Haloossim v. Hyatt Corporation et al
Filing
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ORDER granting 69 Motion to Join as to the joinder; denying 63 Motion for Summary Judgment. Signed by Chief Judge Robert C. Jones on 3/14/13. (Copies have been distributed pursuant to the NEF - JC)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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Plaintiff,
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v.
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HYATT CORPORATION, S. FRANKFORD )
& SONS, INC. and TEN UNKNOWN
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ENTITIES,
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Defendants.
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___________________________________
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MARK HALOOSSIM,
3:12-cv-258-RCJ-WGC
ORDER
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Currently before the Court are Defendant S. Frankford & Sons, Inc.’s Motion for
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Summary Judgment on Plaintiff’s Claims for Loss of Income (#63) and Defendant Hyatt
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Corporation’s Motion to Join in Defendant S. Frankford & Sons, Inc.’s Motion for Summary
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Judgment on Plaintiff’s Claims for Loss of Income (#69).
BACKGROUND
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I.
Complaint
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In January 2012, Plaintiff Mark Haloossim filed his first amended complaint for damages
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in federal court based on diversity jurisdiction against Defendants Hyatt Corporation (“Hyatt”)
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and S. Frankford & Sons, Inc. (“Frankford”) (collectively “Defendants”). (First Am. Compl. (#8)
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at 1-2). The complaint alleged the following. (Id. at 3). On or about May 25, 2010, the Hyatt
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purchased four #845WM-FGA 7 ½' x 8 rib Wooden Market Umbrellas-Acrylic-Wood Center
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Pole-Pulley Lift-No Tilt-Forest Green from Frankford for use on the Sierra Vista Deck of the
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Sierra Café located at the Hyatt Regency Lake Tahoe Resort, Spa, and Casino in Incline
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Village, Nevada. (Id. at 2-3). The Hyatt invited members of the general public to eat outside
on the Sierra Vista Deck. (Id. at 3). On or about July 4, 2010, Plaintiff was legally and lawfully
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having brunch with his family on the Sierra Vista Deck at the Sierra Café when one of the
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umbrellas used on the deck broke and struck Plaintiff on the head causing personal injuries.
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(Id.). Defendants knew, or in the exercise of due care, should have known, that injury to
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Plaintiff could have and would have resulted from the unsafe use and/or dangerous condition
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of the umbrellas used on the deck. (Id. at 3-4).
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The complaint alleged two causes of action. (Id. at 4-5). In the first cause of action,
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Plaintiff alleged negligence against all Defendants. (Id. at 4). Plaintiff alleged that as a direct
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and proximate result of Defendants, he was hurt and “injured in his health, strength and
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activity, sustaining injury to his nervous system and person, all of which . . . caused and will
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continue to cause . . . great mental, physical and nervous pain and suffering.” (Id.). As a
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result of Defendants’ conduct, Plaintiff had to employ physicians and surgeons to examine,
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treat, and care for him. (Id.). Plaintiff incurred medical and incidental expenses in the sum of
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$34,390.77 and additional expenses in the amount unknown at this time. (Id.). Plaintiff “was
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prevented from attending to his usual occupation and sustained a loss of earnings in the sum
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of $150,000.00.” (Id. at 5).
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In the second cause of action, Plaintiff alleged defect in design-products liability against
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Frankford. (Id.). Plaintiff alleged that Frankford had induced Hyatt to purchase umbrellas that
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Frankford had manufactured, sold, and warranted to be good and of merchantable quality.
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(Id.). The umbrellas and “their component parts were defective as to design, manufacture,
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and warnings, causing the umbrellas and their component parts to be in a dangerous and
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defective condition that made them unsafe for their intended use.” (Id. at 6). The umbrellas
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were not, at the time of sale and warranty, of good and merchantable quality. (Id.). Unknown
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to Plaintiff, “one of the umbrellas was in fact of bad quality at the time of sale, unfit for use,
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breaking when used causing [P]laintiff to suffer damages in a sum in excess of $200,000.00.”
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(Id.).
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Plaintiff sought general damages for pain and suffering in the amount of $100,000.00,
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medical and related expenses in the sum of $34,390.77, actual damages for loss of income
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in the sum of $150,000.00, costs, prejudgment interest, and attorneys’ fees. (Id.).
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II.
