FOLEX GOLF INDUSTRIES, INC., a California corporation v. O-Ta Precision Industries Co., Ltd.

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FOLEX GOLF INDUSTRIES, INC., a
California corporation,
Plaintiff - Appellant,
v.
O-TA PRECISION INDUSTRIES CO.,
LTD.,
Defendant - Appellee.
No. 10-57003
D.C. No. 2:09-cv-02248-R-CW
MEMORANDUM*
FOLEX GOLF INDUSTRIES, INC., a
California corporation,
Plaintiff - Appellant,
v.
O-TA PRECISION INDUSTRIES CO.,
LTD.,
Defendant - Appellee.
No. 11-55463
D.C. No. 2:09-cv-02248-R-CW
Appeal from the United States District Court
for the Central District of California
FILED
JUN 19 2012
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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The Honorable John A. Mendez, United States District Judge for the**
Eastern District of California, sitting by designation.
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Manuel L. Real, District Judge, Presiding
Argued and Submitted June 8, 2012
Pasadena, California
Before: B. FLETCHER and WARDLAW, Circuit Judges, and MENDEZ, District
Judge.**
Folex Golf Industries, Inc., appeals the district court’s grant of summary
judgment in favor of O-TA Precision Industries Co., Ltd, as to Folex’s Fourth,
Sixth, Seventh, and Tenth Causes of Action. Folex also appeals the district court’s
award of attorneys’ fees to O-TA. We have jurisdiction pursuant to 28 U.S.C.
§ 1291. We reverse and remand for further proceedings, and vacate the award of
attorneys’ fees to O-TA.
We review the district court’s grant of summary judgment de novo,
construing the facts in the light most favorable to the nonmoving party and
drawing all reasonable inferences in that party’s favor. See Earl v. Nielsen Media
Research, Inc., 658 F.3d 1108, 1112 (9th Cir. 2011). The district court erred in
concluding as a matter of law that Folex had actual knowledge in 2005 of its
claims against O-TA. Although there was some evidence indicating that Folex was
aware that commissions were not being paid in 2005, there was other evidence

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supporting the conclusion that Folex had no reason to believe that it had legitimate
claims against O-TA or Luoyang Ship Material Research Institute (“LSMRI”).
LSMRI wrote to Folex on December 31, 2005, representing that it had spun
off its titanium alloy casting business and thus would no longer accept orders from
O-TA, which, if true, would have been a legitimate basis for failing to pay Folex
commissions. Folex also introduced evidence that O-TA’s General Manager told
two Folex officers on December 12, 2005, that due to various problems, O-TA
would no longer purchase goods from LSMRI, and would return to purchasing golf
club heads from a previous supplier. If O-TA and LSMRI had truly ceased to do
business together, as they allegedly represented to Folex, then Folex would have
no contractual right to collect commissions, and thus had no claims for damages
against O-TA or LSMRI. Viewing these facts in the light most favorable to Folex
and drawing all reasonable inferences in its favor, we conclude that there is a
genuine issue of material fact as to whether Folex was on inquiry notice of its
Fourth, Sixth, Seventh, and Tenth Causes of Action as of 2005. See Sylve v. Riley,
18 Cal. Rptr. 2d 608, 610 (Ct. App. 1993) (“Under the delayed discovery rule, the
limitations period does not begin to run until a plaintiff discovers or could have
discovered through the exercise of reasonable diligence all facts essential to her
cause of action.”) (footnote omitted). We therefore reverse the district court’s

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The district court dismissed Folex’s Fifteenth Cause of Action for an1
accounting because it concluded that each of Folex’s other claims failed. Because
we reverse the district court’s grant of summary judgment as to Folex’s Fourth,
Sixth, Seventh, and Tenth Causes of Action, we also reverse the district court’s
dismissal of Folex’s claim for an accounting.
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grant of summary judgment as to these causes of action and remand for further
proceedings. The award of attorneys’ fees to O-TA is vacated.1
No. 10-57003: REVERSED and REMANDED.
No. 11-55463: VACATED.

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