Edu-Science (USA) Inc. v. Intubrite, LLC, No. 3:2012cv01078 - Document 62 (S.D. Cal. 2013)
Court Description: ORDER Denying 28 Motion for Judgment on the Pleadings. Signed by Judge Barry Ted Moskowitz on 7/9/2013. (rlu)(jrd)
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Edu-Science (USA) Inc. v. Intubrite, LLC Doc. 62 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 EDU-SCIENCE (USA), INC., 11 Case No. 12cv01078 BTM (WMC) Plaintiff, v. ORDER DENYING MOTION FOR JUDGMENT ON THE PLEADINGS 12 13 INTUBRITE, LLC, Defendant. 14 15 INTUBRITE, LLC, 16 v. 17 18 Counterclaimant, EDU-SCIENCE (USA), INC.; and EDU-SCIENCE (HK) LTD., 19 Counterdefendants. 20 21 This case was transferred from the Eastern District of California on May 2, 2012 22 (see ECF No. 16). On September 28, 2013, Defendant IntuBrite, LLC (“IntuBrite”) 23 filed a motion for judgment on the pleadings (ECF No. 28). For the reasons below, the 24 motion is hereby DENIED. 25 // 26 // 27 // 28 // 1 12cv01078 BTM (WMC) Dockets.Justia.com I. BACKGROUND 1 2 On February 16, 2012, Edu-Science (USA), Inc. (“EDU-USA”) brought this 3 action against IntuBrite for breach of contract (ECF No. 2). The Court must accept all 4 factual allegations in the Complaint as true for the purposes of this motion. 5 IntuBrite contacted EDU-USA around early 2009 for a price quotation on 6 stylettes, which are used in tracheal intubation to open someone’s airway. EDU-USA 7 gave IntuBrite a quotation on May 11, 2009. On July 17, 2009, IntuBrite issued a 8 purchase order in the amount of $134,000 for three different sizes of stylettes, plus 9 $6,000 for tooling costs. The parties later agreed to eliminate some of the stylettes 10 ordered, and EDU-USA ultimately manufactured $128,000 in stylettes. 11 In the purchase order, see Compl., Ex. B, it states that product releases are to be 12 determined (“TBD”), which appears to refer to when the product would be shipped. 13 According to the Complaint, EDU-USA was shipping the stylettes in accordance with 14 IntuBrite’s product releases, and completed manufacturing the stylettes by early 2010. 15 However, EDU-USA only shipped $13,945.60 in stylettes before IntuBrite stopped 16 issuing product releases. 17 $114,054.40 on September, which has not been paid. EDU-USA issued a new invoice for the balance of 18 In addition to the stylettes, IntuBrite had also contacted EDU-USA for a price 19 quotation for laryngoscopes with pouches in late 2008 or early 2009. EDU-USA gave 20 IntuBrite a quotation on August 19, 2009, which included tooling costs to be amortized 21 with purchases over time. The quotation also required that EDU-USA have the 22 “[e]xclusive product supply right” until August 14, 2012. See Compl., Ex. D at 2. 23 On September 10, 2009, IntuBrite issued four purchase orders for the 24 laryngoscopes: 1) purchase order 0001000 for $51,980.00; 2) purchase order 0001001 25 for $212,476.52; 3) purchase order 0001002 for $271,403.32; and 4) purchase order 26 0001004 for $531.180.86, for a total of $1,066,950.70. While each purchase order 27 includes a delivery date, see Compl., Ex. E-H, EDU-USA alleges that “[t]he delivery 28 date could not be confirmed at that time as Defendant Intubrite was still developing the 2 12cv01078 BTM (WMC) 1 specifications for the laryngoscopes. . . .” Compl. ¶ 12. According to EDU-USA, it 2 accepted all four purchase orders as the Original Equipment Manufacturer (“OEM”), 3 see id., although this does not appear to be reflected on the quotation or purchase 4 orders themselves. 5 EDU-USA shipped $162,610.24 in laryngoscopes to IntuBrite before IntuBrite 6 ordered the shipments be stopped. However, EDU-USA had already manufactured 7 additional laryngoscopes for IntuBrite, which are currently being held in inventory in 8 China. EDU-USA alleges that IntuBrite stopped buying the laryngoscopes from EDU- 9 USA because it found a cheaper supplier in Pakistan. In any event, EDU-USA had 10 bought capital equipment worth approximately $200,000 to produce the laryngoscopes, 11 which it alleges that it cannot use for any other purpose. 12 EDU-USA further alleges that IntuBrite “never attempted to terminate the 13 exclusive purchase agreement for [the laryngoscopes], but rather ordered the shipping 14 stopped and ceased paying. . . .” Compl. ¶ 15. According to EDU-USA, when 15 IntuBrite ordered the shipping stopped, there was already a shipment en route that had 16 to be re-routed to a warehouse in Los Angeles, and other items were in various stages 17 of production. IntuBrite ceased all payments in May 2011. 18 II. LEGAL STANDARD 19 20 Under Federal Rule of Civil Procedure 12(c), “[a]fter the pleadings are 21 closed—but early enough not to delay trial—a party may move for judgment on the 22 pleadings.” 23 “Judgment on the pleadings is proper when the moving party clearly establishes 24 on the face of the pleadings that no material issue of fact remains to be resolved and 25 that it is entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard 26 Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). A motion for judgment on the 27 pleadings is “functionally identical” to a motion to dismiss. Dworkin v. Hustler 28 Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). 