Wright v. Old Gringo, Inc. et al, No. 3:2017cv01996 - Document 67 (S.D. Cal. 2018)
Court Description: ORDER Denying Defendants' Motion for Reconsideration in its Entirety (ECF No. 63 ). The Court denies Defendants' request to "file a sur-reply" to this Order. Signed by Judge Cynthia Bashant on 12/26/2018. (jdt)
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 10 SOUTHERN DISTRICT OF CALIFORNIA MARSHA WRIGHT, 11 Plaintiff, 12 13 14 15 v. OLD GRINGO INC, et al., Case No. 17-cv-1996-BAS-NLS ORDER DENYING DEFENDANTS’ MOTION FOR RECONSIDERATION IN ITS ENTIRETY [ECF No. 63] Defendants. 16 17 18 19 On December 13, 2018, the Court granted in part and denied in part Defendants 20 Old Gringo, Inc. (“OGI”), Ernest Tarut (“Tarut”), and Yan Ferry’s (“Ferry”) 21 (together, “Defendants”) Rule 56 motion for summary judgment. (ECF 62.) Within 22 a week’s span, Defendants have moved for reconsideration on “two discrete issues” 23 which they believe are case-dispositive. (ECF No. 63-1 at 1.) 24 25 First, although the Court granted summary judgment to Defendants on Plaintiff 26 Marsha Wright’s (“Wright”) breach of contract claim for the alleged 5% Ownership 27 Interest in the OG Entities and specific performance claim solely to the extent it is 28 based on that claim, Defendants argue that the Court also should have granted them –1– 17cv1996 1 summary judgment on Claims 2 through 7.1 They believe that “the Court did not 2 address a crucial argument made by Defendants” that if there was no binding contract 3 by which Wright agreed to provide her services in exchange for the Ownership 4 Interest or an offer of the Ownership Interest requiring Wright’s performance of such 5 services, then Wright cannot establish reliance necessary for these other claims. (Id. 6 at 1.) Second, Defendants argue that “the Court did not address Defendants’ 7 argument that Plaintiff never stated a claim for unjust enrichment and that the facts 8 do not demonstrate any basis for a claim of unjust enrichment.” (Id.) Defendants 9 request that all of Wright’s claims be dismissed with prejudice on reconsideration. 10 11 Defendants’ motion mischaracterizes the Court’s summary judgment order, 12 ignores its analysis, raises new arguments and law not cited in the initial motion, and 13 otherwise does not show that reconsideration is warranted. Thus, the Court denies 14 Defendants’ motion for reconsideration in its entirety. 15 FACTUAL SYNOPSIS2 16 17 Plaintiff Marsha Wright is a Texas-based professional designer of Western 18 apparel, including boots and handbags. (ECF No. 50-1 Ex. A Marsha Wright Decl. 19 (“Wright Decl.”) ¶¶ 3, 21.) Defendants OGI and Old Gringo, S.A. de. C.V. (“OGS”) 20 (together, the “OG Entities”) make and sell Western-style boots. (ECF No. 53 Joint 21 Statement of Undisputed Material Facts (“JSUF”) ¶ 1.) Defendants Tarut and Ferry 22 are the majority owners of the OG Entities. (Wright Decl. ¶ 10.) Wright designed 23 24 25 26 27 28 Wright’s Complaint raises eight claims: (1) breach of contract, (Compl. ¶¶ 54–65); (2) fraud and fraudulent misrepresentation, (id. ¶¶ 66–79); (3) specific performance, (id. ¶¶ 80–85); (4) promissory fraud, (id. ¶¶ 86–93); (5) concealment, (id. ¶¶ 94–103); (6) negligent misrepresentation, (id. ¶¶ 104–108); (7) promissory estoppel, (id. ¶¶ 109–112); and (8) unjust enrichment, (id. ¶¶ 113– 118). As a result of the Court’s summary judgment order, only the second through eighth remain. 1 2 The Court has already discussed the relevant factual and procedural background of this case in detail. (ECF No. 62 at 2–4.) Accordingly, the Court provides only a brief synopsis. –2– 17cv1996 1 boots for Defendants from 2005 until October 2015. (JSUF ¶ 2; Wright Decl. ¶¶ 4– 2 6.) 3 4 The dispute amongst the parties arises from a January 2013 in-person meeting 5 between Wright, Ferry and Tarut in León, Mexico. (JSUF ¶ 3; Wright Decl. ¶ 10.) 6 During the meeting, Ferry and Tarut “raised [Wright’s] compensation, to a figure that 7 Defendants paid [her] for the remainder of the time that [she] was with Old Gringo” 8 in an oral contract. (JSUF ¶ 4; Wright Decl. ¶ 10.) It is undisputed that Wright would 9 and did receive a $180,000 salary from Defendants for over two and a half years. 