United States District Court, D. Hawaii
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
A. Otake United States District Judge
case concerns Defendant Fujifilm Medical Systems'
(“Fujifilm”) sale of digital mammography
equipment to Plaintiff Breast Care Center of Hawai‘i
LLC (“BCCH”) and its agreement to service and
maintain the equipment for four years. BCCH's Complaint
alleges that Fujifilm made false promises to induce BCCH to
enter into the contract and breached the incorporated service
agreement. Fujifilm filed a counterclaim for failure to pay
annual service fees. Presently before the Court is
Fujifilm's Motion for Summary Judgment on BCCH's
claims and Fujifilm's counterclaim. For the reasons set
forth below, the Motion is GRANTED as to all of BCCH's
claims and DENIED as to Fujifilm's counterclaim.
a medical service provider founded by Dr. Beth Rhodes. ECF
No. 1 at 1-2. In June 2012, BCCH purchased three different
pieces of equipment from Fujifilm: (1) an Aspire HD
mammography system, (2) a Biopsy Positioner, and (3) a
Synapse Express Picture Archiving and Communication System
(PACS). ECF No. 44 ¶ 1. BCCH and Fujifilm executed the
purchase agreement for the Aspire HD System, which
incorporated Fujifilm's standard conditions of sale
agreement (“the Conditions of Sale Agreement”), a
service agreement for service and maintenance of the
equipment (“the Service Agreement”), and an
“End User Purchase, License and Services
Agreement” (“the End User
Agreement”). ECF No. 44 ¶ 2.
written Service Agreement provided for four years of service
and maintenance of the equipment, commencing after the
one-year warranty expired. ECF No. 1 at 4; ECF No. 44 ¶
6. The Service Agreement indicates that Fujifilm would
provide one maintenance inspection and calibration per year;
scheduled and emergency services; all replacement parts,
labor, and travel, performed by factory- trained service
engineers; and one-hour telephone and four-hour on-site
response time. ECF No. 43-14 at 3. Under the Service
Agreement, BCCH was to pay Fujifilm $33, 270 per year in
advance for these services. Id.
User Agreement contains numerous provisions limiting
Fujifilm's liability under the Service Agreement.
Specifically, the End User Agreement precludes liability for
any consequential damages, caps damages at the amount of
annual fees paid, and states that Fujifilm will not be liable
for any breach of the professional and workmanlike service
warranty unless BCCH provides Fujifilm with thirty-days
written notice of any alleged breach. ECF No. 44 at 2
¶¶ 8-9; ECF No. 43-11 at 6. The End User Agreement
also contains a provision prohibiting oral modifications. ECF
No. 43-11 at 10.
replaced the equipment in May 2013, after BCCH moved offices
and after BCCH had complained to Fujifilm that the equipment
malfunctioned regularly. Fujifilm then applied a new
eight-month warranty beginning May 2013 and a four-year
Service Agreement beginning May 2014. It is undisputed that
BCCH never paid its annual fees under the Service Agreement
and that Fujifilm terminated the contract in August
2017. ECF No. 44 ¶ 28; ECF No. 62 at 11.
The reasons for the termination are in dispute, as described
contends that it entered into the contracts based on
Fujifilm's verbal assurances, which included that: (1) it
had six “cross-trained” field service engineers
in Hawai‘i who could assist Dr. Rhodes; (2) it would
adjust the annual service fees based on the number of
mammograms BCCH performed per year, and that Fujifilm would
refund to BCCH any overpayment after the annual service fees
were reduced; and (3) it would compensate BCCH for any losses
incurred from Fujifilm's inability to service the
equipment. ECF No. 1 ¶¶ 11, 12, 17, 20, 35; ECF No.
63 ¶¶ 1-2. Fujifilm denies that its employees made
such statements. ECF No. 44 ¶¶ 7, 16, 24.
alleges that the equipment stopped working almost immediately
and Defendant failed to repair it. ECF No. 1 at 29-31; ECF
No. 63 ¶¶ 4-9. Fujifilm contends that the
malfunctioning was due, in significant part, to user error.
ECF No. 43-1 at 17-18; ECF No. 43-3 ¶ 17.
alleges that Fujifilm only remedied the problems with the
equipment in May 2013 by replacing the Aspire HD and Biopsy
Positioner. ECF No. 1 ¶ 30; ECF No. 62-1 ¶¶
9-11; ECF No. 44 ¶ 20. BCCH alleges that problems
emerged with the replacement equipment, and Fujifilm did not
satisfy its service obligations. ECF No. 63 ¶¶ 6-9.
