Grant v. Kamehameha Schools/Bernice Pauahi Bishop Estate et al

Filing 85

APPENDIX of Unpublished Cases in support of 84 Opposition by Jane Doe, John Doe (Attachments: # 1 Exhibit Bou-Matic Decision, # 2 Exhibit J.G. Boswell Tomato Co. Decision, # 3 Exhibit Lenscrafters Decision)(Stein, Jerry) Modified on 10/17/2008 (Benson, A).

Page 1 2 0 0 7 U.S. Dist. LEXIS 76137, *

1 of 8 DOCUMENTS B O U - M A T I C , LLC, a W is c o n s in Limited Liability Corporation, Plaintiff, vs. O L L I M A C DAIRY, INC., a California Corporation; TURLOCK DAIRY AND R E F R I G E R A T I O N , INC., a California Corporation; R.J. FULLW O O D FUSION E L E C T R O N I C S B.V., Netherlands Corporation; FULLW O O D LIM I T E D , United K in g d o m Corporation; LELY RESEARCH HOLDING AG, a foreign business e n t i t y ; and LELY INDUSTRIES NV, a foreign business entity, Defendants. N o . CV-F-05-203 OW W /S M S U N I T E D STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF C A L IF O R N IA 2 0 0 7 U.S. Dist. LEXIS 76137

S e p t e m b e r 28, 2007, Decided September 28, 2007, Filed P R I O R HISTORY: Bou-Matic, L.L.C. v. Ollimac D a i r y , Inc., 2006 U.S. Dist. LEXIS 35211 (E.D . Cal., A p r . 17, 2006) C O U N S E L : [*1] For Bou-Matic LLC, a W i s c o n s i n L i m i te d Liability Corporation, Plaintiff: Luke W illia m H o w itt, LEAD ATTORNEY, Nabil L Abu-Assal, LEAD A T T O R N E Y , Christensen Miller Fink Jacobs Glaser W e il & Shapiro LLP, Los Angeles, CA. F o r Ollimac Dairy Inc., a California Corporation, D e fe n d a n t: Michelle I. Morelli, LEAD ATTORNEY, F r e d r ic k s o n Mazeika and Grant LLP, Roseville, CA. F o r Turlock Dairy & Refrigeration Inc., a California C o r p o r a tio n , Defendant: James Leslie Sadler, LEAD A T T O R N E Y , Stockton and Sadler, Modesto, CA. F o r R.J. Fullwood & Bland Limited, a United Kingdom C o r p o r a tio n , Fullwood Fusion Electronics B.V., a N e th e rla n d s Corporation, Fullwood Limited, A United K in g d o m Corporation, Defendants: John J. Soltys - PRO H A C VICE, LEAD ATTORNEY, Ramona N. Hunter, P H V , LEAD ATTORNEY, Cozen O'Connor, Seattle, W A ; Steven Lee Rodriguez, LEAD ATTORNEY, Cozen O 'C o n n o r , San Francisco, CA. J U D G E S : Oliver W . W a n g e r , UNITED D I S T R I C T JUDGE. O P I N I O N BY: Oliver W . W a n g e r O P IN IO N M E M O R A N D U M D E C IS IO N G RA N T IN G D E F E N D A N T OLLIMAC DAIRY, INC.'S MOTION STATES T O REALIGN AND TO DISMISS(Doc. 58) AND D I S M I S S I N G ACTION FOR LACK OF SUBJECT M A T T E R JURISDICTION B e fo r e the Court is Defendant Ollimac Dairy, Inc.'s ( " O llim a c ) motion to realign the parties and [*2] dismiss t h i s action for lack of subject matter jurisdiction and to r e c o n s id e r or clarify the Order filed on April 17, 2006, d e n yin g Ollimac's motion to dismiss for lack of subject m a t t e r jurisdiction. 1 1 Ollimac's motions raise other grounds for r e l i e f. Resolution of these other grounds is not n e c e ss a ry and they are not addressed. A . PROCEDURAL BACKGROUND. B o u - M a t i c , L.L.C., a W i s c o n s i n limited liability c o r p o r a tio n (Bou-M a t i c ) , filed its Complaint on February 1 4 , 2005, seeking a declaratory judgment under 28 U .S .C . § 2201. Subject matter jurisdiction is alleged to be d iv e rs ity of citizenship and satisfaction of the $ 75,000 a m o u n t in controversy requirement. See 28 U . S . C . § 1332. O llim a c moved to dismiss the Complaint on N o v e m b e r 18, 2005 (Doc. 35). The motion to dismiss w a s denied by Order filed on April 17, 2006 (Doc. 57). O llim a c moved to reconsider and to realign the parties a n d dismiss for lack of subject matter jurisdiction on A p r il 17, 2006 (Doc. 58). Bou-Matic filed an opposition to these motions on May 25, 2006 (Doc. 61). Ollimac file d a reply on June 6, 2006 (Doc. 62). B . BACKGROUND.
2

