United States District Court, D. Nevada
21ST CENTURY COMMUNITIES, INC., a Nevada Corporation, Plaintiff,
MUZLINK, LLC, a California Limited Liability Company; Defendants.
D. George United States District Judge
plaintiff, 21st Century Communities, Inc.
(21st Century) alleges that defendant Muzlink, LLC
(Muzlink), Wayne Williams (Williams), and Phillip Bradley
Parker (Parker) breached a loan agreement in which they
agreed to allow 21st Century to be involved with
decision making and are in default for repayment of loans.
ECF No. 1. Defendants Williams and Parker move for summary
judgment on two separate grounds. ECF No. 106. First, they
argue that a choice of forum clause existed in Muzlink's
operating agreement designating California as the proper
forum for lawsuits. Second, they assert that the matter was
already litigated in California and res judicata precludes
further suits. The Court will deny the motion.
for Summary Judgment
considering a motion for summary judgment, the court performs
“the threshold inquiry of determining whether there is
the need for a trial-whether, in other words, there are any
genuine factual issues that properly can be resolved only by
a finder of fact because they may reasonably be resolved in
favor of either party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 250 (1986); United States v.
Arango, 670 F.3d 988, 992 (9th Cir. 2012). 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 the court may grant judgment as a matter of law. Fed. R.
Civ. Pro. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986); Arango, 670 F.3d at 992.
material fact is one required to prove a basic element of a
claim. Anderson, 477 U.S. at 248. The failure to
show a fact essential to one element, however,
"necessarily renders all other facts immaterial."
Celotex, 477 U.S. at 323. Additionally, “[t]he
mere existence of a scintilla of evidence in support of the
plaintiff's position will be insufficient.”
United States v. $133, 420.00 in U.S. Currency, 672
F.3d 629, 638 (9th Cir. 2012) (quoting Anderson, 477
U.S. at 252).
plain language of Rule 56(c) mandates the entry of summary
judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to
establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.” Celotex, 477 U.S.
at 322. “Of course, a party seeking summary judgment
always bears the initial responsibility of informing the
district court of the basis for its motion, and identifying
those portions of ‘the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, ' which it believes demonstrate the
absence of a genuine issue of material fact.”
Id., at 323. As such, when the non-moving party
bears the initial burden of proving, at trial, the claim or
defense that the motion for summary judgment places in issue,
the moving party can meet its initial burden on summary
judgment "by 'showing'-that is, pointing out to
the district court-that there is an absence of evidence to
support the nonmoving party's case." Id.,
at 325. Conversely, when the burden of proof at trial rests
on the party moving for summary judgment, then in moving for
summary judgment the party must establish each element of its
the moving party meets its initial burden on summary
judgment, the non-moving party must submit facts showing a
genuine issue of material fact. Fed. R. Civ. Pro. 56(e);
Nissan Fire & Marine Ins. Co. v. Fritz Companies,
Inc., 210 F.3d 1099, 1103 (9th Cir. 2000). As summary
judgment allows a court "to isolate and dispose of
factually unsupported claims or defenses, "
Celotex, 477 U.S. at 323-24, the court construes the
evidence before it "in the light most favorable to the
opposing party." Adickes v. S. H. Kress &
Co., 398 U.S. 144, 157 (1970). The allegations or
denials of a pleading, however, will not defeat a
well-founded motion. Fed. R. Civ. Pro. 56(e); Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586-87 (1986). That is, the opposing party cannot
“‘rest upon the mere allegations or denials of
[its] pleading' but must instead produce evidence that
‘sets forth specific facts showing that there is a
genuine issue for trial.'” Estate of Tucker v.
Interscope Records, 515 F.3d 1019, 1030 (9th Cir. 2008)
(quoting Fed. R. Civ. Pro. 56(e)).
Century commenced this suit in state court against Muzlink on
December 10, 2009. Muzlink removed this matter to this Court
on December 31, 2009. In January 2011, 21st
Century moved to amend the complaint seeking, in part, to add
Williams and Parker as individual defendants. Following
Muzlink's subsequent Notice of Automatic Stay and Filing
of Petition under Chapter 11 of the Bankruptcy Code in April
2011, the Court denied the motion to amend without prejudice.
After the bankruptcy stay was lifted, 21st Century
renewed its motion to amend the complaint, which the Court
granted in March 2014.
on August 30, 2013, 21st Century and other persons
commenced an action against Williams and Parker in California
state court. The California defendants sought dismissal of
all California claims as barred by the statute of
limitations. The California court conducted a bifurcated
trial, the first phase of which addressed whether the claims
were barred by the statute of limitations. Ultimately, the
California court entered a tentative ruling that the
California plaintiffs' claims related to
misrepresentation in regards to intellectual property were
not barred by the statute of limitations and would proceed,
but that all other remaining claims were barred by the
statute of limitations. More particularly, the California
state court determined that the California plaintiffs had
notice of their causes of action by August 11, 2009. As such,
the claims, filed on August 30, 2013, were barred by
California's four-year statute of limitations for claims
arising from breach of contract.
and Parker seek summary judgment in their favor on the
grounds that Muzlink's operating agreement designated
California as the proper forum for any litigation against
Muzlink. They also argue that 21st Century's
claims against them are barred by the doctrine of res
judicata because the California court has ruled that the
California plaintiffs' breach of contract claims against
them are barred by California's four-year statute of
limitations. Neither argument warrants a grant of summary
court has previously ruled that 21st Century is
not bound by Muzlink's operating agreement to litigate
its claims in California, when the argument was first raised