Fujifilm disputes this, contending that the new equipment was
fine and that Dr. Rhodes' emails to Fujifilm indicate as
much. ECF No. 43-3 ¶ 25.
significant point of dispute is what happened regarding
payment of the Service Agreement fees. BCCH contends that it
received invoices from Fujifilm for the Service Agreement
beginning in 2014, that BCCH disputed the invoices, and
Fujifilm opted not to collect on the invoices due to the
equipment's continued failures. ECF No. 63 ¶ 10.
Fujifilm contradicts this, saying that it billed BCCH
quarterly for the service fees and repeatedly demanded
payment. ECF No. 44 ¶¶ 26-27. BCCH alleges that
Fujifilm's termination forced them to purchase
replacement equipment in 2018. ECF No. 63 ¶ 11.
brought this lawsuit on September 5, 2017. ECF No. 1. The
Complaint asserts numerous causes of action against Fujifilm,
but counsel for BCCH abandoned several of its claims at the
hearing on the Motion. The Court therefore DISMISSES the
following abandoned claims and TERMINATES the Motion as to
these claims: Fraudulent Inducement (Count I); Breach of
Implied Covenant of Good Faith and Fair Dealing (Count IV);
Intentional Interference (Count V); Unjust Enrichment (Count
VI); Declaratory Relief (Count VIII); and Specific
Performance (Count IX). This Order addresses the remaining
claims, which are: Negligent Misrepresentation (Count II);
Breach of Contract (Count III), and Promissory Estoppel
(Count VII). See ECF No. 1 ¶¶ 10, 11, 14.
Fujifilm also asserted a breach of contract counterclaim
against BCCH, alleging that BCCH never paid the annual
service fees. ECF No. 9-1.
brought the present Motion for Summary Judgment on November
19, 2018, seeking summary judgment on all of BCCH's
claims, as well as on its counterclaim. ECF No. 43-1.
Fujifilm contends that the statute of limitations precludes
all three of the remaining causes of action. See ECF
No. 43-1 at 26-32. Fujifilm also argues that the terms of the
contract bar the breach of contract claim. Id. at
32-37. Specifically, Fujifilm asserts that the contract: (1)
caps damages to the annual service fees paid; (2) requires
BCCH to provide written notice within thirty days of any
breach of the Service Agreement; and (3) precludes oral
modifications. Id. Fujifilm also argues that
BCCH's failure to pay the annual service fees bars the
breach of contract claim. Id. at 37-38. Fujifilm
further contends that because the alleged promises are
covered by the contract, the equitable claim for promissory
estoppel is barred as a matter of law. Id. at 38.
Finally, Fujifilm asserts that the negligent
misrepresentation claim is barred because: (1) Hawai‘i
law does not recognize such claims when the alleged
misrepresentations are merely promises of future conduct and
(2) BCCH waived its claims by reaffirming the contract after
becoming aware of the alleged misrepresentations.
Id. at 38-41.
filed its opposition to the motion on March 1, 2019. ECF No.
62. BCCH opposes the statute of limitations issue and the
argument that BCCH's failure to pay the annual service
fees excused Fujifilm's performance. ECF No. 62. BCCH
also opposes Fujifilm's Motion regarding Fujifilm's
counterclaim, arguing that Fujifilm's breach of the
Service Agreement excused BCCH's payment requirements.
Id. at 11. BCCH did not address the other grounds on
which Fujifilm seeks summary judgment. Fujifilm filed its
reply on March 19, 2019. ECF No. 66.
STANDARD OF REVIEW
judgment is proper when there are no genuine issues of
material fact and the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a). Federal Rule of Civil
Procedure 56(a) mandates summary judgment “against a
party who fails to make a showing sufficient to establish the
existence of an element essential to that party's case,
and on which that party will bear the burden of proof at
trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986); see also Broussard v. Univ. of Cal. at
Berkeley, 192 F.3d 1252, 1258 (9th Cir. 1999).
party seeking summary judgment bears the initial burden of
informing the court of the basis for its motion and of
identifying those portions of the pleadings and discovery
responses that demonstrate the absence of a genuine issue of
material fact.” Soremekun v. Thrifty Payless,
Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing
Celotex, 477 U.S. at 323). “When the moving
party has carried its burden under Rule 56[(a)], its opponent
must do more than simply show that there is some metaphysical
doubt as to the material facts [and] . . . come forward with
specific facts showing that there is a genuine issue for
trial.” Matsushita Elec. Indus. Co. v. Zenith
Radio, 475 U.S. 574, 586-87 (1986) (internal quotation
marks and citations omitted); see also Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)
(“[A] party opposing a properly supported motion for
summary judgment may not rest upon the mere allegations or
denials of his pleading, but . . . must set forth specific
facts showing that there is a genuine issue for trial.”
