Borelli v. Black Diamond Aggregates, Inc.

Filing 73

ORDER signed by District Judge Kimberly J. Mueller on 8/9/2017 DENYING 68 Motion for Reconsideration. (Washington, S)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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EDWARD BORELLI; CHRISTINA
PITASSI; and JAMES MUNIZ,
Plaintiffs,

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No. 2:14-cv-02093-KJM-KJN

ORDER
v.
BLACK DIAMOND AGGREGATES,
INC. and BASIC RESOURCES, INC.,
Defendants.

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On March 21, 2017, this court granted the parties’ cross-motions to compel

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arbitration. See Order, ECF No. 67. Defendants Black Diamond Aggregates, Inc. and Basic

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Resources, Inc. had argued the claims against Black Diamond should be subject to arbitration

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while the claims against Basic Resources should be stayed pending resolution of that arbitration.

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See Defs.’ Mot. to Compel Arbitration, ECF No. 46. Plaintiffs Edward Borelli, Christina Pitassi

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and James Muniz, argued that their claims were not subject to arbitration, or alternatively that

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their claims against Basic Resources should be subject to arbitration if defendants’ motions were

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granted. See Pls.’ Opp’n to Defs.’ Mot., ECF No. 52; Pls.’ Mot. to Compel Arbitration, ECF

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No. 53. The court granted defendants’ motion as to plaintiffs Pitassi and Muniz, but ordered that

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an evidentiary hearing be held to determine whether defendants’ motion would be granted as to

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plaintiff Borelli. Order 24, ECF No. 67. The court further granted plaintiffs’ motion to the extent
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that defendants’ motion would ultimately be granted, finding that Basic Resources is bound to

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arbitrate to the extent plaintiffs are. Id. The court held the arbitration clauses at issue applied

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equally to both defendants on the basis of defendants’ status as alter egos of each other. See id. at

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22–24. Basic Resources now moves for reconsideration of the determination that Black Diamond

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and Basic Resources are each other’s alter egos. ECF No. 68.

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I.

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LEGAL STANDARD
Under Rule 59(e), three grounds may justify reconsideration: (1) an intervening

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change in controlling law; (2) the availability of new evidence; or (3) the need to correct clear

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error or prevent manifest injustice. See Kern-Tulare Water Dist. v. City of Bakersfield, 634 F.

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Supp. 656, 665 (E.D. Cal. 1986), rev’d in part on other grounds, 828 F.2d 514 (9th Cir. 1987).

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Courts construing Federal Rule of Civil Procedure 59(e) have noted a motion to reconsider is not

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a vehicle permitting the unsuccessful party to “rehash” arguments previously presented, or to

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present “contentions which might have been raised prior to the challenged judgment.” Costello v.

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United States, 765 F. Supp. 1003, 1009 (C.D. Cal. 1991). These limitations “reflect[] district

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courts’ concerns for preserving dwindling resources and promoting judicial efficiency.” Id.

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In addition, Rule 60(b) provides:

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On motion and just terms, the court may relieve a party or its legal
representative from a final judgment, order, or proceeding for the
following reasons: (1) mistake, inadvertence, surprise, or excusable
neglect; (2) newly discovered evidence that, with reasonable
diligence, could not have been discovered in time to move for a
new trial under Rule 59(b); (3) fraud (whether previously called
intrinsic or extrinsic), misrepresentation, or misconduct by an
opposing party; (4) the judgment is void; (5) the judgment has been
satisfied, released or discharged; it is based on an earlier judgment
that has been reversed or vacated; or applying it prospectively is no
longer equitable; or (6) any other reason that justifies relief.

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Fed. R. Civ. P. 60(b).
“[A] motion for reconsideration should not be granted, absent highly unusual

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circumstances, unless the . . . court is presented with newly discovered evidence, committed clear

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error, or if there is an intervening change in the controlling law.” Marlyn Nutraceuticals, Inc. v.

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Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (first alteration in original)

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(quoting 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)). Further, Local
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Rule 230(j) requires that a motion for reconsideration state “what new or different facts or

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circumstances are claimed to exist which did not exist or were not shown upon such prior motion,

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or what other grounds exist for the motion,” and “why the facts or circumstances were not shown

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at the time of the prior motion.” E.D. Cal. Local Rule 230(j)(3)–(4).

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II.

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ANALYSIS
Basic Resources, though purporting to bring its motion under both Federal Rules

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of Civil Procedure 59 and 60(b), see Mot. for Recons. 4, does not address the applicable standards

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identified above. Instead, Basic Resources cites In re Fowler, 394 F.3d 1208 (9th Cir. 2005), for

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the proposition that “[m]otions to reconsider should be granted where[] . . . the court has made a

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decision outside the adversarial issues . . . presented by the parties,” Mot. for Recons. 4 (quoting

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In re Fowler, 394 F.3d at 1215 n.3 (ellipses in original)). Moreover, Basic Resources quotes In re

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Fowler wholly out of context. The language it quotes originates from a District of Kansas case,

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and the Ninth Circuit includes that language in Fowler to support its assertion that “[o]ther

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bankruptcy courts have applied different standards” than the one applied by the bankruptcy and

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district courts in that case. In re Fowler, 394 F.3d at 1215 & n.3 (citing In re Winders, 202 B.R.

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512, 517 (D. Kan. 1996)). In other words, the language does not articulate a standard adopted by

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the Ninth Circuit, but provides merely an example of the varying standards used by bankruptcy

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courts to address motions for rehearing under Federal Rule of Bankruptcy Procedure 8022

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(formerly cited as Rule 8015). See id.

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Looking to the substance of Basic Resources’ arguments, it appears it contends the

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court committed clear error in finding Basic Resources and Black Diamond were alter egos. See

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Mot. for Recons. 5 (arguing that “the [c]ourt was . . . without evidence to support its alter ego

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finding”). Basic Resources, however, fails to present any evidence that demonstrates the court

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committed clear error in making its alter ego finding. Contrary to its assertions, the court relied

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on several pieces of evidence to support its conclusion. See Order 23–24.

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The only case Basic Resources cites in its motions, other than In re Fowler, is

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Associated Vendors, Inc. v. Oakland Meat Co., 210 Cal. App. 2d 825 (1962). Aside from quoting

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a long paragraph identifying factors relevant to an alter-ego analysis, Basic Resources cites
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Associated Vendors for the proposition that “a determination to disregard corporate existence and

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find alter ego for purposes of liability is a fact-intensive analysis for the trier of fact, and not a

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question of law.” Mot. for Recons. 4 (citing Associated Vendors, 210 Cal. App. 2d at 837). Basic

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Resources does not explain the relevance of this contention, and the section cited addresses only

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the appellate standard of review applicable to a trial court’s determination that the corporate

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entity be disregarded. See Associated Vendors, 210 Cal. App. 2d at 837 (stating that such a

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determination “will not be disturbed if it be supported by substantial evidence”). Basic Resources

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falls short of demonstrating clear error or that reconsideration is otherwise warranted.

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Basic Resources requests as an alternative to reconsideration that the court

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“clarify” its order to limit its applicability to only “whether the parties should be required to

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arbitrate their dispute” and not to “the merits of alter ego at trial.” Mot. for Recons. 3. Basic

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Resources provides no authority to support the notion that entities can be considered alter egos for

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some purposes and not for others. Basic Resources has not shown that any clarification of the

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court’s prior order is warranted.

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III.

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CONCLUSION
For the reasons provided above, the court DENIES Basic Resource’s Motion for

Reconsideration. ECF No. 68.
IT IS SO ORDERED.
DATED: August 9, 2017.

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UNITED STATES DISTRICT JUDGE

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