Court Opinion

ID: 2653632
Source: CourtListenerOpinion
Date Created: 2014-02-18 21:16:39.968741+00
Date Added: 2024-06-11T09:11:24.450166
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                 FEB 18 2014

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

                            FOR THE NINTH CIRCUIT

SOUTHERN CALIFORNIA STROKE                       No. 12-56824
REHABILITATION ASSOCIATES,
INC., a California corporation,                  D.C. No. 3:09-cv-00744-CAB-
                                                 MDD
              Plaintiff - Appellant,

  v.                                             MEMORANDUM*

NAUTILUS, INC., a Washington
corporation, DBA The Nautilus Group,
Inc.,

              Defendant - Appellee.

                   Appeal from the United States District Court
                      for the Southern District of California
                 Cathy Ann Bencivengo, District Judge, Presiding

                     Argued and Submitted February 10, 2014
                              Pasadena, California

Before: FARRIS, N.R. SMITH, and WATFORD, Circuit Judges.

       1. The district court properly granted judgment as a matter of law against

Southern California Stroke Rehabilitation Associates, Inc. (SCSRA). Notice to the

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                                                           Page 2 of 3
seller of an alleged breach of warranty is a required element under California

Commercial Code § 2607(3)(A), and notice must occur pre-suit. See Alvarez v.

Chevron Corp., 656 F.3d 925, 932 (9th Cir. 2011). While notice need not be

formal, the purpose of the statutory requirement is to give the defendant an

“opportunity [to repair] the defective item, reduc[e] damages, avoid[] defective

products in the future, and negotiat[e] settlements.” Pollard v. Saxe & Yolles Dev.

Co., 525 P.2d 88, 92 (Cal. 1974). No reasonable jury could conclude that

SCSRA’s May 2008 letter provided Nautilus with the requisite notice of an

impending breach-of-warranty claim, even as to the weight trees mentioned in the

letter. See Fed. R. Civ. P. 50(a). As to the rest of the equipment at issue here,

SCSRA claimed it was unaware of the defects underlying the present action until

after the Direct Focus litigation concluded. Assuming that to be true, SCSRA’s

May 2008 letter, sent during the Direct Focus litigation, could not have notified

Nautilus of defects that SCSRA itself had not yet discovered.

      The district court did not err in rejecting SCSRA’s novel “futility” and

equitable estoppel excuses. No California court has recognized such excuses to

§ 2607(3)(A)’s notice requirement, and given the absence of a prejudice

requirement, it’s unlikely a California court would do so. See Cardinal Health

301, Inc. v. Tyco Elecs. Corp., 87 Cal. Rptr. 3d 5, 22 (Cal. Ct. App. 2008).
                                                                           Page 3 of 3
      2. The district court didn’t abuse its discretion in denying leave to amend

the complaint. In addition to SCSRA’s undue delay in seeking leave to amend,

allowing amendment would have prejudiced Nautilus by requiring another round

of summary judgment motions and materially altering the scope of the litigation.

The district court didn’t clearly err in finding that SCSRA’s new assertions were

inconsistent with its original claims, and that SCSRA knew or should have known

the relevant facts at least three years prior to seeking leave to amend. Under these

circumstances, the district court did not abuse its discretion in denying leave to

amend. See AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946,

951–54 (9th Cir. 2006).

      AFFIRMED.