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A&C Catalysts, Inc. v. Raymat Materials, Inc.

United States District Court, N.D. California

February 26, 2015

A&C CATALYSTS, INC., Plaintiff and Counter-Defendant,
RAYMAT MATERIALS, INC., Defendant and Counter-Plaintiff.


WILLIAM ALSUP, District Judge.


This action is a follow-on lawsuit over a busted settlement agreement resolving a prior lawsuit. After a three-day bench trial, lengthy findings of fact, conclusions of law, and an order for relief followed enforcing the settlement agreement. Now, defendant seeks to "amend" the judgment. For the reasons stated herein, the motion is DENIED.


The findings of fact recounted the history of this action so it will not be repeated herein (Dkt. No. 111). In brief, plaintiff A&C Catalysts Inc. and defendant Raymat Materials Inc. settled a prior lawsuit, also before the undersigned judge, regarding an exclusive supply agreement. In pertinent part, A&C Catalysts agreed to pay $150, 000 to Raymat "to purchase Raymat's LL ["N'-Lauroyl-L-lysine"] manufacturing process, along with documentation of that process, in both English and Chinese" and eight hours of teleconferencing support time (Dkt. No. 20). The dispute boiled down to whether an eleven-page process description in Chinese (and the English translation thereof) sufficed. It did not, the Court ultimately held after a three-day bench trial. Now, Raymat moves to "amend" the judgment. This order follows full briefing and oral argument.


Raymat, unsatisfied with the outcome of the three-day bench trial by a district judge who presided over both lawsuits collectively spanning more than two years, now moves to "amend" the judgment. After ruling on numerous discovery disputes, motions for summary judgment, a motion for civil contempt, and other motions, the Court received the parties' stipulation to dismiss the original lawsuit on the eve of trial.

Three months later, this satellite litigation erupted apparently when the settlement agreement unraveled. It soon became clear that the parties could agree on little, if anything. More discovery disputes arose and in light of the circumstances, the undersigned judge felt that the best course of action was to promptly proceed to trial before memories (and evidence) became stale. The parties submitted pre-trial proposed findings and conclusions, a trial brief, motions in limine, Daubert motions, and post-trial proposed findings, conclusions, and responses. After considering the evidence in the three-day trial record, lengthy findings of fact, conclusions of law, an order for relief, and judgment followed (Dkt. Nos. 111, 112).

Now, Raymat seeks to reverse the judgment. Specifically, it seeks to "amend" the judgment under Rule 59(e) from stating "Judgment is hereby entered in favor of A&C Catalysts, Inc. to the extent stated in the findings of fact, conclusions of law, order for relief following bench trial, and referral to the Department of Justice" to stating "Judgment is hereby entered for Raymat against A&C Catalysts, Inc. in the amount of $150, 000, plus 10% prejudgment interest accruing from August 29, 2014, at the rate of $41.10 per day" (emphases added). This motion is DENIED. Raymat's arguments are unavailing.

First, Raymat contends that the findings and conclusions rejected Raymat's repudiation theory without "discussing" decisions such as Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes, 191 Cal.App.4th 435, 467 (Cal.Ct.App. 2010), and Fracasse v. Brent, 494 P.2d 9, 17 (Cal. 1972), both cited in Raymat's post-trial proposed conclusions. Neither of those decisions was or is persuasive.

Mammoth involved a developer suing a town for anticipatory breach of a development agreement after the town refused to move forward with a development project in light of the Federal Aviation Administration's objections. The jury in Mammoth awarded $30 million to the developer after expressly finding, among other things, that the development had met all or substantially all of its obligations under the agreement. 191 Cal.App.4th at 453. The California Court of Appeal affirmed. In pertinent part, it found sufficient evidence to establish that the town expressly repudiated the agreement. Id. at 467-69.

Mammoth is distinguishable because (1) the developer met all or substantially all of its obligations whereas Raymat's eleven-page process description was inadequate and (2) the town in Mammoth refused to move forward with the development agreement, stated in internal communications that it wanted to "get rid of" the developer's project (in favor of another project), and "actively sought to undermine" the developer's rights. Our trial record contained no such evidence. A&C Catalysts placed the $150, 000 in escrow. Moreover, (3) the developer there spent more than $15 million on improvements after entry of the development agreement whereas Raymat insisted and still insists that all it had to do was turn over a "preexisting document, " namely, the eleven-page process description in its actual possession at the time (Br. 17). Mammoth, 191 Cal.App.4th at 447, 453, 449-50, 467, 469.

Raymat's reliance on dictum in the dissent in Fracasse is equally unavailing. Fracasse involved an attorney who was discharged without cause by his client and sued to recover fees. The majority held that a discharged attorney was entitled to recover the reasonable value of services rendered before the time of discharge, but the cause of action to recover compensation for services rendered under a continency-fee agreement did not accrue until the occurrence of the stated contingency. 494 P.2d at 15. Justice Raymond Sullivan dissented. Neither the majority nor the dissent focused on repudiation. Nevertheless, Raymat cites Justice Sullivan's 1972 dissent for the proposition that one who is injured by a breach of contract may elect to pursue any of three remedies, one of which is to "treat the repudiation as putting an end to the contract for all purposes of performance, and [to] sue for the profits he would have realized if he had not been prevented from performing." Id. at 17. Here, however, Raymat was not excused from performance merely because counsel for A&C Catalysts demanded physical equipment (Dkt. No. 111 at 13). This order rejects Raymat's argument that tendering performance was a "vain and idle ceremony" (Br. 8).

This order also rejects Raymat's reliance on the following sentence in Pacific Coast Engineering Co. v. Merritt-Chapman & Scott Corp., 411 F.2d 889, 895 (9th Cir. 1969): "If the offeror is not asserting a good faith interpretation of the contract terms, that fact may be evidence that he is repudiating the agreement" (citing law review note). Procedurally, neither party cited this 1969 decision in the pre- and post-trial proposed conclusions and responses. Substantively, the order for ...

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