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SIAM NUMHONG PRODS. CO. v. EASTIMPEX

September 29, 1994

SIAM NUMHONG PRODUCTS CO., LTD., a limited company organized and registered under the laws of Thailand, Plaintiff,
v.
EASTIMPEX, a California corporation, Defendant. AND RELATED COUNTERCLAIM


PATEL


The opinion of the court was delivered by: MARILYN HALL PATEL

Plaintiff Siam Numhong Products, Co., Ltd. ("SNH") brought this action against defendant Eastimpex alleging breach of two written contracts and one oral contract for the manufacture and purchase of Thai bamboo shoots. Eastimpex filed related counterclaims. Now before the court is Eastimpex's motion for summary judgment on SNH's first and third claims for relief for breach of written contract and breach of oral contract.

 Having considered the parties' arguments and submissions, and for the reasons set forth below, the court enters the following memorandum and order.

 BACKGROUND1

 Plaintiff SNH is a Thai company that processes and sells Thai agricultural products to foreign distributors. Defendant Eastimpex is a California corporation that, among other things, imports foreign foodstuffs for resale to restaurant suppliers.

 On August 1, 1991, Eastimpex offered to purchase and SNH agreed to provide 30,000 cartons of cultivated bamboo shoots at a certain price, pursuant to Eastimpex's purchase order number SE-8917 (the "SE-8917 contract"). Payment under the SE-8917 contract was to be made pursuant to a letter of credit executed by Eastimpex in favor of SNH. Originally, this letter of credit was open through December 31, 1991. Eastimpex did not take delivery of all of the product under the SE-8917 contract by December 31, 1991, and the parties dispute whether Eastimpex was obligated to take up delivery of all of the product by that date.

 SNH requested that Eastimpex amend the SE-8917 contract letter of credit because otherwise SNH would incur bank penalties and a reduction of its credit rating, and payment under the contract would be unsecured. In response to SNH's request, Eastimpex obtained two extensions, the first to March 31, 1992 and the second to July 31, 1992.

 Between August 1, 1991 and August 1, 1992 the market price for bamboo shoots declined. Between February 1992 and May 1993, SNH resold some of the SE-8917 product. By July 1992, SNH had resold at least 9,763 of the 30,000 cartons of bamboo shoots contracted for in the SE-8917 contract.

 In June, 1991 Eastimpex opened a letter of credit in favor of SNH for a second agreement, this one involving wild bamboo shoots ("Wild Bamboo Shoot Contract"). No written purchase order was ever issued for this contract. Eastimpex refused to take up delivery of all of the wild bamboo shoot product it had ordered, claiming that there were problems with the product. On January 10, 1992 Eastimpex wrote that it would not extend the Wild Bamboo Shoot Contract letter of credit.

 On October 19, 1993 SNH filed this action against Eastimpex alleging, inter alia, breach of written contract and breach of oral contract. Eastimpex answered and counterclaimed for breach of contract, breach of warranty of merchantability, breach of implied warranty of fitness and negligence.

 LEGAL STANDARD

 Under Federal Rule of Civil Procedure 56, summary judgment shall be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial . . . since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). See also T.W. Elec. Serv. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (the nonmoving party may not rely on the pleadings but must present significant probative evidence supporting the claim); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986) (a dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.").

 The court's function, however, is not to make credibility determinations, Anderson, 477 U.S. at 249, and the inferences to be drawn from the facts must be viewed in a light most favorable to the party ...


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