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Windmill & Eastern, LLC v. Shakib

United States District Court, D. Nevada

September 24, 2014

WINDMILL & EASTERN, LLC, a Nevada limited liability company, Plaintiff,
v.
SIMON SHAKIB, an individual and as the trustee of the Nevada K, LLC Defined Benefit Pension Plan; ZANNA SHAKIB, an individual and as trustee of the Nevada K, LLC Defined Benefit Pension Plan; NEVADA K, LLC, a Nevada limited liability company, and DOES I through X; and ROE ENTITIES I through X, inclusive, Defendants.

ORDER

LLOYD D. GEORGE, District Judge.

Defendants Nevada K, LLC, Simon Shakib, and Zanna Shakib filed a motion to dismiss this matter for lack of jurisdiction (#46). The parties also filed cross-motions for summary judgment (## 30, 32, 41, 42). The Court held a hearing on these cross-motions on December 18, 2013.

Summary Judgment

To succeed on a motion for summary judgment, the moving party must show (1) the lack of a genuine issue of any material fact, and (2) that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56©. The essential question when considering a motion for summary judgment is whether "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). If so, summary judgment is not proper. Id.

Determining materiality is a separate consideration from the question of whether a genuine issue exists. Anderson, 477 U.S. at 248. A material fact is one required to prove a basic element of a claim. Id. The substantive law of the case determines which facts are material. Id. However, the determination of materiality changes slightly when one party's case consists of multiple essential elements, all of which must be satisfied under the substantive law. In such a case, when the moving party can demonstrate that the nonmoving party "fail[ed] to make a showing sufficient to establish the existence of an element essential to [the nonmoving] party's case, " all other facts become immaterial. Celotex Corp. v. Catrett, 477 U.S. 321, 322-323 (1986).

Of course, the moving party bears the burden of showing the district court those portions of the record "which it believes demonstrate[] the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. A party may also object that material cited to "dispute a fact cannot be presented in a form that is admissible in evidence." Fed.R.Civ.P. 56(c)(2). The moving party need not negate the nonmoving party's claim, but must show the lack of a genuine issue of material fact. Celotex, 477 U.S. at 323.

Once a moving party has met its burden, a party opposing summary judgment must provide sufficient facts to show the existence of a genuine issue of material fact. Fed.R.Civ.P. 56(c). Mere allegation or denial is insufficient if not supported by citation to particular parts of materials in the record that establish the existence of a genuine issue. Fed.R.Civ.P. 56(c); see also Block v. City of Los Angeles, 253 F.3d. 410, 418-19 (9th Cir. 2001) (finding an affidavit insufficient under Rule 56(c) because, in part, it was "based on inadmissible hearsay"); F.T.C. v. Publishing Clearing House, Inc., 104 F.3d. 1168, 1171 (9th Cir. 1997) ("[A] conclusory, self-serving affidavit, lacking detailed facts and any supporting evidence, is insufficient to create a genuine issue of material fact").

When considering a motion for summary judgment, it is not the court's role to "determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S., at 249. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S., at 249-250 (citations removed). However, "[i]f reasonable minds could differ as to the import of the evidence, " summary judgment is not proper. Id. at 250. Nevertheless, in so considering, the court must view all inferences drawn from the moving party's materials "in the light most favorable to the opposing party." Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970).

Background

Defendants, Simon Shakib and Nevada K, LLC, opened certificate of deposit #XXXXXXXXXX on September 8, 2006. The face of the document shows it was issued to "Nevada K LLC" and "Simon K Shakib." On July 30, 2007, defendants signed a security agreement with Bank of Nevada in which they pledged certificate of deposit #XXXXXXXXXX ("pledged CD") as security for a loan Bank of Nevada made to a third-party borrower. Two months later, defendants rolled the pledged CD over into a new certificate of deposit ("rollover CD"). The face of the rollover CD shows it was issued to Nevada K, LLC Defined Benefit Pension Plan, a pension plan for the employees of Nevada K.

The borrower defaulted on the loan and a state court awarded a deficiency judgment against Simon Shakib. Plaintiff asserts it is entitled to offset the outstanding debt due with money from the pledged CD now in the rollover CD. Defendants contend the pledged CD was the asset of Nevada K, LLC Defined Benefit Pension Plan, a plan they further contend was subject to the Employee Retirement Income Security Act of 1974 (ERISA), could not have been pledged, and must be returned to the pension plan. Plaintiff seeks declaratory judgment that when defendants pledged the CD: (A) the pension plan was not subject to ERISA and (B) the pledged CD was not an asset of the pension plan.

Defendants' Motion to File Additional Supplement to Prior Opposition to Motion for Summary Judgment

As an initial matter, on March 16, 2014, defendants filed a motion to supplement their opposition to motion for summary judgment and counter-motion for summary judgment (#48, opposition #50, reply #51). Defendants seek to file documents to be considered in deciding the pending motion for summary judgment. The documents include actuarial valuations prepared on November 8, 2011, identifying Barry Schreiber as a Nevada K Plan participant, handwritten notes, and bank statements. The hearing on the cross motions for summary judgment was scheduled on December 6, 2013, and conducted on December 18, 2013. At the time the hearing was scheduled, the Court instructed counsel to be prepared to address "the adequacy of the showing of the existence of a third employee participant in Nevada K, LLC Defined Benefit Pension Plan."

Defendants do not dispute that their supplemental documentation is unauthenticated and was not produced during discovery. Nor do defendants dispute that they had possession of the documentation for nearly a decade. Rather, defendants argue that the documents have also been in the possession of plaintiff or its predecessors and were not produced by plaintiff pursuant to Fed.R.Civ.P. 26. However, if the discovery rules are to have any meaning, it would be that an obligation lies on the party responding to discovery to produce requested documentation upon which its case relies, and not be allowed to continue to produce, without cause, additional documentation years after the close of discovery, and months after a hearing on dispositive motions. Moreover, the rules do not contemplate that, in responding to discovery, a party is excused from producing documents critical to its case because they are presumably in the possession of an opposing party. Defendants provide no good cause for the delay, and it would be extremely burdensome at this time on the Court and plaintiff to reopen discovery, repeat dispositive motions, and delay a review of the merits based on newly presented documents. Furthermore, defendants were put on notice on December 6, 2013, that one of the issues in the hearing would be the existence of a third party participant in the plan, yet did not request to supplement ...


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