Ks Resources Limited v. Agx Lines Limited ( 2014 )

FILED
NOT FOR PUBLICATION APR 11 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
KS RESOURCES LIMITED, a Chinese No. 12-55962
corporation; K & S INTERNATIONAL
SINGAPORE PTE LTD, a Singapore D.C. No. 2:11-cv-01517-JHN-JCG
corporation,
Plaintiffs - Appellees, MEMORANDUM*
v.
A.W.L.I. GROUP OF FLORIDA, INC.,
dba Amber Worldwide Logistics,
Defendant-third-party-
plaintiff - Appellee,
V.
AGX LINES LIMITED,
Third-party-defendant -
Appellant.
Appeal from the United States District Court
for the Central District of California
Jacqueline H. NGUYEN, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Submitted April 9, 2014**
Pasadena, California
Before: FARRIS and HURWITZ, Circuit Judges, and FRIEDMAN, Senior District
Judge.***
AGX Lines Limited (AGX) appeals a district court judgment holding that AGX
was not the assignee of certain claims against Amber Worldwide Logistics (AWLI).
AGX also appeals the district court’s determination, pursuant to California Code of
Civil Procedure § 877.6, that a settlement between AWLI and KS was made in good
faith. We have jurisdiction under 28 U.S.C. § 1291 and affirm.
1. The district court did not err in finding that an agreement settling litigation
between KS Resources Limited and K&S International (collectively, KS) and AGX
did not assign to AGX any claims KS had against AWLI. The language of the
settlement agreements between KS and AGX was ambiguous. The court thus properly
considered extrinsic evidence and appropriately determined that KS’s claims against
AWLI were not included in the agreements’ assignment of claims. See L.K. Comstock
& Co. v. United Eng’rs & Constructors, 880 F.2d 219, 221 (9th Cir. 1989) (“[I]f the
district court relies upon extrinsic evidence to interpret an ambiguous contract, that
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Paul L. Friedman, Senior District Judge for the U.S.
District Court for the District of Columbia, sitting by designation.
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interpretation is a factual determination reversible only if the district court’s
construction is clearly erroneous or if the court applied an incorrect legal standard.”)
(internal quotation marks omitted).
2. A district court’s determination that a settlement was made in good faith
under California Code of Civil Procedure § 877.6 is reviewed for abuse of discretion.
Mason & Dixon Intermodal, Inc. v. Lapmaster Int’l LLC, 632 F.3d 1056, 1060 (9th
Cir. 2011). AGX had the burden to prove that the settlement between KS and AWLI
was not made in good faith. Tech-Bilt, Inc. v. Woodward-Clyde & Assocs., 698 P.2d
159, 162 (Cal. 1985). To determine whether a settlement has been made in good faith,
California courts consider whether there was “collusion, fraud, or tortious conduct
aimed to injure the interests of non-settling defendants.” Id. at 166-67. The district
court did not abuse its discretion in determining that the settlement between AWLI
and KS satisfied § 877.6, because AGX did not establish either collusion, fraud, or
tortious intent to injure its interests.
3. AGX also argues that because KS had claimed in its complaint against
AWLI that its damages exceeded $1,000,000, the settlement agreement, which only
required that AWLI pay $325,000, was not made in good faith. In rejecting that
argument, the district court found that AGX had not met its burden of showing that
AWLI’s liability exceeded the settlement amount, and recognized that a settlor will
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typically pay less in settlement than the total amount sought. See id. at 166 (holding
that “the intent and policies underlying section 877.6 require that a number of factors
be taken into account including a rough approximation of plaintiffs’ total recovery and
the settlor’s proportionate liability, the amount paid in settlement . . . and a recognition
that a settlor should pay less in settlement than he would if he were found liable after
a trial”). The district court was well within its discretion in concluding that the
settlement amount did not indicate a lack of good faith.
AFFIRMED.
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