Court Opinion

ID: 179045
Source: CourtListenerOpinion
Date Created: 2010-11-10 01:03:52+00
Date Added: 2024-06-11T17:25:47.075312
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             NOV 09 2010

                                                                        MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                      U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

THOMAS N. SMITH,                                 No. 09-17206

              Plaintiff - Appellant,             D.C. No. 1:05-cv-01187-OWW-
                                                 GSA
  v.

DARRIN SIMMONS, formerly DBA                     MEMORANDUM *
Clean Air Products, Inc.,

              Defendant - Appellee.

                    Appeal from the United States District Court
                        for the Eastern District of California
                    Oliver W. Wanger, District Judge, Presiding

                           Submitted November 5, 2010 **
                             San Francisco, California

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

       Thomas Smith appeals the district court’s grants of partial summary judgment

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
        ***
             The Honorable Jane A. Restani, Judge of the United States Court of
International Trade, sitting by designation.
in his diversity action against Darrin Simmons, individually and d.b.a. Clean Air

Products, Inc. Smith alleges breach of contract arising from his sale of business assets

to Clean Air. He seeks to hold Simmons personally liable for a 1998 contract that

Simmons claims to have signed on behalf of Clean Air, and Smith argues that the

district court erred in holding there was no genuine issue of material fact as to

Simmons’s personal liability. Smith contends that the erroneous partial summary

judgments improperly altered the character of his subsequent trial, in which a jury

found no breach. We affirm.

      Smith alleges that a genuine issue of material fact exists as to whether Simmons

assumed personal liability under the 1998 contract. None of his three theories have

merit, and partial summary judgment on this issue was proper.

      First, Smith argues that parol evidence from a 2001 contract between Smith and

Simmons makes the 1998 contract ambiguous with regard to Simmons’s personal

liability. This ambiguity, says Smith, presents a question of fact. However, while

parol evidence can be used to interpret ambiguous contract language, see Hervey v.

Mercury Cas. Co., 185 Cal. App. 4th 954, 961 (2010), Smith’s argument is

unpersuasive.    The 2001 contract’s mere mention of a possible prior contract

involving Simmons does not make the otherwise unambiguous 1998 contract

reasonably susceptible to an interpretation that Simmons was personally liable for it.

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It is undisputed that the 1998 contract repeatedly references the fact that it is between

two corporate entities, mentions Smith’s name several times but does not mention

Simmons’s name at all in the body of the agreement, and never mentions a guaranty

or personal liability. So, even in light of the 2001 contract, the undisputed facts show

that the 1998 contract is unambiguous with regard to Simmons’s personal liability.

      Second, Smith argues that there was a genuine dispute as to whether Smith or

Simmons drafted the contract, and that this fact issue is material to Smith’s claim

because any ambiguities in the 1998 contract should be resolved against the

drafter—i.e., allegedly Simmons. Thus, Smith argues, the fact issue of who drafted

the contract controls the resolution of the ambiguity regarding Simmons’s personal

liability. Smith correctly notes that, under California law, “[a]mbiguities in contract

language are to be resolved against the drafter.” Victoria v. Superior Court, 40 Cal.

3d 734, 738 (1985); see Cal. Civ. Code § 1654 (codifying the doctrine of contra

proferentem). However, as noted, the 1998 contract’s language is not ambiguous,

even in light of its broader context and later agreements. Therefore, the doctrine of

contra proferentem does not apply; there is no ambiguity to interpret against the

drafter, whoever that might be.

      Third, Smith argues that the pre-printed signature line of the 1998 contract

shows that Simmons was personally liable because it listed the name “Darrin

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Simmons” without any reference to Simmons’s corporate position. Smith relies on,

but mischaracterizes, Sebastian Int’l, Inc. v. Peck, 195 Cal. App. 3d 803 (1987). In

Sebastian, a California appellate court held that a corporation’s vice president

assumed personal liability for a lease agreement between his corporation and another

corporation pursuant to a guaranty document, despite the fact that the pre-printed

signature line of the document referenced the signee’s corporate title. Sebastian, 195

Cal. App. 3d at 805–06, 809. The guaranty document in Sebastian unquestionably

described a personal obligation, and the words “Vice President” in the signature line

were merely descriptio personae—a term describing the person rather than the

capacity in which that person signed. Id. at 809. Sebastian, therefore, stands for the

proposition that personal liability may be determined by looking to the terms of the

agreement, rather than to the pre-printed signature line alone. In this sense, Sebastian

actually hurts Smith’s case because Smith urges us to discount the 1998 contract’s

terms and give weight to the fact that the signature line names “Darrin Simmons” sans

corporate title. Thus, Smith is wrong to assert that personal liability should be

imposed merely because the pre-printed signature line fails to reference Simmons’s

position as a corporate officer.

      Smith also alleges that a genuine issue of material fact exists as to whether

Simmons is personally liable for the obligations of Clean Air under the alter ego

                                          -4-
doctrine. The alter ego doctrine applies to pierce a corporate veil if two requirements

are met: (1) there is such unity of interest and ownership that the separate personalities

of the corporation and the individual no longer exist, and (2) an inequitable result will

follow if the corporate veil is not pierced. Mesler v. Bragg Mgmt. Co., 39 Cal. 3d 290,

300 (1985) (quoting Automotriz del Golfo de Cal. S. A. de C. V. v. Resnick, 47 Cal. 2d

792, 796 (1957)). Smith has not shown that a genuine issue of material fact exists as

to the unity of interest requirement. Smith’s only evidence of a unity of interest is the

fact that Simmons is Clean Air’s sole owner. Many other undisputed facts indicate

that Clean Air and Simmons do not share a unity of interest—e.g., Clean Air

employees only do corporate work, Clean Air’s corporate location is separate from

Simmons’s home, and Clean Air’s finances were kept separate from Simmons’s

finances. Given the undisputed facts and the evidence presented, there is no genuine

issue of material fact as to whether Simmons and Clean Air maintain separate

personalities. Thus, partial summary judgment on this issue was appropriate.

      Finally, even if the grants of partial summary judgment were erroneous, Smith

has failed to show how they improperly affected his subsequent trial. He points to no

facts or issues that were eliminated from trial due to the partial summary judgments,

but that would have provided the jury with more clarity or context regarding the case.

      AFFIRMED.

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