Opinion
No. 09-56929.
The panel unanimously concludes this case is suitable for decision without oral argument. See Fed.R.App.P. 34(a)(2).
Filed February 15, 2011.
Neil Gerber, Lowell F. Sutherland, Sutherland Gerber, El Centro, CA, for Plaintiff-Appellant.
Margarita Haugaard, Horton, Knox, Carter Foote, San Diego, CA, Orlando B. Foote, Horton Knox Carter Foote, El Centro, CA, for Defendant-Appellee.
Appeal from the United States District Court for the Southern District of California, Barry T. Moskowitz, District Judge, Presiding. D.C. No. 3:09-cv-00353-BTM-PCL.
Before: PREGERSON, WARDLAW, and BEA, Circuit Judges.
This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
Kelomar, Inc. ("Kelomar") appeals from the district court's grant of Darrell Kulow's ("Kulow") motion for judgment on the pleadings. We affirm.
Kelomar contends that Kulow owed a personal duty to ensure that Kelomar's melons were properly labeled. The law imposes no general duty to label melons correctly independent of a contract See Stop Loss Ins. Brokers, Inc. v. Brown Toland Med. Group, 143 Cal.App.4th 1036, 49 Cal.Rptr.3d 609, 612 (Ct.App. 2006) (stating that the duty to "promptly process another's data" arises from a contract, and is not comparable to a general duty to avoid injuring others). Thus, if Kulow had such a duty, it could only arise from Hebberd-Kulow Enterprise's ("HKE") contract with Kelomar.
But even assuming HKE's contract with Kelomar imposed a duty on Kulow, Kelomar could not recover in tort for the breach of that contractual duty. See Aas v. Superior Court, 24 Cal.4th 627, 101 Cal. Rptr.2d 718, 729, 12 P.3d 1125 (2000) ("A person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations."). As the district court stated, Kelomar should seek its remedy in a breach-of-contract suit against HKE.
Kelomar argues that the deterioration of the melons resulted in property damage as opposed to purely economic injury, thus elevating the breach-of-contract claim to a tort claim. Assuming without deciding that the existence of property damage may convert a breach of contract into a tort, we nonetheless disagree that the defective labels damaged the melons. The defective labels arguably precluded sale of the melons temporarily until the error was corrected. The labels did not "directly cause physical injury." Erlich v. Menezes, 21 Cal.4th 543, 87 Cal.Rptr.2d 886, 891, 981 P.2d 978 (1999). Any damage to the melons resulted from natural deterioration, not from any defect in the labels.
Kelomar does not dispute that the loss of profits from a decline in value of non-perishable goods is adequately addressed by remedies in contract. See S.M. Wilson Co. v. Smith Intern., Inc., 587 F.2d 1363, 1376 (9th Cir. 1978) ("Where the suit is between a non-performing seller and an aggrieved buyer and the injury consists of . . . a loss of profits that the deal had been expected to yield to the buyer, it would be sensible to limit the buyer's rights to those provided by the Uniform Commercial Code."). We see no reason to create a special rule for perishable goods, nor does Kelomar cite to any case suggesting we should.
Kelomar objects that if it can recover only for breach of contract, then Kelomar has no remedy against Kulow, who is not a party to the contract. But this is the nature of limited liability, and this case presents no reason to question a fundamental concept of the law of corporations. See United States Liab. Ins. Co. v. Haidinger-Hayes, Inc., 1 Cal.3d 586, 83 Cal. Rptr. 418, 423, 463 P.2d 770 (1970) ("Directors and officers are not personally liable on contracts signed by them for and on behalf of the corporation unless they purport to bind themselves individually.").