3 12cv01078 BTM (WMC) III. DISCUSSION 1 2 Defendant IntuBrite moves for judgment on the pleadings on the grounds that 3 EDU-USA lacks standing and, in the alternative, that it has failed to state a cause of 4 action. 5 6 A. Whether EDU-USA Has Standing 7 IntuBrite’s first argument is that EDU-USA lacks standing to bring this action 8 because the contracts for the stylettes and laryngoscopes are between IntuBrite and 9 EDU-HK, not EDU-USA. This argument is based on the fact that the price quotations 10 state toward the bottom, “For and on behalf of Edu-Science (H.K.) Ltd.” See Compl., 11 Ex. A & D. 12 The Court finds this argument unpersuasive. First, while the price quotations do 13 contain that statement, they are on EDU-USA’s letterhead. More importantly, all the 14 negotiations and arrangements were made between IntuBrite and EDU-USA: IntuBrite 15 contacted EDU-USA for the quotations, EDU-USA gave them the quotations, IntuBrite 16 sent the purchase orders to EDU-USA, with EDU-USA noted as the vendor on all of 17 the purchase orders, see Compl., Ex. B & E-H, and EDU-USA shipped the products 18 and issued the invoices for IntuBrite’s outstanding balance. Therefore, the Court holds 19 that EDU-USA has standing to bring this suit.1 20 21 B. Whether EDU-USA Has Stated a Cause of Action 22 IntuBrite’s second argument is that EDU-USA failed to plead facts sufficient to 23 state a breach of contract claim against IntuBrite. To prove a breach of contract under 24 California law, the plaintiff must show: (1) the existence of the contract; (2) plaintiff’s 25 performance or excuse for nonperformance; (3) the defendant’s breach; and (4) 26 damages to plaintiff as a result of the breach. Conder v. Home Sav. of Am., 680 F. 27 1 28 There is some argument in the papers as to whether the price quotation or purchase order constitutes the offer, but the Court finds it unnecessary to reach that issue at this time. 4 12cv01078 BTM (WMC) 1 Supp. 2d 1168, 1174 (C.D. Cal. 2010). 2 With regard to the contract for stylettes, IntuBrite argues that EDU-USA has not 3 stated a cause of action for breach of contract because EDU-USA “fail[ed] to show how 4 IntuBrite’s actions constitute a breach.” D’s Mot. for Entry of Judgment on Pleadings 5 (ECF No. 28-1) at 7. According to the purchase order, 50% of the purchase price was 6 “Due at Approval of Drawings, Tolerances, Material Certifications, and color samples” 7 and the balance was “Due upon Approval of 1st Article,” Compl., Ex. B, and EDU- 8 USA did not allege any facts showing that either approval took place. Without those 9 approvals, IntuBrite argues, EDU-USA has not shown that IntuBrite owed EDU-USA 10 any payments under the purchase order and therefore has not alleged a breach of 11 contract. 12 As to the contract for the laryngoscopes, IntuBrite argues that EDU-USA cannot 13 show that EDU-USA performed its duties under the contract – as required by the 14 second element for a breach of contract – because it “fail[ed] to plead that it met the 15 strict delivery deadlines” in the purchase orders. Id. at 8. While EDU-USA alleged in 16 the Complaint that it produced and shipped the laryngoscopes in accordance with the 17 purchase orders “as revised between the parties,” Compl. ¶11, IntuBrite argues that the 18 reference to revisions is wholly conclusory and inadequately pled to overcome the stark 19 delivery dates in the purchase orders. 20 However, as the moving party, the burden is on IntuBrite to show that no 21 material issue of fact remains to be resolved and that it is entitled to judgment as a 22 matter of law. The parties’ course of conduct or prior course of dealing could easily 23 account for the discrepancy between the contracts as written and the performance 24 thereof, and IntuBrite has not alleged any facts that demonstrate otherwise. The Court 25 is also mindful that under Federal Rule of Civil Procedure 8, only a “short and plain 26 statement of the claim” is needed, Fed. R. Civ. P. 8(a)(2), as long as factual allegations 27 are “enough to raise a right to relief above the speculative level.” Bell Atlantic v. 28 Twombly, 550 U.S. 544, 555 (2007). The Court holds that EDU-USA has met this 5 12cv01078 BTM (WMC) 1 standard. EDU-USA has alleged the existence of contracts with IntuBrite, that it was 2 fulfilling its duties under the contracts, that IntuBrite breached the contracts by, inter 3 alia, refusing to pay for goods it had already ordered, and that EDU-USA suffered 4 damages as a result, including the lost profits and buying capital equipment that cannot 5 be used for anything else. Therefore, IntuBrite’s motion for judgment on the pleadings 6 is DENIED. 7 IV. CONCLUSION 8 9 10 For the reasons above, IntuBrite’s motion for judgment on the pleadings (ECF No. 28) is hereby DENIED. 11 12 IT IS SO ORDERED. 13 DATED: July 9, 2013 14 15 BARRY TED MOSKOWITZ, Chief Judge United States District Court 16 17 18 19 20 21 22 23 24 25 26 27 28 6 12cv01078 BTM (WMC)
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