Enough for Everyone, Inc. v. Provo Craft & Novelty, Inc. , 567 F. App'x 533 ( 2014 )

FILED
NOT FOR PUBLICATION APR 10 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ENOUGH FOR EVERYONE, INC, a No. 12-56489
California corporation,
D.C. No. 8:11-cv-01161-DOC-
Plaintiff - Appellee, MLG
v.
MEMORANDUM*
PROVO CRAFT AND NOVELTY,
INC., a Utah corporation,
Defendant - Appellant.
ENOUGH FOR EVERYONE, INC, a No. 12-57025
California corporation,
D.C. No. 8:11-cv-01161-DOC-
Plaintiff - Appellee, MLG
v.
PROVO CRAFT AND NOVELTY,
INC., a Utah corporation,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
page 2
David O. Carter, District Judge, Presiding
Argued and Submitted March 7, 2014
Pasadena, California
Before: KOZINSKI, Chief Judge, GRABER, Circuit Judge, and BREYER,
Senior District Judge.**
1. Although the Consulting Services and Royalty Agreement (“Agreement”)
contained an arbitration clause applicable to “every dispute or difference between
them, arising under this Agreement,” it specifically excluded from its purview “any
dispute regarding . . . non-payment or late payment.” Enough for Everyone’s
operative Complaint alleges that Provo failed to make payments required by the
Agreement. See Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999)
(“[W]e must examine the factual allegations raised to determine which of Simula’s
causes of action are arbitrable.”). Provo’s eleventh-hour tender of payment in an
amount that it unilaterally determined to be owing under the Agreement does not
convert Enough for Everyone’s Complaint from one alleging non-payment to one
alleging under-payment. Even if it did, we do not find such a distinction relevant.
Indeed, under Provo’s theory, it could have made a $1 payment shortly before trial,
thereby triggering the arbitration clause and undoing nearly a year’s worth of work
**
The Honorable Charles R. Breyer, Senior District Judge for the U.S.
District Court for the Northern District of California, sitting by designation.
page 3
and expense incurred by the parties and the court. We find it implausible that this
is what the parties intended. See Am. Express Co. v. Italian Colors Rest., 133 S.
Ct. 2304, 2309 (2013) (acknowledging “the overarching principle that arbitration is
a matter of contract”).
2. The district court empowered the Special Master to “mak[e] any and all
factual findings and legal conclusions necessary, and upon conclusion of such
accounting report those findings and conclusions to the Court.” Although Provo
contends that the Special Master made findings and legal conclusions that were not
necessary to performing this task, the purpose of an accounting is to determine the
amount of money “owed to the plaintiff but held by the defendant.” Black’s Law
Dictionary 22 (9th ed. 2009). The challenged findings and conclusions clearly go
to the calculation of the amount owed by Provo to Enough for Everyone under the
Agreement, and therefore are necessary to this determination.
3. Provo further faults the Special Master for failing to ensure a court
reporter was present to record witness testimony. But the Federal Rules of Civil
Procedure did not require him to do so. See Fed. R. Civ. P. 53(c)(1)(C) (“Unless
the appointing order directs otherwise, a master may . . . if conducting an
evidentiary hearing, exercise the appointing court’s power to compel, take, and
page 4
record evidence.” (emphasis added)). As the Advisory Committee Notes observe,
this rule “is intended to provide the broad and flexible authority necessary to
discharge the master’s responsibilities. The most important delineation of a
master’s authority and duties is provided by the Rule 53(b) appointing order.” Fed.
R. Civ. P. 53 advisory committee’s note. The district judge’s appointing order
only demanded that the Special Master “preserve all documents and records filed
with the Special Master.” The Special Master properly discharged this duty.
AFFIRMED