Opinion
Civil Action No. 3:98-CV-1596-D
February 28, 2002
ORDER
Plaintiff Securities and Exchange Commission ("SEC") moves for partial summary judgment against defendants Kendyll R. Horton and Hazel A. Horton, contending they are liable for violating §§ 5(a) and (c) and 17(a) of the Securities Act of 1933, 15 U.S.C. § 77e(a) and (c) and 77q(a), § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. § 240. 10b-5, and seeking an order of disgorgement and imposing a civil monetary penalty. The court grants the motion.
The pleadings of the SEC and of defendants do not comply with certain of this court's local summary judgment rules. Because the defects have not interfered with the decisional process of the court in resolving this straightforward motion, it has accepted the pleadings for filing "as is." In a future case, however, the court might not do so and counsel should review ND. Tex. Civ. R. 56.1-356.7 for filing pleadings and evidence in a summary judgment matter.
The Civil Justice Expense and Delay Reduction Plan adopted by this court provides that "[e]ach judge will continue to give priority to the monitoring and resolution of pending motions." Plan at § XI(2) ( reprinted in Texas Rules of Court: Federal at 278 (West Pamp. Supp. 2001)). To eliminate undue delay and unnecessary expense to the parties to this and other civil actions pending on the court's docket, and because the court has determined that the motion is suitable for resolution in this manner, the court is deciding this motion by order rather than by a more detailed memorandum opinion.
Because the SEC will have the burden of proof at trial, to obtain partial summary judgment it "must establish `beyond peradventure all of the essential elements of the claim[.]'" Bank One, Tex., N.A. v. Prudential Ins. Co. of Am., 878 F. Supp. 943, 962 (N.D. Tex. 1995) (Fitzwater, J.) (quoting Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986)). It has introduced evidence in support of each of the essential elements of its claims.
When the party seeking summary judgment meets its threshold burden, the burden then shifts to the nonmovants. They must then go beyond their pleadings and designate specific facts showing that there is a genuine issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). Summary judgment is mandatory where the nonmoving parties fail to meet this burden. Little, 37 F.3d at 1076. Unsworn assertions set out in a complaint or brief do not constitute summary judgment evidence. "Unsworn pleadings, memoranda, or the like are not, of course, competent summary judgment evidence." Larry v. White, 929 F.2d 206, 211 n. 12 (5th Cir. 1991). An issue of fact is genuine if the evidence supporting its resolution in favor of the parties opposing summary judgment, together with any inference in those parties' favor that the evidence allows, would be sufficient to support a verdict in their favor. Hilton v. Southwestern Bell Tel. Co., 936 F.2d 823, 827 (5th Cir. 1991) (per curiam). An issue of fact is not genuine if no reasonable trier of fact could find in favor of the nonmovants. Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990).
Defendants have not adequately raised a genuine issue of material fact that is sufficient to defeat the SEC's motion. They have only submitted an unsworn response in which they contend the case against them has been settled. Even if their brief could be considered admissible evidence, which it cannot, see Larry, 929 F.2d at 211 n. 12, the SEC has introduced evidence that the settlement on which they rely was never finalized.
Normally, the court would not consider evidence submitted in support of a reply brief unless the party first obtained leave of court to file it. See Dethrow v. Parkland Health Hosp. Sys., 204 F.R.D. 102, 104 (N.D. Tex. 2001) (Fitzwater, J.) (holding that party may not file summary judgment reply appendix without first obtaining leave of court). Here, however, the SEC was not required in its opening motion and appendix to anticipate that defendants would assert the affirmative defense of settlement as a basis to avoid summary judgment. Accordingly, the court grants leave to file the evidence.
Accordingly, the SEC's February 1, 2002 motion for partial summary judgment is granted, and a Fed.R.Civ.P. 54(b) judgment is filed today. Because the court has disposed of the motion that prompted the court to reopen the case statistically, it directs the clerk of court to close the case for statistical purposes, without prejudice to reopening it for good cause shown.
SO ORDERED.