Reality Kats, LLC et al v. Mirsyl, Inc., et al, No. 4:2016cv06957 - Document 57 (N.D. Cal. 2018)

Court Description: ORDER DENYING PLAINTIFFS MOTION TO DISMISS ACTION WITHOUT PREJUDICE AND GRANTING DEFENDANTS MOTION FOR SUMMARY JUDGMENT by Judge Claudia Wilken. (dtmS, COURT STAFF) (Filed on 3/29/2018)
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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 REALITY KATS, LLC, et al., Case No. 16-cv-06957-CW Plaintiffs, 5 ORDER DENYING PLAINTIFFS’ MOTION TO DISMISS ACTION WITHOUT PREJUDICE AND GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT v. 6 7 MIRSYL, INC., et al., 8 Defendants. (Dkt. Nos. 43, 45) United States District Court Northern District of California 9 10 11 12 13 14 15 16 17 18 19 20 21 Before the Court are two dispositive motions. On January 29, 2018, Plaintiffs Reality Kats, LLC and Dennis Simpson moved to dismiss this action voluntarily, without prejudice, pursuant to Federal Rule of Civil Procedure 41(a)(2). Defendants Mirsyl, Inc., David P. Lennon, and Novato Development, LLC oppose this motion. On February 8, 2018, Defendants moved for summary judgment against Plaintiffs. Plaintiffs filed an opposition to this motion and Defendants filed a reply. On March 27, 2018, the parties appeared for a hearing on these motions. Having considered the papers and the arguments of counsel, the Court DENIES Plaintiffs’ motion to dismiss this action without prejudice and GRANTS Defendants’ motion for summary judgment. 22 BACKGROUND 23 24 25 26 27 28 I. Sale of Novato Development Reality Kats is a limited liability company engaged in real estate development. Declaration of David P. Lennon (Lennon Decl.) ¶ 3; see also id., Ex. C at 16:1-25. manager of Reality Kats. Id. Simpson is the Novato Development is a real estate development company 1 2 which owns a residential development project in Novato, 3 California. 4 Development and were partners in several other businesses. 5 ¶ 5. Id. ¶ 2. Simpson and Jeffrey Hoyal owned Novato Id. In 2015, Simpson and Hoyal’s relationship fell apart. 7 ¶ 6. 8 Id. 9 United States District Court Northern District of California 6 $3 million. Id.; see also Lennon Decl., Ex. D (Purchase 10 Agreement). At that time, Reality Kats owned forty-three 11 percent of Novato Development, Simpson owned seven percent, 12 and Crater Lake Trust (a trust with Hoyal as trustee) owned 13 fifty percent. 14 Mirsyl to purchase Novato Development from Reality Kats, 15 Simpson, and Crater Lake Trust. 16 Because Lennon had previously represented Simpson, Reality 17 Kats, Hoyal, Crater Lake Trust, and Novato Development as their 18 attorney, Lennon advised them orally and in writing that he could 19 not act as their attorney in conjunction with the sale of Novato 20 Development. 21 Simpson and Hoyal stating: 22 23 24 25 26 27 Id. They agreed to dissolve their various joint ventures. They decided to sell Novato Development to Lennon for Purchase Agreement at 1. Lennon formed Lennon Decl. ¶ 9. On November 2, 2015, Lennon sent an email to As I have already advised, since I have previously represented both of you personally as your attorney, as well as the various owners of Novato Development and Novato Development itself, I cannot act as your attorneys in connection with this transaction. Accordingly, it is necessary for each of you to have your own attorneys review and approve these documents on your behalf. Lennon Decl., Ex. F (11/2/15 Letter). Plaintiffs in fact engaged William J. Braun, Esq. to represent them in the sale of Novato 28 2 1 Development. Lennon Decl., Exs. G and H.1 On or about November 5, 2015, the parties executed the sale, 2 which was memorialized in a Purchase Agreement. 4 also Purchase Agreement at 1. 5 executing a promissory note in the amount of that price, payable 6 in monthly installments to Reality Kats. 7 also id., Ex. I (Promissory Note) at 2. 8 sale of Novato Development, Reality Kats also extended a $500,000 9 United States District Court Northern District of California 3 Id. ¶ 10; see line of credit to Mirsyl, by way of promissory note, to Mirsyl paid the purchase price by Lennon Decl. ¶ 11, see In conjunction with the 10 facilitate further development of the property, which was 11 executed as a promissory note. 12 Promissory Note at 1. 13 ownership interest in Novato Development as collateral, as 14 governed by a Pledge Agreement. 