L. Barber Gems, Inc. v. Brink's Diamond & Jewelry North America

MEMORANDUM** L. Barber Gems, Inc. (“Barber”) appeals the district court’s grant of summary judgment in favor of Brink’s Diamond & Jewelry North America, et al., (“Brink’s”). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm. Because the parties are familiar with the factual and procedural history of this case, we will not recount it here. Barber contends the district court erred in finding that Jodhani’s alleged conversion of diamonds was not the reasonably foreseeable consequence of Brink’s delivery of the diamonds without first collecting payment. As a preliminary matter, the district court correctly held that the agreement between Barber and Brink’s was a carriage contract, not a C.O.D. contract. See Cermetek, Inc. v. Butler Avpak, Inc., 573 F.2d 1370, 1382 (9th Cir.1978). Under a C.O.D. contract, a carrier must strictly comply with its duty to collect, and is liable to the shipper for loss or damage caused by its failure to collect the price before delivery. See 13 Am.Jur.2d § 489 (2000). However, carriers under a general carriage contract have no duty to act as a collection agent; instead, they are bound by common law duties, including duties to receive, transport, care for, and deliver goods. Cermetek, 573 F.2d at 1375; see also 4 Witkin, Summary of California Law: Personal Property § 134 (9th ed.1987) (common carrier or bailee under the lesser standard of ordinary care). In the context of carriage contracts, consequential damages for misdelivery are recoverable only when they are the natural and probable consequence of the carrier’s breach of contract. See Contempo Metal Furniture Co. v. East Tex. Motor Freight Lines, Inc., 661 F.2d 761, 765 (9th Cir.1981). In actions for breach of contract, it is essential to establish a causal connection between the breach and the damages sought. See Cal. Civ.Code § 3300. “Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produced the [166] injury [or damage complained of] and without which such result would not have occurred.” State of California v.Super. Ct., 150 Cal.App.3d 848, 857, 197 Cal.Rptr. 914 (1984) (internal quotations and citations omitted). The district court concluded, and we agree, that Brink’s failure to confirm payment was not the proximate cause of the loss suffered by Barber because Jodhani’s alleged tort of conversion was an intervening event sufficient to break the chain of causation. Barber nevertheless argues that this case presents a simple chain-of-causation scenario. At most, however, Brink’s breach amounts to a “but for” cause for the loss, which is not determinative of proximate cause. As the district court correctly concluded: For Plaintiffs loss to have been the proximate cause of Brink’s breach, it must have been foreseeable that: (a) Jodhani would refuse to pay for the goods on the basis o[f] their non-conformity to the invoice; (b) Plaintiff would enter into a settlement acknowledging the non-conformity and extinguishing Jodhani’s obligation to pay for the goods; (c) in lieu of returning the goods pursuant to the settlement, Jodhani would substitute inferior diamonds of lesser quantity. While Plaintiff is correct that Brink’s failure to comply with the shipping instructions “set the stage” for what followed, it cannot be said that this concatenation of events was the reasonably foreseeable consequence of Brink’s failure to follow such instructions. While the issue whether an intervening force is superseding is often a question of fact for the jury to decide, “like proximate cause generally, it is a matter of law where only one reasonable conclusion may be reached.” Brewer v. Teano, 40 Cal.App.4th 1024, 1035, 47 Cal.Rptr.2d 348 (1995). Therefore,-the district court correctly concluded the such alleged conduct was not reasonably foreseeable to Brink’s at the time it entered into contract, and that it broke the chain of causation between Brink’s act and Barber’s loss. Barber next argues that the district court erroneously concluded that the written contract between the parties did not create an insured/insurer relationship. However, the express agreement between Barber and Brink’s belies this contention: Brink’s is not an insurer hereunder. Brink’s shall obtain and maintain, at all times during its performance of this contract, insurance payable to Brink’s in such amounts and against such risks as shall adequately cover the liability assumed by Brink’s under the contract. The terms of the contract are clear and unambiguous. Plaintiffs alleged belief regarding insurance is immaterial, as “[a] party’s subjective expectations as to policy coverage are irrelevant in determining whether an insurance policy is ambiguous.” Justice H. Walter Croskey, Justice Marcus M. Kaufman, et al., California Practice Guide: Insurance Litigation § 4:118.5 (Rutter Group 2001) (citing Havstad v. Fidelity Nat’l Title Ins. Co., 58 Cal.App.4th 654, 661, 68 Cal.Rptr.2d 487 (1997)). Therefore, the district court properly granted summary judgment in favor of Brink’s on this claim. Given our resolution of these issues, we need not address any of the other arguments raised by Barber. AFFIRMED. Footnotes [**] This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by Ninth Circuit Rule 36-3.