Summary Judgment Evidence
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Plaintiff’s response to the Hyatt’s special interrogatories, set one, stated the following.
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(Special Interrogatories (#64-1) at 2). Plaintiff was the President and 55% shareholder of
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Contempo Floor Coverings, Inc. (“Contempo”) located in Los Angeles, California. (Id. at 3).
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Contempo was engaged in the business of retail and wholesale flooring and window coverings.
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(Id.). Plaintiff alleged lost earnings in the amount of $38,000.00. (Id. at 5). Plaintiff stated that
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he was responsible for generating most of the sales at Contempo and that Contempo
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employed commission sales personnel who were responsible for dealing with his clients and
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referrals while he was unavailable because of the injuries he had sustained. (Id.). Plaintiff did
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not contend that he would lose income in the future as a result of the incident. (Id.).
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Plaintiff’s amended responses to the Hyatt’s special interrogatories, set one, stated the
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following. (Am. Special Interrogatories (#64-2) at 2). Plaintiff’s yearly income depended on
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many factors including sales, profit, employee commissions and availability of funds. (Id.).
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Plaintiff’s annual income was based on payment of his monthly salary ($21,000) plus bonuses
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in that 12-month period. (Id.). Profit varied based on total sales and expenses including the
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payment of commissions to the sale staff. (Id. at 2-3). Plaintiff clarified that his loss of
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earnings in the amount of $38,000 was based on the fact that he was not able to work full-time
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due to his injuries. (Id. at 3). He calculated his loss
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by adding 2009 July to Dec. figure for [his] sales, $825,489.98, to [his] 2011
July-Dec sales of $939,331.77 = $1,764,821.75. [He] divided this number by 2
creating an average of $882,410.87. Subtracting $668,921.66 from the
$882,410.87 = $213,489.87. Contempo realizes a 32-33% profit on sales and
[he] multiplied $213,489.87 x 32.5% (.325) = $69,384. [He] then multiplied
$69,384 x .55 = $38,161. Additionally, [he] missed a yearly opportunity to travel
to China for a trade show but [could not] predict lost opportunities from this
missed trip.
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(Id.). Plaintiff provided a chart with his earnings and sales for past years. (Haloossim Chart
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(#64-2) at 7). Plaintiff’s W-2 was for $346,200 in 2009, $387,049 in 2010, and $352,581 in
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2011. (Id.). Plaintiff’s sales from July to December was $825,489.98 in 2009, $668,921.66
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in 2010, and $939,331.77 in 2011. (Id.).
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In his deposition, Plaintiff testified to the following. (Haloossim Depo. (#64-3) at 2).
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Plaintiff was a 55% shareholder in the business and his brother owned the remaining interest.
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(Id. at 10). Plaintiff received a salary of $21,000 per month from the corporation and received
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that salary during July 2010 through December 2010. (Id. at 31). After tax returns were
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completed at the end of each year, Plaintiff and his brother made tax decisions. (Id.).
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Specifically, if it was “best to distribute that extra benefit or added compensation to the
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officers” they did.
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reason–personal or corporate reason.”
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compensation which he stated was “subjective.” (Id.). The main factor that went into the
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decision each year was “corporate versus individual in terms of . . . benefits of what would be
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the best way to distribute . . . whatever money [was] left.” (Id.). Plaintiff agreed that, in any
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given year, he could decide not to distribute some of the added compensation because he
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could need it for the corporation the following year depending on planning. (Id. at 31-32).
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Plaintiff was in charge of buying, managing, promoting, selling, and importing at Contempo.
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(Id. at 32).
(Id.).
However, there were years that they did not “for whatever
(Id.).
That was how Plaintiff got his added
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Upon being asked how Contempo determined that it realizes a 32-33% profit on sales,
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Plaintiff responded, “Well basically when we figure our gross sales . . . versus the cost of
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material and labor and . . . you deduct that shows that . . . about 30 or 32 percent of or 33–it
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depends, you know, depending on the product but between 32 to 33 percent, 35 percent of
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the gross is our gross profit.” (Id. at 34-35). The 32-33% was gross profit not net profit. (Id.
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at 35). Plaintiff asserted that he was claiming himself as an individual in terms of lost earnings
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and had calculated how much sales he had done before and after the incident. (Id. at 35-36).