15 Agreement). 16 II. 17 Lennon Decl. ¶ 12, see also Both promissory notes used Mirsyl’s Lennon Decl., Ex. J (Pledge This Lawsuit On November 2, 2016, Plaintiff filed this suit in Marin 18 Superior Court, alleging claims for: (1) fraud; (2) legal 19 malpractice - constructive fraud; (3) legal malpractice - dual 20 representation of adverse interests; (4) breach of fiduciary duty 21 arising out of the attorney-client relationship; (5) member’s 22 derivative action; and (6) restitution/constructive 23 trust/equitable lien. 24 Plaintiffs filed a notice of pending action with the Marin County Docket No. 1., Ex. A. At the same time, 25 1 26 27 28 Hoyal, who is not a plaintiff, decided to represent himself in the transaction because he had an LLM in tax. See Declaration of David P. Lennon in Support of Opposition to Motion to Dismiss (Lennon Opp. Decl.) ¶ 11. Hoyal executed an acknowledgment that he had been strongly advised not to do so and that Lennon did not represent him or his entities in the transaction. Id., Ex. G. 3 1 clerk, creating a cloud on Novato Development’s title. 2 Opp. Decl., Ex. K. 3 action to federal court. 4 5 6 Lennon On December 2, 2016, Defendants removed this Docket No. 1. LEGAL STANDARD III. Federal Rule of Civil Procedure 41(a)(2) Under Federal Rule of Civil Procedure 41(a)(1), a plaintiff “may dismiss an action without a court order by filing: (i) a 8 notice of dismissal before the opposing party serves either an 9 United States District Court Northern District of California 7 answer or a motion for summary judgment; or (ii) a stipulation of 10 dismissal signed by all parties who have appeared.” 11 plaintiff must seek a court order dismissing an action “on terms 12 that the court considers proper.” 13 a defendant has pleaded a counterclaim before being served with 14 the plaintiff’s motion to dismiss, the action may be dismissed 15 over the defendant's objection only if the counterclaim can 16 remain pending for independent adjudication.” 17 Otherwise, a Fed. R. Civ. P. 41(a)(2). “If Id. “In ruling on a motion for voluntary dismissal, the District 18 Court must consider whether the defendant will suffer some plain 19 legal prejudice as a result of the dismissal.” 20 Firestone Tire & Rubber Co., 679 F.2d 143, 145 (9th Cir. 1982). 21 The decision of whether to grant a voluntary dismissal is 22 “addressed to the sound discretion of the district court.” 23 Plain legal prejudice does not necessarily result simply because 24 a defendant faces the prospect of a second lawsuit or a plaintiff 25 gains some tactical advantage. 26 considered in determining whether there is legal prejudice 27 include: whether “it would be inequitable or prejudicial to 28 defendant to allow plaintiff to refile the action,” whether Id. 4 Hamilton v. Factors that may be Id. 1 “plaintiff waited until the defendant is on the verge of triumph 2 to move for a Rule 41(a)(2) dismissal,” “the defendant's effort 3 and expense in preparing for trial,” “excessive delay and lack of 4 diligence on the part of the plaintiff in prosecuting the 5 action,” and “insufficient explanation of the need to take a 6 dismissal.” 7 538, 540 (N.D. Cal. 2005). 8 IV. United States District Court Northern District of California 9 Williams v. Peralta Cmty. Coll. Dist., 227 F.R.D. Federal Rule of Civil Procedure 56 Summary judgment is properly granted when no genuine and 10 disputed issues of material fact remain, and when, viewing the 11 evidence most favorably to the non-moving party, the movant is 12 clearly entitled to prevail as a matter of law. 13 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); 14 Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 15 1987). 16 Fed. R. Civ. P. The moving party bears the burden of showing that there is 17 no material factual dispute. 18 true the opposing party’s evidence, if supported by affidavits or 19 other evidentiary material. 20 815 F.2d at 1289. 21 in favor of the party against whom summary judgment is sought. 22 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 23 587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 24 F.2d 1551, 1558 (9th Cir. 1991). 