Court Opinion

ID: 3029090
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:42:14.074046+00
Date Added: 2024-06-11T09:11:15.585323
License: Public Domain

FILED
                            NOT FOR PUBLICATION                               NOV 13 2009

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

                            FOR THE NINTH CIRCUIT

PACIFIC MECHANICAL                               No. 08-55873
CORPORATION, a California
corporation,                                     D.C. No. 2:08-cv-00109-PA-E

              Plaintiff - Appellant,
                                                 MEMORANDUM *
  v.

CITY OF SAN LUIS OBISPO; et al.,

              Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                     Percy Anderson, District Judge, Presiding

                           Submitted November 6, 2009**
                               Pasadena, California

Before: BRIGHT, *** Senior Circuit Judge. and BYBEE and M. SMITH, Circuit
Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
            The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
        ***
             The Honorable Myron H. Bright, Senior United States Circuit Judge
for the Eighth Circuit, sitting by designation.
      Plaintiff-Appellant Pacific Mechanical Corp. (PMC) appeals the district

court’s dismissal pursuant to Federal Rule Civil Procedure 12(b)(6) of claims

brought against the City of San Luis Obispo (City). We assume the parties’

familiarity with the facts and do not recount them here, except as necessary to

explain our decision. We have jurisdiction under 28 U.S.C. § 1291, review de

novo the district court’s Rule 12(b)(6) dismissal, Biltmore Assocs., LLC v. Twin

City Fire Ins. Co., 572 F.3d 663, 668 (9th Cir. 2009), and affirm.

      “A threshold requirement to a substantive or procedural due process claim is

the plaintiff’s showing of a liberty or property interest protected by the

Constitution.” Engquist v. Oregon Dep’t of Agric., 478 F.3d 985, 996 (9th Cir.

2007) (internal quotation marks omitted). PMC argues that it has been denied due

process with respect to two property interests: 1) its right to receive payments

under the contract; and 2) its cause of action for breach of contract.

      PMC’s purported property interest with respect to the contract is based

entirely on its belief that it is entitled to $1,277,800–the amount of liquidated

damages the City assessed. Without citing any authority, PMC argues that

“liquidated damages only operate when the contractor is otherwise entitled to be

paid.” To the contrary, liquidated damages have been defined by the California

courts as “‘an amount of compensation to be paid in the event of a breach of

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contract, the sum of which is fixed and certain by agreement . . . .’” Chodos v.

West Publ’g Co., 292 F.3d 992, 1002 (9th Cir. 2002) (emphasis added) (quoting

Kelly v. McDonald, 276 P. 404, 406 (Cal. Dist. Ct. App. 1929)). Therefore, while

PMC may pursue a contractual right for the amount of liquidated damages assessed

against it, it has no present entitlement to that money. As a result, PMC is fully

protected by an ordinary breach of contract suit. See Lujan v. G & G Fire

Sprinklers, Inc., 532 U.S. 189, 196-97 (2001).

      In addition, PMC has no present entitlement to the money under the

contract’s explicit terms. See Brewster v. Bd. of Educ. of Lynwood Unified Sch.

Dist., 149 F.3d 971, 982 (9th Cir. 1998) (looking to contract to find potential

source of entitlement). Rather, whether the City is owed liquidated damages due to

PMC’s “unexcused performance” is left entirely within the City Engineer’s

discretion.

      With respect to PMC’s state law cause of action for breach of contract, that

cause of action has not been reduced to a final judgment. See Ileto v. Glock, Inc.,

565 F.3d 1126, 1141 (9th Cir. 2009) (“We have squarely held that although a cause

of action is a species of property, a party’s property right in any cause of action

does not vest until a final unreviewable judgment is obtained.” (internal quotation

marks omitted)). Indeed, PMC has not even commenced a breach of contract

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action in state court. Even if PMC has a vested property right in its breach of

contract action, it has not been deprived of due process.

      Finally, PMC’s failure to assert a constitutionally protected property interest

also forecloses its ability to state a substantive due process claim. Engquist, 478
F.3d at 996. In addition, the district court properly held that nothing about the

conduct of the City can be fairly considered to “shock[] the conscience.” Matsuda

v. City and County of Honolulu, 512 F.3d 1148, 1156 (9th Cir. 2008).

      AFFIRMED.

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