2 Bou-Matic argues that Ollimac has not s a t is fie d standards governing reconsideration,

Page 2 2 0 0 7 U.S. Dist. LEXIS 76137, * n o tin g [*3] that the Court ordered supplemental b r ie fin g prior to issuing the April 17, 2006 Order o n the issues of party re-alignment and the p r o p r ie t y of filing a complaint for declaratory j u d g m e n t under the circumstances of this dispute. B e c a u s e the April 17, 2006 Order did not refer to th o s e issues or the supplemental briefing, BouM a t ic contends, the Court impliedly ruled against O l l i m a c on these issues. Ollimac urges r e c o n s i d e r a t i o n on facts and law previously p r e s e n t e d to the Court. As explained at the h e a r in g on the instant motions, however, the C o u r t did not see the supplemental briefs due to p r e ss of business and did not address the issues r a i s e d by the Court. Reconsideration is a p p r o p r i a t e under these circumstances, especially s i n c e the issue concerns subject matter j u r is d i c t i o n . B o u - M a t i c is a d a i r y equipment supplier, d i s t r i b u tin g nationwide through independent local e q u ip m e n t dealers such as Defendant Turlock Dairy and R e f r i g e r a t i o n , Inc. (TDR). One of Bou-Matic's products is a robotic milking system (RM S ) , which reduces the n e e d for human involvement in the milking process. ( D o c . 1, Compl., PP 3-4). Through TDR, Bou-Matic fu r n is h e d a RMS to Ollimac, after lengthy negotiations, b e t w e e n [*4] April 2003 and August 2004. (Decl. of R o b e r t A. Morelli, P 7). The RMS did not perform to O llim a c 's expectations, and Ollimac became concerned t h a t the representations allegedly made by Bou-Matic d u r in g the prior negotiations were false. Ollimac brought th e se concerns to Bou-Matic and requested assistance f r o m Bou-Matic and TDR to ensure that the RMS would p e r f o r m in the manner which Ollimac claims Bou-Matic r e p r e s e n te d it would. (Morelli Decl., PP 8-12). During n e g o tia t io n s Bou-Matic filed the present federal action, s e e k in g a declaration of its rights and responsibilities w i t h respect to any liability for any misrepresentations in th e furnishing, defect in design or operation of the RM S a n d allegedly resulting damage, regarding the rights and d u tie s of Ollimac and other named Defendants, who p a r t i c i p a t e d in various capacities in the development, d e sig n , furnishing, installation and operation of the RM S . ( D o c . 47, Mem. in Opp., 2). C . LEGAL STANDARD AND ANALYSIS. Ollimac concedes that the amount in controversy r e q u ir e m e n t for diversity of citizenship subject matter j u r is d i c t io n is satisfied. Ollimac argues, however, if the p a r tie s are properly re-aligned, diversity of citizenship is [ * 5 ] absent. Ollimac argues: For the purposes of re-alignment in [the fe d e r a l declaratory judgment] case, there c a n be no reasonable doubt that [ D e f e n d a n t ] Ollimac was the 'real' p l a in tiff at both the time the action was file d , at the time [Defendant] Ollimac's o r ig in a l motion to dismiss was brought b e f o r e the Court. Further, [Defendant] O llim a c is and will remain the real p l a i n t i f f in the underlying dispute th r o u g h o u t the litigation. [Defendant] O llim a c is the plaintiff in the substantive s ta te court action, seeking damages a g a i n s t the identical parties who are in v o l v e d in the present declaratory relief a c tio n , including [Plaintiff] Bou-Matic.