25 Therefore, the court must regard as Celotex, 477 U.S. at 324; Eisenberg, The court must draw all reasonable inferences Material facts which would preclude entry of summary 26 judgment are those which, under applicable substantive law, may 27 affect the outcome of the case. 28 identify which facts are material. The substantive law will 5 Anderson v. Liberty Lobby, 1 2 Inc., 477 U.S. 242, 248 (1986). Where the moving party does not bear the burden of proof on 3 an issue at trial, the moving party may discharge its burden of 4 production by either of two methods: 5 6 7 8 United States District Court Northern District of California 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 The moving party may produce evidence negating an essential element of the nonmoving party’s case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial. Nissan Fire & Marine Ins. Co., Ltd., v. Fritz Cos., Inc., 210 F.3d 1099, 1106 (9th Cir. 2000). If the moving party discharges its burden by showing an absence of evidence to support an essential element of a claim or defense, it is not required to produce evidence showing the absence of a material fact on such issues, or to support its motion with evidence negating the non-moving party’s claim. Id.; see also Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 885 (1990); Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). If the moving party shows an absence of evidence to support the non-moving party’s case, the burden then shifts to the non-moving party to produce “specific evidence, through affidavits or admissible discovery material, to show that the dispute exists.” Bhan, 929 F.2d at 1409. If the moving party discharges its burden by negating an essential element of the non-moving party’s claim or defense, it must produce affirmative evidence of such negation. F.3d at 1105. Nissan, 210 If the moving party produces such evidence, the burden then shifts to the non-moving party to produce specific evidence to show that a dispute of material fact exists. 28 6 Id. If the moving party does not meet its initial burden of 1 2 production by either method, the non-moving party is under no 3 obligation to offer any evidence in support of its opposition. 4 Id. 5 ultimate burden of persuasion at trial. This is true even though the non-moving party bears the 6 7 8 United States District Court Northern District of California 9 Id. at 1107. DISCUSSION I. Motion to Dismiss Without Prejudice Plaintiffs move for a court order authorizing voluntary dismissal of their suit, alleging that they wish to consolidate 10 this suit with another litigation pending against Lennon and 11 Hoyal in the state of Oregon. 12 that, because the events that gave rise to the instant action and 13 the Oregon action all took place in Oregon, and most of the 14 witnesses and attorneys reside in Oregon, “it promotes judicial 15 efficiency and reduces the burden on all parties to have all 16 claims between Plaintiffs,” Lennon and Hoyal “adjudicated in a 17 single proceeding in Oregon.” 18 the case information of the Oregon state court action in their 19 papers. 20 counsel of record in the Oregon state court action and was not 21 familiar with the any of the details of the Oregon state court 22 action, such as the case title, case number, parties involved, 23 claims implicated, or case status. 24 Motion at 4. Id. Plaintiffs argue Plaintiffs did not provide At the hearing, Plaintiffs’ counsel stated he was not Defendants point out that there is no Oregon state court 25 action brought by Plaintiffs against Defendants that is currently 26 pending. 27 Plaintiffs filed their motion to dismiss, Plaintiffs voluntarily 28 dismissed what appears to be the only Oregon state court action In fact, on January 29, 2018, the same day that 7 that was pending against Lennon at that time.2 2 LLC v. David Lennon, Jody Lennon, Case No. 17CV05360 (Jackson 3 Sup. Ct. Feb. 7, 2017) (Oregon state court action). 4 shows that Plaintiffs voluntarily dismissed the action without 5 prejudice on the eve of trial, which was scheduled for February 6 13, 2018, and while motions for summary judgment, sanctions, and 7 abatement were pending. 8 to consolidate this action with the Oregon state court action and 9 United States District Court Northern District of California 1 thus have not shown sufficient reason for dismissal without 10 prejudice. See Reality Kats The docket Plaintiffs misrepresented their intent Williams, 227 F.R.D. at 540. 