Cathay Enterprises, Inc. v. Design Trend International Interiors Ltd. (in the Matter of Cathay Enterprises, Inc.)

Summarized by Lars Fuller , BakerHostetler
11 years 11 months ago

Citation:

Cathay Enterprises, Inc. v. Design Trend Int'l Interiors Ltd. (In re Cathay Enterprises, Inc.), No. 12-15650 (9th Cir. Mar. 31, 2014) (unpublished)

Tag(s):

Ruling:

The Ninth Circuit affirmed the district court's judgment in favor of defendant as to liability, but reversed and remanded for the calculation of prejudgment interest and attorneys' fees. As to liability, the Ninth Circuit affirmed the district court's reversal of the bankruptcy court, finding that plaintiff debtor owed defendant contractor for project completion, notwithstanding defendant contractor's failure to timely perform, based on plaintiff's waiver of defendant's breach by demanding that defendant complete performance. However, the Ninth Circuit reversed the district court's finding that plaintiff owed defendant prejudgment interest based on a "nunc pro tunc" application of prejudgment interest finding that the district court failed to make specific findings justifying the implementation of equitable nunc pro tunc findings or prejudgment interest. The Ninth Circuit further reversed the district court's award of attorneys' fees, determining that the district court failed to make adequate findings justifying the discretionary award, or that the amount awarded was "reasonable," or that the district court properly excluded fees attributable to unrelated matters.

Procedural context:

Plaintiff appealed to the Ninth Circuit the district court's reversal of a bankruptcy judgment. The district court reversed the bankruptcy court's judgment in favor of plaintiff, finding that plaintiff had waived defendant's prior breach of contract by demanding further performance. Plaintiff debtor appears to have initiated the suit as an objection to defendant's claim.

Facts:

The Ninth Circuit elected not to recount the case's "extensive history." However, the court indicated that debtor had contracted with defendant on a project, but defendant had failed to complete project under the contract time frame. Debtor plaintiff pursued various remedies, including letter demands and two administrative enforcement actions, enlisting the help of the Arizona Registrar of Contractors. The administrative law judge determined that defendant had substantially completed the project, but the bankruptcy court subsequently ruled that based on defendant's material breach by untimely performance, plaintiff was not obligated to pay the balance of the contract price. The district court reversed the bankruptcy court, but offset the amount plaintiff owed to defendant with expenses incurred by plaintiff.

Judge(s):

Wallace, McKeown, and Gould

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