General Electric Capital Corporation et al v. Ten Forward Dining, Inc. et al

Filing 139

ORDER signed by Judge John A. Mendez on 5/24/12 ORDERING that Plaintiffs' 134 motion for voluntarily dismissal is GRANTED and all claims against Equity Lenders are dismissed. Plaintiffs' 134 motions for severance and entry of final judgment are DENIED. (Kastilahn, A)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
11
12

GENERAL ELECTRIC CAPITAL
CORPORATION; CEF FUNDING II,
LLC; and CEF FUNDING V, LLC,

13

Plaintiffs,

14
15
16

v.
TEN FORWARD DINING, INC.; et
al.;
Defendants.

17

)
)
)
)
)
)
)
)
)
)
)
)
)

Case No. 2:09-CV-03296-JAM-EFB
ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS’
MOTION FOR VOLUNTARY DISMISSAL
OF CLAIMS AGAINST EQUITY
LENDERS AND TO SEVER EQUITY
LENDERS’S COUNTER-CLAIMS, OR
IN THE ALTERNATIVE ENTRY OF
FINAL JUDGMENT

This matter is before the Court on Plaintiffs General Electric

18
19

Capital Corporation; CEF Funding II, L.L.C.; and CEF Funding V,

20

LLC’s (collectively “Plaintiffs”) Motion For Voluntary Dismissal

21

and to Sever Equity Lenders’ Counterclaims, or in the Alternative

22

For Entry of Final Judgment (Doc. # 134).1

23

citizens of Delaware.

24

Corporation, opposes the motion in part (Doc. #136).

25

filed a reply (Doc. # 137).

26

///

Plaintiffs are all

Defendant Equity Lenders, an Indiana
Plaintiffs

27
1

28

This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was originally
scheduled on May 16, 2012.
1

1
2

I.

FACTUAL ALLEGATIONS & PROCEDURAL BACKGROUND

This action originated when Plaintiffs filed their Complaint

3

on November 29, 2009 (Doc. # 1).

4

defendants Ten Forward Dining; Delightful Dining, Inc.; TGIA

5

Restaurants, Inc.; Kobra Restaurant Properties, LLC; and

6

Abolghassem Alizadeh (collectively the “Kobra Defendants”), but not

7

including Equity Lenders, defaulted on or breached seven written

8

loan contracts made with Plaintiffs.

9

secured by real and personal property generally associated with

The Complaint alleges that

The loans were allegedly

10

restaurants (the “Kobra Properties”).

11

seeks declaratory relief against Equity Lenders because Equity

12

Lenders may have liens against a subset of the Kobra Properties

13

known as the “19373 Kobra Properties” and Plaintiffs seek to

14

establish the superiority of their own liens to Equity Lenders’.

Plaintiffs’ complaint also

15

Equity Lenders alleges that the owners of the 19373 Kobra

16

Properties defaulted on their obligations to Equity Lenders in

17

2009, and Equity Lenders foreclosed on November 19 or 20, 2009.

18

early 2010, Equity Lenders alleges that it negotiated a pay-off

19

amount for Plaintiffs’ remaining interest in the 19373 Kobra

20

Properties, but that there was a dispute as to the final pay-off

21

amount.

22

Plaintiffs under protest.

23

the 19373 Kobra Properties, but gave rise to Equity Lenders’

24

counter-claims.

25

In

Equity Lenders paid the pay-off amount demanded by
The payoff resolved Plaintffs’ claim to

Upon Equity Lenders’ motion, the Court granted leave (Doc. #

26

126) to supplement its existing counterclaims with three new

27

counterclaims: 1) a counter-claim for an accounting of the actual

28

amount due to Plaintiffs after the default on the 19373 Kobra
2

1

Properties, 2) a counter-claim for declaratory relief as to the

2

parties’ interests in the 19373 Kobra Properties, and 3) a counter-

3

claim for restitution of any overpayments made by Equity Lenders to

4

Plaintiffs in relation to the 19373 Kobra Properties.

