Court Opinion

ID: 4406663
Source: CourtListenerOpinion
Date Created: 2019-06-13 20:00:29.500629+00
Date Added: 2024-06-11T13:32:30.678730
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUN 13 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

JOHN M. FLOYD & ASSOCIATES, INC, a No.                 18-55025
Texas corporation,                                     18-55254

                Plaintiff-Appellant,            D.C. No.
                                                3:16-cv-01851-DMS-WVG
 v.

FIRST IMPERIAL CREDIT UNION, a                  MEMORANDUM*
California corporation,

                Defendant-Appellee.

                   Appeal from the United States District Court
                      for the Southern District of California
                    Dana M. Sabraw, District Judge, Presiding

                       Argued and Submitted May 16, 2019
                              Pasadena, California

Before: LIPEZ,** WARDLAW, and HURWITZ, Circuit Judges.

      In this diversity case, John M. Floyd & Associates, Inc. (“JMFA”) appeals the

summary judgment in favor of First Imperial Credit Union (“FICU”) on a breach-

of-contract claim. JMFA asserts that material factual disputes exist concerning

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
              The Honorable Kermit V. Lipez, United States Circuit Judge for the
First Circuit, sitting by designation.
FICU’s obligations under the parties’ 2008 agreement for the creation and

implementation of an overdraft protection program. JMFA claims that it is owed

contingent fees based on income FICU earned from a program implemented in 2012

through a different vendor.

      We review the grant of summary judgment de novo. See Pavoni v. Chrysler

Grp., LLC, 789 F.3d 1095, 1098 (9th Cir. 2015). We conclude, like the district court,

that the contract is not reasonably susceptible to the interpretation advanced by

JMFA, and we therefore affirm.

      The critical provision in the JMFA-FICU agreement states:

             If a recommendation is not installed it will not be included
             in the fee calculation. However, if any recommendation,
             within 24 months of the end of the tracking period, is
             installed or installed as modified, or initially declined and
             later installed as recommended or as subsequently
             modified or installed using another party, it will be
             included in the fee calculation for a period equal to the
             contract term.

(Emphasis added.) JMFA argues that a reasonable factfinder could conclude that it

is entitled to fees based on income generated for FICU by another vendor’s overdraft

program because that program’s recommendations are “functionally equivalent” to

proposals previously made by JMFA.

      But the contractual language, particularly when read in context, plainly makes

FICU's obligation to JMFA contingent on the credit union’s implementation of

JMFA’s recommendations. The quoted passage is the third paragraph in a section

                                          2                                   18-55025
of the agreement labeled “Quantification of Earnings.” The section begins by stating

that the increased income that will determine JMFA’s compensation will be “based

on reasonable changes that can be [e]ffected on existing income or expenses realized

as a result of our [JMFA’s] recommendations.” (Emphasis added.) The mention of

“any recommendation” later in the same section of the agreement can only be

reasonably understood to refer to “any” of “our” recommendations — i.e.,

programmatic features recommended by JMFA. See Block v. eBay, Inc., 747 F.3d
1135, 1138 (9th Cir. 2014) (noting that, under California law, the words of a written

agreement should be “interpreted in their ‘ordinary and popular sense,’” with “‘[t]he

whole of a contract . . . to be taken together’” (quoting Cal. Civ. Code §§ 1644, 1641)

(alteration in original)).

       The quoted provision does not apply if FICU adopts another consultant’s

recommendation, even if substantially similar to JMFA’s. And JMFA offers no

evidence that SmartStep modified, rather than replaced, the JMFA program.1

       1
         JMFA cites an email exchange between SmartStep and FICU on September
6 and November 27, 2012, to argue that a factual dispute remains concerning
whether the 2012 implementation incorporated JMFA's own work product. The one
email referencing JMFA (sent by SmartStep) states: "The file layout that you sent
over looks good. Can you go ahead and create a data file in the JMFA format and
send that to our secure site as well? Please let me know." The other emails respond
to that inquiry. JMFA does not develop its contention that these emails reveal a
material factual dispute. It also fails to respond to FICU's explanation, supported by
citations to the record, that the emails refer to material that FICU created and
provided to JMFA.

                                          3                                    18-55025
Indeed, JMFA acknowledged to the district court that it could not show that “the

credit union actually used our program per se.”

      Given the language of the contract, no reasonable factfinder could conclude

that FICU agreed to pay fees to JMFA if it never implemented JMFA's

recommendations and instead, several years down the road, launched a similar

program newly developed by a different consultant. See Cal. Civ. Code § 1636 (“A

contract must be so interpreted as to give effect to the mutual intention of the parties

as it existed at the time of contracting, so far as the same is ascertainable and

lawful.”). The parties’ agreement was contingent in nature, and no fees based on

increased income were owed by FICU until JMFA’s program had been in operation

for ninety days.2 That never happened.

      JMFA also argues that the award by the district court of attorney’s fees and

costs to FICU as the prevailing party should be vacated along with the summary

judgment. However, JMFA does not argue that the awards are improper if summary

judgment was properly granted in favor of FICU. Hence, we also affirm the award

of fees and costs to FICU.

      AFFIRMED.

      2
         The agreement states: “After the recommendations have been installed and
monitored for ninety (90) days, we will quantify the increased income and [FICU]
agrees to pay monthly the [specified] fees[.]” FICU otherwise owed JMFA only a
$1,000 retainer that would have been refundable “against JMFA’s monthly fee
billings,” as well as reimbursement for “out-of-pocket expenses.”

                                           4                                    18-55025