11 Over the course of nine months, Plaintiffs commenced five 12 different proceedings against Lennon, in four different forums 13 and three different states, many involving the same set of facts 14 asserted here. 15 these proceedings, such as a complaint with the Oregon state bar 16 regarding the same facts alleged here, were resolved in 17 Defendants’ favor, while others, such as the Oregon state court 18 action, were voluntarily dismissed by Plaintiffs. 19 to Dismiss (MTD) at 8-13; Lennon Opp. Decl., Ex. N (Oregon state 20 bar decision). 21 “campaign of frivolous litigation,” not because they want 22 adjudication on the merits, but because they want to litigate 23 Defendants into the ground so that they will default on their 24 promissory notes and return the properties purchased, without a Id. ¶¶ 17, 30. Defendants allege that some of Opp. to Motion Defendants allege that Plaintiffs brought this 25 2 26 27 28 In Defendants’ Updated Case Management Statement, Defendants provide information for a number of cases brought by Plaintiffs, including Premier Trust of Nevada, Inc. and Simpson v. Hoyal, Case No. 17CV21456 (Jackson Sup. Ct. May 25, 2017), an Oregon state court action that is still pending. Defendants are not parties to that case, however. 8 1 fight. 2 Simpson’s CPA to Simpson speculating that Lennon might not have 3 “very much money to fight a lawsuit unless they sell assets” and 4 that he “might just return ownership to Novato to you without a 5 fight”). 6 Opp. to MTD at 2-3; Lennon Opp. Decl., Ex. T (email from There is also evidence that Plaintiffs filed for voluntary dismissal in this case to avoid an adverse ruling. 8 v. Assurity Financial Services, LLC, et al., Case No. 15-cv-4526- 9 United States District Court Northern District of California 7 See Batuhan WHO, Docket No. 50 (a court “may consider whether the plaintiff 10 is requesting a voluntary dismissal only to avoid a near-certain 11 adverse ruling.”). 12 Plaintiffs asking them to confirm that they are “no longer 13 advocating in this action that [Lennon] represented plaintiffs in 14 connection with the Novato Development transaction.” 15 Decl., Ex. P at 1. 16 several times. 17 stated that they “expect[ed] to apply to dismiss the pending 18 action without prejudice.” 19 again but received no response. 20 Defendants emailed Plaintiffs stating that the summary judgment 21 deadline was imminent and that they intended to move for summary 22 judgment on all of Plaintiffs’ claims related to the issue of 23 Lennon’s alleged representation of Plaintiffs in connection with 24 the Novato Development transaction. 25 2018, Plaintiffs stated that they were authorized to file a 26 motion to dismiss without prejudice. 27 January 29, 2018, Plaintiffs filed their motion to dismiss, 28 asserting falsely that they intended to join their claims here On January 11, 2018, Defendants emailed Lennon Opp. Defendants followed up on this request Id. at 2-5. On January 16, 2018, Plaintiffs Id. at 6. Id. 9 Defendants followed up On January 24, 2018, Id. at 10. Id. On January 26, A few days later, on with the Oregon state court action. 2 indicates that they began considering voluntary dismissal of this 3 action only after Defendants indicated that they intended to move 4 for summary judgment on an issue they do not dispute, that Lennon 5 did not actually represent Plaintiffs in connection with the 6 Novato Development transaction.3 7 Plaintiffs again to avoid adjudication on the merits of their 8 claim and enable them to bring another action against Defendants 9 United States District Court Northern District of California 1 Plaintiffs’ correspondence in another forum. Thus, dismissal would allow In sum, because several factors demonstrate that Defendants 10 11 will suffer legal prejudice if this action is voluntarily 12 dismissed, Plaintiffs’ motion must be denied. 13 Court proceeds to consider the merits of Defendants’ motion for 14 summary judgment. 15 II. 16 Accordingly, the Motion for Summary Judgment Plaintiffs fail completely to rebut the substantive 17 arguments of Defendants’ motion for summary judgment. Instead, 18 they concede what they call the “single factual premise” of 19 Defendants’ motion -- “that Plaintiffs were not represented by 20 Defendant David Lennon in the sale of Novato Development” -- and 21 advocate that the Court enter partial summary judgment on this 22 limited issue rather than on the entirety of Plaintiffs’ claims. 