5

Lenders alleges in its counter-claims that $338,800 in default

6

interest was overpaid to Plaintiffs and $49,225.12 in attorney fees

7

were also paid, but the fees were not specifically attributed by

8

Plaintiffs to matters actually involving the 19373 Kobra

9

Properties.

10

Equity

Plaintiffs moved for summary judgment on claims 1-24 against

11

the Kobra Defendants(Doc. # 85).

12

against those defendants by order on October 3, 2011 (Doc. # 94).

13

Plaintiffs then resolved claims against or received judgment

14

against defendants County of Placer (Doc. # 100); City of Elk Grove

15

(Doc. # 101); County of Sacramento, County of Nevada, and County of

16

Shasta (Doc. # 102); Apex Property Advisors Inc. (Doc. # 109);

17

State of California Employment Development Department (Doc. # 110);

18

and Mechanics Bank and the United States of America (Doc. # 128).

Summary judgment was granted

19

Now Plaintiffs move to voluntarily dismiss their remaining

20

claims against Equity Lenders and to sever Equity Lenders’ counter-

21

claims from this action.2

22

counter-claims, Plaintiffs seek entry of final judgment as to all

23

other defendants.

24

If the Court declines to sever the

This Court has jurisdiction pursuant to 28 U.S.C. § 1332

25
2

26
27
28

Plaintiffs originally moved to voluntarily dismiss only claim 25,
which is expressly pled against Defendant. In their reply,
Plaintiffs clarified that they seek to voluntarily dismiss all
claims against Equity Lenders’ interests including claims 13 and
14.
3

1

because the lawsuit is between citizens of different states and the

2

amount in controversy exceeds $75,000.

3
4
5
6
7

II.
A.

OPINION

Legal Standard
1. Voluntary Dismissal

Federal Rule of Civil Procedure 41(a)(2) permits a party, upon

8

order of the court, to voluntarily dismiss a claim without

9

prejudice.

Westlands Water Dist. v. United States, 100 F.3d 94, 96

10

(9th Cir. 1996).

11

the court must consider whether the defendant will suffer any

12

prejudice resulting from dismissal.

13

pled a counter-claim against the party seeking voluntary dismissal,

14

the dismissal should only be granted over the defendant’s

15

objections when the counter-claim “can remain pending for

16

independent adjudication.”

17
18

When ruling on a motion for voluntary dismissal,

Id.

If the defendant has also

Fed. R. Civ. P. 41(a)(2).

2. Motion to Sever
Federal Rule of Civil Procedure 21 provides that “[a]ny claim

19

against a party may be severed and proceeded with separately.”

20

Fed. R. Civ. P. 21.

21

claim, even without a finding of improper joinder, where there are

22

sufficient other reasons . . . .’” Khanna v. State Bar of Cal., No.

23

C-07-2587 EMC, 2007 WL 2288116, at *2 (N.D. Cal. Aug. 7, 2007)

24

(citing Wyndham Assocs. v. Bintliff, 398 F.2d 614, 618 (2d

25

Cir.1968)) (alterations in original).

26

they arise from different factual situations, involve different

27

legal questions, or if doing so would be more efficient.

28

(citations omitted).

“‘[Rule 21] authorizes the severance of any

4

Claims may be severed if

Id.

1
2

3. Entry of Final Judgment
Pursuant to Federal Rule of Civil Procedure 54(b), “[w]hen an

3

action presents more than one claim for relief, or when multiple

4

parties are involved, the court may direct entry of a final

5

judgment as to . . . fewer than all claims . . . if the court

6

expressly determine that there is no just reason for delay.”

7

R. Civ. P. 54(b).

8

court must first determine that it has rendered a ‘final judgment,’

9

that is, a judgment that is ‘an ultimate disposition of an

10

individual claim entered in the course of a multiple claims

11

action.’”

12

(quoting Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7

13

(1980)).

14

reason for delay before entering final judgment.

15

B.

16
17

Fed.

