Opinion
2:11-CV-1173 JCM (CWH)
2013-09-26
ARCHWAY INSURANCE SERVICES, LLC, et al., Plaintiff(s), v. JAMES HARRIS, et al., Defendant(s).
ORDER
Presently before the court is defendants James Harris', Harris Consulting Services, Inc.'s, and Gregory Harris' first motion for summary judgment. (Doc. # 95). Plaintiffs Archway Insurance Services, LLC, Union One Insurance Group, LLC, Nevada Investment Partners, LLC, and Trinity Capital Management Group, LLC, filed a response (doc. # 100), and defendants filed a reply (doc. # 117).
I. Background
This matter arises out of the financing and purchase of the Harris Agency ("THA"), an insurance business, and was originally filed in the Eastern District of Pennsylvania. Upon motion of all of the defendants, the portion of the case relating to the defendants herein, (James Harris, Harris Consulting Services, Inc. and Gregory Harris) was transferred to this court, and the portion relating to various bank defendants was transferred to the United States District Court for the District of Kansas. Only counts one and two of the complaint for fraud and breach of contract are being litigated in this district.
On January 4, 2013, defendants served requests for documents, interrogatories, and requests for admission upon plaintiffs. Plaintiffs failed to respond within 30 days, and the requests were deemed admitted pursuant to Fed. R. Civ. P. 36(a). Defendants then filed the instant motion on February 27, 2013, based almost exclusively on those deemed admissions.
On March 27, 2013, defendants filed a second motion for summary judgment based on grounds separate and apart from the deemed admissions. (Doc. # 102). However, this order rules only on defendants' first motion for summary judgment. (Doc. # 95).
On March 21, 2013, plaintiffs filed a motion to withdraw the deemed admissions. (Doc. # 98). On May 31, 2013, Magistrate Judge Hoffman heard oral argument and granted plaintiffs' motion to withdraw. (See docket # 129).
II. Legal Standard
Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir. 1996); Fed. R. Civ. P. 56©. An issue is genuine only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is material only if it could affect the outcome of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). The moving party bears the burden of informing the court of the basis for its motion, together with evidence demonstrating the absence of any genuine issue of material fact. Celotex Corp.v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to present, by affidavits, depositions, answers to interrogatories, or admissions on file, "specific facts showing that there is a genuine issue for trial." Id. at 324; Fed. R. Civ. P. 56©. . . . . . . . . .
III. Discussion
In their motion, defendants' introductory paragraph states that "[t]his motion specifically addresses [p]laintiffs' complete failure to respond to detailed discovery that [d]efendants have served in this case. Among the discovery are requests for admissions. Plaintiffs have not responded whatsoever to any of the requests for admissions served by [d]efendants. Because the requests for admissions address both claims for relief being made by [p]laintiffs, the admissions that are deemed to occur when a party chooses not to respond to requests for admission require that judgment be entered in favor of [d]efendants." (See defendants' first motion for summary judgment, doc. # 95, p. 2). Thus, it is clear that the instant motion is premised upon plaintiffs' failure to timely respond to discovery requests.
Fraud (count 1)
To establish a claim for fraud, a plaintiff must prove that: (1) the defendant made a false representation; (2) with knowledge or belief that the representation was false or without a sufficient basis for making the representation; (3) with the intent to induce the plaintiff to act or refrain from acting on the representation; (4) which representation the plaintiff justifiably relies upon; and (5) which reliance damages the plaintiff. Bulbman, Inc. v. Nevada Bell, 825 P.2d 588 (Nev. 1992); Nevada Power Co. v. Monsanto Co., 891 F. Supp. 1406 (D. Nev. 1995).
Additionally, any claim for fraud must be pled with particularity under Federal Rule of Civil Procedure 9(b). Yourish v. Cal. Amplifier, 191 F.3d 983, 993 (9th Cir. 1999). To meet this standard, plaintiffs must present details regarding the "time, place, and manner of each act of fraud, plus the role of each defendant in each scheme." Lancaster Com. Hosp. V. Antelope Valley Hosp. Dist., 940 F.2d 397, 405 (9th Cir. 1991).
In contesting the basis for plaintiffs' claims for fraud, defendants do not argue that plaintiffs have failed to plead or otherwise allege facts sufficient to establish a claim for fraud. Instead, defendants rely almost exclusively on the deemed admissions to requests number 10 ("[a]dmit that no false statements are contained in the Production Report that is attached hereto as Ex. 1" ) and number 11 ("[a]dmit that [p]laintiffs' fraud claim against James Harris and Gregory Harris is false and without factual basis"). (See defendants' first motion for summary judgment, doc. # 95, at p. 9).
Despite being improper requests, as they seek admissions to admittedly contested facts, the deemed admissions were withdrawn pursuant to Magistrate Judge Hoffman's subsequent order. (See docket # 129). Because the instant motion is based upon those withdrawn admissions, the court finds that defendants have not satisfied their burden to demonstrate the absence of any genuine issue of material fact. Celotex, 477 U.S. 317. Accordingly, the court declines to grant defendants' first motion for summary judgment on plaintiffs' fraud claims.
Breach of contract (count 2)
Plaintiffs assert claims for breach of contract regarding: (1) an alleged loan made to a THA employee, Dianne Curry, at the request of defendant James Harris, and (2) an alleged loan guaranty for the second traunche of the account acquisition purchase price. As with the fraud claims, defendants' argument that they are entitled to summary judgment on plaintiffs' breach of contract claims is based primarily based upon deemed admissions.
As to the breach of contract claim regarding Curry, defendants rely heavily upon deemed admissions to requests number 18 ("[a]dmit that the allegations contained in [p]aragraph 63 of [p]laintiffs' [c]omplaint are false and without good and proper factual basis"), and number 35 ("[a]dmit that none of [p]laintiffs provided or paid any monies to Dianne Curry during the time that she worked for The Harris Agency, LLC"), among others. For the reasons discussed above, these requests were improper, and were withdrawn in any event.
In addition to their reliance on the deemed admissions, defendants argue they are entitled to summary judgment on plaintiffs' breach of contract claim regarding Curry because the payment was not a "loan" but was instead a "non-refundable sign-on bonus." Again, defendants do not provide any support from the record for this assertion, whether it be deemed admissions or otherwise.
Accordingly, defendants have not satisfied their burden and their first motion for summary judgment on plaintiffs' breach of contract claims is denied. . . . . . .
IV. Conclusion
As defendants admit, "[a]bsent the [c]ourt's granting of [p]laintiffs' separate motion to withdraw admissions, [p]laintiffs have not provided a basis for denying the Harrises' motion for summary judgment." (See defendants' reply in support of motion for summary judgment, doc. # 117, p. 3). Because defendants' first motion for summary judgment is premised on deemed admissions, and because the court has subsequently granted plaintiffs' request to withdraw those admissions, the court denies defendants' motion. The court finds that defendants have failed to provide appropriate evidence demonstrating the absence of any genuine issue of material fact. Celotex, 477 U.S. 317.
Defendants have filed a second motion for summary judgment containing additional grounds for an adjudication in their favor that are separate and apart from the grounds relied upon here. (See doc. # 102). To be clear, the instant order rules solely on defendants' first motion for summary judgment based upon deemed admissions. (Doc. # 95). The court will issue a separate order ruling on defendants' second motion for summary judgment.
Accordingly,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendants' first motion for summary judgment (doc. # 95) be, and the same hereby is, DENIED.
_______________
UNITED STATES DISTRICT JUDGE