Court Opinion

ID: 3033217
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:49:10.847753+00
Date Added: 2024-06-11T12:14:50.834300
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                FEB 16 2010

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

                           FOR THE NINTH CIRCUIT

COKER EQUIPMENT CO., INC.,                       No. 08-16359

             Plaintiff - Appellant,              D.C. No. 2:06-CV-00516-RCJ-
                                                 RJJ
  v.
                                                 MEMORANDUM *
BERNIE WITTIG; et al.,

             Defendants - Appellees.

COKER EQUIPMENT CO., INC.,                       No. 08-16362

             Plaintiff - Appellee,               D.C. No. 2:06-CV-00516-RCJ-
                                                 RJJ
  v.

CITIWEST STRUCTURES
(CALIFORNIA), INC.,

             Defendant - Appellant,

and

BERNIE WITTIG; et al.,

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

                                          1
             Defendants.

                   Appeal from the United States District Court
                            for the District of Nevada
                    Robert C. Jones, District Judge, Presiding
                    Argued and Submitted December 9, 2009
                            San Francisco, California

Before: SCHROEDER and CALLAHAN, Circuit Judges, and LYNN, ** District
Judge.

      Coker Equipment Co., Inc. appeals the district court’s judgment, following

partial summary judgment and a bench trial in favor of Citiwest Structures

(California), Inc. Citiwest cross-appeals on the amount of its attorney fees and

costs awarded. This court has jurisdiction under 28 U.S.C. § 1291. We affirm in

part, and reverse and remand in part for further proceedings.

                                         I.

      The district court did not err by granting Citiwest summary judgment on

Coker’s breach of contract claim. We review the district court’s grant of summary

judgment de novo. See Northrop Grumman Corp. v. Factory Mut. Ins. Co., 563

       **
            The Honorable Barbara M.G. Lynn, U.S. District Judge for the
Northern District of Texas, sitting by designation.

                                         2
F.3d 777, 783 (9th Cir. 2009).

       Coker leased a crane to Citiwest, with an option to purchase, for use on the

Pinnacle Museum Tower project. At issue is whether the district court correctly

interpreted the contract as providing for specified crane usage over the life of the

lease term, rather than per month, and whether Citiwest exceeded its allotted usage.

Coker contends that the contract unambiguously limits Citiwest’s basic usage to

250 hours monthly.

      It is reasonable to interpret the contract to mean that 250 hours per month is

the basis for the rental rate, not a monthly limit. See Caldwell v. Consol. Realty &

Mgmt. Co., 668 P.2d 284, 287 (Nev. 1983) (requiring the Court to seek a

reasonable interpretation for an ambiguous contract). Because there is more than

one reasonable interpretation of the contract, the contract is ambiguous, and the

district court properly considered parol evidence. See Glenbrook Homeowners v.

Glenbrook Co., 901 P.2d 132, 137 (Nev. 1995). Ambiguity is construed against

the drafter, Coker. See Williams v. Waldman, 836 P.2d 614, 619 (Nev. 1992). The

contract did not provide for objectively timing crane usage. Coker did not provide

a meter to track monthly usage and there was evidence that Coker represented to

Citiwest that usage hours would be considered in the aggregate. Parol evidence

supports Citiwest’s interpretation, and we agree with the district court’s

                                          3
interpretation that the contract provided Citiwest with 4,875 hours of usage

aggregated over the 19.5 months it leased the crane.

      Citiwest did not exceed its 4,875 hours of allotted crane usage. The operator

logs show 4,420 hours of usage. Once the payroll logs are corrected to exclude the

time when the operator was at work but not using the crane, they show 4,305 hours

of use. Because Citiwest did not exceed its allotted usage, the district court

correctly granted Citiwest’s motion for summary judgment.

                                           II.

      The district court correctly found after a bench trial that Coker breached the

contract, because Citiwest had reasonable grounds for insecurity and Coker failed

to provide to Citiwest an adequate assurance of due performance. We review for

clear error the district court’s factual findings in a bench trial. See Saltarelli v. Bob

Baker Group Med. Trust, 35 F.3d 382, 384 (9th Cir. 1994).

      In August 2004, Citiwest notified Coker that it intended to exercise the

option and pay Coker $109,924.76 to purchase the crane in September 2004.

Citiwest became insecure as to whether the crane was encumbered and sought

adequate assurance from Coker. See Nev. Rev. Stat. §§ 104.2312, 104.2609.

Coker argues that Citiwest did not have a reasonable basis for insecurity, since

Coker provided Citiwest with a UCC-1 filing from G.E. Capital, showing that its

                                            4
security interest in the crane had been released. The district court did not commit

clear error in finding that Citiwest was reasonably insecure, despite the release,

based on events that occurred during the parties’ relationship. The crane was not

Cal/OSHA certified when delivered to the job site and was consequently

inoperable for three weeks.1 Further, Coker breached its contractual obligation to

provide monthly maintenance on the crane. In January 2004, the crane’s hoist

motor, the motor by which items are raised and lowered, seized up and ceased

functioning. In May 2004, the swing motor, which powers the turning of the

crane, ceased functioning. Although Citiwest had completed many projects

requiring tower cranes, it had never had a hoist or swing motor blow on any other

crane during a lease. Viewing Coker’s repeated delinquencies as cumulative, the

district court correctly determined that Citiwest had reasonable grounds for

insecurity. See Nev. Rev. Stat. § 104.2609, Comment 4.

