Cundiff v. Dollar Loan Center, LLC et al

Filing 67

ORDER Granting in part and Denying in part 27 Defendants' Motion to Dismiss Amended Complaint. The motion is granted as to counts one, two, three and six as to all Defendants. The motion is also granted as to counts five and seven as to Def endants Dollar Loan Center, LLC, Clark County Collection Service, LLC, and the Charles C. Brennan Living Trust, without prejudice. The motion is DENIED in all other respects. IT IS FURTHER ORDERED that 28 Defendants' Motion for Summary Judgm ent as to All Claims Against Defendant the Charles C. Brennan Living Trust is DENIED. IT IS FURTHER ORDERED that 34 Plaintiff's Motion for Denial or Continuance is GRANTED. Plaintiff shall file an amended complaint within 30 days of the date of this Order. Signed by Judge Philip M. Pro on 7/29/10. (Copies have been distributed pursuant to the NEF - EDS)

Cundiff v. Dollar Loan Center, LLC et al

Doc. 67

1 2 3 UNITED STATES DISTRICT COURT 4 D IS T R IC T OF NEVADA 5 6 K J E L D E N CUNDIFF, 7 P la in tif f , 8 v. 9 D O L L A R LOAN CENTER LLC, et al., 10 Defendants. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 *** ) ) ) ) ) ) ) ) ) ) )

2 :0 9 -C V -0 2 4 4 1 -P M P -P A L

ORDER

P re se n tly before the Court is Defendants' Motion to Dismiss Amended C o m p la in t (Doc. #27), filed on March 29, 2010. Plaintiff filed an Opposition (Doc. #35) on A p ril 22, 2010. Defendants filed a Reply (Doc. #46) on May 10, 2010. A ls o before the Court is Defendants' Motion for Summary Judgment as to All C la im s Against Defendant the Charles C. Brennan Living Trust (Doc. #28), filed on March 2 9 , 2010. Plaintiff filed an Opposition (Doc. #32) and a Motion for Denial or Continuance P u rs u a n t to FRCP Rule 56(f) (Doc. #34) on April 17, 2010. Defendants filed a Reply (Doc. # 4 4 ) on May 6, 2010. I . BACKGROUND A c c o rd in g to Plaintiff Kjelden Cundiff ("Cundiff"), Defendant Charles C. B re n n a n ("Brennan") was his childhood friend and former schoolmate. Plaintiff alleges th a t Brennan solicited him to leave his corporate position with Pillsbury Company in M in n e s o ta to go to work for Brennan in Las Vegas. At that time, Brennan was operating a s o le proprietorship business doing business as Dollar Loan Center, and was preparing to c o m m e n c e a collection agency doing business as Clark County Collection Service.

Dockets.Justia.com

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

B re n n a n advised Plaintiff that he was going to incorporate a business called Brencor which w a s going to own and operate Dollar Loan Center and Clark County Collection Service. Cundiff contends he did not want to leave his Pillsbury job prior to May 2001 because he w o u ld vest in that company's pension plan if he stayed until then. However, Brennan was in s is te n t that Cundiff start work for him in March 2001, and assured Cundiff that a position w ith Brencor would surpass the Pillsbury pension. Cundiff alleges that on March 1, 2001, he accepted the employment offer and b e g a n to work for Brennan performing management work. Cundiff contends that Brennan n e v e r formed Brencor as promised, and instead transferred ownership of Dollar Loan C e n te r and Clark County Collection Service to a living trust, Defendant Charles C. Brennan L iv in g Trust ("Trust"). The Trust then formed Defendants Dollar Loan Center, LLC (" D L C " ) and Clark County Collection Service, LLC ("CCCS") in April 2002. Cundiff alleges Defendants were supposed to compensate him with a $4000 s ig n in g bonus, health and dental insurance, a car allowance, and six months housing a llo w a n c e until he found a house in Las Vegas. Additionally, he was to receive an annual s a la ry increasing each year from his first through fifth years of employment from $60,000 to $ 1 0 0 ,0 0 0 , and then continuing at $100,000 for the fifth through fifteenth years of e m p lo ym e n t, and a one percent ownership interest in the business starting March 1, 2007 to b e capped at a ten percent ownership interest after fifteen years. Cundiff alleges he left Minnesota and came to Nevada to work for Defendants, s ta rtin g in March 2001 until October 21, 2009. However, Cundiff contends Defendants did n o t live up to the bargain, by failing to pay for his full monthly salary as set forth in the a g re e m e n t, by failing to pay for his health insurance, by refusing to pay his salary due and o w in g for November 2009 through March 2016, and failing to transfer one percent interest in the company on March 1, 2007, 2008, and 2009. Cundiff contends that when he brought th e s e breaches to Defendants' attention on October 21, 2009, Defendants fired him within 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