Both Ollimac and Defendant TDR are California c o r p o r a t io n s . If Ollimac is re-aligned as a plaintiff in the fe d e r a l case, subject matter jurisdiction will be absent b e c a u s e the parties will not be of completely diverse c i t iz e n s h i p . 28 U.S.C. § 1332; Allstate Ins. Co. v. H u g h e s, 358 F.3d 1089, 1095 (9th Cir.2004) ("[d]iversity j u r is d i c t io n under [Section 1332] requires complete d iv e r s ity of citizenship; each of the plaintiffs must be c i tiz e n s of a different state than each of the defendants"). I n cases premised on diversity jurisdiction, inquiry must [ * 6 ] be made whether proper alignment of the parties m i g h t destroy complete diversity of citizenship. P r u d e n t ia l Real Estate Affiliates, Inc. v. PPR Realty, I n c ., 204 F.3d 867, 873 (9th Cir.2000). " T h e generally accepted test of proper alignment is w h e t h e r the parties with the same 'ultimate interests' in th e outcome of the action are on the same side. This test is meant to ensure that there is an actual, substantial c o n tr o v e rs y between citizens of different states, all of w h o m on one side of the controversy are citizens of d iffe r e n t states from all parties on the other side." 13B W r ig h t, Miller & Cooper, Federal Practice and P r o c e d u r e : Jurisdiction 2d § 3607 & n.7, citing City of I n d ia n a p o l i s v. Chase Nat'l Bank of City of New York, 3 1 4 U.S. 63, 69, 62 S. Ct. 15, 86 L. Ed. 47 (1941). [ E m p h a sis added]. "The issue of alignment for purposes o f diversity jurisdiction requires a court to 'look beyond th e pleadings' to the actual interests of the parties r e sp e c tin g the subject matter of the lawsuit." Prudential R e a l Estate Affiliates, supra, 204 F.3d at 872. The Court " m u s t align for jurisdictional purposes those parties w h o s e interests coincide respecting the 'primary matter in d is p u te .'" Id. at 873. F o r example, in Continental Airlines, Inc. v. G o o d y e a r Tire & Rubber Co., 819 F.2d 1519 (9th C ir .1 9 8 7 ), [*7] plaintiff Continental bought planes from m a n u fa c t u r e r McDonnell Douglas Corporation (MDC). I d . at 1521. The contract contained an exculpatory clause i n favor of MDC. After a fatal crash, Continental sued in b o th state and federal court. MDC and a parts supplier, S a r g e n t Industries (SI), were defendants in the state case;

