                                                                           FILED
                            NOT FOR PUBLICATION                             JUN 21 2013

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



BLUEEARTH BIOFUELS, LLC,                         No. 11-16846

              Plaintiff - Appellant,             D.C. No. 1:09-cv-00181-DAE-
                                                 KSC
  v.

HAWAIIAN ELECTRIC COMPANY,                       MEMORANDUM *
INC.; MAUI ELECTRIC COMPANY,
LTD.; ALOHA PETROLEUM, LTD.;
KARL E. STAHLKOPF, Individually,

              Defendants - Appellees.



                    Appeal from the United States District Court
                             for the District of Hawaii
                     David A. Ezra, District Judge, Presiding

                        Argued and Submitted June 11, 2013
                                Honolulu, Hawaii

Before: FARRIS, D.W. NELSON, and NGUYEN, Circuit Judges.

       BlueEarth Biofuels, LLC appeals the district court’s judgment in favor of

Hawaiian Electric Company, Inc. (“HECO”), Maui Electric Company, Ltd.

(“MECO”), Karl E. Stahlkopf, and Aloha Petroleum, Ltd. BlueEarth alleged


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
various causes of action that arose out of the parties’ failed effort to develop a

biodiesel production plant on Maui. As relevant to this appeal, the district court

granted summary judgment on BlueEarth’s claims for breach of the parties’

memorandum of understanding (“MOU”) and breach of fiduciary duties, and

dismissed with prejudice BlueEarth’s unfair competition claim in a supplemental

pleading after denying leave to amend it. We have jurisdiction under 28 U.S.C.

§ 1291, and we affirm.

1.    The district court did not abuse its discretion by considering HECO and

MECO’s novation theory in granting them summary judgment on BlueEarth’s

claim for breach of the MOU.1 HECO and MECO contended that the BlueEarth

Maui Biodiesel, LLC Investment and Operating Agreements (“BEMB

Agreements”) were integrated and covered the same subject matter as the MOU,

therefore superseding and cancelling the MOU in its entirety. BlueEarth was fairly

on notice of HECO and MECO’s legal argument without a specific reference to

novation in their answers or motions. See Cnty. of Haw. v. Unidev, LLC, 289 P.3d

1014, 1031 (Haw. Ct. App. 2012) (explaining that “a novation is but one type of a

substituted contract” that “brings in a new party”), vacated in non-relevant part,


      1
       In granting summary judgment on BlueEarth’s claim for breach of the
MOU, the district court assumed without deciding—as do we—that the MOU
created legally binding commitments between the parties.

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No. SCWC-10-0000188 (Haw. May 22, 2013); cf. Fanucchi & Limi Farms v.

United Agri Prods., 414 F.3d 1075, 1082 (9th Cir. 2005) (holding that complaint

relying on novation theory need not “plead novation specifically” in order to put

defendants on notice of claim).

      The district court correctly held that the BEMB Agreements novated the

MOU. We look to state law to determine “whether an agreement was meant to

extinguish the old obligation and to substitute a new one.” Fanucchi & Limi

Farms, 414 F.3d at 1082. In Hawaii, the construction of a written agreement as

either supplemental to or in place of a previous agreement “is plainly a question of

law. What [the later agreement] was [subjectively] intended to be by the parties is

as plainly immaterial.” William W. Bierce, Ltd. v. Hutchins, 18 Haw. 511, 519

(Haw. Terr. 1907). Only where a written agreement’s terms are ambiguous as to

the parties’ objective intent may the factfinder “consider evidence extrinsic to the

written contract, including evidence of the surrounding circumstances and the

parties’ subsequent conduct in construing the contract.” Stewart v. Brennan, 748

P.2d 816, 821 (Haw. Ct. App. 1988).

      The MOU set the basic negotiating framework that would govern the

parties’ relationship until they reached an agreement on more detailed terms for the

project’s development and financing. The MOU thus clearly anticipates that the


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parties would reach subsequent agreements that would supersede the MOU’s

terms.

