Oregon Investors v. Harder et al, No. 3:2008cv01252 - Document 23 (D. Or. 2009)
Court Description: OPINION AND ORDER: Plaintiff's Motion for Partial Summary Judgment 11 on the breach of contract claim is granted as to Fisher and King's Manor Oregon, LLC. The motion is stayed as to Harder; Plaintiff's motion for Default Judgment 16 is granted. A separate Judgemnt will be entered. Signed on 1/14/09 by Judge Anna J. Brown. (ljl)
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1 2 3 4 5 6 7 8 9 IN THE UNITED STATES DISTRICT COURT 10 FOR THE DISTRICT OF OREGON 11 12 13 14 15 16 17 18 19 20 OREGON INVESTORS, a California) General Partnership, ) ) Plaintiff, ) ) v. ) ) JON M. HARDER, an individual, ) DARRYL E. FISHER, an indi) vidual, and KING'S MANOR ) OREGON, LLC, an Oregon Limited) Liability Company, ) ) Defendants. ) ) No. CV-08-1252-HU OPINION & ORDER R. Scott Whipple WHIPPLE & DUYCK, P.C. 1500 S.W. First Avenue, Suite 883 Portland, Oregon 97201 21 Attorney for Plaintiff 22 23 24 25 26 James Streinz MCEWEN GISVOLD, LLP 1100 S.W. Sixth Avenue, Suite 1600 Portland, Oregon 97204 Attorney for Defendants Harder and Fisher BROWN, District Judge: 27 Plaintiff Oregon Investors, a California General Partnership, 28 brings this breach of contract and fraud action against defendants 1 - OPINION & ORDER 1 Jon Harder, Darryl Fisher, and King's Manor Oregon, LLC. Plaintiff 2 moves for summary judgment on the breach of contract claim, and 3 moves for default judgment on both the contract and fraud claims as 4 to King's Manor Oregon. 5 Harder due to his bankruptcy filing on December 31, 2008. 6 that one exception, I grant the motions. The case has been stayed with regard to 7 With BACKGROUND 8 Pursuant to Local Rule 56.1(f), the facts asserted by 9 plaintiff in its summary judgment motion, and supported by the 10 Declaration of Edward Pierce, are deemed admitted by Fisher and 11 King's Manor Oregon because those defendants failed to respond to 12 those asserted facts. 13 King's Manor Oregon was entered on January 8, 2009. 14 well-pleaded factual allegations in the Complaint regarding that 15 defendant's liability are also deemed true. 16 v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). 17 here are therefore deemed admitted either by the Order of Default 18 or by defendants' failure to respond to the summary judgment 19 motion, or both in the case of King's Manor Oregon. Additionally, an Order of Default against Thus, the Fair Housing of Marin The facts recited 20 Oregon Investors is a group of individuals who formed their 21 partnership for the specific purpose of lending $500,000 to Harder, 22 Fisher, and King's Manor Oregon. Waldman Management Group, Inc. is 23 the 24 President and Chief Operating Officer of Waldman. 25 general partner of Oregon Investors. Pierce Harder is the Manager of King's Manor Oregon. is a Vice Harder's 26 company Sunwest Management, has created multiple single purpose 27 limited liability companies that buy or build one assisted living 28 facility, which Sunwest then manages. 2 - OPINION & ORDER 1 In discussing a loan by Oregon Investors to defendants, Pierce 2 made it clear that Oregon Investors would not lend any money 3 without sufficient collateral. 4 defendants pledge to Oregon Investors the future payments to be 5 received by King's Manor Oregon from defendants' fifty-percent 6 membership interest in King's Manor Washington, LLC, a Washington 7 limited liability company. Oregon Investors requested that 8 On October 31, 2002, the parties executed the "Installment 9 Promissory Note" ("the Note"), under which Oregon Investors agreed 10 to lend Harder, Fisher, and King's Manor Oregon, $500,000, and 11 under which defendants agreed to pledge their interests in future 12 payments 13 requested. 14 Pierce's Declaration, require defendants to pay $500,000 to Oregon 15 Investors with twelve-percent interest accruing from October 31, 16 2002, until paid. 17 from their interests in King's Manor Washington as The terms of the Note, attached as Exhibit B to Exh. B to Pierce Declr. The interest was payable on the first of each month beginning 18 December 1, 2002, until November 1, 2004. 19 principal and accrued interest were due on December 1, 2004. 