Page 3 2 0 0 7 U.S. Dist. LEXIS 76137, * tw o other parts suppliers, Goodyear (GY) and B.F. G o o d r ic h (BFG), were defendants in the federal case. C o n t in e n t a l later filed a second federal case against a n o th e r parts supplier. MDC's attempt to remove the s ta t e case failed for lack of subject matter jurisdiction b e c a u s e neither a federal question nor diversity of c i tiz e n s h i p was present, SI and Continental both being C a l ifo r n ia citizens. MDC then filed a declaratory j u d g m e n t action against Continental, SI, GY and BFG. I d . at 1521-1523. The Ninth Circuit commenting that " [ t ] h e critical question here is [SI]'s proper alignment" a n d that "[SI]'s alignment with MDC would destroy c o m p le te diversity", ruled: [SI]'s strongest contention below was th a t MDC's exculpatory clause barred C o n t i n e n t a l 's claims against the parts m a n u fa c t u r e r s. Indeed, the district court s o held. MDC took the same position b e c a u s e if Continental [*8] had been able to recover against [SI], [SI] could have s o u g h t indemnity against MDC. Thus b o th manufacturers had an identical in te re st in proving the validity and scope o f MDC's exculpatory clause. Indeed, [SI] file d papers below supporting MDC's w i n n in g summary judgment motion, and th e two parties arranged to be represented b y the same counsel on this appeal. Thus, w i t h respect to the primary matter in d i s p u te , [SI] was in reality MDC's cop a r t y against Continental. Diversity in M D C 's action was therefore lacking. m o tio n to dismiss. The state court Complaint alleges e i g h t causes of action against various parties, including B o u -M a tic and all other Defendants named in this federal d e c l a r a t o r y judgment action. 3 The state Complaint a l le g e s causes of action for (1) fraud and deceit against B o u - M a t ic , DEC International, Inc. (DECI), Dairy E q u ip m e n t Company (DEC), and Madison One Holdings L L C (Madison One); (2) negligent misrepresentation a g a in s t Bou-Matic, DECI, DEC and Madison One; (3) b r e a c h of contract (third-party beneficiary) against TDR; ( 4 ) breach of express warranty against B o u - M a t ic , DECI, D E C and M a d i s o n One; (5) breach of implied warranties a g a i n s t TDR; (6) strict products liability against BouM a t ic , DECI, DEC, Madison One, Fullwood, Lely and T D R ; (7) negligence against all defendants; and (8) d e c l a r a t o r y [*10] relief as to all defendants. 3 Other defendants in the state court action who a r e not parties to this federal action are DEC I n t e r n a t i o n a l Inc., Dairy Equipment Company, a n d Madison One Holdings LLC B o u - M a tic 's federal Complaint seeks "a judicial d e t e r m in a t io n that Bou-Matic is not responsible for the a l le g e d problems Ollimac is experiencing with the R M S " , alleging that "[a] judicial declaration is necessary a n d appropriate at this time under the circumstances so t h a t Bou-Matic may ascertain its rights within this r e la t io n s h i p chain between the supplier/installer, the d e a l e r , the manufacturer, the Dairy Farm and ultimately th e farm manager who is using the dairy equipment on t h e cows at the farm." O llim a c alleges it has suffered damages and lost p r o fits from defects in and defective operation of the R M S . The primary matters in dispute in the suits in both c o u r t s among all parties is misrepresentation and p r o d u c ts liability; whether the RMS failed and caused d a m a g e to Ollimac; whether Ollimac's RM S acquisition w a s induced by Bou-Matic's and TDR's fraud or m i s r e p r s e n ta tio n ; whether the alleged RMS failure was c a u s e d by faulty design, installation, or operation of the R M S ; which parties are [*11] liable to O llim a c and the n a t u r e and extent any alleged damages to Ollimac. BouM a t i c and Ollimac are direct and irrevocable antagonists r e g a rd in g the primary matter in dispute, liability for d a m a g e s caused by the RMS's failure and any m is r e p r e s e n t a t i o n s which wrongfully induced the p u r c h a s e . T h e i r interests do not coincide for j u r i s d i c t i o n a l purposes. Prudential Real Estate Affiliates, s u p r a , 204 F.3d at 873. All the other parties are a n t a g o n i s t i c to Ollimac, who seeks to hold all Defendants lia b l e for Ollimac's damages, caused by their alleged r o l e s in inventing and designing, promoting, selling, fu r n is h in g , installing, and failing to maintain the RM S . O llim a c argues it is more properly a plaintiff in the f e d e r a l declaratory judgment case because "Ollimac is

Id. at 1523. H e r e , the alignment of the parties for diversity p u r p o s e s must be ascertained from "the principal purpose o f the suit," and "the primary and controlling matter in d is p u te ." City of Indianapolis, supra, 314 U.S. at 69. T h is is determined by the Complaint. Ollimac argues: In 2 0 0 1 , Bou-Matic and Ollimac entered into negotiations fo r the sale of a RM S , which failed and caused Ollimac d a m a g e s . During these negotiations, Bou-M a t i c allegedly m i s r e p r e s e n te d the system's capabilities, leading Ollimac to conclude that Ollimac would profit by purchasing and in s ta llin g the RM S . Based on its reasonable reliance on B o u - M a t i c 's misrepresentations, Ollimac entered into fo u r separate [*9] finance lease agreements with the B a n k of the W e s t to lease RM S 's for a period of ten y e a r s . The RM S 's were sold to the Bank of the W e st by T D R and then leased to Ollimac. The RM S 's did not p e r f o r m as well as Bou-M a t i c had led Ollimac to expect, a n d Ollimac has suffered financial loss as a result. O l l i m a c 's Complaint in the Stanislaus County S u p e r io r Court is attached as Exhibit B to Ollimac's

