Roots Ready Made Garments Co., W.l.l. v. THE GAP, INC., AKA Gap, Inc.

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The Honorable Jane A. Restani, Judge of the United States Court of
International Trade, sitting by designation.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROOTS READY MADE GARMENTS
CO., W.L.L.,
Plaintiff - Appellant,
v.
THE GAP, INC., AKA Gap, Inc.; GAP
INTERNATIONAL SALES, INC.;
BANANA REPUBLIC, LLC; OLD
NAVY, LLC,
Defendants - Appellees.
No. 08-17421
D.C. No. 3:07-cv-03363-CRB
MEMORANDUM *
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted November 2, 2010
San Francisco, California
Before: THOMAS and IKUTA, Circuit Judges, and RESTANI, Judge.**
FILED
NOV 29 2010
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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The district court did not err in ruling that the parol evidence rule, Cal. Code
Civ. Proc. § 1856, barred Roots from presenting evidence of the terms of an
alleged May 2003 oral contract between Roots and Gap that contradicted the terms
of the 2003 written Gap-Gabana contract. Although Roots was not a party to the
Gap-Gabana contract, California’s parol evidence rule applies to strangers to a
contract who challenge that contract’s terms, see Kern Cnty. Water Agency v.
Belridge Water Storage Dist., 18 Cal. App. 4th 77, 86–87 (1993), and here the
record establishes that Roots and Gap intended to document the terms of their deal
by means of the written Gap-Gabana contract. The record does not support Roots’
claim that there is a genuine issue of material fact as to whether Gap intended to
make a unilateral offer to Roots that Roots could accept by making a payment. See
Davis v. Jacoby, 1 Cal. 2d 370, 379 (1934). The testimony of Roots’ witnesses,
when read in context, does not create a genuine issue of material fact as to the
continuing existence of an oral contract separate from the Gap-Gabana contract.
Nor does Abu Issa’s declaration create such a genuine issue: the district court did
not abuse its discretion in excluding the declaration, which it found flatly
contradicted Abu Issa’s earlier deposition testimony. See Van Asdale v. Int’l Game
Tech., 577 F.3d 989, 998–99 (9th Cir. 2009). Without this declaration, Roots’
claim that Gap repeatedly reaffirmed the continuing existence of the oral contract,

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and is therefore estopped from claiming that the oral contract merged with the
written one, lacks any support in the record.
The district court did not err in granting summary judgment to Gap on
Roots’ claim that it entered into a second oral contract with Gap in June 2003. Abu
Issa, Roots’ sole witness to that oral contract, admitted that the May 2003 contract
was the only oral contract. Nor does evidence that Roots acted consistently with
the terms of the alleged oral contract create a genuine issue of fact regarding its
existence, because Roots had earlier committed to taking such actions under the
terms of its letter of understanding with Gabana.
The district court did not err in granting summary judgment to Gap on
Roots’ claim that Gap breached the covenant of good faith and fair dealing by
prematurely terminating its relationship with Roots. Roots cannot bring a claim for
breach of an implied term of the oral contract, because any such contract was
preliminary and merged with the integrated Gap-Gabana agreement, which
expressly gave Gap the right to terminate its relationship with Gabana and its
retailers. See Gerdlund v. Elec. Dispensers Int’l, 190 Cal. App. 3d 263, 270
(1987). Roots’ reliance on Locke v. Warner Bros., Inc., 57 Cal. App. 4th 354,
364–65 (1997), is unavailing, because Gap’s obligations under the Gap-Gabana
agreement were not dependent on its “subjective satisfaction” with Gabana’s or

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Roots’ services, and therefore California law does not read a covenant of good
faith and fair dealing into Gap’s exercise of its discretion, see Third Story Music,
Inc. v. Waits, 41 Cal. App. 4th 798, 808 (1995).
Although Roots appealed the district court’s grant of summary judgment to
Gap on Roots’ fraudulent concealment claims, it failed to appeal the district court’s
alternative ruling, namely, the district court’s dismissal of Roots’ fraudulent
concealment claim under Federal Rule of Civil Procedure 9(b). Accordingly,
Roots has “abandoned [its] right to appeal the grant of summary judgment” on this
claim, MacKay v. Pfeil, 827 F.2d 540, 542 n.2 (9th Cir. 1987) (per curiam), and we
do not address it here.
We also affirm the district court’s dismissal of Roots’s unfair competition
claim. See Cal. Bus. & Prof. Code § 17200. Even if the district court erred in
dismissing this claim on the ground that it had to be tethered to a statutory
violation, see Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 994 (9th
Cir. 2000), Roots failed to identify conduct that comprises “unfairness “ for
purposes of § 17200. Gap’s termination of the Gap-Gabana contract before Roots
could recoup its investment in the excess inventory and in its Middle Eastern retail
network does not meet the requisite standard, because such conduct was permitted
by the plain terms of the contract, and the “unfairness” prong of section 17200

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1 Because we affirm the district court’s disposition of Roots’ claims, we do
not reach Roots’ arguments regarding the district court’s pre-trial rulings on
damages, or Gap’s motion to strike portions of Roots’ excerpts of record and
opening brief relating to damages evidence.
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“does not give the courts a general license to review the fairness of contracts.” S.
Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th 861, 887 (1999)
(internal quotation marks omitted) (quoting Samura v. Kaiser Found. Health Plan,
Inc., 17 Cal. App. 4th 1284, 1299 n.6 (1993)).
The district court did not err in granting summary judgment to Gap on
Roots’ quasi-contract claims, because an “action based on an implied-in-fact or
quasi-contract cannot lie where there exists between the parties a valid express
contract covering the same subject matter.” Lance Camper Mfg. Corp. v. Republic
Indem. Co., 44 Cal. App. 4th 194, 203 (1996). For the reasons explained above,
the written contract between Gap and Gabana is the contract documenting the
Roots-Gap agreement.1
AFFIRMED.

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