th e hour. Plaintiff alleges Defendants thus breached the contract by firing him and also by a n tic ip a to rily breaching the ownership interest transfers for the remaining years of the c o n tra c t. Cundiff therefore asserts claims for (1) breach of contract, (2) breach of the im p lie d covenant of good faith and fair dealing, (3) declaratory relief that he had a valid and b in d in g employment contract and/or that Defendants violated Nevada law by making false re p re se n ta tio n s to induce him to leave his job in Minnesota and move to Nevada, (4) n e g lig e n t misrepresentation, (5) unjust enrichment, (6) luring employee under false p re te n se s under Nevada Revised Statutes § 613.010, (7) promise with an intent not to p e rf o rm , (8) promissory estoppel, and (9) constructive trust. Defendants now move to d is m is s . Defendants also move for summary judgment, arguing the Trust is not a proper p a rty to this litigation. Plaintiff opposes both motions and moves for a denial or c o n tin u a n c e pursuant to Federal Rule of Civil Procedure 56(f). I I . MOTION TO DISMISS (Doc. #27) In considering a motion to dismiss, "all well-pleaded allegations of material fact a re taken as true and construed in a light most favorable to the non-moving party." Wyler S u m m it P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation o m itte d ). However, the Court does not necessarily assume the truth of legal conclusions m e re ly because they are cast in the form of factual allegations in the plaintiff's complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). There is a s tro n g presumption against dismissing an action for failure to state a claim. Ileto v. Glock In c ., 349 F.3d 1191, 1200 (9th Cir. 2003). A plaintiff must make sufficient factual a lle g a tio n s to establish a plausible entitlement to relief. Bell Atl. Corp. v Twombly, 550 U .S . 544, 556 (2007). Such allegations must amount to "more than labels and conclusions, [ o r] a formulaic recitation of the elements of a cause of action." Id. at 555. /// 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

A . Count one - breach of contract In Nevada, an employment contract presumptively is terminable at will. Martin v . Sears, Roebuck & Co., 899 P.2d 551, 554 (Nev. 1995); D'Angelo v. Gardner, 819 P.2d 2 0 6 , 211 (Nev. 1991). An agreement for employment for an indefinite term usually will be f o u n d to be an at-will relationship. Bally's Grand Employees' Fed. Credit Union v. W a lle n ,7 7 9 P.2d 956, 958 (Nev. 1989). "Generally, an at-will employment contract can be te rm in a te d whenever and for whatever cause by an employer without liability for wrongful d is c h a rg e if the employment is not for a definite term and if there is no contractual or s ta tu to ry restrictions on the right of discharge." Smith v. Cladianos, 752 P.2d 233, 234 (N e v . 1988). Although employment generally is at-will, "an employer may expressly or im p lie d ly agree with an employee that employment is to be for an indefinite term and may b e terminated only for cause or only in accordance with established policies or procedures." D'Angelo, 819 P.2d at 211; see also Martin, 899 P.2d at 554. This is known as a "contract o f continued employment." D'Angelo, 819 P.2d at 211 (quotation marks omitted). Additionally, an employer may bind itself to a term of lifetime employment if the parties e x p re s s ly so agree, and consideration is given therefor. Shoen v. Amerco, Inc., 896 P.2d 4 6 9 , 473-74 (Nev. 1995) (holding plaintiff could enforce lifetime employment agreement w h e re lifetime term was express and fifty-nine-year-old employee gave consideration in a g re e in g to not to provide his services to any competitor for the remainder of his life, and c irc u m s ta n c e s indicated the contract was the plaintiff's retirement deal). H e re , the document which Plaintiff sets forth as the contract provides as follows: [ Y ]o u r starting salary will be $5,000 per month ($60,000 per year) and w ill carry a guaranteed progression of the following: 1 s t year $ 6 0 ,0 0 0 annual salary 2 n d year $70,000 annual salary 3 rd year $ 8 0 ,0 0 0 annual salary 4 th year $ 9 0 ,0 0 0 annual salary 5 th year $ 1 0 0 ,0 0 0 annual salary 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

