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Sou v. Bash

United States District Court, D. Nevada

November 21, 2017

RAMA SOU; TAI BUI; and SCOTT ZIMMERMAN, Plaintiffs,
v.
MICHAEL BASH; JEREMY BASH; BERKLEY ENTERPRISES, INC.; PEPPERDINE ENTERPRISES, INC.; NINETY-FIVE FORT APACHE COMPLEX, LLC; and ROYAL VIEW, LLC, Defendants.

          ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT (ECF NOS. 103, 105)

          ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE

         In 2010, defendants Michael and Jeremy Bash pitched plaintiffs Rama Sou, Tai Bui, and Scott Zimmerman, on investing in two companies that owned property in Las Vegas: Ninety-Five Fort Apache Complex, LLC (Fort Apache) and Royal View, LLC (Royal View). The defendants allegedly told the plaintiffs of their intent to develop the properties on a certain timetable. All three plaintiffs invested in Fort Apache, and Sou and Bui invested in Royal View, for a total of $300, 000. The properties remain undeveloped.

         In this lawsuit, the plaintiffs allege fraudulent inducement, false promise, and negligent misrepresentation. They move for summary judgment as to Jeremy Bash, arguing he made specific representations about construction plans (pursuant to which they made their investments) that were false because the properties remain undeveloped. The defendants respond that Bash's representations were not false, as the defendants intended (and still intend) to develop the properties but have been stymied by politics and a bad economy. Further, the defendants contend that optimistic statements by Bash about the properties are not actionable. Bash moves for summary judgment on the claims against him on these same grounds.

         The parties are familiar with the facts of this case so I will not repeat them here except where necessary. I deny the plaintiffs' motion for summary judgment. There are genuine disputes whether Bash's statements about the properties were false or negligently made. I also deny Bash's motion for summary judgment as untimely. Even if I considered it, disputed facts would lead me to deny the motion.

         I. ANALYSIS

         Summary judgment is appropriate if the pleadings, discovery responses, and affidavits demonstrate “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), (c). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). I view the evidence and draw reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Hebert Schenck, P.C., 523 F.3d 915, 920 (9th Cir. 2008).

         a. Fraudulent inducement

         Under Nevada law, the plaintiff must prove the following to sustain a claim of fraudulent inducement:

(1) A false representation made by the defendant; (2) defendant's knowledge or belief that its representation was false or that defendant has an insufficient basis of information for making the representation; (3) defendant intended to induce plaintiff to act or refrain from acting upon the misrepresentation; and (4) damage to the plaintiff as a result of relying on the misrepresentation.

Barmettler v. Reno Air, Inc., 956 P.2d 1382, 1386 (Nev. 1998). “Fraud is never presumed; it must be clearly and satisfactorily proven.” Havas v. Alger, 461 P.2d 857, 860 (Nev. 1969). The plaintiffs argue that Bash represented to them in 2010 that the defendants were seeking final investments on the Fort Apache property and that a retail plaza would be constructed within eighteen months. The plaintiffs also argue that the defendants represented that the Royal View property would be developed as a commercial property with construction commencing “immediately.” ECF No. 103 at 8. Yet both properties remain undeveloped. According to the plaintiffs, these facts show that Bash's representations in 2010 must have been false and that Bash intended to deceitfully induce them into investing in companies he knew would not develop the properties.

         Bash contends that any statements by him were mere puffery, which is not actionable as a misrepresentation. He also argues that at the time he was pitching the property to the plaintiffs, the defendants intended to develop and rezone the properties, so this representation was accurate at the time it was made. Bash contends that economic and political difficulties resulted in the defendants' inability to develop the properties on their intended timetable.

         The plaintiffs have not met their burden of demonstrating the absence of disputes of material fact regarding whether Bash's statements about the development plans were false when made and that the defendants never intended to develop the properties. The plaintiffs do not point to any evidence showing that Bash's 2010 statements about the plans to construct the properties were false. Meanwhile, in Bash's response to interrogatories he states that the intent was to commercially develop the properties but this intent has been “put on temporary hold.” ECF No. 103-5 at 5-6.

         The fact that the properties were not developed on the original timetable does not on its own prove fraud. Therefore, I deny the plaintiffs' motion for ...


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