Katt et al v. Riepe et al

Filing 145

ORDER granting in part and denying in part 140 Motion for Reconsideration ; denying 141 Motion for Reconsideration. Signed by Judge David G Campbell on 7/31/2015.(DGC, nvo)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Brian M. Katt, et al., No. CV-14-08042-PCT-DGC Plaintiffs, 10 11 v. 12 ORDER Jordan J. Riepe, et al., 13 Defendants. 14 15 The parties have filed motions for reconsideration of the Court’s June 26, 2015 16 order. Docs. 140, 141. For the reasons stated below, the Court will grant Defendants’ 17 motion in part and deny Plaintiffs’ motion. 18 I. Background. 19 This lawsuit arises out of the sale of Plaintiffs Brian and Rachel Katt’s vehicle 20 towing business, U.S. Metro. The ten count complaint named Jordan Riepe, Janette 21 Riepe, J.A.R.R. Towing & Recovery LLC, Duane Weston, McCarthy Weston PLLC, 22 Dominic Femia, WCI Brokers, Michael Shumaker, and BizDoc Inc. as Defendants. 23 On December 10, 2014, Plaintiffs dismissed their claims against Jordan and 24 JARR. Doc. 88. They also dismissed count eight – unjust enrichment – against Janette. 25 Id. at 2. On January 6, 2015, Plaintiffs dismissed their claims against Femia and WCI 26 Brokers. Doc. 95. 27 In March 2015, Plaintiffs filed a motion for partial summary judgment (Doc. 102) 28 and Defendants Janette Riepe, Duane Weston, and McCarthy Weston PLLC filed a 1 motion for summary judgment (Doc. 113). Plaintiffs also filed a motion for default 2 judgment against Michael Shumacher and BizDoc. Doc. 96. On June 26, 2015, the 3 Court entered an order granting in part and denying in part Defendants’ motion for 4 summary judgment, denying Plaintiffs’ motion for summary judgment, and denying 5 Plaintiffs’ motion for default judgment. Doc. 138. Although several of Plaintiffs’ claims 6 were dismissed, their claims for unjust enrichment, negligence, and tortious breach of the 7 covenant of good faith and fair dealing survived the ruling. Id. at 18. Both parties ask 8 the Court to reconsider its order. 9 II. Legal Standard. 10 Motions for reconsideration are disfavored and should be granted only in rare 11 circumstances. Collins v. D.R. Horton, Inc., 252 F. Supp. 2d 936, 938 (D. Ariz. 2003). A 12 motion for reconsideration will be denied “absent a showing of manifest error or a 13 showing of new facts or legal authority that could not have been brought to [the Court’s] 14 attention earlier with reasonable diligence.” LRCiv 7.2(g)(1); see Carroll v. Nakatani, 15 342 F.3d 934, 945 (9th Cir. 2003). Mere disagreement with an order is an insufficient 16 basis for reconsideration. See Ross v. Arpaio, No. CV-05-4177-PHX-MHM, 2008 WL 17 1776502, at *2 (D. Ariz. 2008). Nor should reconsideration be used to ask the Court to 18 rethink its analysis. United States v. Rezzonico, 32 F. Supp. 2d 1112, 1116 (D. Ariz. 19 1998); see N.W. Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925-26 (9th 20 Cir. 1988). 21 III. Defendants’ Motion. 22 Defendants argue that the Court should dismiss Plaintiffs’ remaining claims for 23 unjust enrichment, negligence, and tortious breach of the covenant of good faith and fair 24 dealing. They argue that Plaintiffs dismissed the unjust enrichment claim against Janette 25 in December 2014. They also assert the Court’s factual findings mandate dismissal of the 26 remaining tort claims. 27 Defendants are correct that Plaintiffs dismissed their unjust enrichment claim 28 against Janette. Count eight – unjust enrichment – was brought against Jordan, JARR, -2- 1 Janette, Femia, and WCI Brokers. Doc. 1 at 59. Each Defendant has been dismissed via 2 stipulation. See Docs. 88, 95. This claim will be dismissed. 3 Defendants’ remaining arguments, however, were not raised in their motion for 4 summary judgment. Doc. 113. Motions for reconsideration “are not the place for parties 5 to make new arguments not raised in their original briefs.” 6 Rodgers Mech. Contr., 215 F.R.D. 581, 582 (D. Ariz. 2003). Nor is the Court obligated 7 to make arguments for Defendants when ruling on motions for summary judgment. See, 8 e.g., Weissman v. Weener, 12 F.3d 84, 86 (7th Cir. 1993) (noting that “judges should be 9 hesitant to wander too far astray – in their search for the correct legal result – from the 10 arguments presented to them by the parties”); First Fin. Bank v. CS Assets, LLC, 678 F. 11 Supp. 2d 1216, 1241 n.37 (S.D. Ala. 2010) (“As stated repeatedly herein, the Court will 12 not make or develop a party’s arguments for it on summary judgment.”). As a result, the 13 Court correctly declined to grant summary judgment on Plaintiffs’ claims for negligence 14 and breach of the covenant of good faith and fair dealing. Motorola, Inc. v. J.B. 15 Because the Court recognizes that Defendants’ failure to raise these argument may 16 result in a waste of resources for the Court and all parties, the Court will permit 17 Defendants to file a second motion for summary judgment on these claims. The motion 18 shall be filed by August 7, 2015, and shall not exceed ten pages. Plaintiffs’ response 19 shall be filed by August 21, 2015, and shall not exceed ten pages. Defendants’ reply 20 shall be filed by August 28, and shall not exceed five pages. The parties shall not file 21 separate statements of fact under LRCiv 56.1. 