Court Opinion

ID: 180023
Source: CourtListenerOpinion
Date Created: 2010-11-30 01:03:08+00
Date Added: 2024-06-11T17:25:50.472489
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                             NOV 29 2010

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

ROOTS READY MADE GARMENTS                        No. 08-17421
CO., W.L.L.,
                                                 D.C. No. 3:07-cv-03363-CRB
              Plaintiff - Appellant,

  v.                                             MEMORANDUM *

THE GAP, INC., AKA Gap, Inc.; GAP
INTERNATIONAL SALES, INC.;
BANANA REPUBLIC, LLC; OLD
NAVY, LLC,

              Defendants - Appellees.

                   Appeal from the United States District Court
                     for the Northern District of California
                   Charles R. Breyer, District Judge, Presiding

                     Argued and Submitted November 2, 2010
                            San Francisco, California

Before: THOMAS and IKUTA, Circuit Judges, and RESTANI, Judge.**

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
            The Honorable Jane A. Restani, Judge of the United States Court of
International Trade, sitting by designation.
      The district court did not err in ruling that the parol evidence rule, Cal. Code

Civ. Proc. § 1856, barred Roots from presenting evidence of the terms of an

alleged May 2003 oral contract between Roots and Gap that contradicted the terms

of the 2003 written Gap-Gabana contract. Although Roots was not a party to the

Gap-Gabana contract, California’s parol evidence rule applies to strangers to a

contract who challenge that contract’s terms, see Kern Cnty. Water Agency v.

Belridge Water Storage Dist., 18 Cal. App. 4th 77, 86–87 (1993), and here the

record establishes that Roots and Gap intended to document the terms of their deal

by means of the written Gap-Gabana contract. The record does not support Roots’

claim that there is a genuine issue of material fact as to whether Gap intended to

make a unilateral offer to Roots that Roots could accept by making a payment. See

Davis v. Jacoby, 1 Cal. 2d 370, 379 (1934). The testimony of Roots’ witnesses,

when read in context, does not create a genuine issue of material fact as to the

continuing existence of an oral contract separate from the Gap-Gabana contract.

Nor does Abu Issa’s declaration create such a genuine issue: the district court did

not abuse its discretion in excluding the declaration, which it found flatly

contradicted Abu Issa’s earlier deposition testimony. See Van Asdale v. Int’l Game

Tech., 577 F.3d 989, 998–99 (9th Cir. 2009). Without this declaration, Roots’

claim that Gap repeatedly reaffirmed the continuing existence of the oral contract,

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and is therefore estopped from claiming that the oral contract merged with the

written one, lacks any support in the record.

      The district court did not err in granting summary judgment to Gap on

Roots’ claim that it entered into a second oral contract with Gap in June 2003. Abu

Issa, Roots’ sole witness to that oral contract, admitted that the May 2003 contract

was the only oral contract. Nor does evidence that Roots acted consistently with

the terms of the alleged oral contract create a genuine issue of fact regarding its

existence, because Roots had earlier committed to taking such actions under the

terms of its letter of understanding with Gabana.

      The district court did not err in granting summary judgment to Gap on

Roots’ claim that Gap breached the covenant of good faith and fair dealing by

prematurely terminating its relationship with Roots. Roots cannot bring a claim for

breach of an implied term of the oral contract, because any such contract was

preliminary and merged with the integrated Gap-Gabana agreement, which

expressly gave Gap the right to terminate its relationship with Gabana and its

retailers. See Gerdlund v. Elec. Dispensers Int’l, 190 Cal. App. 3d 263, 270

(1987). Roots’ reliance on Locke v. Warner Bros., Inc., 57 Cal. App. 4th 354,

364–65 (1997), is unavailing, because Gap’s obligations under the Gap-Gabana

agreement were not dependent on its “subjective satisfaction” with Gabana’s or

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Roots’ services, and therefore California law does not read a covenant of good

faith and fair dealing into Gap’s exercise of its discretion, see Third Story Music,

Inc. v. Waits, 41 Cal. App. 4th 798, 808 (1995).

      Although Roots appealed the district court’s grant of summary judgment to

Gap on Roots’ fraudulent concealment claims, it failed to appeal the district court’s

alternative ruling, namely, the district court’s dismissal of Roots’ fraudulent

concealment claim under Federal Rule of Civil Procedure 9(b). Accordingly,

Roots has “abandoned [its] right to appeal the grant of summary judgment” on this

claim, MacKay v. Pfeil, 827 F.2d 540, 542 n.2 (9th Cir. 1987) (per curiam), and we

do not address it here.

      We also affirm the district court’s dismissal of Roots’s unfair competition

claim. See Cal. Bus. & Prof. Code § 17200. Even if the district court erred in

dismissing this claim on the ground that it had to be tethered to a statutory

violation, see Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 994 (9th

Cir. 2000), Roots failed to identify conduct that comprises “unfairness “ for

purposes of § 17200. Gap’s termination of the Gap-Gabana contract before Roots

could recoup its investment in the excess inventory and in its Middle Eastern retail

network does not meet the requisite standard, because such conduct was permitted

by the plain terms of the contract, and the “unfairness” prong of section 17200

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“does not give the courts a general license to review the fairness of contracts.” S.

Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th 861, 887 (1999)

(internal quotation marks omitted) (quoting Samura v. Kaiser Found. Health Plan,

Inc., 17 Cal. App. 4th 1284, 1299 n.6 (1993)).

      The district court did not err in granting summary judgment to Gap on

Roots’ quasi-contract claims, because an “action based on an implied-in-fact or

quasi-contract cannot lie where there exists between the parties a valid express

contract covering the same subject matter.” Lance Camper Mfg. Corp. v. Republic

Indem. Co., 44 Cal. App. 4th 194, 203 (1996). For the reasons explained above,

the written contract between Gap and Gabana is the contract documenting the

Roots-Gap agreement.1

      AFFIRMED.

      1
        Because we affirm the district court’s disposition of Roots’ claims, we do
not reach Roots’ arguments regarding the district court’s pre-trial rulings on
damages, or Gap’s motion to strike portions of Roots’ excerpts of record and
opening brief relating to damages evidence.

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