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He explained that this number had nothing to do with his staff because it involved his sales not
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Contempo’s sales. (Id.). He explained that if he had bought an umbrella from a company for
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$5 and sold it for $10, he would deduct 10 from 5 and have 50% profit. (Id. at 35). Plaintiff
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stated that his W-2 form had “nothing to do with what [he was] claiming here in terms of loss
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of earning.” (Id. at 47).
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LEGAL STANDARD
In reviewing a motion for summary judgment, the court construes the evidence in the
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light most favorable to the nonmoving party. Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.
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1996). Pursuant to Fed.R.Civ.P. 56, a court will grant summary judgment “if the movant shows
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that there is no genuine dispute as to any material fact and the movant is entitled to judgment
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as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are “facts that might affect the outcome
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of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106
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S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A material fact is “genuine” if the evidence is such
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that a reasonable jury could return a verdict for the nonmoving party. Id.
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The moving party bears the initial burden of identifying the portions of the pleadings and
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evidence that the party believes to demonstrate the absence of any genuine issue of material
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fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265
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(1986). A party asserting that a fact cannot be or is genuinely disputed must support the
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assertion by “citing to particular parts of materials in the record, including depositions,
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documents, electronically stored information, affidavits or declarations, stipulations (including
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those made for purposes of the motion only), admissions, interrogatory answers, or other
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materials” or “showing that the materials cited do not establish the absence or presence of a
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genuine dispute, or that an adverse party cannot produce admissible evidence to support the
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fact.” Fed. R. Civ. P. 56(c)(1)(A)-(B). Once the moving party has properly supported the
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motion, the burden shifts to the nonmoving party to come forward with specific facts showing
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that a genuine issue for trial exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
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U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). “The mere existence of a
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scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be
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evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252,
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106 S.Ct. at 2512. The nonmoving party cannot defeat a motion for summary judgment “by
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relying solely on conclusory allegations unsupported by factual data.” Taylor v. List, 880 F.2d
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1040, 1045 (9th Cir. 1989). “Where the record taken as a whole could not lead a rational trier
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of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita, 475
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U.S. at 587, 106 S.Ct. at 1356.
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DISCUSSION
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On November 26, 2012, Frankford filed a motion for summary judgment on Plaintiff’s
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claims for loss of income. (Mot. for Summ. J. (#63)). The next day Frankford filed an errata
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to the motion for summary judgment stating that its original motion for summary judgment
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inadvertently left the exhibit numbers off in the footnotes. (Errata to Mot. for Summ. J. (#64)
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at 1). The Court will cite to the errata.
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On December 20, 2012, Hyatt filed a motion to join in Frankford’s motion for summary
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judgment. (Mot. for Joinder (#69)). The Court grants Hyatt’s motion to join in Frankford’s
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motion for summary judgment.
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In the motion for summary judgment, Frankford asserts that Plaintiff originally claimed
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$150,000 in loss income but now claims loss of income in the sum of $38,000 in his
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interrogatory responses. (Errata to Mot. for Summ. J. (#64) at 3). Frankford argues that
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Plaintiff, as an individual, did not sustain any loss of income in the year he was injured or the
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proceeding eight to nine months following the incident. (Id. at 5). Frankford asserts that,
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Plaintiff received his monthly salary of $21,000 even after the July 2010 accident. (Id.).
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Frankford argues that according to the chart Plaintiff provided, Plaintiff’s personal income from
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Contempo in 2010 was $387,049.00 and decreased to $352,581.00 in 2011 when Plaintiff
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came back to work. (Id.). Frankford asserts that Plaintiff did not receive a decrease in his
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salary or his total compensation in 2010 when the accident occurred. (Id.). Frankford argues
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that the additional compensation that Plaintiff received as an officer after tax returns were
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completed was subjective and did not occur every year. (Id.). Frankford asserts that the
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additional compensation was subjective and depended on many different elements that were
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not the result of the July 4, 2010 incident. (Id.). Frankford asserts that without an actual loss
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of income there exists no basis to award damages for lost income. (Id.). Frankford argues
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that Plaintiff’s evidence of lost income is speculative and asserts that Plaintiff cannot articulate
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with any degree of certainty or clarity how he determined that Contempo realizes a 32-33%
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profit on sales. (Id. at 7). Frankford asserts that Plaintiff stated that the amount lost was
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based on the loss of the corporation because Plaintiff was not able to service the corporation
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as well as he would have otherwise had. (Id.).
