Unpublished Disposition, 867 F.2d 613 (9th Cir. 1989)

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US Court of Appeals for the Ninth Circuit - 867 F.2d 613 (9th Cir. 1989)

RAY FLADEBOE LINCOLN-MERCURY, INC., dba Ray Fladeboe BritishMotor Cars, Plaintiff-Appellant,v.JAGUAR CARS, INC., Bauer Motors, Inc., Southland MotorsCorporation, et al., Defendants-Appellees.

No. 88-5561.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 5, 1988* .

Decided Jan. 26, 1989.

A. Wallace Tashima, District Judge, Presiding.



Ray Fladeboe Lincoln-Mercury, Inc. ("Fladeboe") appeals the district court's order dismissing his action against Jaguar Cars, Inc. ("Jaguar") and seven Jaguar auto dealerships, including the principal of one such dealership (collectively the "Dealer Defendants"). The district court found that Fladeboe's action arose from the same facts as an earlier lawsuit filed by Fladeboe against Jaguar. The first lawsuit was dismissed pursuant to a stipulation entered into between Fladeboe and Jaguar whereby Fladeboe agreed to exhaust his administrative remedies before the California New Motor Vehicle Board prior to filing any future lawsuit against Jaguar. The district court found that Fladeboe's second action against Jaguar and the Dealer Defendants was barred by the stipulation. We affirm the judgment as to Jaguar and reverse the judgment as to the Dealer Defendants and remand for further proceedings.


Stipulations are interpreted according to principles of contract interpretation. See United States v. McKinney, 758 F.2d 1036, 1047 (5th Cir. 1985) (a stipulation is akin to a contract); National Audobon Society, Inc. v. Watt, 678 F.2d 299, 307 (D.C. Cir. 1982) (stipulations, like other contracts, must be interpreted in light of the circumstances under which the agreement was made). The interpretation of a contractual provision is reviewed de novo. See United States v. City of Twin Falls, 806 F.2d 862, 869 (9th Cir. 1986), cert. denied, 107 S. Ct. 3185 (1987). The district court's factual findings are reviewed for clear error. Id.


1. Factual Basis for Fladeboe's First and Second Actions

Fladeboe contends that the district court erred by holding that the parties did not dispute that the second action was based on the same set of facts as the first action. Fladeboe further contends that the second action alleged a different set of facts than the first action.

We find that Fladeboe's second action arose out of the same set of facts as the first action. Fladeboe is correct in his assertion that the district court erroneously found that " [i]t is not disputed that the facts underlying [the second] action are the same facts on which the prior action was based." At the hearing on Jaguar's motion to dismiss, Fladeboe argued that the facts underlying the first and second actions were different.

Nevertheless, this court may affirm the district court on any basis supported by the record. United States v. County of Humboldt, 628 F.2d 549, 551 (9th Cir. 1980). We find that Fladeboe's first and second actions are based on the same set of facts. Both actions clearly arise out of Jaguar's nonrenewal of Fladeboe's license and planned termination of his dealership through an unfair system of allocating the limited supply of Jaguar's cars. Both actions allege a plan to eliminate Fladeboe's dealership. The first action alleges such a plan between Jaguar and various Doe defendants, the second, between Jaguar and various Jaguar dealerships. At base, Fladeboe's second complaint is simply a more factually detailed version of his first complaint.

Fladeboe contends that the stipulation does not apply to his federal antitrust claims in the second action because these federal claims are not subject to the Yamaha exhaustion doctrine. See Yamaha Motor Corp. v. Superior Court, 185 Cal. App. 3d 1232, 1240, 230 Cal. Rptr. 382, 386 (1986) (holding that a party must exhaust administrative remedies for claims within the New Motor Board's jurisdiction prior to seeking judicial relief). He further contends that the stipulation, by its terms, cannot be interpreted to apply to his federal claims because the stipulation expressly states that the dismissal is based on the Yamaha doctrine.

It is true that the stipulated dismissal of Fladeboe's first action was expressly conditioned on Yamaha. As the district court noted, however, Fladeboe and Jaguar must have contemplated at the time of entering into the stipulation that splitting Fladeboe's claims between state and federal court could lead to duplicative and wasteful litigation. Moreover, the stipulation expressly provides that any future lawsuit must be brought within six months of the Board's determination, and there is no indication from the record that the Board has determined that it lacks jurisdiction over Fladeboe's federal antitrust claims.

3. The Stipulation's Applicability to the Dealer Defendants

Fladeboe contends that the district court erred in finding that the Fladeboe-Jaguar stipulation was applicable to the Dealer Defendants. He contends that the Dealer Defendants should not be barred by the stipulation because they were not parties to the stipulation nor were they intended beneficiaries of the stipulation.

It is undisputed that the Dealer Defendants were not parties to the stipulation because they were not named as defendants in the first action. Nor were the Dealer Defendants third party beneficiaries of the stipulation. Under California law, for a third party to qualify as a beneficiary under a contract, the contracting parties must have intended to benefit that third party, and their intent must appear from the terms of the contract. Karo v. San Diego Symphony Orchestra Ass'n, 762 F.2d 819, 821-22 (9th Cir. 1985) (interpreting California law). "Although the beneficiary need not be named in the contract, he must be a member of a class referred to and identified in it." Id. at 822.

Here, the Dealer Defendants were neither named in the stipulation nor were they members of a class referred to in the stipulation. Because the Dealer Defendants were not parties to the stipulation or third party beneficiaries of the stipulation, they were not subject to the terms of the stipulation. The district court recognized this when it required the Dealer Defendants to sign a written waiver coextensive with Jaguar's waiver on reconsideration of its order dismissing Fladeboe's second action. Because the Dealer Defendants were not bound by the stipulation, the district court erred in dismissing Fladeboe's claims against the Dealer Defendants on the ground that they were barred by the stipulation.

On remand, the district court should consider whether Jaguar is a necessary or indispensable party to the action and whether the action against the Dealer Defendants should be stayed until Jaguar can be joined as a defendant.


We affirm the dismissal of Fladeboe's claims against Jaguar. We reverse the dismissal of his claims against the Dealer Defendants and remand for further proceedings.



This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3