the court. We find it implausible that this

is what the parties intended. See Am. Express Co. v. Italian Colors Rest., 133 S.

Ct. 2304, 2309 (2013) (acknowledging “the overarching principle that arbitration is

a matter of contract”).

      2. The district court empowered the Special Master to “mak[e] any and all

factual findings and legal conclusions necessary, and upon conclusion of such

accounting report those findings and conclusions to the Court.” Although Provo

contends that the Special Master made findings and legal conclusions that were not

necessary to performing this task, the purpose of an accounting is to determine the

amount of money “owed to the plaintiff but held by the defendant.” Black’s Law

Dictionary 22 (9th ed. 2009). The challenged findings and conclusions clearly go

to the calculation of the amount owed by Provo to Enough for Everyone under the

Agreement, and therefore are necessary to this determination.

      3. Provo further faults the Special Master for failing to ensure a court

reporter was present to record witness testimony. But the Federal Rules of Civil

Procedure did not require him to do so. See Fed. R. Civ. P. 53(c)(1)(C) (“Unless

the appointing order directs otherwise, a master may . . . if conducting an

evidentiary hearing, exercise the appointing court’s power to compel, take, and
                                                                                  page 4
record evidence.” (emphasis added)). As the Advisory Committee Notes observe,

this rule “is intended to provide the broad and flexible authority necessary to

discharge the master’s responsibilities. The most important delineation of a

master’s authority and duties is provided by the Rule 53(b) appointing order.” Fed.

R. Civ. P. 53 advisory committee’s note. The district judge’s appointing order

only demanded that the Special Master “preserve all documents and records filed

with the Special Master.” The Special Master properly discharged this duty.

      AFFIRMED