A f te r the 5th year of service, your salary will cap at $100,000 per year a n d you will begin to receive a percentage of the company to tie you in to no-charge ownership of BRENCOR. Each year for the next 10 ye a rs , on you[r] anniversary date . . . after 6 years of employment, you w ill receive 1% interest of the company as a bonus. After a 15 year p e rio d with the company, you will be receiving $100,000 per year and o w n 10% of the company. (A m . Compl., Ex. 1.) The contract's plain language establishes that it is for an indefinite p e rio d . Although Plaintiff tries to characterize it as a fifteen-year contract, the final s e n te n c e of the above-quoted provision plainly states that after fifteen years, Plaintiff would c o n tin u e to receive a $100,000 per year salary. The contract is for an indefinite term, and th u s presumptively is at-will. As such, Defendants could terminate the contract for any re a s o n without liability so long as there are no contractual or statutory restrictions on D e f e n d a n ts' right of discharge. Plaintiff has not pled any facts supporting a contractual or s ta tu to ry restriction on Defendants' right of discharge. The Court therefore will grant D e f e n d a n ts' motion to dismiss the breach of contract claim. B . Count two - breach of covenant of good faith and fair dealing B e c a u s e the employment relationship was at will, and thus Defendants could d is c h a rg e Plaintiff for any reason absent contractual or statutory restrictions, Plaintiff c a n n o t state a claim for breach of the covenant of good faith and fair dealing. Martin, 899 P .2 d at 555. The Court therefore will grant Defendants' motion to dismiss this claim. C . Count three - negligent misrepresentation N e v a d a has not addressed whether a misrepresentation as to future performance c a n be negligent. "Where the state's highest court has not decided an issue, the task of the f e d e ra l courts is to predict how the state high court would resolve it." Giles v. Gen. Motors A c c e p ta n c e Corp., 494 F.3d 865, 872 (9th Cir. 2007) (quotation omitted). "In answering th a t question, this court looks for `guidance' to decisions by intermediate appellate courts of th e state and by courts in other jurisdictions." Id. (quotation omitted). T h e Court concludes Nevada would hold that a misrepresentation as to future 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

p e rf o rm a n c e cannot be negligent because such a statement is either fraudulent, i.e., the p e rs o n never held that intention at the time he made the statement, or it was not a m isre p re s e n ta tio n at all, the person simply later failed to perform as promised. As stated by th e Restatement (Second) of Torts § 530: T o be actionable the statement of the maker's own intention must be f ra u d u le n t, which is to say that he must in fact not have the intention s ta te d . If he does not have it, he must of course be taken to know that h e does not have it. If the statement is honestly made and the intention in fact exists, one who acts in justifiable reliance upon it cannot m a in ta in an action of deceit if the maker for any reason changes his m in d and fails or refuses to carry his expressed intention into effect. C a lif o rn ia specifically rejected an attempt to base a negligent misrepresentation claim on an a lle g e d ly negligent false promise of future performance: S im p ly put, making a promise with an honest but unreasonable intent to perform is wholly different from making one with no intent to p e rf o rm and, therefore, does not constitute a false promise. Moreover, w e decline to establish a new type of actionable deceit: the negligent f a lse promise. T a rm a n n v. State Farm Mut. Auto. Ins. Co., 2 Cal. App. 4th 153, 159 (Cal. App. Ct. 1991). The Court concludes Nevada likewise would not recognize such a claim. Here, Plaintiff alleges Brennan misrepresented his intent to perform in the future. B re n n a n either intended to perform at the time he entered the contract or he did not. If he d id not intend to perform at the time he made the promise, that is an intentional m isre p re s e n ta tio n , not a negligent misrepresentation. If he intended to perform at the time h e entered the contract, then he made no misrepresentation as to his intentions. The Court th e re f o re will grant Defendants' motion to dismiss this claim. D . Count four - unjust enrichment D e f e n d a n ts contend Plaintiff cannot allege an unjust enrichment claim when he h a s alleged the existence of a written contract. Plaintiff responds that he pleads this claim in the alternative. The Court will grant Plaintiff thirty (30) days to amend to reassert this c la im without including or incorporating by reference any allegation that the parties entered 6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

in to an enforceable contract. E . Count five - Nev. Rev. Stat. § 613.010 D e f e n d a n ts move to dismiss this claim, alleging it only applies when a person in d u c e s another to move from one place or another within the state of Nevada, or induces th e person to move into the state to work in a department of labor of the state, as in a g o v e rn m e n ta l body. Defendants argue they did not induce Plaintiff to move within the s ta te , and they did not induce Plaintiff to work in a department of labor in the state. Defendants also argue the statute does not apply to highly compensated executives, as it a p p lie s to "workmen." Additionally, Defendants contend Plaintiff must allege they induced h im to come here using false representations or under false pretenses, and Plaintiff has not p le d fraud with particularity. Finally, Defendants argue DLC and CCCS cannot be liable b e c a u s e they did not even exist at the time of any alleged false statements. Plaintiff responds that the relevant statutory section applies to him because it re f e rs to "workmen of any class or calling," which would include any employee. Plaintiff a ls o contends it does not apply just to state departments of labor, as the statute makes liable a n y person, company, corporation, or organization. Nevada Revised Statutes § 613.010 provides as follows: 1 . It shall be unlawful for any person, persons, company, corporation, s o c ie ty, association or organization of any kind doing business in this s ta te by himself, herself, itself, themselves, his, her, its or their agents o r attorneys to induce, influence, persuade or engage workers to c h a n g e from one place to another in this state, or to bring workers of a n y class or calling into this state to work in any of the departments of la b o r in this state, through means of false or deceptive representations, f a lse advertising or false pretenses concerning: (a ) The kind and character of the work to be done; (b ) The amount and character of the compensation to be paid for s u c h work; (c ) The sanitary or other conditions of their employment; or (d ) The existence or nonexistence of a strike or other trouble p e n d in g between the employer and employees at the time of or prior to s u c h engagement, proposal or contract for such employment of w o rk e rs . 2 . Any person, persons, company, corporation, society, 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

a s so c ia tio n or organization of any kind doing business in this state, as w e ll as his, her, their or its agents, attorneys, servants or associates, v io la tin g any of the provisions of subsection 1 is guilty of a gross m is d e m e a n o r . 3 . Any worker of this state or any worker of another state who has been o r shall be influenced, induced or persuaded to engage with any person m e n tio n e d in subsection 1, or any company, corporation, society or o rg a n iz a tio n mentioned in subsection 1, through or by means of any of th e things therein prohibited, shall have a cause of action for recovery a n d may recover at law for all damages that the worker shall have s u s ta in e d in consequence of the false or deceptive representations, f a lse advertising or false pretenses used to induce the worker to change h is or her place of employment, or place of abode in case such worker s h a ll not be then employed at the time of such inducement and hiring, a g a in s t any person or persons, corporations, companies or associations d ire c tly or indirectly causing such damages. In any action under this s e c tio n for the recovery of such damages, the court shall have the p o w e r to award a reasonable attorney's fee in favor of the prevailing p a rty, which fee shall be taxed as costs against the losing party therein. N e v . Rev. Stat. § 613.010. Nevada never has addressed this statute's meaning. The Court th e re f o re must predict how Nevada's highest court would resolve the issue. Giles, 494 F.3d a t 872. U n d e r Nevada law, statutory construction is a question of law for the Court. Richardson Constr., Inc. v. Clark County Sch. Dist., 156 P.3d 21, 23 (Nev. 2007). The C o u rt should construe the statute to give effect to the Legislature's intent. Id. The Court b e g in s with the statute's plain statutory language, giving effect to any unambiguous la n g u a g e . Id. If the statutory language is ambiguous, the Court must "examine the statute in the context of the entire statutory scheme, reason, and public policy to effect a c o n s tru c tio n that reflects the Legislature's intent." Id. B y its plain language, the statute is not restricted to employment with a g o v e rn m e n ta l department of labor, as Defendants argue. First, liability will attach to any p e rs o n , persons, company, corporation, society, association or organization of any kind d o in g business in this state. Thus, it appears to extend to private employment, and is not f o c u s e d on inducing employment with the State as a governmental employer. Moreover, s u b s e c tio n three provides that a worker "who has been or shall be influenced, induced or 8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

p e rs u a d e d to engage with any person mentioned in subsection 1, or any company, c o rp o ra tio n , society or organization mentioned in subsection 1," has a cause of action. Id. § 613.010. Thus, the statute contemplates the worker will "engage with" private o rg a n iz a tio n s, and if that engagement is obtained through the prohibited means, the worker w ill have a cause of action. A s to Defendants' second argument, there is no basis to exempt managerial e m p lo ye e s from this statute's reach. The statute covers "workers of any class or calling." The statute does not contain an exemption for highly paid executives or management. Moreover, as discussed below, Plaintiff adequately pleads falsity with particularity as to B re n n a n . The Court therefore will deny Defendants' motion to dismiss this claim as to D e f e n d a n t Brennan. However, as to DLC, CCCS, and the Trust, Plaintiff has not alleged w ith particularity how these Defendants would be liable under the statute when they did not e v e n exist at the time of the alleged misrepresentations that induced Plaintiff to come to N e v a d a . The Court therefore will dismiss this claim as to these Defendants, without p re ju d ic e to Plaintiff amending his Complaint within thirty (30) days to plead such facts w ith particularity if there is a sufficient basis for doing so. F . Count six - declaratory judgment P la in tif f 's declaratory claims are duplicative of his substantive claims, and add n o th in g to this litigation. The Court, in its discretion, therefore will dismiss the request for d e c la ra to ry relief. See Government Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9 th Cir. 1998) (stating that avoidance of duplicative litigation is one reason for a district c o u rt to decline exercising jurisdiction over a claim for declaratory relief); Tempco Elec. H e a te r Corp. v. Omega Eng'g, Inc., 819 F.2d 746, 749 (7th Cir. 1987) (affirming denial of d e c la ra to ry relief where it would "serve no useful purpose"). G. Count seven - intent not to perform In Nevada, the failure to fulfill a promise to perform in the future may give rise to 9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

a fraud claim if the promisor "had no intention to perform at the time the promise was m a d e ." Bulbman, Inc. v. Nev. Bell, 825 P.2d 588, 592 (Nev. 1992). To state a fraud claim, th e plaintiff must allege: 1 . A false representation made by the defendant; 2 . Defendant's knowledge or belief that the representation is false (or in s u f f ic ie n t basis for making the representation); 3 . Defendant's intention to induce the plaintiff to act or to refrain from a c tin g in reliance upon the misrepresentation; 4 . Plaintiff's justifiable reliance upon the misrepresentation; and 5 . Damage to the plaintiff resulting from such reliance. Id . Plaintiff must plead his fraud claim with particularity. Fed. R. Civ. P. 9(b). Federal Rule of Civil Procedure 9(b) requires that "[i]n alleging fraud or mistake, a party m u s t state with particularity the circumstances constituting fraud or mistake." To satisfy th is burden, the complaint "`must set forth more than the neutral facts necessary to identify th e transaction.'" Yourish v. Cal. Amplifier, 191 F.3d 983, 993 (9th Cir. 1999) (footnote o m itte d ) (quoting In re GlenFed Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc)). The "neutral facts" mean the "`time, place, and content of an alleged misrepresentation.'" Id. at 993 n.10 (quoting GlenFed, 42 F.3d at 1547-48). In addition to pleading these neutral f a c ts , the plaintiff "`must set forth what is false or misleading about a statement, and why it is false. In other words, the plaintiff must set forth an explanation as to why the statement o r omission complained of was false or misleading.'" Id. (quoting GlenFed, 42 F.3d at 1 5 4 8 ). Plaintiff alleges that he met with Brennan in fall 2000 in Minneapolis, and that in N o v e m b e r 2000, Brennan faxed to Plaintiff the employment offer. (Am. Compl. at 13.) Plaintiff alleges he then flew to Las Vegas shortly after Thanksgiving and during this trip B re n n a n recruited Plaintiff to accept employment with him. (Id.) Plaintiff further alleges h e came to Las Vegas again around New Year's Eve 2000, during which trip Brennan again s o lic ite d him. (Id. at 13-14.) Plaintiff alleges Brennan advised him Brennan was going to 10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

