ORDER DENYING PLAINTIFF'S "RENEWED MOTION FOR SUMMARY JUDGMENT/PARTIAL SUMMARY ADJUDICATION AND/OR AN FRCP 56(g) ORDER," ECF NO. 127
J. MICHAEL SEABRIGHT, Chief District Judge.
Plaintiff Emerson M.F. Jou ("Plaintiff" or "Jou") moves for summary judgment on his claim for Intentional Spoliation of Evidence ("Spoliation") against Defendant Gregory M. Adalian ("Defendant" or "Adalian") as set forth in the Second Amended Complaint ("SAC"). He also seeks summary judgment as to certain affirmative defenses raised in Defendant's Answer.
Based on the following, because genuine issues of material fact exist, Plaintiff's Motion is DENIED.
The court need not reiterate the background of this long-running and complex dispute; the background is set forth in detail in two of this court's prior Orders: (1) a February 5, 2015 Order in a related case, Jou v. Adalian, Civ. No. 09-00226 JMS-BMK (D. Haw.), that denied Plaintiff's motion seeking an order to arrest Defendant for repeated failures to pay an outstanding judgment, see Jou v. Adalian, 2015 WL 477268 (D. Haw. Feb. 5, 2015) ("Jou I"); and (2) a September 1, 2016 "Order Granting Defendant's Motion for Judgment on the Pleadings, with Leave to Amend Count Three" (the "September 1, 2016 Order") in this suit, see Jou v. Adalian, 2016 WL 4582042 (D. Haw. Sept. 1, 2016) ("Jou II").
Generally, two types of claims were at issue in Jou I and Jou II: (1) those "with regard to the Notes" between Jou and Adalian, and (2) those "arising out of the SCV Limited Partnership or its affairs." Jou II, 2016 WL 4582042, at *2 n.3. The September 1, 2016 Order dismissed with prejudice, on res judicata grounds, Plaintiff's three claims in the First Amended Complaint ("FAC") that were "with regard to the Notes" — those three claims sounding in settlement fraud arising out of a July 6, 2010 settlement agreement were or could have been litigated in the previous suit (Civ. No. 09-00226 JMS-BMK) See id. at *17. But the September 1, 2016 Order also granted Plaintiff leave to amend his vague and potentially time-barred claim for Spoliation — a claim that could plausibly have "arisen out of the SCV Limited Partnership or its affairs" (and thus not be barred by res judicata). Id. at *20. That is, although the FAC alleged Spoliation in general terms, the claim was unclear and time-barred as it was pled in the FAC.
Accordingly, on September 22, 2016, Plaintiff filed the SAC, which asserts a single count for Spoliation, which contends (among other assertions) that Plaintiff did not know Defendant had "spoliated SCV Records" until August 9, 2011 and September 7, 2011 (within a six-year limitations period and when Defendant allegedly knew of a potential lawsuit regarding the SCV Limited Partnership). SAC ¶ 9C, ECF No. 68. Specifically, the SAC alleges that Defendant "intentionally destroyed, concealed, or otherwise spoliated evidence designed to disrupt or defeat Plaintiff's potential lawsuit," id. ¶ 10, and that Plaintiff only discovered such spoliation in August and September of 2011 during Defendant's bankruptcy proceedings in the Bankruptcy Court for the Middle District of Pennsylvania. Id. ¶¶ 10B, 10C. Plaintiff also alleges in some detail that "[t]here was a causal relationship between the acts of spoliation and the inability to prove the . . . claims in a lawsuit[,]" id. ¶ 17, and that he suffered damages as a result of the alleged spoliation, id. ¶ 18.
On May 4, 2017, Plaintiff filed his "Renewed Motion for Summary Judgment/Partial Summary Adjudication," seeking:
Pl.'s Mot. at 2, ECF No. 127. Defendant filed his Opposition on June 2, 2017, ECF No. 134, and Plaintiff filed his Reply on June 16, 2017, ECF No. 147.
STANDARD OF REVIEW
Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Rule 56(a) mandates summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Broussard v. Univ. of Cal. at Berkeley, 192 F.3d 1252, 1258 (9th Cir. 1999).
"A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact." Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323); see also Jespersen v. Harrah's Operating Co., 392 F.3d 1076, 1079 (9th Cir. 2004). "When the moving party has carried its burden under Rule 56[(a)] its opponent must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forward with specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (citation and internal quotation marks omitted).
