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Universal Green Solutions, LLC v. Vii Pac Shores Investors, LLC

United States District Court, N.D. California, San Jose Division

May 15, 2014



RONALD M. WHYTE, District Judge.

Defendant VII Pac Shores Investors, LLC ("Pac Shores") moves for summary judgment. Dkt. No. 60. For the reasons explained below, the court DENIES Pac Shores' motion.


According to the First Amended Complaint ("FAC"), Pac Shores and Plaintiff Universal Green Solutions, LLC ("UGS") in 2010 allegedly entered into two agreements under which UGS was to replace fluorescent light bulbs with LED light bulbs at a Pac Shores property. The first retrofit agreement was a written contract (the "Retrofit Contract") providing for an LED retrofit of one building at 1700 Seaport Boulevard and accompanying parking lots. The second agreement was an oral contract covering three additional buildings. Dkt. No. 59, FAC ¶¶ 9-11. UGS also alleges in the alternative that the Retrofit Contract encompasses a retrofit of all four Pac Shores buildings.

The written Retrofit Contract was prepared initially by Jim Helton, a manager and owner at UGS with no legal training or experience drafting contracts. Dkt. No. 63-6, Helton Decl. ¶ 3. Mr. Helton based the Retrofit Contract on a form contract he found online. Id. William Moyer, previously the General Manager for the Pac Shores Center, then made small changes to the Retrofit Contract and forwarded it to Kevin Lee, an asset manager for Pac Shores. Pac Shores' attorneys reviewed the Retrofit Contract and returned it with minor changes. Moyer Decl. ¶ 21. The Retrofit Contract was executed on December 21, 2010. See Dkt. No. 63-5, Retrofit Contract.

When Pac Shores chose not to pursue the retrofit, UGS sued, alleging four breach of contract claims, including one claim for the alleged breach of the implied promise of good faith and fair dealing not to do anything that would unfairly interfere with the other party's right to receive the benefits of the contract. Id. ¶¶ 19-46. According to Mr. Moyer, between March and May 2011 Pac Shores was in discussions with Mazuma Capital Corp. to secure financing for the LED retrofit. Dkt. No. 63-1, Moyer Decl. ¶¶ 40-53. However, Pac Shores delayed the agreement because of "issues with its own primary lenders as a result of expiring mortgages on the Pac Shores Center." Id. ¶ 52. UGS and Pac Shores then agreed to further delays while Pac Shores attempted to refinance its expiring mortgages on the Pac Shores Center. Id. ¶ 55. Mr. Moyer explains that, after nearly a year of delay, Pac Shores sold two of its buildings, and was soon thereafter the subject of a hostile takeover by a Blackstone management company called Equity Office. Id. ¶¶ 58-62. According to Mr. Moyer, the new ownership had no intention of following through with the LED retrofit. Id. ¶ 63; see also FAC ¶¶ 13-19.

On December 28, 2012, Pac Shores moved to dismiss UGS's claims for lack of federal diversity jurisdiction, which the court denied on April 5, 2013. Dkt. No. 6 (motion to dismiss); Dkt. No. 18 (order denying motion to dismiss). Pac Shores subsequently filed an answer to UGS's complaint on May 21, 2013. Dkt. No. 21. Pac Shores also moved for leave to file a third-party complaint for express contractual indemnity against Cushman & Wakefield of California, Inc., the property management company responsible for the Pac Shores Center, which the court granted on September 18, 2013. Dkt. No. 35. UGS then moved to amend its complaint to allege its alternative legal theory of breach of contract that the Retrofit Contract covered all four buildings. Dkt. No. 49. The court on February 22, 2014 granted UGS's leave to amend. Dkt. No. 58.

Pac Shores now moves for summary judgment on all claims. Dkt. No. 60. UGS filed an opposition, Dkt. No. 63, and Pac Shores filed a reply, Dkt. No. 65. The court held a hearing on the motion for summary judgment on May 2, 2014.


Summary judgment is proper where the pleadings, discovery, and affidavits demonstrate that there is "no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). At the summary judgment stage, the Court "does not assess credibility or weigh the evidence, but simply determines whether there is a genuine factual issue for trial." House v. Bell, 547 U.S. 518, 559-60 (2006). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id.

A. Breach of Contract Claims

Pac Shores moves for summary judgment on UGS's claims, all of which derive from breach of contract. "[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011). Resolution of the parties' controversy requires the court to interpret the contract at issue.

1. Contract Interpretation

Under California law, it is well settled that the interpretation of a contract is a question of law for the trial court's determination. Parsons v. Bristol Development Co., 62 Cal. 2d 861, 865 (1965); Heppler v. J.M Peters Co., 73 Cal.App.4th 1265, 1285 (1999); Southland Corp. v. Emerald Oil Co., 789 F.2d 1441, 1443 (9th Cir. 1986). "The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties." Powerine Oil Co., Inc. v. Superior Court, 37 Cal.4th 377, 390 (2005). "Such intent is to be inferred, if possible, solely from the written provisions of the contract." ...

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