f o rm Brencor and Plaintiff would be vice president, and eventually Plaintiff would obtain a n ownership interest in the businesses. (Id. at 14.) According to Plaintiff, he relied on th e s e representations, specifically the representation of future ownership, and quit his prior e m p lo ym e n t and moved to Nevada to accept the position. (Id. at 14-15.) Plaintiff alleges th a t "[a]t the time that Defendant Brennan made the representation that Plaintiff would earn a n d be given an ownership interest in the businesses, he had no intention of performing on th is promise." (Id. at 15.) Plaintiff alleges he was damaged as a result of his reliance on B re n n a n 's misrepresentation. (Id. at 16.) Plaintiff thus has alleged the who (Brennan), the what (misrepresentations about e m p lo ym e n t terms including ownership interest), when (late 2000, early 2001), and where (o ra l communications during various trips and in employment offer). As to why it was f a ls e , Plaintiff alleges Brennan had no intention of performing at the time he made the re p re se n ta tio n s . By Plaintiff's own allegations, Brennan performed under the contract's te rm s for four years. Although that undermines an argument that at the time Brennan made th e statements they were false, viewing the allegations in the light most favorable to P la in tif f , Plaintiff plausibly has alleged that Brennan did not intend to fulfill his promises w h e n he made them. It is plausible that Brennan intended to induce Plaintiff to work for h im for several years before the ownership interest clause was triggered, but never intended to live up to the promise of granting Plaintiff ownership interests. The Court therefore will d e n y Defendants' motion to dismiss this claim as to Brennan. H o w e v e r, Plaintiff has not alleged with particularity how or why Defendants D L C , CCCS, or the Trust are liable for this claim. None of these entities existed at the time th e alleged misrepresentations were made. The Court therefore will dismiss this claim as to th e s e Defendants, without prejudice to Plaintiff amending his Complaint within thirty (30) d a ys to plead such facts with particularity if there is a sufficient basis for doing so. /// 11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

H . Count eight - promissory estoppel D e f e n d a n ts move to dismiss this claim, arguing Plaintiff cannot plead a p ro m iss o ry estoppel claim because he already has alleged a breach of contract claim. As th e Court is dismissing the breach of contract claim, the Court will grant Plaintiff thirty (30) d a ys in which to amend to reassert the promissory estoppel claim without including or in c o rp o ra tin g allegations of a valid, enforceable contract between the parties. I . Count nine - constructive trust In Nevada, a constructive trust is "a remedial device by which the holder of legal title to property is held to be a trustee of that property for the benefit of another who in good c o n s c ie n c e is entitled to it." Locken v. Locken, 650 P.2d 803, 804-05 (Nev. 1982). A c o n s tru c tiv e trust may be appropriate where: "(1) a confidential relationship exists between th e parties; (2) retention of legal title by the holder thereof against another would be in e q u ita b le ; and (3) the existence of such a trust is essential to the effectuation of justice." Id. at 805. A constructive trust is a remedy, not a cause of action. Consequently the Court w ill not "dismiss" it, as it is not an independent claim. III. MOTION FOR SUMMARY JUDGMENT (Doc. #28)/RULE 56(f) MOTION (D o c . #34) D e f e n d a n t Trust moves for summary judgment, arguing that because it was not f o rm e d until February 11, 2002, it could not have committed any of the actions Plaintiff a lle g e s as the basis for his claims. Trust therefore argues the Court should grant summary ju d g m e n t in its favor on all claims. Plaintiff responds by arguing that the Trust is an in d is p e n s a b le party under Federal Rule of Civil Procedure 19 either because it holds legal title to Plaintiff's alleged equitable interest in the businesses. Plaintiff also moves under F e d e ra l Rule of Civil Procedure 56(f) for a denial of the Trust's motion to pursue discovery a s to the ownership structure of the various businesses. Plaintiff contends that discovery 12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

