KST Data, Inc. v. DXC Technology Co., No. 19-55422 (9th Cir. 2020)
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A defendant is not required to file a new answer reasserting its affirmative defenses when the claim in the amended complaint related to those affirmative defenses remains the same. After ES entered into a contract with KST to provide services to NASA, KST filed suit against ES after ES's nonpayment of invoices. The district court granted summary judgment sua sponte to KST on its breach of contract claim.
Applying de novo review, the Ninth Circuit held that, by not giving ES notice and the opportunity to assert its affirmative defenses, the district court erred in granting summary judgment sua sponte. The panel also held that ES was not required to respond and reassert its affirmative defenses to KST's Second Amended Complaint because ES had already asserted those affirmative defenses in response to the same breach of contract claim in the First Amended Complaint. Therefore, the panel reversed the district court's grant of summary judgment and entry of judgment for KST and remanded with instructions for the district court to allow ES to show why KST is not entitled to judgment as a matter of law on KST's breach of contract claim.
Court Description: Affirmative Defenses The panel affirmed in part, and reversed in part, the district court’s judgment in an action concerning a contractual dispute between Enterprise Services, LLC and KST Data, Inc. to provide services to the National Aeronautics and Space Administration. The district court granted summary judgment sua sponte to KST on its breach of contract claim. Enterprise contended this was error because the district court did not give * The Honorable Eric F. Melgren, United States District Judge for the District of Kansas, sitting by designation. KST DATA V. ENTERPRISE SERVICES 3 Enterprise the opportunity to assert its affirmative defenses. Enterprise raised the defenses in its answers to KST’s complaint and first amended complaint, but it did not file an answer to KST’s second (and final) amended complaint. The panel held that the standard of review was de novo review because the issue presented was a legal issue that involved the interpretation of the Federal Rules of Civil Procedure. The panel held that a defendant is not required to file a new answer reasserting its affirmative defenses when the claim in the amended complaint related to those affirmative defenses remains the same. Specifically, the panel held that by not giving Enterprise notice and the opportunity to assert its affirmative defenses, the district court erred in granting summary judgment sua sponte. The panel further held that Enterprise did not waive its affirmative defenses to the breach of contract claim by not filing an answer to the Second Amended Complaint, where Enterprise had raised the same affirmative defense in the First Amended Complaint. The panel remanded with instructions for the district court to allow Enterprise to show why KST was not entitled to judgment as a matter of law on KST’s breach of contract claim. The panel addressed remaining issues on appeal in a concurrently filed memorandum disposition. 4 KST DATA V. ENTERPRISE SERVICES
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