23 Opp. to Motion for Summary Judgment (MSJ) at 2. 24 request that the order “specifically preserve claims not 25 currently pled in the California action and specifically preserve Plaintiffs 26 3 27 28 At the hearing, Plaintiffs’ counsel confirmed that he had known that Defendants did not represent Plaintiffs in connection with the Novato Development sale since the parties attended mediation in August 2017. 10 claims that may be brought in the Oregon court.” 2 contend that this is justified because “additional facts have 3 surfaced” indicating a “broader pattern of misconduct” by Lennon, 4 Hoyal, and others, but provide no specific evidence to support 5 this allegation. 6 failure to oppose the motion for summary judgment. 7 excuse Plaintiffs’ failure to conduct any discovery in this case 8 to develop their claims. 9 United States District Court Northern District of California 1 in arguing that Defendants’ motion is based on a single factual Id. Id. Plaintiffs This does not excuse Plaintiffs’ complete Nor does it In any event, Plaintiffs are mistaken 10 premise. As explained below, Defendants have shown an absence of 11 evidence to support Plaintiffs’ case on each and every claim, 12 shifting the burden to Plaintiffs to produce “specific evidence, 13 through affidavits or admissible discovery material, to show that 14 the dispute exists.” 15 have not done so,4 summary judgment is warranted on all claims. Bhan, 929 F.2d at 1409. Because Plaintiffs 16 A. 17 Plaintiffs’ first cause of action contains two allegations Fraud 18 of fraud: (1) the balance sheet misrepresented Novato 19 Development’s assets and liabilities and (2) Lennon conspired 20 with others to create a “sham sale” of seventeen lots owned by 21 Novato Development to a third party, Rudnick Estates Realty 22 4 23 24 25 26 27 28 Plaintiffs claim that they could not adequately respond to the motion for summary judgment because they did not know whether the Court would consider their motion to dismiss and thus their time to respond was “shortened.” This does not provide an excuse for not responding to a pending summary judgment motion, which is required to be filed within fourteen days of filing the motion by Civil Local Rule 7-3, unless otherwise ordered by the Court. If Plaintiffs felt they needed more time to respond, they could have sought an extension of time pursuant to Civil Local Rule 6-1. In any event, Plaintiffs inexplicably filed their opposition twelve days late, undermining their argument that they did not have time to form an adequate response. 11 1 2 Group, Inc. (Rudnick). The Purchase Agreement provides that the “Agreement shall be construed in accordance with, and shall be governed by, the laws 4 of the State of Oregon.” 5 Oregon law, the elements of fraud are: “(1) a representation; (2) 6 its falsity; (3) its materiality; (4) the speaker’s knowledge of 7 its falsity or ignorance of its truth; (5) his intent that it 8 should be acted on by the person and in the manner reasonably 9 United States District Court Northern District of California 3 contemplated; (6) the hearer's ignorance of its falsity; (7) his Purchase Agreement at 4, 10.d. Under 10 reliance on its truth; (8) his right to rely thereon; (9) and his 11 consequent and proximate injury.” 12 Dairy Prod. Co., 190 Or. 332, 350 (1950). 13 a fraud claim by “clear and convincing” evidence, which is a 14 higher standard than a mere preponderance of the evidence. 15 Hill Gen. Contractor, Inc. v. Tandy Corp., 303 Or. 390, 402 16 (1987). 17 Conzelmann v. Nw. Poultry & A plaintiff must prove Riley Defendants point out that Plaintiffs have not adequately 18 alleged that Defendants made any misrepresentation. 19 to the first allegation of fraud, it was Plaintiffs, not 20 Defendants, who made representations about the assets and 21 liabilities of Novato Development. 22 23 24 25 26 27 With respect Section 5 states: 5. Seller hereby represents and warrants to Buyer, and covenants to Buyer, as follows . . . i. The Balance Sheet annexed hereto as Exhibit “D” materially represents the current assets and liabilities of the company as of the Effective Date. Thus, Plaintiffs cannot show that this was a misrepresentation made by Defendants. Regarding the second allegation of fraud, Plaintiffs have 28 12 1 not identified a representation. 