In order to make such a finding, “[a] district

Wood v. GCC Bend, LLC, 422 F.3d 873, 878 (9th Cir. 2005)

Then the district court must determine if there is a just
Id.

Discussion
1. Motion for Voluntary Dismissal

Plaintiffs move for voluntary dismissal of all claims against

18

Equity Lenders.

19

satisfied the outstanding debt against the 19373 Kobra Properties,

20

the claims against Equity Lenders related to those properties are

21

resolved.

22

against it so long as none of Equity Lenders’ claims or defenses

23

are prejudiced.

24

Plaintiffs’ motion to voluntarily dismiss all claims against Equity

25

Lenders is granted.

26
27
28

Plaintiffs indicate that since Equity Lenders

Equity Lenders does not oppose dismissal of the claims

In light of Equity Lenders’ non-opposition,

2. Motion to Sever
Plaintiffs seek to sever Equity Lenders’ counter-claims from
the present action.

Plaintiffs argue that doing so will permit
5

1

them to foreclose on the other properties involved in this

2

litigation that do not involve Equity Lenders.

3

opposes severance on the grounds that its counter-claims are more

4

efficiently resolved in the present action because discovery is

5

already underway.

6

Equity Lenders

In the Court’s prior order (Doc. # 83) granting leave for

7

Equity Lenders to supplement its answer with additional counter-

8

claims related to the 19373 Kobra Properties, the Court analyzed

9

the relatedness of the counter-claims to Plaintiffs’ original

10

claims as well as the judicial efficiency of allowing the counter-

11

claims to proceed in this action.

12

Lenders’ counter-claims are related to the factual issues raised by

13

Plaintiffs’ original claims, and that judicial economy is served by

14

permitting all of the claims to proceed in one action.

The Court held that Equity

15

The Court hereby reaffirms its prior holding and notes that

16

discovery related to Equity Lenders’ counter-claims is underway,

17

making severance less efficient than proceeding with the present

18

action.

19

related to Plaintiffs’ original claims and that judicial efficiency

20

is served by adjudicating all of the claims related to the 19373

21

Kobra Properties in one action, the Court declines to sever Equity

22

Lenders’ counter-claims and Plaintiffs’ motion is denied.

23

3. Motion for Entry of Final Judgment

24

Having found that Equity Lenders’ counter-claims are

Plaintiffs also move for entry of final judgment with respect

25

to the non-Equity Lenders defendants pursuant to Rule 54(b).

26

Equity Lenders does not oppose entry of final judgment with respect

27

to the other defendants.

28

Plaintiffs’ motion fails to identify the parties as to which
6

1

final judgment is sought.

2

summary judgment with respect to the claims against the Kobra

3

Defendants (Doc. # 94).

4

judgment with respect to all of the non-Equity Lenders defendants.

5

The Court notes that the City of Grass Valley was served with the

6

Complaint, but it has not appeared in this action.

7

City of Redding filed a single stipulation establishing the

8

superiority of its lien to Plaintiffs’ (Doc. # 107).

9

clear as to which defendants entry of final judgment is sought or

10

why entry of final judgment is proper as to particular defendants

11

or claims.

12

against them in this action, which is a prerequisite for entry of

13

final judgment.

14

judgment on the basis of Plaintiffs’ motion is improper and the

15

motion is denied.

16

Plaintiffs must indicate each defendant against which entry of

17

final judgment is sought, the claim upon which final judgment

18

should be entered, and why entry of final judgment is proper as to

19

that defendant and claim.

However, the Court has not entered a

Further, the

It is not

Further, at least some defendants have no judgment

Therefore, the Court finds that entering final

In order for the Court to enter final judgment,

20
21

Plaintiffs note that the Court granted

III. ORDER
For the reasons stated above:

22

1. Plaintiffs’

23

GRANTED

24

motion

for

voluntarily

dismissal

is

Lenders

are

dismissed;

25

28

all

claims

against

Equity

2. Plaintiffs’ motions for severance and entry of final

26
27

and

judgment are DENIED.
IT IS SO ORDERED.
Dated:

May 24, 2012
7

____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE