Court Opinion

ID: 4366242
Source: CourtListenerOpinion
Date Created: 2019-02-08 21:00:47.799927+00
Date Added: 2024-06-11T14:48:30.235162
License: Public Domain

NOT FOR PUBLICATION                        FILED
                    UNITED STATES COURT OF APPEALS                        FEB 8 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                              FOR THE NINTH CIRCUIT

RESIDUAL INCOME OPPORTUNITIES,                  No.    17-55627
INC., a California corporation,
                                                D.C. No.
                Plaintiff,                      2:15-cv-07359-SVW-RAO

 v.
                                                MEMORANDUM*
RWN, INC., a Missouri corporation, FKA
Bankcard Central, Inc.; BANKCARD
CENTRAL LLC,

      Defendants-counter-
      defendants-Appellants,

 v.

RORY JUSTIN CYPERS,

      Third-party-defendant-
      counter-claimant-Appellee.

                   Appeal from the United States District Court
                       for the Central District of California
                   Stephen V. Wilson, District Judge, Presiding

                             Submitted November 16, 2018**
                                 Pasadena, 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).
                                       1
Before: GOULD, PARKER,*** and MURGUIA, Circuit Judges.

      This case arises out of a contract dispute between RWN, Inc., a provider of

credit card processing services, and Rory Justin Cypers. In 2004, Cypers and

RWN entered into a Marketing Partner Agreement (“MPA”), under which Cypers

would refer merchants to RWN. The MPA entitled Cypers to receive a portion of

the gross profits RWN received from processing merchant credit card transactions

(“Residuals”). In 2005, Cypers referred Flavorus, Inc., dba Groove Tickets

(“Groove”) to RWN. Pursuant to their arrangement, RWN placed a portion of the

Residuals owed to Cypers in an account to reserve against back payments (the

“Reserve”). RWN processed payments for Groove and received revenue through

February 2016.

      On appeal, RWN challenges the District Court’s grants of summary

judgment to Cypers on (1) Cypers’s breach of contract claims with respect to the

Reserve and the Residuals and (2) Appellants’ affirmative defense of offset. We

review the grant of summary judgment de novo.

      Cypers was entitled to summary judgment on the Reserve. RWN has

pointed to no evidence creating a genuine dispute of material fact as to its liability

      ***
            The Honorable Barrington D. Parker, United States Circuit Judge for
the U.S. Court of Appeals for the Second Circuit, sitting by designation.
                                        2
to Cypers on this point or as to Cypers’s standing to bring the claim. Significantly,

RWN’s CEO admitted in deposition testimony that it owed Cypers the Reserve.

        Cypers was also entitled to summary judgment on the Residuals. The MPA,

at Paragraph 4.2, controls Cypers’s compensation while the MPA is in effect. It

provides that Cypers will be compensated where he was the source of a merchant

which processes payments through RWN. Further, RWN admits that Cypers was

the source of the Groove account. While RWN now claims that, from May 2015

through February 2016, the Groove account was a new account for which Cypers

was not entitled to payments, RWN points to no evidence suggesting this is the

case.

        Appellants claim that they are entitled to an offset against any amount

awarded to Cypers because he owes them $14,000, as evidenced by a 2005

promissory note from Cypers in favor of RWN. Cypers argues that a 2007

promissory note marked “paid in full” shows that all debts that Cypers owed to

RWN have been paid. Cypers also introduced a spreadsheet detailing amounts

owed by Cypers to RWN to show that the amount paid pursuant to the 2007 note

included the 2005 note.

        Given Cypers’s presentation of the spreadsheet and 2007 note, in

conjunction with RWN’s lack of explanation for their existence, the District Court

correctly determined that RWN’s evidence was insufficient to establish a triable

                                           3
issue of fact. See Pakootas v. Teck Cominco Metals, Ltd., 905 F.3d 565, 589 (9th

Cir. 2018). The judgment of the District Court is AFFIRMED.

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