         Moreover, the BEMB Agreements unambiguously express the parties’ intent

to replace rather than amend the MOU. The BEMB Operating Agreement contains

an integration clause stating that it “supersedes any and all prior agreements or

arrangements (oral or written) among any of the parties hereto regarding the

subject matter hereof.” The BEMB Investment Agreement contains a similar

clause. Cf. Shanghai Inv. Co. v. Alteka Co., 993 P.2d 516, 531 (Haw. 2000)

(finding that later agreement was properly viewed as amendment rather than

substituted contract where the parties indicated specific terms that they intended to

amend and the amendment stated that the terms of the earlier agreements “shall

remain in full force and effect”), overruled on other grounds, Blair v. Ing, 31 P.3d

184, 188 n.6 (Haw. 2001). Plainly, the parties objectively intended the BEMB

Agreements to serve as a novation of the MOU.

         In claiming that HECO and MECO breached the MOU, BlueEarth asserted

that HECO violated its exclusivity provisions and failed to make a required

contribution of $400,000. But the BEMB Agreements eliminated the exclusivity

requirement before HECO and MECO began discussions with Aloha and modified

the capital contribution requirement such that the obligation was transferred from


                                          4
HECO to Uluwehiokama Biofuels Corp. Consequently, BlueEarth cannot recover

for alleged breaches of the MOU that either occurred after the BEMB Agreements

came into effect or involved an obligation that the BEMB Agreements

extinguished as to the party allegedly in breach. The district court correctly

granted summary judgment on this claim.

2.     BlueEarth challenges the district court’s grant of summary judgment on its

claim for breach of fiduciary duties on the ground that the district court failed to

consider HECO and MECO’s non-contractual fiduciary duties. By failing to raise

this argument in opposition to summary judgment, however, BlueEarth waived it.

See, e.g., Ruiz v. Affinity Logistics Corp., 667 F.3d 1318, 1322 (9th Cir. 2012)

(“[A]n issue will generally be deemed waived on appeal if the argument was not

raised sufficiently for the trial court to rule on it.” (quoting In re Mercury

Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010)) (internal quotation

mark omitted)); see also Alexopulos ex rel Alexopulos v. Riles, 784 F.2d 1408,

1410–11 (9th Cir. 1986) (finding tolling argument waived because the appellants

failed to raise it in opposition to summary judgment—even though the parties had

briefed the general statute-of-limitations issue—and “did not provide reasons for

their failure”).




                                            5
      It is true that the district court earlier had allowed for the possibility that

BlueEarth could show that HECO and MECO breached fiduciary duties imposed

by statute, such as the duty of loyalty and the duty to refrain from self-dealing. Yet

BlueEarth, by pressing only its argument that HECO and MECO violated the non-

disclosure and non-compete agreements during the summary judgment

proceedings, signaled to the district court that it had abandoned a statute-based

theory of duty. This is especially so given that the district court had raised the

statutory theory sua sponte in its order denying the earlier motion to dismiss.

Because BlueEarth never attempted to articulate a statute-based theory of fiduciary

duty, summary judgment was appropriate on its claim for breach of any such duty.

3.    The district court did not abuse its discretion by denying BlueEarth leave to

amend its supplemental pleading to add allegations concerning an unfair

competition claim. Even considering BlueEarth’s proposed amendments, its unfair

competition claim was still vague and conclusory regarding “the nature of the

competition” and how defendants’ conduct “will negatively affect competition,”

which are necessary elements of an unfair competition claim. Davis v. Four

Seasons Hotel Ltd., 228 P.3d 303, 317–18 (Haw. 2010). In particular, it is unclear

how HECO’s project with ’Âina Koa Pono LLC (“AKP”) has anything to do with

HECO allegedly freezing BlueEarth out of the biodiesel project with Aloha. The


                                            6
remainder of BlueEarth’s allegations in its proposed amendment to the

supplemental pleading—those having nothing to do with AKP—all were known to

BlueEarth before it filed its third amended complaint. Despite several

opportunities to amend its pleadings, BlueEarth’s proposed amendment to its

supplemental pleading failed to correct the fundamental deficiencies in its unfair

competition claim. Therefore, the district court did not abuse its discretion in

denying leave to amend the supplemental pleading. See, e.g., Wood v. City of San

Diego, 678 F.3d 1075, 1082 (9th Cir. 2012).

      AFFIRMED.




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