Thomas Smith v. Darrin Simmons , 409 F. App'x 88 ( 2010 )

FILED
NOT FOR PUBLICATION NOV 09 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
THOMAS N. SMITH, No. 09-17206
Plaintiff - Appellant, D.C. No. 1:05-cv-01187-OWW-
GSA
v.
DARRIN SIMMONS, formerly DBA MEMORANDUM *
Clean Air Products, Inc.,
Defendant - Appellee.
Appeal from the United States District Court
for the Eastern District of California
Oliver W. Wanger, District Judge, Presiding
Submitted November 5, 2010 **
San Francisco, California
Before: HALL and THOMAS, Circuit Judges, and RESTANI, Judge.***
Thomas Smith appeals the district court’s grants of partial summary judgment
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Jane A. Restani, Judge of the United States Court of
International Trade, sitting by designation.
in his diversity action against Darrin Simmons, individually and d.b.a. Clean Air
Products, Inc. Smith alleges breach of contract arising from his sale of business assets
to Clean Air. He seeks to hold Simmons personally liable for a 1998 contract that
Simmons claims to have signed on behalf of Clean Air, and Smith argues that the
district court erred in holding there was no genuine issue of material fact as to
Simmons’s personal liability. Smith contends that the erroneous partial summary
judgments improperly altered the character of his subsequent trial, in which a jury
found no breach. We affirm.
Smith alleges that a genuine issue of material fact exists as to whether Simmons
assumed personal liability under the 1998 contract. None of his three theories have
merit, and partial summary judgment on this issue was proper.
First, Smith argues that parol evidence from a 2001 contract between Smith and
Simmons makes the 1998 contract ambiguous with regard to Simmons’s personal
liability. This ambiguity, says Smith, presents a question of fact. However, while
parol evidence can be used to interpret ambiguous contract language, see Hervey v.
Mercury Cas. Co., 185 Cal. App. 4th 954, 961 (2010), Smith’s argument is
unpersuasive. The 2001 contract’s mere mention of a possible prior contract
involving Simmons does not make the otherwise unambiguous 1998 contract
reasonably susceptible to an interpretation that Simmons was personally liable for it.
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It is undisputed that the 1998 contract repeatedly references the fact that it is between
two corporate entities, mentions Smith’s name several times but does not mention
Simmons’s name at all in the body of the agreement, and never mentions a guaranty
or personal liability. So, even in light of the 2001 contract, the undisputed facts show
that the 1998 contract is unambiguous with regard to Simmons’s personal liability.
Second, Smith argues that there was a genuine dispute as to whether Smith or
Simmons drafted the contract, and that this fact issue is material to Smith’s claim
because any ambiguities in the 1998 contract should be resolved against the
drafter—i.e., allegedly Simmons. Thus, Smith argues, the fact issue of who drafted
the contract controls the resolution of the ambiguity regarding Simmons’s personal
liability. Smith correctly notes that, under California law, “[a]mbiguities in contract
language are to be resolved against the drafter.” Victoria v. Superior Court, 40 Cal.
3d 734, 738 (1985); see Cal. Civ. Code § 1654 (codifying the doctrine of contra
proferentem). However, as noted, the 1998 contract’s language is not ambiguous,
even in light of its broader context and later agreements. Therefore, the doctrine of
contra proferentem does not apply; there is no ambiguity to interpret against the
drafter, whoever that might be.
Third, Smith argues that the pre-printed signature line of the 1998 contract
shows that Simmons was personally liable because it listed the name “Darrin
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Simmons” without any reference to Simmons’s corporate position. Smith relies on,
but mischaracterizes, Sebastian Int’l, Inc. v. Peck, 195 Cal. App. 3d 803 (1987). In
Sebastian, a California appellate court held that a corporation’s vice president
assumed personal liability for a lease agreement between his corporation and another
corporation pursuant to a guaranty document, despite the fact that the pre-printed
signature line of the document referenced the signee’s corporate title. Sebastian, 195
Cal. App. 3d at 805–06, 809. The guaranty document in Sebastian unquestionably
described a personal obligation, and the words “Vice President” in the signature line
were merely descriptio personae—a term describing the person rather than the
capacity in which that person signed. Id. at 809. Sebastian, therefore, stands for the
proposition that personal liability may be determined by looking to the terms of the
agreement, rather than to the pre-printed signature line alone. In this sense, Sebastian
actually hurts Smith’s case because Smith urges us to discount the 1998 contract’s
terms and give weight to the fact that the signature line names “Darrin Simmons” sans
corporate title. Thus, Smith is wrong to assert that personal liability should be
imposed merely because the pre-printed signature line fails to reference Simmons’s
position as a corporate officer.
Smith also alleges that a genuine issue of material fact exists as to whether
Simmons is personally liable for the obligations of Clean Air under the alter ego
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doctrine. The alter ego doctrine applies to pierce a corporate veil if two requirements
are met: (1) there is such unity of interest and ownership that the separate personalities
of the corporation and the individual no longer exist, and (2) an inequitable result will
follow if the corporate veil is not pierced. Mesler v. Bragg Mgmt. Co., 39 Cal. 3d 290,
300 (1985) (quoting Automotriz del Golfo de Cal. S. A. de C. V. v. Resnick, 47 Cal. 2d
792, 796 (1957)). Smith has not shown that a genuine issue of material fact exists as
to the unity of interest requirement. Smith’s only evidence of a unity of interest is the
fact that Simmons is Clean Air’s sole owner. Many other undisputed facts indicate
that Clean Air and Simmons do not share a unity of interest—e.g., Clean Air
employees only do corporate work, Clean Air’s corporate location is separate from
Simmons’s home, and Clean Air’s finances were kept separate from Simmons’s
finances. Given the undisputed facts and the evidence presented, there is no genuine
issue of material fact as to whether Simmons and Clean Air maintain separate
personalities. Thus, partial summary judgment on this issue was appropriate.
Finally, even if the grants of partial summary judgment were erroneous, Smith
has failed to show how they improperly affected his subsequent trial. He points to no
facts or issues that were eliminated from trial due to the partial summary judgments,
but that would have provided the jury with more clarity or context regarding the case.
AFFIRMED.
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