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In response, Plaintiff asserts that the parties agree to the nature of the evidence but
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disagree as to whether it meets the threshold for establishing his claim. (Opp’n to Mot. for
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Summ. J. (#72) at 2). Plaintiff argues that he had testified that his added compensation was
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diminished because (a) he could not attend to his regular clientele and, as a result, these
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transactions had to be delegated to other sales personnel that Contempo had to pay
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commission to, and (b) he was not available to generate sales regardless if the latter part of
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2010 was a good or bad year. (Id. at 2-3).
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In reply, Frankford argues that Plaintiff cannot articulate how he came up with the 32-
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33% mark-up and, thus, his figures are speculative. (Reply to Mot. for Summ. J. (#73) at 3).
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Frankford also argues that, even if Plaintiff could explain that percentage, Plaintiff’s testimony
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is that the company received the loss and not Plaintiff. (Id. ). Frankford contends that the
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argument that there was a reduction to the amount payable to shareholders fails because the
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potential end of the year payout was subjective, not always paid, and the evidence showed
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an increase in sales from July to December 2010 when Plaintiff was away from work. (Id. at
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4).
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In Nevada, the “rule against the recovery of uncertain damages generally is directed
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against uncertainty as to the existence or cause of damage rather than as to measure or
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extent.” Brown v. Lindsay, 228 P.2d 262, 266 (Nev. 1951). The rule barring recovery is not
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applicable if a court perceives no uncertainty as to the existence of lost profits. Gen. Elec.
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Supply Co. v. Mt. Wheeler Power, Inc., 587 P.2d 1312, 1313 (Nev. 1978). “The existence and
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extent of lost profits . . . become[s] issues of evidentiary weight instead of admissibility.”
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Houston Exploration Inc. v. Meredith, 728 P.2d 437, 439 (Nev. 1986).
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In this case, the Court denies Defendants’ motion for summary judgment on Plaintiff’s
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claim for lost income. The Court finds that there is no uncertainty that lost income or profits
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could have resulted from Plaintiff’s injuries during July 2010 and December 2010 when he was
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unable to work full time for Contempo. The Court finds that the dispute between the parties
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is the measure or extent of the lost profits and not to the existence or cause of the alleged lost
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profits.
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The Court also finds that a rational trier of fact could find for Plaintiff. It is true that
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Plaintiff’s W-2 form from Contempo demonstrates that he made more money in 2010 when
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he was injured and could not work full time than he did working full time in 2011. However,
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these numbers are based on Contempo’s success as a whole and not solely on Plaintiff’s
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capacity as an employee. A closer look at Plaintiff’s figures demonstrate that in 2009 his
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personal sales were $1,757,491.39 for the company, in 2010 they were $1,475,941.61, and
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in 2011 they were 1,706,607.20. (See Haloossim Chart (#64-2) at 7). A breakdown of those
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numbers demonstrates that Plaintiff’s sales in 2009 from July to December were $825,489.98,
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in 2010 they were $668,921.66, and in 2011 they were $939,331.77. (See id.). As such, a
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rational trier of fact could find that Plaintiff’s July 4, 2010 injuries impacted his sales
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productivity from July 2010 through December 2010 resulting in lost income/profits as an
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individual sales person. Therefore, the Court finds that there is a genuine issue of material
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fact as to the extent of Plaintiff’s lost profits and that the matter should proceed to a jury.
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Accordingly, the Court denies Defendants’ motion for summary judgment on Plaintiff’s claims
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for loss of income (#63).
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CONCLUSION
For the foregoing reasons, IT IS ORDERED that Defendant S. Frankford & Sons, Inc.’s
Motion for Summary Judgment on Plaintiff’s Claims for Loss of Income (#63) is DENIED.
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IT IS FURTHER ORDERED that the Hyatt Corporation’s Motion to Join Defendant S.
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Frankford & Sons, Inc.’s Motion for Summary Judgment on Plaintiff’s Claims for Loss of
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Income (#69) is GRANTED as to the joinder. However, the motion for summary judgment on
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Plaintiff’s claims for loss income (#63) is DENIED for the reasons stated above.
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14th day of March, 2013.
DATED: This _____ day of March, 2013.
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_________________________________
United States District Judge
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