w ill show that Brennan's interests in DLC and CCCS were transferred into or are owned by th e Trust. In reply, the Trust argues that it is not an indispensable party because Brennan is th e trustee, and the Court therefore could order him, as Trustee, to transfer any interest in th e companies. The Trust also argues that Plaintiff presents no evidence raising an issue of f a c t that the Trust owns any interest in the companies, as Plaintiff's affidavit is based solely o n hearsay. In the interest of justice, the Court may grant additional time for discovery where th e opposing party to a motion for summary judgment has presented by affidavit, compliant w ith Rule 56(f), that they cannot obtain facts essential to the opposition of the motion. Fed. R . Civ. P. 56(f). However, a party seeking further discovery under Rule 56(f) bears the b u rd e n to make clear "`what information is sought and how it would preclude summary ju d g m e n t.'" Nicholas v. Wallenstein, 266 F.3d 1083, 1088-89 (9th Cir. 2001) (quoting M a rg o lis v. Ryan, 140 F.3d 850, 853 (9th Cir. 1998)). As the United States Court of A p p e a ls for the Second Circuit has noted, "it is clear that a plaintiff cannot defeat a motion f o r summary judgment by merely restating the conclusory allegations contained in his c o m p la in t, and amplifying them only with speculation about what discovery might u n c o v e r." Contemporary Mission, Inc. v. U.S. Postal Serv., 648 F.2d 97, 107 (2d Cir. 1 9 8 1 ). P u rs u a n t to Federal Rule of Civil Procedure 19(a), a party must be joined as a " n e c e s s a ry" party in two circumstances: "(1) when complete relief is not possible without th e absent party's presence, or (2) when the absent party claims a legally protected interest in the action." In re County of Orange, 262 F.3d 1014, 1022 (9th Cir. 2001) (quotation o m itte d ). If the Court finds an absent party is "necessary" under either of these tests, the C o u rt then determines whether joinder is feasible. E.E.O.C. v. Peabody W. Coal Co., 400 F .3 d 774, 779 (9th Cir. 2005). If joinder of the necessary party is feasible, then the party w ill be joined and the action will proceed. Id. 13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

G e n e ra lly, a trust is not a necessary or indispensable party where the trustee is n a m e d as a party. See, e.g., Sunbelt Envmtl. Servs., Inc. v. Rieder's Jiffy Market, Inc., 138 S .W .3 d 130, 134 (Mo. App. Ct. 2004) (trustees and beneficiaries are necessary parties); W. L if e Trust v. State, 536 N.W.2d 709, 712 (N.D. 1995) (trustee is real party in interest); C o lo . Springs Cablevision, Inc. v. Lively, 579 F. Supp. 252, 254 (D. Colo. 1984) (trustee w a s properly named defendant and trust therefore was not indispensable). In the interest of justice, the Court will grant Plaintiff's Rule 56(f) motion. The q u e s tio n of whether the Trust owns Brennan's interests in DLC and CCCS should be a very s tra ig h tf o rw a rd matter and easily ascertainable at little to no discovery costs to the parties. Although a trust generally is not a necessary party where the plaintiff has sued the trustee, n o th in g prevents the Trust's trustee from changing at any time. Plaintiff seeks as a potential re m e d y the turnover of ten percent ownership in the businesses. To the extent Plaintiff p re v a ils and shows this is the remedy to which he is entitled, such ownership interest would h a v e to be taken from the current owner, and Plaintiff contends further discovery will show th e Trust is the current owner. Consequently, the Trust may be a proper nominal defendant, n o t accused of wrongdoing itself, but with interests which may be affected by this litigation a n d without whose participation complete relief cannot be afforded. The Court therefore w ill grant Plaintiff's Rule 56(f) motion and will deny Defendant Trust's motion for s u m m a ry judgment. I V . CONCLUSION IT IS THEREFORE ORDERED that Defendants' Motion to Dismiss Amended C o m p la in t (Doc. #27) is hereby granted in part and denied in part. The motion is granted as to counts one, two, three, and six as to all Defendants. The motion also is granted as to c o u n ts five and seven as to Defendants Dollar Loan Center, LLC, Clark County Collection S e rv ic e , LLC, and the Charles C. Brennan Living Trust, without prejudice to amend to a lle g e facts supporting liability as to these Defendants on these claims. The motion is 14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

d e n ie d in all other respects. IT IS FURTHER ORDERED that Defendants' Motion for Summary Judgment as to All Claims Against Defendant the Charles C. Brennan Living Trust (Doc. #28) is hereby D E N IE D . IT IS FURTHER ORDERED that Plaintiff's Motion for Denial or Continuance P u rs u a n t to FRCP Rule 56(f) (Doc. #34) is hereby GRANTED. IT IS FURTHER ORDERED that Plaintiff shall file an amended complaint w ith in thirty (30) days of the date of this Order.

DATED: July 29, 2010 _______________________________ PHILIP M. PRO United States District Judge

15