"An issue is `genuine' only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is `material' only if it could affect the outcome of the suit under the governing law." In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences in the light most favorable to the nonmoving party. Friedman v. Live Nation Merch., Inc., 833 F.3d 1180, 1184 (9th Cir. 2016).
A. Intentional Spoliation of Evidence
As explained in the September 1, 2016 Order, it is unclear whether a cause of action for Spoliation exists under Hawaii law. No Hawaii case has adopted the tort, and Matsuura v. E.I. du Pont de Nemours & Co., 102 Haw. 149, 73 P.3d 687 (2003), explicitly found it unnecessary to decide whether such a tort exists in Hawaii common law. Id. at 168, 73 P.3d at 706. Matsuura, however, recognized the following elements of such a tort in other jurisdictions, and explained why those elements would not be met under the facts of that case:
Id. at 166, 73 P.3d at 704 (citations omitted). Essentially, Matsuura assumed Spoliation's basic elements from "the few jurisdictions that recognize" the tort, but found no reason to adopt the cause of action because the plaintiffs would necessarily have failed to prove such a claim.
Likewise, at least at this stage, this court can address Plaintiff's Motion and analyze whether questions of fact exist by assuming the basic elements of the tort as recognized in other jurisdictions (but without explicitly predicting whether the Hawaii Supreme Court would recognize the tort). Further, for purposes of this Motion only, the court can assume — as Plaintiff argues — that evidence need not actually be physically destroyed to constitute "spoliation." See, e.g., Elliott-Thomas v. Smith, ___ N.E.3d ___, 2017 WL 758481, at *5 (Ohio Ct. App. Feb. 27, 2017) ("[T]he [element]`willful destruction of evidence by defendant designed to disrupt the plaintiff's case' includes one's willful act of rendering evidence useless, such as hiding evidence.").
With those assumptions, the court easily concludes that Plaintiff is not entitled to summary judgment in his favor on his Spoliation claim. Notably, Defendant is not moving for summary judgment on a claim against him; rather, Plaintiff is moving for summary judgment on his affirmative claim — a claim on which he would have the burden of proof at trial.
"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., Inc. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)). In this instance, then, Plaintiff "must establish beyond peradventure all of the essential elements of the claim . . . to warrant judgment in his favor." Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Put another way, "his showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986) (quoting W. Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 488 (1984)).
Plaintiff has not met this burden — questions of material fact exist on almost every element of a Spoliation claim, as those elements are discussed in Matsuura:
In particular, in Defendant's Declarations of June 1, 2017, ECF No. 134-1, and (to a lesser extent) of May 23, 2017, ECF No. 132-1, Defendant specifically and repeatedly denies the essential elements of Spoliation, and explains in detail the context of each of his statements. For example, Defendant declares that "at all times, all accounting records and other financial records for SCV were prepared and maintained by Joel Criz and were not in my possession." Adalian Decl. (June 1, 2017) ¶ 18. He explains:
Id. ¶ 20.
Id. ¶ 21.
Id. ¶ 26.
Id. ¶ 28.
Id. ¶ 41.
Id. ¶ 45.
Id. ¶ 48.
Id. ¶ 49.
Id. ¶ 54.
Id. ¶ 55. See also, e.g., Adalian Decl. (May 23, 2017) ¶ 15 ("[A]t no time did I have any intent to conceal or hide these recently-located (or any other) documents from Dr. Jou or anyone else, and I never destroyed any documents in this case or in any other or an any other time. Nor did I remove any documents or portions of documents or create any `gaps' in them[.]").
In response to Defendant's lengthy Declarations, Plaintiff repeatedly contends that Defendant's statements are false. See, e.g., Jou Decl. (June 16, 2017) ¶¶ 3, 4, 7, 8, 11, 13, 15, 16, 17; ECF No. 148-1. But this is a summary judgment motion, and such credibility determinations are for a fact-finder, not for summary judgment. See, e.g., McGinest v. GTE Serv. Corp., 360 F.3d 1103, 1113 n.5 (9th Cir. 2004) ("[I]t is axiomatic that disputes about material facts and credibility determinations must be resolved at trial, not on summary judgment."); T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) ("Nor does the judge make credibility determinations with respect to statements made in affidavits, answers to interrogatories, admissions, or depositions."); Nigro v. Sears, Roebuck & Co., 784 F.3d 495, 497 (9th Cir. 2015) (stating that a court cannot disregard a declaration at summary judgment "solely based on its self-serving nature"). At this summary judgment stage, the court must construe evidence in the light most favorable to Defendant — and doing so means the court DENIES Plaintiff's Motion regarding Spoliation.