Page 4 2 0 0 7 U.S. Dist. LEXIS 76137, * th e real plaintiff with respect to the underlying claims a n d the primary dispute at issue." Although Congress has g r a n te d federal courts the authority to issue federal d e c l a r a to r y judgments through the Declaratory Judgment A c t , 28 U.S.C. §§ 2201-2202, Biodiversity Legal F o u n d a t i o n v. Badgley, 309 F.3d 1166, 1172 (9th C ir .2 0 0 2 ), the underlying claims determine the true n a t u r e of the dispute and principal matter in controversy. [ * 1 2 ] T h e purpose of the Declaratory Judgment Act is to g iv e litigants an early opportunity to resolve federal is su e s to avoid the threat of impending litigation. Seattle A u d u b o n Society v. Moseley, 80 F.3d 1401, 1405 (9th C i r .1 9 9 6 ). "The remedy made available by the D e c l a r a t o r y Judgment Act and Rule 57 is intended to m in im iz e the danger of avoidable loss and the u n n e c e s s a r y accrual of damages and to afford one th r e a te n e d with liability an early adjudication without w a itin g until an adversary should see fit to begin an a c tio n after the damage has accrued." 10B W r ig h t, Miller & Kane, Federal Practice and Procedure: Civil 3d § 2 7 5 1 ; see also McGraw-Edison Co. v. Preformed Line P r o d u c t s Co., 362 F.2d 339, 342 (9th Cir.), cert. denied, 3 8 5 U.S. 919, 87 S. Ct. 229, 17 L. Ed. 2d 143 (1966). H e r e , Ollimac alleges and Bou-Matic does not deny t h a t damages have occurred. Cunningham Bros., Inc. v. B a i l , 407 F.2d 1165 (7th Cir.), cert. denied, 395 U.S. 9 5 9 , 89 S. Ct. 2100, 23 L. Ed. 2d 745 (1969), is a n a l o g o u s . There, a plaintiff general contractor sought d e c la ra to r y relief against a sub-contractor and the subc o n tr a c to r 's allegedly injured employees to determine: ( 1 ) plaintiff was not directing the sub-contractor's e m p lo y e e s when they were injured and that the e m p lo y e e s [*13] had no cause of action against plaintiff fo r their alleged injuries; and (2) the sub-contractor was l i a b l e under the contract to indemnify plaintiff and hold p la i n tiff harmless if plaintiff was found liable to the e m p l o y e e s . Id. at 1167. In affirming the District Court's d is m i s sa l of the declaratory judgment complaint, the S e v e n th Circuit observed: Regarding the individual defendants, we a r e of the opinion that to compel potential p e r s o n a l injury plaintiffs to litigate their c la im s at a time and in a forum chosen by th e alleged tort-feasor would be a p e r v e r s io n of the Declaratory Judgment A c t. B o u -M a tic 's pre-emptive federal declaratory relief a c tio n selects the forum and anticipates the underlying fr a u d , products liability and breach of contract claims t h a t arise out of the purchase, installation and operation o f the RMS. Ollimac's [*14] plaintiff's case was not filed i n the California Superior Court for Stanislaus County, a ss e rtin g these primary claims until October 7, 2005, a lm o s t eight months following the filing of the federal d e c l a r a to r y judgment action on February 14, 2005. M r . M o r e lli's Declaration states at Paragraphs 14-18: 14. W h e n verbal requests for BM's aid p r o v e d futile, I began to send letters to B M pleading for assistance and requesting B M to take all necessary steps to live up t o the representations made prior to O L L I M A C entering into a lease for the A M S [sic]. 1 5 . In these letters, I indicated that I w a n t e d BOUMATIC [sic] and/or TDR to c o m p e n sa te me for the losses I had s u s ta in e d , and that additional action w o u ld be taken if BOUMATIC [sic] a n d /o r TDR continued to ignore my r e q u e s ts . 1 6 . D u r i n g conversations with B O U M A T I C and TDR personnel both b e fo r e and after I sent these letters, when I v o ic e d my complaints, I was informed th a t the EUROPEAN DEFENDANTS had b e e n unresponsive to requests for a s s is ta n c e from BOUMATIC [sic], which w a s preventing addressing many of the p r o b le m s OLLIMAC was experiencing w i th the AMS [sic]. 1 7 . In February 2005, in response to m y lette r s , O L L I M A C m e t with r e p r e s e n t a t i v e s of [*15] BOUMATIC and T D R at the OLLIM A C facility. 1 8 . Shortly after the meeting with B O U M A T I C and TDR I received a letter f r o m B O U M A T I C ' s presid e n t , E d J o h n s o n , stating, 'We think a dispute in c o u r t represents a failure o f negotiation, and we d o n ' t want to find ourselves in court. Nevertheless, our s e n s e is that you may have c o n sid e re d taking this step, a n d , therefore, regretfully, w e h a ve decided to e s t a b l i s h some basics as to