22 IV. Plaintiffs’ Motion. 23 Plaintiffs challenge nearly every facet of the Court’s order. Most of the arguments 24 were already addressed in the prior order and several merely disagree with the Court’s 25 analysis. See Doc. 141 at 8-16. Those arguments will not be addressed. See Rezzonico, 26 32 F. Supp. 2d at 1116 (“A motion for reconsideration should not be used to ask the court 27 to rethink what the court had already thought through – rightly or wrongly.” (internal 28 quotation marks omitted)). Plaintiffs do, however, raise a legitimate challenge to the -3- 1 Court’s analysis of their motion for default judgment. 2 committed manifest error with respect to five findings of fact. They also argue the Court 3 A. 4 Plaintiffs claim the Court committed error by finding Plaintiffs could not establish 5 the proximate causation element of any of their claims against BizDoc and Shumacher. 6 Doc. 141 at 17. They assert that proximate causation is a question for the jury. Plaintiffs 7 also assert that an intervening cause alone is insufficient to relieve a defendant from 8 liability unless it is also a superseding cause. Default. 9 “Proximate causation encompasses causation-in-fact and is generally a jury 10 question.” Piper v. Bear Med. Sys., 883 P.2d 407, 411 (Ariz. Ct. App. 1993) (emphasis 11 added). But proximate cause may be a question of law “when the facts are not only 12 undisputed but are also such that there can be no difference in the judgment of reasonable 13 men as to the inferences to be drawn from them.” Kavanaugh v. Kavanaugh, 641 P.2d 14 258, 266 (Ariz. Ct. App. 1981). In order to be a superseding intervening cause, the act 15 must be “both unforeseeable and extraordinary.” Ontiveros v. Borak, 667 P.2d 200, 206 16 (Ariz. 1983). 17 Here, the facts underlying proximate cause were undisputed: (1) Plaintiffs turned 18 over the Bill of Sale and keys to Jordan with full knowledge that he had not received 19 funding, (2) Plaintiffs extended Jordan a line of credit, (3) Plaintiffs breached the 20 Purchase Agreement, (4) Jordan refused to return U.S. Metro to Plaintiffs even after he 21 failed to remit the purchase price, and (5) Plaintiffs repeatedly failed to protect their 22 interests by canceling the contract. Doc. 138 at 17. Therefore, a reasonable jury could 23 not find proximate cause on any of Plaintiffs’ claims. Plaintiffs do not argue otherwise in 24 their motion. 25 To the extent the Court did not expressly identify the acts as “extraordinary,” it 26 does so here. The five intervening acts were not only unforeseeable by BizDoc and 27 Shumacher, but they reflected several remarkably poor business decisions by Plaintiffs in 28 which they failed to protect their interests. Plaintiffs failed to cancel the contract several -4- 1 times when circumstances were questionable, and they committed several breaches of the 2 contract themselves. What is more, Plaintiffs do not dispute these facts, nor do they 3 argue that these events are insufficient intervening superseding causes. Consequently, 4 the Court did not commit clear error and it will not reconsider its decision on this issue. 5 B. 6 Plaintiffs argue the Court erred in finding that the Bill of Sale was never delivered 7 to Weston to hold in escrow. They cite the declaration of Brian Katt, which states: 8 “Weston said that he was going to hold everything until after the vehicles were paid off.” 9 Doc. 137, ¶ 1. Based on this statement, Plaintiffs claim a reasonable jury could find the 10 Bill of Sale was delivered to Weston. But Brian’s recollection of this statement is not 11 evidence that the Bill of Sale was delivered to Weston to hold in escrow. As the Court 12 noted in its order, Plaintiffs failed to cite any evidence that the Bill of Sale was actually 13 delivered to Weston or that any party instructed him to hold the Bill of Sale as the escrow 14 agent. And the actual circumstances belie this claim, as it is undisputed that the Bill of 15 Sale was immediately turned over to the Riepes without objection from the Katts. Brian 16 did not protest until months later, after receiving advice from counsel: 17 Summary Judgment. Q. Now tell me what was said about this Asset Bill of Sale. Did [Weston] offer to hold on to it? A. I don’t recall. Q. He was not to give this to Jordan and Janette? 