10 (JSUF ¶ 4; ECF No. 50-2 Steve Greenberg Decl. (“Greenberg Decl.”) ¶ 12; see also 11 Wright Dep. at 128:09–20.) Wright contends also that at the meeting Tarut and Ferry 12 also promised her a 5% Ownership Interest in both OGI and OGS. (Wright Decl. ¶ 13 10.) Tarut told Wright “on many occasions” in 2014 and 2015 “things to remind 14 [her] that [she] was now an owner or a ‘partner’ in the Old Gringo companies, and 15 needed to work extra hard[.]” (Wright Decl. ¶¶ 46–47.) Wright has never received 16 the alleged Ownership Interest. 17 18 LEGAL STANDARD 19 District courts may entertain a motion for reconsideration of an interlocutory 20 order at any time before entry of final judgment. See Fed. R. Civ. P. 54(b), 59(e); 21 Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996). Such a motion must be filed 22 no later than 28 days after entry of the order on which reconsideration is sought. Fed. 23 R. Civ. P. 59(e). 24 25 “Reconsideration is appropriate if the district court (1) is presented with newly 26 discovered evidence, (2) committed clear error or the initial decision was manifestly 27 unjust, or (3) if there is an intervening change in controlling law.” Sch. Dist. No. 1J, 28 Multnomah Cty. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). The moving –3– 17cv1996 1 party must provide a court with valid grounds for reconsideration by: (1) showing 2 some valid reason why the court should reconsider its prior decision, and (2) setting 3 forth facts or law of a strongly convincing nature to persuade the court to reverse its 4 prior decision. Frasure v. United States, 256 F.Supp.2d 1180 (D. Nev. 2003) (citing 5 All Hawaii Tours Corp. v. Polynesian Cultural Ctr., 116 F.R.D. 645, 648–49 (D. 6 Haw. 1987), rev’d on other grounds, 855 F.2d 860 (9th Cir. 1988)). 7 8 However, a motion for reconsideration is not an avenue for the moving party 9 to re-litigate the same issues and arguments upon which a court has already ruled. 10 Brown v. Kinross Gold, U.S.A., 378 F. Supp. 2d 1280, 1288 (D. Nev. 2005); Brogdon 11 v. Nat’l Healthcare Corp., 103 F. Supp. 2d 1322, 1338 (N.D. Ga. 2000). Nor is it a 12 mechanism for the moving party to seek relief simply because the party disagrees 13 with the prior order. Haw. Stevedores, Inc. v. HT&T Co., 363 F. Supp. 2d 1253, 1269 14 (D. Haw. 2005) (“Mere disagreement with a previous order is an insufficient basis 15 for reconsideration.”). Nor is it a vehicle to raise new arguments or evidence which 16 the moving party could have raised in the underlying motion, but did not. Kona 17 Enters. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000); All Hawaii Tours 18 Corp., 116 F.R.D. at 649–50. 19 20 “Whether or not to grant reconsideration is committed to the sound discretion 21 of the court.” Navajo Nation v. Confederated Tribes & Bands of the Yakama Indian 22 Nation, 331 F.3d 1041, 1046 (9th Cir. 2003) (citing Kona Enters. v. Estate of Bishop, 23 229 F.3d 877, 883 (9th Cir. 2000)). Reconsideration is “an extraordinary remedy 24 which should be used sparingly” and thus such motions “‘are disfavored and are 25 rarely granted.’” Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011); 26 IV Solutions, Inc. v. TakeCare Ins. Co., Inc., CV 13-4592-JFW (MANx), 2014 WL 27 8515781, at *1 (C.D. Cal. Feb. 28, 2014) (citation omitted); Trust Corp. v. Aetna 28 Cas. & Surety Co., 873 F. Supp. 1386, 1393 (D. Ariz. 1994)). –4– 17cv1996 DISCUSSION3 1 2 1. The Undeveloped and Unavailing “Detrimental Reliance” Argument 3 Defendants first seek reconsideration on the Court’s order denying summary 4 judgment on Claims 2 through 7 because: “[g]iven the Court’s finding that any 5 alleged ownership promise of a grant of [sic] ownership interest was entirely 6 unrelated to Plaintiff’s contemplated future work for Defendants, there is no way that 7 such promise can serve as the basis for a claim of detrimental reliance in this case.” 8 (ECF No. 63-1 at 1.) According to Defendants, they raised this “crucial argument” 9 in their initial summary judgment motion, but “the Court failed to address” it. 10 Relatedly, Defendants take issue with the Court’s determination that failure of 11 consideration does not entitle them to summary judgment on Wright’s remaining 12 claims. Defendants argue that “Defendants do not however, claim that Wright’s tort 13 claims require consideration,” but “[r]ather, the same facts which establish a lack of 14 consideration . . . also establish that Plaintiff cannot claim to have detrimentally relied 15 upon the alleged promise of a grant of the ownership interest[.]” (Id. at 3 (emphasis 16 in original removed).) The Court rejects Defendants’ arguments. 17 18 First, it is not clear to the Court whether Defendants have read their motion for Defendants expressly argued that: (1) “[e]ach of 19 summary judgment closely. 20 Plaintiff’s eight causes of action fails because the alleged contract term granting 21 Plaintiff a 5% ownership interest is not enforceable for lack of consideration,” (2) 22 “[w]ith no consideration, there is no enforceable contract term granting Plaintiff a 23 5% ownership interest. Each of Plaintiff’s contract claims (Counts 1, 3, 7, and 8) 24 fail[,]” and (3) “[e]ach of Plaintiff’s causes of action fails because there was no 25 26 27 28 Unlike their motion for summary judgment, (see generally, ECF No. 38-1), Defendants’ motion for reconsideration now makes arguments regarding the elements of promissory estoppel. (ECF No. 63-1 at 5–6.) A motion for reconsideration, however, is not an opportunity for a party to raise new legal arguments that were available to the party in its original motion. The Court therefore declines to consider this argument. 3 –5– 17cv1996 1 consideration to support the alleged oral contract term granting Plaintiff a 5% 2 ownership interest in Old Gringo.” (ECF No. 38-1 at 5, 7–8.) Thus, the Court did 3 not misconstrue Defendants’ arguments when it analyzed why failure of 4 consideration for Wright’s breach of contract claim does not entitle Defendants to 5 summary judgment on any of Wright’s remaining claims. (ECF No. 62 at 14–15.) 6 Moreover, despite claiming now that they meant the “same facts” which show lack 7 of consideration also show that Wright could not have detrimentally relied on the 8 alleged promise or grant of the Ownership Interest, Defendants solely provided legal 9 analysis on failure of consideration for a contract claim with no legal analysis 10 regarding how such failure could warrant summary judgment on Wright’s remaining 11 claims on those “same facts” as a matter of law. (Id. at 6–8; see also ECF No. 38-1 12 at 5–8.) As the Court concluded, Defendants did not meet their summary judgment 13 burden as to Wright’s remaining claims. 14 15 Second, and relatedly, Defendants did not develop their detrimental reliance 16 argument with any legal analysis in their initial motion and they fail to do so now.4 17 As Defendants recognize in their motion for reconsideration, they stated in their 18 opening brief merely that “Plaintiff cannot establish detrimental reliance in entering 19 into the contract term related to the 5% ownership interest. Plaintiff’s fraud causes 20 of action must also fail.” (ECF No. 38-1 at 7:24–8:1.)5 Defendants repeated this 21 conclusory assertion in their reply brief without citation to any law or meaningful 22 23 24 25 26 Contrary to Defendants’ apparent belief that they may litigate any underdeveloped arguments in their motion for summary judgment until they convince the Court that summary judgment should be granted in their favor, a party may not use a motion for reconsideration as an opportunity to re-hash a previously raised argument, whether that argument was fully fleshed out or not. 4 Defendants’ motion for reconsideration incorrectly cites the argument as appearing on “MSJ, p. 27, lines 4–8.” (ECF No. 63-1 at 6.) There is no page 27 in Defendants’ underlying motion and page 27 of the Court’s ECF pagination does not contain this argument, but rather Defendants’ statute of limitations argument. 5 27 28 –6– 17cv1996 1 analysis. 2 “detrimental reliance” argument as a “crucial” “bottom-line” argument, merely 3 making a conclusory argumentative statement without citation to law or analysis is 4 insufficient either to competently raise the argument for judicial consideration or for 5 a party to meet its burden on summary judgment.6 See United States v. Aguilar, 782 6 F.3d 1101, 1108 (9th Cir. 2015) (courts need not consider an undeveloped argument 7 that is not supported by citations to authority); Hibbs v. Dep’t of Human Resources, 8 273 F.3d 844, 873 n.34 (9th Cir. 2001) (finding argument “too undeveloped to be 9 capable of assessment”); Wells Fargo Bank, N.A. v. Renz, 795 F. Supp. 2d 898, 911 10 (N.D. Cal. 2011) (denying defendants’ request for summary judgment on claims for 11 which defendants “offer a string citation to various cases and California civil jury 12 instructions, without providing any explanation or analysis of how these authorities 13 support their position.”); In Re Katz Interactive Call Processing Patent Litig., 883 F. 14 Supp. 2d 935, 948 n.1 (C.D. Cal. 2010) (denying summary judgment because “the 15 argument was so undeveloped that this Court can only reject the argument for failure 16 to satisfy [movant’s] burden”); Williams v. Eastside Lumberyard & Supply Co., 190 17 F. Supp. 2d 1104, 1114 (S.D. Ill. 2001) (“A judge is . . . neither required to hunt down 18 arguments [defendants] keep camouflaged nor required to address perfunctory and 19 undeveloped arguments.”). (ECF No. 62 at 4:5–13; 10:12–15.) Despite now labelling their 20 21 22 23 24 25 26 27 28 The Court’s summary judgment order was clear regarding the multiple and substantial shortcomings in Defendants’ legal arguments. (See, e.g., ECF No. 62 at 14 (“‘Cursory research into the elements of the remaining claims would have shown Defendants that their consideration challenge to these claims is not “warranted by existing law or by a nonfrivolous argument[.]’ Fed. R. Civ. P. 11(b)(2).”); id. at 22 (“It is not the Court’s duty to make Defendants’ summary judgment arguments for them or to identify the portions of the Complaint that could support their arguments, if any, and the Court will not do so. See Bladeroom Grp. Ltd. v. Facebook, Inc., No. 5:15-cv-01370EJD, 2018 WL 514923, at *6 (N.D. Cal. Jan. 23, 2018) (“[I]t is not the Court’s duty to create arguments or find evidence” for the parties at the summary judgment stage); Blankenship v. Cox, No. 3:05-CV-00357-RAM, 2007 WL 844891, at *12 (D. Nev. Mar. 19, 2007) (“It is not the court’s duty to do Defendants’ legal research.”).) 6 –7– 17cv1996 1 Third, even as to the merits, the Court rejected the assumption implicit in 2 Defendants’ detrimental reliance argument when the Court rejected Defendants’ 3 argument that Wright cannot show fraud damages: 4 5 6 7 8 9 10 11 Wright has clearly alleged in the Complaint the specific misrepresentations by Defendants regarding the Ownership Interest on which she relied. More specifically, she alleges that Defendants intended to induce her to continue working for the OG Entities and she continued to work for the OG Entities until October 2015 based on the alleged agreement to provide Wright the Ownership Interest and increased compensation in exchange for her continued services. (Compl. ¶¶ 15, 68–70.) Lost earnings or lost profits from other business opportunities are a plausible consequence of this alleged fraudulent conduct. (ECF No. 62 at 30.) 12 Contrary to Defendants’ argument that the Court found that the Ownership 13 Interest is “entirely unrelated” to Wright’s “contemplated future work,” the Court 14 clarified how they are related such that Wright could show damages from reliance: 15 16 17 18 19 20 21 22 Of course, the Court has concluded that the undisputed evidence does not show that consideration was agreed to at the time of the January 2013 to render the Ownership Interest enforceable in contract. Even so, that the Ownership Interest is not enforceable in contract does not mean that Wright cannot seek fraud damages for lost employment or lost business opportunities. The alleged Ownership Interest misrepresentations were made alongside the contract for her services and Wright alleges that further misrepresentations were made to her by Tarut in 2014 and 2015 to induce her to work harder. (Wright Decl. ¶¶ 46–47.) (ECF No. 62 at 30 n.6.) 