Textainer Equipment Management v. Pacific Interlink CA1/1

Filed 3/29/13 Textainer Equipment Management v. Pacific Interlink CA1/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

TEXTAINER EQUIPMENT MANAGEMENT LIMITED, Plaintiff and Respondent, A133155

v. (San Francisco City & County PACIFIC INTERLINK SDN BDH, Super. Ct. No. CGC10498933) Defendant and Appellant.

Textainer Equipment Management Limited (Textainer) sued Pacific Interlink SDN BDH (Pacific) for unpaid rent on shipping containers Pacific lost while it had them on lease from Textainer. Pacific asserts it does not owe rent because Textainer did not fulfill its contractual obligation to invoice Pacific for the lost containers‘ replacement value— payment of which would have stopped rent from accruing. Textainer asserts it had no obligation to invoice Pacific, which could have paid the pre-set replacement value at any time to stop accrual of rent. After inspecting the parties‘ lease agreement, the trial court ruled in favor of Textainer and awarded it rent and other damages. We affirm. FACTUAL BACKGROUND On April 1, 2001, Pacific agreed, by written agreement, to lease intermodal shipping containers from Textainer. The 2001 agreement sets forth the general terms governing the lease. A later 2006 schedule, active at all times relevant to this appeal, specifies Pacific‘s minimum container commitment, the daily rental charges per

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container, the containers‘ original replacement values, and a formula for calculating depreciated replacement value. Paragraph 10 of the 2001 agreement is titled ―RISK OF LOSS AND DAMAGE.‖ It provides: ―Lessee is liable for all loss . . . to the Containers subsequent to delivery and prior to return to Lessor, regardless of when such loss . . . may be discovered. Lessee is obligated to pay all Rental Charges on lost . . . Containers until the Off-hire Date of each Container.‖ Further, ―Lessee shall pay to Lessor the Replacement Value for such Container in accordance with the provisions of the Lease.‖ For a lost container, paragraph 1 of the agreement defines ―Off-hire Date‖ as ―the date upon which Lessee has paid the Replacement Value of the Container to Lessor.‖ Paragraph 6 governs ―BILLING AND PAYMENT.‖ Subparagraph (c) provides: ―In the event that Lessee shall become responsible under the Lease for the Replacement Value of Containers, Lessor will charge Lessee, and Lessee will pay Lessor for the Replacement Value of such Containers.‖ The general terms of paragraph 6 provide: ―PAYMENT OF ALL CHARGES MUST BE MADE IN ACCORDANCE WITH INSTRUCTIONS STATED ON EACH INVOICE ISSUED BY LESSOR. ALL CHARGES INVOICED BY LESSOR ARE DUE AND PAYABLE WITHIN THIRTY (30) DAYS FROM THE DATE OF EACH INVOICE. IF LESSOR‘S INVOICE IS NOT PAID WHEN DUE, LESSOR MAY CHARGE, AS ADDITIONAL RENTAL, A SERVICE CHARGE AT THE RATE OF 1.5% PER MONTH (18% PER ANNUM) ON THE UNPAID BALANCE.‖ In 2003, Pacific declared some containers lost. Pacific and Textainer negotiated a discounted replacement value and Textainer agreed to forego rental charges following the declared loss. Textainer told Pacific it was getting special treatment, that freezing rental charges was an ―abnormal practise,‖ and that other customers facing similar losses were not getting so favorable a deal.