22 A. From my understanding, no, he was not supposed to. 23 Q. And what’s your understanding based on? A. I have spoken to my attorney and he advised me that this shouldn’t have been given to Jordan and Janette until my money came. 18 19 20 21 24 25 26 Doc. 111-5 at 29. Plaintiffs’ argument is without merit. 27 Plaintiffs also claim the Court erred in finding that “neither Plaintiffs nor any 28 Defendants contemplated, let alone instructed, Weston to hold the Bill of Sale.” -5- 1 Doc. 138 at 8. Again, they rely on Brian’s declaration. But Plaintiffs point to no 2 evidence of any party instructing Weston to hold the Bill of Sale other than Brian’s 3 declaration. In fact, Plaintiffs did not dispute this fact in their briefs. See Docs. 111, ¶¶ 4 33-35; 123, ¶¶ 33-35. And Brian testified at his deposition that he did not give Weston 5 any such instructions. Doc. 111 at 28. 6 Plaintiffs assert the Court erred in finding that the Purchase Agreement “required 7 Plaintiffs to deliver the Bill of Sale directly to Jordan on July 2, 2013.” Doc. 138 at 8-9. 8 They claim a jury could reasonably find that no such requirement existed, and that 9 instead, delivery of the Bill of Sale was not required until the purchase price was paid. 10 Doc. 141 at 6. But the Purchase Agreement explicitly stated: “Seller shall deliver to 11 Buyer, at Closing of the sale, a Bill of Sale for all Assets . . . .” Doc. 105-7 at 10. And 12 the First Amendment to the Purchase Agreement, which was executed on July 2, 13 identified the closing date as July 1. Doc. 111-7 at 2 (“The transaction shall have an 14 effective Closing Date of July 1, 2013.”). There is no testimony from any party that the 15 actual closing would take place once the funds were physically transferred. Plaintiffs’ 16 arguments are directly contradicted by the evidence. 17 Plaintiffs argue the Court erred in finding that “Plaintiffs signed the Bill of Sale 18 with full knowledge that it would be immediately turned over to Jordan even though 19 BizDoc had not funded the bridge loan.” Doc. 138 at 9. Plaintiffs again rely on Brian 20 Katt’s declaration, in which he states: “It never occurred to me that the Weston 21 Defendants would give the Bill of Sale to his client immediately[.]” Doc. 137, ¶ 1. But 22 Brian testified at his deposition that he knew the bridge loan had not been funded and he 23 did not object to Jordan taking the Bill of Sale after it was signed, nor did he instruct 24 Weston to hold it in escrow. Doc. 111-5 at 31, 34. Brian’s declaration is directly 25 contradicted by his earlier deposition testimony. And even if Plaintiffs’ claim of error 26 was well-taken, this would not change the outcome as it is undisputed that Weston never 27 received the Bill of Sale to hold in escrow. An escrow relationship was never created, 28 and Brian Katt’s subjective understanding of the situation is irrelevant. -6- 1 Lastly, Plaintiffs assert that the Court erred in finding that “Weston’s offer to act 2 as escrow agent did not come to fruition” and that “he never actually acted as escrow 3 agent.” Doc. 138 at 9. Plaintiffs argue that a reasonable jury could find Weston did act 4 as escrow agent. As the Court has already stated, “[t]here can be no escrow without the 5 conditional delivery of the instrument to a third person as the depositary.” Doc. 138 at 7 6 (citing cases in support). Plaintiffs failed to show that any funds or property were 7 delivered to Weston to hold in escrow. This is fatal to several of Plaintiffs’ claims. 8 9 Accordingly, Plaintiffs have failed to establish any manifest error in the Court’s order. The motion will be denied.1 10 IT IS ORDERED that Defendants’ motion for reconsideration is granted in part 11 and denied in part. The unjust enrichment claim against Jeanette is no longer a part of 12 this case. Plaintiffs’ motion for reconsideration (Doc. 141) is denied. Defendants may 13 file a second motion for summary judgment and it shall be briefed on the schedule set 14 forth above. 15 Dated this 31st day of July, 2015. 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Plaintiffs also assert the Court committed clear error by failing to address their request for a sur-reply. But the Court found Plaintiffs’ motion to strike adequately addressed any additional arguments raised by Defendants in their reply brief. The request was denied as moot. Doc. 138 at 17. -7-

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