23 It is not clear to the Court whether Defendants overlooked the Court’s analysis 24 in their haste to file a motion for reconsideration. Nevertheless, it is clear that 25 Defendants disagree with the Court’s essential conclusion that even in the absence of 26 a contract regarding the Ownership Interest which required Wright to work for 27 Defendants, Wright has plausibly pleaded and provided evidence of her reliance on 28 Defendants’ alleged promise of the Ownership Interest. –8– Defendants’ mere 17cv1996 1 disagreement does not warrant reconsideration. Tom v. GMAC Mortg., LLC, CIV. 2 No. 10-00653 SOM/BMK, 2011 WL 2712958, at *2 (D. Haw. July 12, 2011) (“In 3 essence, [Defendants] simply disagree with the court’s analysis. That disagreement 4 does not justify reconsideration of the order.”); White v. Sabatino, 424 F. Supp. 2d 5 1271, 1274 (D. Haw. 2006) (same). Defendants do not otherwise provide the Court 6 with factual or legal arguments of a strongly persuasive nature. Thus, the Court 7 affirms its denial of summary judgment to Defendants on Claims 2 through 7. 8 9 2. The New Unjust Enrichment Argument 10 As a final matter, Defendants take issue with Wright’s unjust enrichment 11 claim. Defendants argue that “the Court failed to consider” the following argument 12 in the twelve lines in their motion for summary judgment expressly concerning 13 Wright’s unjust enrichment claim: “[c]learly, claim 8 is nothing more than a 14 restatement of Plaintiff’s breach of contract claim, and all arguments herein relating 15 to Plaintiff’s breach of contract claim apply equally to claim 8.” (ECF No. 63-1 at 7 16 (citing ECF No. 38-1 at 10:4–5.) 17 Defendants’ argument that Wright’s “unjust enrichment claim (count 8) is time- 18 barred.” (ECF No. 38-1 at 9–10.) Tellingly, this contention appeared under 19 20 The Court expressly considered and rejected Defendants’ statute of limitations 21 arguments. 22 reconsideration on that conclusion, let alone specifically as to the unjust enrichment 23 claim. Rather, Defendants now parrot back to the Court the elements of an unjust 24 enrichment claim and argue that the oral contract for Wright’s continued services to 25 the OG Entities in exchange for $180,000 plus bonuses means that Wright cannot 26 maintain an unjust enrichment claim pertaining to the alleged promise of the 27 Ownership Interest. (ECF No. 63-1 at 7–9.) (ECF No. 62 at 18–28.) Defendants, however, do not seek 28 –9– 17cv1996 1 Fatal to Defendants’ motion is that they raise entirely new arguments absent 2 from their summary judgment motion. 3 “reconsideration,” but rather they request a new ruling on arguments they could have 4 raised earlier but did not. 7 Defendants have therefore waived the arguments and may 5 not raise them now. See Sunburst Minerals, LLC v. Emerald Copper Corp., 300 F. 6 Supp. 3d 1056, 1065 (D. Ariz. 2018) (concluding that defendant’s motion for 7 reconsideration “argument does not seek reconsideration, it is a new argument that 8 [defendant] waived by not raising earlier.”); Kamaole Pointe Dev. LP v. Cty. of Maui, 9 573 F. Supp. 2d 1354, 1385 (D. Haw. 2009) (rejecting “a new argument that is not 10 As such, Defendants do not seek appropriate in a motion for reconsideration.”). 11 12 CONCLUSION & ORDER 13 For the foregoing reasons, the Court DENIES IN ITS ENTIRETY 14 Defendants’ motion for reconsideration of the Court’s summary judgment order. 15 (ECF No. 63.) The Court DENIES Defendants’ request to “file a sur-reply” to this 16 Order. (Id. at 10.) 17 18 IT IS SO ORDERED. DATED: December 26, 2018 19 20 21 22 23 Defendants implicitly recognize that their arguments regarding Wright’s unjust enrichment claim are new. Although they extol on why their “detrimental reliance” argument is not an “attempt[] to present a new argument,” (ECF No. 63-1 at 5), they omit any such representation with respect to their new unjust enrichment claim arguments. To the extent Defendants believe that they adequately challenged the sufficiency of Wright’s unjust enrichment claim, they are wrong because (1) the argument appeared in their statute of limitations analysis and (2) any pleading argument they believe they raised lacked legal analysis and, thus, was too undeveloped to meet their summary judgment burden. Wells Fargo Bank, N.A., 795 F. Supp. 2d at 911; In Re Katz Interactive Call Processing Patent Litig., 883 F. Supp. 2d at 948 n.1. 7 24 25 26 27 28 – 10 – 17cv1996
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