Mitsui O.S.K. Lines, Ltd. v. Seamaster Logistics, Inc.

MEMORANDUM

Appellants SeaMaster Logistics, Inc. and Toll Global Forwarding (Americas) Inc. (“Summit US”) appeal the district court’s findings that Appellants are liable for fraud and civil conspiracy and award of attorney’s fees to Appellee Mitsui O.S.K Lines, Ltd. (“MOL”). MOL cross-appeals the district court’s dismissal of MOL’s claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and finding that Summit U.S. is not liable for damages MOL sustained before Summit U.S. joined the conspiracy. We have jurisdiction under 28 U.S.C. § 1291 .

I

Appellants first appeal the district court’s conclusion that MOL justifiably relied on the misrepresentations of Appellants. Findings of fraud and justifiable reliance are questions of fact subject to clearly erroneous review. In re Jogert, Inc., 950 F.2d 1498 , 1504-05 (9th Cir.1991).

MOL’s reliance was justified because Appellants’ misrepresentations were not “preposterous,” or “so patently and obviously false that [MOL] must have closed [its] eyes to avoid discovery of the truth.” Broberg v. Guardian Life Ins. Co. of Am., 171 Cal.App.4th 912 , 90 Cal.Rptr.3d 225, 232 (2009) (quoting OCM Principal Opportunities Fund…