Id. The Seventh Circuit ruled plaintiff "failed to d e m o n s tr a te how the allowance of the instant declaratory j u d g m e n t action would effectuate the purposes of the s ta t u te and thereby afford relief from uncertainty and in s e c u r ity with respect to rights, status[,] and other legal r e la tio n s ," because, as here, all the alleged injury had a l r e a d y accrued. Id. at 1168.

Page 5 2 0 0 7 U.S. Dist. LEXIS 76137, * th e issues that might be in v o l v e d , and where they c o u l d be adjudicated if n e g o t i a t i o n fa i l s . T o a c c o m p l is h this, we have filed the attached C o m p l a i n t in F e d e r a l D i s t r i c t Court in th e Eastern District of C a l i fo r n i a . ' in s ta llin g a defective RM S , denies it committed fraud or a n y other tort, denies it defectively maintained the e q u ip m e n t, breached any contract or any warranty. TDR a n d Ollimac are antagonistically aligned against BouM a tic 's claims. That there may be express or implied e q u ita b le indemnity among TDR, Bou-Matic, and the o t h e r defendants if Ollimac prevails, does not change this a n t a g o n i s m of interests over the primary matter which is a products liability dispute. C O N C L U S IO N For the foregoing reasons, Ollimac's motion to rea lig n the parties is GRANTED. By re-alignment, Ollimac is the real plaintiff in both this federal declaratory j u d g m e n t action and the state court action. The alleged b a sis of subject matter jurisdiction, diversity of c i t i z e n s h ip under 28 U.S.C. § 1332 does not exist. BouM a t i c ' s complaint for declaratory judgment is D I S M I S S E D FOR LACK OF SUBJECT [*17] M A T T E R JURISDICTION. C o u n s e l for Ollimac shall prepare and lodge a form o f order consistent with this decision within five (5) days fo llo w i n g the date of service of this decision. I T IS SO ORDERED. D a t e d : September 28, 2007 /s/ Oliver W . W a n g e r U N I T E D STATES DISTRICT JUDGE

Bou-M a t i c 's letter is an express admission that it p r e -e m p tiv e l y sought to lay venue in the forum of its c h o ic e . At oral argument Ollimac's counsel represented th a t Ollimac had discontinued use of the RMS's. All the a l le g e d injury has accrued. Declaratory relief can serve n o useful purpose where the claims are now actualized. M c G r a w - E d i s o n Co., supra, 362 F.3d at 342. A t oral argument Bou-Matic argued that the proper a l ig n m e n t of all parties cannot be ascertained because T D R has not revealed its position on the issues in any p l e a d i n g or response. This is disingenuous. [*16] C o n t r a r y to Bou-Matic's representation that TDR "could b e " adverse to Bou-Matic if it takes a contrary position as to any of O llim a c 's claims, TDR has answered Ollimac's s t a t e court complaint and has denied any liability to O llim a c on any theory of recovery Ollimac asserts. As l o g i c suggests, TDR has not admitted furnishing and