20 As security, defendants pledged "the future payment to be received 21 by [King's Manor Oregon] for its 50% interest in King's Manor, LLC, 22 a Washington limited liability company, and hereby certify that no 23 pledge 24 Defendants also agreed to make no distributions of cash or property 25 to any of its members so long as any principal or interest remained 26 unpaid on the note. has heretofore been made of Id. such The balance of the collateral." Id. Id. Id. 27 If any installment was not paid, all principal and interest 28 was to become immediately due and collectible at the option of the 3 - OPINION & ORDER 1 holder of the note. 2 demand, notice of dishonor or default and notice of any kind with 3 respect to this note." 4 attorney's fees and collection costs if the note were placed in the 5 hands of an attorney for collection. 6 Id. Defendants waived "presentment, protest, Id. Defendants agreed to pay reasonable Id. Based on the terms of the Note, Oregon Investors lent $500,000 7 to defendants in October 2002. 8 agreed to an extension of the Note, and in a March 2008 written 9 agreement, the due date on the Note was extended to December 1, ("the Extension By oral agreement, the parties 10 2008 Agreement"). Exh. A to Pierce Declr. 11 Defendants made the required monthly payments through June 2008. 12 As of November 20, 2008, when plaintiff filed its summary judgment 13 motion, defendants had failed to make any of the required monthly 14 payments since July 2008. 15 Although defendants waived notice, on August 6, 2008, Pierce 16 personally delivered a letter to Harder informing Harder that 17 Harder, Fisher, and King's Manor Oregon were in default on the loan 18 and that Oregon Investors was declaring the Note fully due and 19 payable. 20 was in default on the loan. Exh. C to Pierce's Declr. Harder acknowledged that he Id. 21 Later in August, Pierce personally provided a copy of the 22 written notice to Wallace Gutzler, King's Manor Oregon's registered 23 agent, and to Thomas Wettlaufer, both of whom are legal counsel for 24 Sunwest. Both acknowledged receipt of the letter, and acknowledged 25 that the defendants were in default on the note. 26 Although the summary judgment motion was filed before the 27 December 1, 2008 payoff date of the Note, counsel informed the 28 Court during a January 7, 2009 telephone hearing, that the full 4 - OPINION & ORDER 1 payment, due December 1, 2008, had not been made. 2 Finally, Harder filed for bankruptcy on December 31, 2008, and 3 a notice of automatic stay was filed in this Court on January 12, 4 2009. 5 SUMMARY JUDGMENT STANDARDS 6 Summary judgment is appropriate if there is no genuine issue 7 of material fact and the moving party is entitled to judgment as a 8 matter of law. 9 initial responsibility of informing the court of the basis of its 10 motion, and identifying those portions of "'pleadings, depositions, 11 answers to interrogatories, and admissions on file, together with 12 the affidavits, if any,' which it believes demonstrate the absence 13 of a genuine issue of material fact." 14 477 U.S. 317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)). Fed. R. Civ. P. 56(c). The moving party bears the Celotex Corp. v. Catrett, 15 "If the moving party meets its initial burden of showing 'the 16 absence of a material and triable issue of fact,' 'the burden then 17 moves to the opposing party, who must present significant probative 18 evidence tending to support its claim or defense.'" Intel Corp. v. 19 Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991) 20 (quoting Richards v. Neilsen Freight Lines, 810 F.2d 898, 902 (9th 21 Cir. 1987)). 22 designate facts showing an issue for trial. 23 322-23. 24 The nonmoving party must go beyond the pleadings and Celotex, 477 U.S. at The substantive law governing a claim determines whether a 25 fact is material. 26 Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). All reasonable doubts as 27 to the existence of a genuine issue of fact must be resolved 28 against the moving party. 5 - OPINION & ORDER T.W. Elec. Serv. v. Pacific Elec. Contractors Matsushita Elec. Indus. Co. v. Zenith 1 Radio, 475 U.S. 574, 587 (1986). The court should view inferences 2 drawn from the facts in the light most favorable to the nonmoving 3 party. T.W. Elec. Serv., 809 F.2d at 630-31. 4 If the factual context makes the nonmoving party's claim as to 5 the existence of a material issue of fact implausible, that party 6 must come forward with more persuasive evidence to support his 7 claim than would otherwise be necessary. 