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Capital Holdings Enterprises, LLC v. Seashore Marketing Group, LLC

United States District Court, D. Nevada

February 24, 2017

CAPITAL HOLDINGS ENTERPRISES, LLC, a Nevada limited liability company, Plaintiff,
SEASHORE MARKETING GROUP, LLC, a California limited liability company, Defendant.


          Gloria M. Navarro, United States District Court Chief Judge

         Pending before the Court is Plaintiff Capital Holdings Enterprises, LLC's (“Plaintiff's”) Motion for Summary Judgment. (ECF No. 14). Defendant Seashore Marketing Group, LLC (“Defendant”) did not file a Response, and the deadline to do so has passed.

         I. BACKGROUND

         The case arises out of a Loan Agreement and Promissory Note (collectively, the “Loan Documents”) between two third-party companies, Pinnacle Solutions Enterprises, Inc. (“Pinnacle”) and Celebrity Beverage Group, LLC (“Celebrity”). (Compl. ¶ 6, Ex. A to Not. of Removal, ECF No. 1). Celebrity representative and CEO Keith Aaron Hale (“Hale”) personally guaranteed the loan. (Id. ¶ 8). As alleged in the Complaint, Pinnacle loaned Celebrity $148, 640.60 on April 29, 2013, which was to be repaid on May 2, 2013, at 3:00 p.m. EST, with 10 percent interest per month if default, along with costs and expenses. (Id. ¶¶ 6, 7, 9). Plaintiff alleges that Celebrity and Hale failed to tender payment on May 2, 2013. (Id. ¶ 10). Since then, Pinnacle has assigned its rights under the Loan Documents to Plaintiff, and Defendant has assumed all liabilities and obligations under the Loan Documents in place of Hale. (Id. ¶¶ 11-13). Plaintiff alleges that as of July 27, 2015, Defendant owes $500, 515.00. (Id. ¶ 16).

         Plaintiff initiated this action by filing the original complaint in state court on September 22, 2015, asserting claims for breach of contract, unjust enrichment, and declaratory relief against Defendant. (Id. ¶¶ 19-39). Plaintiff also requested prejudgment and post-judgment interest, along with attorneys' fees and costs. (Compl. 5:27-6:3). On November 6, 2015, Defendant subsequently removed the action to this Court under diversity jurisdiction pursuant to 28 U.S.C. §§ 1332(a) and 1441(a). (Pet. for Removal, ECF No. 1). On November 18, 2015, Defendant filed its Answer. (Answer to Compl., ECF No. 7).

         On March 29, 2016, Plaintiff filed the instant Motion for Summary Judgment. (Mot. Summ. J. (“MSJ”), ECF No. 14). Defendant's Response was due on April 22, 2016. However, on April 7, 2016, Defendant's counsel, Adam H. Springel, Esq. and Michael A. Arata, Esq., filed a Motion to Withdraw as Counsel. (Mot. Withdraw Counsel, ECF No. 15). In their Motion, counsel cite as their reason for withdrawing Defendant's “unwillingness to further participate in this case nor pay for legal services rendered on its behalf, ” along with Defendant's indication of its “inten[t] to file for bankruptcy protection.” (Id. 2:15-17). On April 12, 2016, the Court granted the Motion to Withdraw as Counsel and extended Defendant's deadline to file its Response by over a month to May 31, 2016. (Order on Mot. Withdraw Counsel 1:26-28, 2:14-15, ECF No. 17). Additionally, the Court explained that because Defendant is a corporation, it cannot appear except through counsel. (Id. 1:18-20) (citing Rowland v. California Men's Colony, 506 U.S. 194, 201-02 (1993); United States v. High Broadcasting Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993)). As such, the Court provided Defendant with a deadline for obtaining new counsel of May 5, 2016. (Id. 2:1-3). Defendant did not comply or request an extension of time to comply with either deadline. On June 1, 2016, Plaintiff filed a Notice of Non-Opposition to the Motion for Summary Judgment. (ECF No. 18).

         On November 9, 2016, the Court ordered Defendant to show cause by December 8, 2016, why its answer should not be stricken and default entered against it for failure to comply with the Court's Order (ECF No. 17) to obtain substitute counsel as it is a corporation. (Order Show Cause (“OSC”), ECF No. 19). On December 19, 2016, Defendant untimely filed a Response to the OSC, explaining that the OSC was not forwarded to the company's new mailing address. (Resp. to OSC, ECF No. 20). In its Response, Defendant requested a 120-day extension to find an attorney because it is a small company, this case has caused financial hardship, and as the company is in California, it is difficult to find a lawyer. (Id.). The Court reluctantly granted Defendant's request for an extension to retain counsel until April 7, 2017. (ECF No. 21). However, as Defendant's Response to the Motion for Summary Judgment was due approximately nine months ago, the Court finds that it is appropriate to address the Motion for Summary Judgment now. Even if Defendant retains new counsel by its current deadline, new counsel will not be permitted to file an untimely Response to the instant Motion for Summary Judgment.


         The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See Id. “Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor.” Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999)). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         In determining summary judgment, a court applies a burden-shifting analysis. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). Then, “the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” Id. In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323- 24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Celotex Corp., 477 U.S. at 324.

         At summary judgment, a court's function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. See Id. at 249-50.


         Generally, under the District of Nevada Local Rules, the failure to file a response to a motion constitutes consent to the granting of the motion. (D. Nev. LR 7-2(d)). However, this Local Rule specifically carves out an exception regarding motions for summary judgment. (Id.). Accordingly, the Court must consider the merits of Plaintiff's Motion and determine if there are no genuine issues of material fact such that Plaintiff is entitled to judgment as a matter of law. See also Marshall v. Gates, 44 F.3d 722, 725 (9th Cir. 1995), as amended (Jan. 27, 1995) (“[A] motion for summary ...

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