(internal quotation marks omitted)).
issue is ‘genuine' only if there is a sufficient
evidentiary basis on which a reasonable fact finder could
find for the nonmoving party, and a dispute is
‘material' only if it could affect the outcome of
the suit under the governing law.” In re
Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing
Anderson, 477 U.S. at 248). When considering the
evidence on a motion for summary judgment, the Court must
draw all reasonable inferences on behalf of the nonmoving
party. Matsushita Elec. Indus. Co., 475 U.S. at 587;
see also Posey v. Lake Pend Oreille Sch. Dist. No.
84, 546 F.3d 1121, 1126 (9th Cir. 2008) (stating that
“the evidence of [the nonmoving party] is to be
believed, and all justifiable inferences are to be drawn in
his [or her] favor”).
moves for summary judgment on all of BCCH's claims and on
its own breach of contract counterclaim. By failing to oppose
many of Fujifilm's arguments for summary judgment, BCCH
waived those issues. Shakur v. Schriro, 514 F.3d
878, 892 (9th Cir. 2008) (“We have previously held that
a plaintiff has ‘abandoned . . . claims by not raising
them in opposition to [the defendant's] motion for
summary judgment.'” (quoting Jenkins v. Cty. of
Riverside, 398 F.3d 1093, 1095 n.4 (9th Cir. 2008)));
Abogados v. AT&T, Inc., 223 F.3d 932, 937 (9th
Cir. 2000); Packnett v. Gomez, 182 F.3d 926 (9th
Cir. 1999); see also Ramirez v. Ghilotti Bros. Inc.,
941 F.Supp.2d 1197, 1210 n.7 (N.D. Cal. 2013) (listing
cases). But regardless of BCCH's waiver, Fujifilm is
entitled to summary judgment on several grounds.
Court addresses BCCH's claims against Fujifilm first, and
then addresses Fujifilm's counterclaim.
BCCH's Claims Against Fujifilm
Breach of Contract (Count III)
alleges that Fujifilm breached the Service Agreement. ECF No.
1 at 11. BCCH, however, takes contradictory positions with
respect to how and when the breach (or breaches) occurred.
The Complaint alleges that the equipment experienced massive
technical problems almost immediately after sale, and that
Fujifilm was unable to fix the problems until it replaced the
machinery more than a year later. ECF No. 1 ¶ 31. The
Complaint further alleges that even after Fujifilm replaced
the equipment, Fujifilm “fail[ed] to provide adequate
technical support.” Id. ¶ 40. In its
opposition brief too, BCCH alleges that Fujifilm's
failure to “employ an on-site engineer trained to
service BCCH's equipment . . . was a “material
breach of the service agreement from its inception.”
ECF No. 62 at 11.
the hearing, perhaps to avoid Fujifilm's statute of
limitations defense, BCCH contended that Fujifilm first
breached the contract in 2017 by terminating the agreement
and refusing to perform further service or maintenance. Under
either of these inconsistent positions, however, summary
judgment must be granted on BCCH's breach of contract
“the construction and legal effect to be given a
contract is a question of law.” Koga Eng'g
& Const., Inc. v. State, 122 Haw. 60, 72 (2010).
Contracts are “interpreted according to their plain,
ordinary, and accepted sense in common speech.”
Hawaiian Ass'n of Seventh-Day Adventists v.
Wong, 130 Haw. 36, 45 (2013). “The court's
objective is ‘to ascertain and effectuate the intention
of the parties as manifested by the contract in its
entirety.'” Id. (quoting Brown v. KFC
National Management Co., 82 Haw. 226, 240 (1996)).
Courts generally do not look outside the contract itself to
assist in its interpretation:
As a general rule, the court will look no further than the
four corners of the contract to determine whether an
ambiguity exists. The parol evidence rule precludes the use
of extrinsic evidence to vary or contradict the terms of an
unambiguous and integrated contract. This rule, however, is
subject to exceptions that permit the court to consider
extrinsic evidence when the writing in question is ambiguous
or incomplete. Where there is any doubt or controversy as to
the meaning of the language, the court is ...