8 Research and Tech. Group, 916 F.2d 528, 534 (9th Cir. 1990); 9 California Architectural Bldg. Prod., Inc. v. Franciscan Ceramics, 10 Id.; In re Agricultural Inc., 818 F.2d 1466, 1468 (9th Cir. 1987). DISCUSSION 11 12 The record establishes that Fisher and King's Manor Oregon, 13 LLC breached their contract with Oregon Investors when they failed 14 to make any interest payments after June 2008. 15 under the terms of the Note, all principal and interest was 16 immediately due and collectible at plaintiff's option. 17 letter, 18 distributed to King's Manor Oregon's registered agent, clearly 19 communicated that Oregon Investors chose to call the full, unpaid 20 balance of the Note immediately due and payable. Moreover, payment 21 of the principal balance of the Note has not been paid. 22 King's Manor Oregon are in default on the Note. 23 Investors is entitled to summary judgment on the breach of contract 24 claim as to Fisher and King's Manor Oregon on the balance of the 25 Note and the missed interest payments. 26 stayed as a result of the bankruptcy. 27 28 As personally for supporting the delivered default summary 6 - OPINION & ORDER to judgment judgment on Harder, Pierce's copies later Fisher and As such, Oregon The motion as to Harder is motion, the with At that point, breach the of same reasoning contract claim 1 supports a default judgment on that claim as to King's Manor 2 Oregon. 3 of the Order of Default, King's Manor Oregon knew, at the time the 4 Extension Agreement was signed, that defendants, and entities for 5 which they were responsible, had tens of millions of dollars of 6 outstanding debts. King's Manor Oregon was also aware at that time 7 that it would be unable to make payments as required by the Note. 8 King's Manor Oregon knew then that the proceeds of the Note would 9 be used for projects unrelated to King's Manor Oregon, King's Manor 10 Washington, or the residential care facility in Tacoma, Washington 11 which is King Manor Washington's sole asset. 12 As recited in the Complaint, and deemed true as a result King's Manor Oregon concealed the status of its financial 13 position from Oregon Investors. 14 providing a false impression to Oregon Investors and intended that 15 Oregon Investors act in accordance with that false impression. 16 Oregon Investors reasonably relied on King's Manor Oregon, was 17 unaware of King's Manor Oregon's financial difficulties, and thus, 18 did not take steps to secure payment on the loan and instead, 19 relied on the value of the security pledge and prohibition against 20 distributions to execute the Extension Agreement. 21 Oregon Investors suffered damages. King's Manor Oregon knew it was As a result, 22 Based on these facts, plaintiff demonstrates that it is 23 entitled to judgment on the fraud claim as well as the breach of 24 contract claim as to King's Manor Oregon. 25 plaintiff seeks identical damages for both claims as follows: 26 an order in plaintiff's favor that payments due to King's Manor 27 Oregon, LLC for its 50% interest in King's Manor Washington, be 28 vested in Oregon Investors as required by the terms of the Note; 7 - OPINION & ORDER In the Complaint, (1) 1 (2) an order prohibiting any distributions be made to defendants 2 from King's Manor Oregon; (3) a judgment against defendants, 3 jointly and severally, awarding Oregon Investors the $500,000 4 principal balance on the Note, plus unpaid interest through the 5 date defendants make payment in full of the Note; and (4) a 6 judgment in favor of Oregon Investors for its reasonable attorney's 7 fees. 8 9 Plaintiff seeks these same damages in its motion for default judgment against King's Manor Oregon, LLC. Other than as to 10 Harder, against whom this action is stayed, the requested damages 11 are supported by the record. 12 requested, 13 judgment. no further 14 As there are no unliquidated damages evidence is necessary before entry of CONCLUSION 15 Plaintiff's motion for partial summary judgment (#11) on the 16 breach of contract claim is granted as to Fisher and King's Manor 17 Oregon, LLC. 18 motion for default judgment (#16) is granted. 19 will be entered. 20 The motion is stayed as to Harder. Plaintiff's A separate Judgment IT IS SO ORDERED. 21 22 Dated this 14th day of January , 2009. 23 24 /s/ Anna J. Brown Anna J. Brown United States District Judge 25 26 27 28 8 - OPINION & ORDER
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