Cathay Logistics, LLC v. Gerber Plumbing Fixtures, LLC

          ORDER GRANTING GERBER PLUMBING FIXTURES, LLC’S MOTION FOR SUMMARY JUDGMENT

          OTIS D. RIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiff Gerber Plumbing Fixtures, LLC (“Gerber”) moved for summary judgment on various affirmative defenses asserted by Defendants Amerifreight, Inc. dba Logistics Team (“Logistics Team”), 19201 Reyes, LLC (“Reyes”), Cathay Logistics, LLC (“Cathay”), and Sinofreight, LLC dba SB Freight (“Sinofreight”) in the consolidated case of Gerber Plumbing Fixtures, LLC v. Amerifreight, Inc., et al., Case No. 2:15-cv-04146-ODW (GJS). For the reasons discussed below, the Court GRANTS Gerber’s Motion. (See Mot. for Summ. J., Gerber Plumbing Fixtures, LLC v. Amerifreight, Inc., et al., Case No. 2:15-cv-04146-ODW (GJS), ECF No. 77).^[1]

         II. BACKGROUND

         Gerber, an Illinois company, manufactures and distributes residential and commercial plumbing products. (Gerber’s Statement of Undisputed Material Facts (“SUF”) 1, 6, ECF No. 78.) Logistics Team, a California company, provides warehousing and logistics services. (See SUF 3, 9.) In January 2012, Gerber and Logistics Team entered into a five-year contract whereby Logistics Team would provide warehouse storage and management for Gerber’s inventory. (SUF 9-13.) From 2012 until June 2015, Logistics Team arranged for Gerber’s products to be stored at a facility operated by Defendant 19201 Reyes, LLC (“Reyes”). (SUF 14.)

         Separately, Gerber contracted with Cathay and Sinofreight for trucking and logistics services for its containers arriving by overseas carrier in both California and Illinois. (SUF 16.) On March 23, 2015, Cathay and Sinofreight filed a Complaint in the Los Angeles Superior Court against Gerber, contending that Gerber owes them in excess of $1 million on an open book account for shipping services. (SUF 19.)^[2]

         On March 30, 2015, Logistics Team sent an e-mail to Gerber stating its belief that Gerber had “engaged in bad faith dealings, ” and thus intended to move Gerber’s products out of the Reyes facility by June 30, 2015, unless Gerber moved its products out before then. (SUF 21.)^[3] The parties then exchanged a series of e-mails and phone calls regarding their contract for services and various unpaid debts. (SUF 21-23.) Gerber eventually informed Logistics Team that it would remove its inventory from the Reyes facility between May 31, 2015, and June 6, 2015. (Id.)

         On June 1, 2015, a Gerber representative arrived at the Reyes facility to meet with a Logistics Team representative to coordinate the move-out. (SUF 28.) However, the Logistics Team representative informed the Gerber representative that it no longer had access to the facility, and that it had turned the keys over to Reyes. (SUF 29, 32.)^[4]

         On June 2, 2015, Gerber filed a Complaint against Logistics Team as well as an Application for a Temporary Restraining Order. (ECF Nos. 1, 3.) Gerber, claiming that Logistics Team was holding millions of dollars’ worth of inventory hostage, sought an immediate injunction against Logistics Team for access to the Reyes facility. (ECF No. 3.) On June 11, 2015, Gerber filed a First Amended Complaint adding Reyes as a defendant to the case. (ECF No. 30.) Gerber also filed a second Application for Temporary Restraining Order, which seeks the same relief against Reyes. (ECF No. 33.)

         The Court denied the TRO as to Logistics Team, but granted the TRO as to Reyes. (ECF No. 43.) The Court ordered Reyes to give Gerber access to its facility on a 24-hour basis for a minimum of five calendar days, and access during regular business hours for a minimum of ten calendar days, so that Gerber could remove its remaining inventory. (Id.) On July 1, 2015, the parties submitted a joint report to the Court. (ECF No. 50.) The parties represented to the Court that it would complete the move-out within the next seven business days. (Id.) None of the parties voiced any objection to the move-out process.

         On December 18, 2015, Gerber filed a Second Amended Complaint (“SAC”), in which Gerber asserts three causes of action: (1) breach of contract (against Logistics Team); (2) conversion (against Reyes); and (3) conspiracy to commit conversion (against Logistics Team, Reyes, Cathay, and Sinofreight). (ECF No. 68.)

         That same day, Reyes answered Gerber’s SAC. (ECF No. 70.) On December 31, 2015, Logistics Team, Cathay, and Sinofreight answered the SAC. (ECF No. 74.) On April 11, 2016, Gerber moved for summary judgment on various affirmative defenses asserted by each Defendant. (ECF No. 77.) All Defendants timely opposed, and Gerber timely replied. (ECF Nos. 84-95.) That Motion is now before the Court for consideration.

         III. LEGAL STANDARD

         The court must grant summary judgment to a moving party if it “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). If the moving party meets this burden, the nonmoving party must go beyond the pleadings and identify specific facts through admissible evidence that show a genuine dispute for trial. Id.; Fed.R.Civ.P. 56(c).

         A disputed fact is “material” where the resolution of that fact might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1968). Conclusory or speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill's Publ’g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). Moreover, there must be more than a mere scintilla of contradictory evidence. Addisu v. Fred Meyer, 198 F.3d 1130, 1134 (9th Cir. 2000). Where the moving and nonmoving parties’ versions of events differ, courts are required to view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007). A court may not weigh conflicting evidence or make credibility determinations. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007).

         IV. DISCUSSION

         A. Logistics Team, ...