      Coker breached the contract by failing to provide an adequate assurance of

due performance. Citiwest requested that Coker provide it with the paperwork

needed to transfer title, including title documents and a bill of sale. Coker never

provided a bill of sale and never informed Citiwest that title documents do not

normally accompany the sale of cranes. Citiwest’s counsel discovered several

      2
          Cal/OSHA is the state of California’s occupational safety and health plan.

                                           5
UCC filings listing Coker as the debtor, as well as a California tax lien filed against

Coker, which Citiwest reasonably believed encumbered the crane. Coker asserts

on appeal that the UCC filings and tax lien did not encumber the crane, but did not

communicate that position to Citiwest before the expiration of the option. Citiwest

had reason for concern, because it understood a California tax lien to encumber “all

personal and real property in the county” and believed that its knowledge of UCC

filings against Coker would prevent Citiwest from being a buyer in the ordinary

course of business. See Cal. Rev. & Tax. Code § 2191.4; Cal Com. Code § 9320,

Comment 3. Even if Citiwest’s belief that the crane was encumbered was incorrect

(which is unclear), it was not unreasonable, arbitrary, or capricious. The district

court did not err by finding that Citiwest had reasonable grounds for insecurity and

that Coker breached the contract by failing to provide an adequate assurance of due

performance.

                                          III.

      The district court correctly determined that Coker abused process and was

liable for punitive damages. Under Nevada law, the two elements of abuse of

process are “(1) an ulterior purpose by the defendant[] other than resolving a legal

dispute, and (2) a willful act in the use of the legal process not proper in the regular

conduct of the proceeding.” LaMantia v. Redisi, 38 P.3d 877, 879 (Nev. 2002).

                                           6
      After the expiration of the option, Coker began billing Citiwest for “double

shifting” of the crane, asserting that Citiwest had been using the crane for sixteen

hours per day. Coker admitted at trial that it had no proof of double shifting and

that it billed Citiwest those amounts “[o]ut of frustration.” When Citiwest refused

to pay the double shifting bills, Coker recorded a lien on the Pinnacle project. At

trial, Coker acknowledged it had a prior judgment against it for filing an

inappropriate lien. Further, Coker sued Citiwest’s president and a crane operator

personally, though neither was a signatory to the contract. The above facts amply

support the district court’s finding that Coker abused process. Because there was

substantial evidence of oppression, fraud, or malice, the district court properly

awarded punitive damages. See Bongiovi v. Sullivan, 138 P.3d 433, 450 (Nev.

2006).

      Coker argues that the district court violated its due process rights by

awarding punitive damages when it did not award compensatory damages for

abuse of process, but instead awarded only attorney fees and costs. There was no

due process violation because attorney fees and costs can constitute compensatory

damages for abuse of process. See Horgan v. Felton, 170 P.3d 982, 989 (Nev.

2007) (Maupin, C.J. concurring); see also Sternberg v. Johnson, 582 F.3d 1114,

1122 (9th Cir. 2009) (recognizing that attorney fees can be damages in abuse of

                                          7
process suits). Because the district court awarded $50,000 in attorney fees and

$5,000 in costs as compensatory damages, and $20,000 in punitive damages, the

ratio of punitive damages to compensatory damages was not excessive. See

generally Bongiovi, 138 P.3d at 451-52. Moreover, the district court satisfied Nev.

Rev. Stat. § 42.005(3) by providing a separate hearing before awarding punitive

damages.

                                          IV.

      Citiwest’s cross-appeal asserts that the district court abused its discretion by

awarding it $50,000 in attorney fees and $5,000 in costs, rather than its requested

fees of $91,692 and costs of $6,079.32. Under Nevada law, a lower court has great

discretion in awarding fees, to be “tempered only by reason and fairness.” Albios

v. Horizon Communities, Inc., 132 P.3d 1022, 1034 (Nev. 2006). However, the

trial court must conduct its analysis in light of the factors identified in Brunzell v.

Golden Gate National Bank, 455 P.2d 31, 33 (Nev. 1969), namely the “advocate’s

professional qualities, the nature of the litigation, the work performed, and the

result.” Albios, 132 P.3d at 1034. We review the district court’s award for abuse

of discretion. Id.

      The district court found in its May 14, 2008 order that Citiwest was entitled

to reasonable attorney fees and costs, but found that Citiwest “has already been

                                            8
made substantially whole by the grant of summary judgment against Coker, the

findings at trial in favor of Citiwest, and the award of $20,000 in punitive

damages.” The court ruled that “an award of $50,000.00 in attorney fees and

$5,000.00 in costs to Citiwest for its claims of $91,692.00 in attorney fees and

$6,079.32 in costs is reasonable.” The district court seemingly held Citiwest’s

victory against it when it reduced its fees and costs, without referencing the

Brunzell factors. Brunzell requires the district court to consider Citiwest’s “total

win” in awarding its fees, not as a basis for reducing them. The district court’s

award of attorney fees is reversed and remanded for reconsideration of fees in light

of the Brunzell factors.

      Under Nev. Rev. Stat. § 18.020, the prevailing party in an action alleging

more than $2,500.00 in damages is entitled to recover all costs as a matter of right.

“[T]he determination of which expenses are allowable as costs is within the sound

discretion of the trial court.” Albios, 132 P.3d at 1037. However, because the

district court did not consider whether certain costs were allowable, but rather

reduced costs seemingly indiscriminately in light of Citiwest’s prevailing overall,

the district court’s award of costs is reversed and remanded for reconsideration and

explanation of why particular costs sought are not awarded. Each party shall bear

its own costs on appeal.

                                          9
AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

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