2 Development and Rudnick is not, in and of itself, a 3 representation. 4 burden of showing a disputed issue of fact with respect to their 5 fraud claim. 6 B. 7 8 United States District Court Northern District of California 9 10 11 12 13 14 15 16 17 18 A transaction between Novato Accordingly, Plaintiffs have not met their Legal malpractice, dual representation of adverse interests, and breach of fiduciary duty Plaintiffs’ second, third, and fourth causes of action all rely on their allegation that Lennon represented Plaintiffs as an attorney in connection with the sale of Novato Development. See Complaint ¶ 33 (alleging reasonable reliance given “their attorney-client relationship); ¶¶ 39, 41 (alleging Lennon “was representing plaintiffs in the aforementioned matter” and “failed to disclose the areas of potential conflict” between Mirsyl and Plaintiffs); ¶ 45 (alleging breach of fiduciary duty based on an “attorney-client relationship that existed between defendant Lennon and plaintiffs”). Because Plaintiffs have already conceded that Lennon did not represent Plaintiffs in connection with the sale of Novato Development, these claims must fail. 19 20 21 22 23 24 25 26 27 C. Derivative action Plaintiffs’ fifth cause of action is a member derivative action that alleges that Novato Development’s assets were undervalued. Defendants contend that Plaintiffs failed to make the requisite demand and that they lack standing to bring this claim. Defendants are correct that Plaintiffs have not alleged that they made a demand on Mirsyl, the only member of Novato Development, or Lennon, the manager. While Plaintiffs alleged it was futile to make a demand on Hoyal, Hoyal resigned as a manager 28 13 1 almost a year prior to this suit, on November 5, 2015. 2 Decl., Ex. L. 3 standing to bring a derivative action because they sold their 4 ownership interest in Novato Development as a result of the 5 Purchase Agreement. 6 (9th Cir. 2010) (the “continuous ownership requirement” provides 7 that “[i]f a shareholder is divested of his or her shares during 8 the pendency of litigation, that shareholder loses standing”). United States District Court Northern District of California 9 10 D. Lennon In addition, Plaintiffs cannot show that they have Quinn v. Anvil Corp., 620 F.3d 1005, 1012 Restitution/constructive trust/equitable lien Plaintiffs’ sixth cause of action for 11 restitution/constructive trust/equitable lien alleges that 12 Defendants wrongfully acquired Novato Development, requiring 13 imposition of a constructive trust in favor of Plaintiffs in 14 order to prevent unjust enrichment of Defendants. 15 ¶¶ 56-58. 16 right. 17 This claim does not stand on its own but, rather, depends on the 18 other causes of action. 19 too, must fail. Complaint This is an equitable remedy rather than a substantive Barnes v. E. & W. Lumber Co., 205 Or. 553, 596–97 (1955). Because those claims fail, this claim, 20 E. 21 Defendants conterclaimed for attorneys’ fees pursuant to a 22 clause in the Pledge Agreement stating that a party is entitled 23 to attorneys’ fees necessary to enforce the Agreement. 24 Plaintiffs oppose Defendants’ request for attorneys’ fees, 25 contesting that this action falls within the purview of the 26 Pledge Agreement’s attorneys’ fees clause. 27 brief, they represent that they will make a separate motion for 28 fees after the Court rules on the present motions, pursuant to Attorneys’ fees 14 In Defendants’ reply 1 Federal Rule of Civil Procedure 54. At the hearing, Defendants 2 agreed to dismiss their counterclaim without prejudice so that 3 the Court could enter judgment. 4 bring a motion for attorneys’ fees pursuant to Federal Rule of 5 Civil Procedure 54. 6 dismissed without prejudice. Defendants reserve the right to Accordingly, Defendants’ counterclaim is 7 CONCLUSION The Court DENIES Plaintiffs’ motion to dismiss without 9 United States District Court Northern District of California 8 prejudice (Docket No. 43) and GRANTS Defendants’ motion for 10 summary judgment (Docket No. 45) as to all Plaintiffs’ claims. 11 Defendants’ counterclaim is dismissed without prejudice. 12 Clerk of the Court shall enter judgment in favor of Defendants, 13 who shall recover their costs from Plaintiffs. 14 The IT IS SO ORDERED. 15 16 Dated: March 29, 2018 CLAUDIA WILKEN United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 15