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Eclipse Group LLP v. Fortune MFG. Co., Ltd.

United States District Court, S.D. California

March 4, 2015

THE ECLIPSE GROUP LLP, a California limited liability partnership, Plaintiff,
v.
FORTUNE MFG. CO., LTD., a Taiwan company, Defendant.

ORDER: (1) DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; [DKT. NO. 17.] (2) VACATING HEARING DATE

GONZALO P. CURIEL, District Judge.

Before the Court is Plaintiff The Eclipse Group LLC's ("Plaintiff") motion for summary judgment against Defendant Fortune Mfg. Co., Ltd. ("Defendant"). (Dkt. No. 17.) The parties have fully briefed the motion. (Dkt. Nos. 20-23.) Pursuant to Civil Local Rule 7.1(d)(1), the Court finds the matter suitable for adjudication on the papers, without oral argument. For the following reasons, the Court DENIES Plaintiff's motion for summary judgment.

FACTUAL BACKGROUND

This action arises from Defendant's alleged failure to pay Plaintiff for legal services. (Dkt. No. 1 ¶¶ 5-11.) Defendant is a Taiwan based company that produces bronze and brass valves for use in industries such as oil, chemical, gas, machinery, construction, and water. (Dkt. No. 20-4 at 3-4.)[1] Around June 2010, Defendant contacted Plaintiff regarding filing a claim against Zurn Industries, LLC ("Zurn"). (Dkt. No. 1 ¶ 5; Dkt. No. 20-1 ¶ 6.)

Around October 26, 2010, Plaintiff and Defendant signed an engagement letter under which Plaintiff would represent Defendant "in connection with preparing and filing a claim against Zurn/Wilkins." (Dkt. No. 17-4 at 2; Dkt. No. 20-1 ¶ 6.) The engagement letter set forth Plaintiff's blended hourly rate and partial contingency arrangement, and stated that Plaintiff was entitled to payment for expended costs. (Dkt. No. 17-4 at 2.) The engagement letter also provided that if payment was not received within sixty days after the issuance of an invoice, the outstanding amount "may" be subject to finance charges of 8% per annum. ( Id. at 3.) In addition, the engagement letter stated that if Defendant had any dispute with any invoiced amounts, it "shall raise such dispute within thirty (30) days of the invoice date" or it would be "liable for the full amount invoiced." ( Id. )

On January 18, 2011, Plaintiff filed an action on behalf of Defendant against Zurn in United States District Court for the Central District of California: Fortune Mfg. Co., Ltd. v. Zurn Industries, LLC, Case No. 11-cv-0530-PA-JEM. (Dkt. No. 20-1 ¶ 8; Dkt. No. 20-3 at 2.) On November 14, 2011, the district court granted Zurn's motion for summary judgment because, among other things, it found that some of Defendant's claims were barred by the applicable statutes of limitation. (Dkt. No. 20-6.) Shortly thereafter, Defendant settled with Zurn. (Dkt. No. 20-1 ¶ 9.)

Between October 2011 and February 2012, Plaintiff sent Defendant invoices for its services. (Dkt. No. 17-3 ¶ 3; Dkt. No. 17-5.) Around April 10, 2012, Defendant sent Plaintiff an email stating that it was "extremely disappointed and dissatisfied" with Plaintiff's legal services, and therefore it "does not find it reasonable to make more payments for the dilettante services provided." (Dkt. No. 21-2 ¶ 2; Dkt. No. 21-3 at 2-3; see also Dkt. No. 20-1 ¶ 9.) On September 3, 2013, Plaintiff sent Defendant a letter stating that Defendant owed it $136, 383.75 in fees and $38, 247.86 in costs. (Dkt. No. 17-7 at 2.) The letter further stated that "[w]e understand that you were unhappy with the outcome of the case and therefore disputed the balance" but "we cannot forgive the amount due." ( Id. )

Defendant declares that it has paid Plaintiff approximately $104, 396.49 for its services, pursuant to the engagement letter, but disputes that any further payments are due. (Dkt. No. 20-1 ¶ 9.) Plaintiff declares that Defendant owes it $136, 383.75 in fees and $38, 247.86 in costs, plus 8% per annum. (Dkt. No. 17-3 ¶¶ 3, 7.)

PROCEDURAL HISTORY

On February 26, 2014, Plaintiff filed this action against Defendant. (Dkt. No. 1.) Plaintiff alleges four claims: (1) breach of written agreement; (2) open book account; (3) account stated; and (4) quantum meruit. ( Id. ¶¶ 12-30.)

On December 8, 2014, the Court granted Defendant's motion to set aside default judgment. (Dkt. No. 13.) Defendant filed its answer on December 11, 2014. (Dkt. No. 15.) In its answer, Defendant asserted as defenses that it "is entitled to offset any recovery by the amount necessary to correct defects caused by [Plaintiff's] deficient and/or negligent legal representation" and that it was "discharged from performing the contract because [Plaintiff]... materially breached the contract by failing to provide reasonably competent representation in multiple instances...." ( Id. at 5.)

On December 22, 2014, Plaintiff filed the instant motion for summary judgment. (Dkt. No. 17.) Defendant filed its opposition on January 30, 2015. (Dkt. No. 20.) Plaintiff replied on February 13, 2015.[2] (Dkt. No. 21.)

LEGAL STANDARD

Federal Rule of Civil Procedure 56 empowers the Court to enter summary judgment on factually unsupported claims or defenses, and thereby "secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327 (1986). Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." ...


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