B. Defendant's Affirmative Defenses
Plaintiff also moves for summary judgment as to Defendant's sixteenth affirmative defense, which states that Plaintiff's claims "are barred, in whole or in part, due to expiration of the applicable statutes of limitations." Def.'s Answer ¶ 50, ECF No. 72. See Fed. R. Civ. P. 56(a) ("A party may move for summary judgment, identifying each claim or defense — or the part of each claim or defense — on which summary judgment is sought.") (emphasis added).
Jou II dismissed Plaintiff's initial Spoliation claim primarily because, as it was vaguely pled in the FAC, it was barred by a six-year limitations period. 2016 WL 4582042, at *19-20. In particular, the FAC alleged that (1) Plaintiff discovered on February 23, 2009, certain problems with "the development project subject to the [SCV] Limited Partnership Agreement," id. at *19 (quoting FAC ¶ 19); and (2) Plaintiff had then "on March 19, 2009," sent a demand to Defendant "for documents relating to the partnership interest," having "determined that property belonging to SCV Development Investors may have been sold, transferred or encumbered to pay various costs[.]" Id. (quoting FAC ¶ 20). It thus appeared that Plaintiff discovered at least some "spoliation" in early 2009 — outside a six-year limitations period. Id. at *20.
Plaintiff, however, amended his Spoliation claim such that the SAC now clearly alleges that he did not discover that documents or potential evidence had actually been destroyed or concealed until August or September of 2011. SAC ¶¶ 10B, 10C. In this regard, it is important to distinguish between Plaintiff's alleged discovery of certain problems with the SCV Limited Partnership (outside a six-year limitations period), and his alleged discovery of purported spoliation of documents related to those problems. That is, there is a difference between Plaintiff's request for information from Defendant in March 2009, and Plaintiff's alleged discovery in 2011 that at least some of what he had been requesting in March 2009 had been destroyed or concealed. It is entirely plausible that Plaintiff knew about problems with the SCV Limited Partnership outside the limitations period, but did not know about spoliation of documents until a time inside the limitations period. With that distinction in mind, the court addresses Plaintiff's Motion as to Defendant's limitations defense.
In support, Plaintiff proffers evidence supporting the SAC's allegations, which, taken as true, would preclude Defendant's statute of limitations defense. See, e.g., Jou Decl. (May 4, 2017), ECF No. 128-1 (detailing Plaintiff's quest for certain SCV records in 2009 and 2010, and his discovery in 2011 that certain information may have been destroyed). This evidence itself would have been sufficient to create a genuine issue of fact if Defendant had moved for summary judgment on a statute of limitations basis. Nevertheless, it is premature to determine that Plaintiff's Spoliation claim is not entirely time-barred as a matter of law. That is, summary judgment is inappropriate at this stage as to Defendant's sixteenth affirmative defense.
Again, Defendant's defense alleges that Plaintiff's claims "are barred, in whole or in part" by the applicable statutes of limitations. Answer ¶ 50 (emphasis added). It is unclear, however, whether Plaintiff's Spoliation claim would be analyzed on a document-by-document basis. And if analyzed document-by-document, Plaintiff may have had sufficient knowledge outside the limitations period that certain documents were being spoliated (and thus be time-barred as to those documents), but as to other documents only discovered their spoliation in 2011 (and thus not be time-barred). As it is, Defendant points out that (similar to how this court interpreted the FAC) the SAC's allegations themselves could indicate that Plaintiff knew of certain "spoliation" before April 29, 2009. SAC ¶ 8C; see also FAC ¶ 45 ("Defendant intentionally destroyed or lost evidence designed to disrupt or defeat this lawsuit. Just some of the documents needed were demanded on March 19, 2009."). The SAC necessarily admits that Plaintiff suspected enough in early 2009 to have counsel seek SCV documents from Defendant — and it is thus plausible that he suspected that at least some documents may have been "spoliated" at that time.
Further, and just as important, it remains unclear whether the limitations period is actually six years (as opposed to two years for a tort claim). As discussed in the September 1, 2016 Order, the court only assumed that a six-year period applies for purposes of addressing Defendant's prior motion for judgment on the pleadings. See Jou II, 2016 WL 4582042, at *19 (applying a six-year period for claims sounding in fraud, but recognizing that "[i]If Hawaii recognizes a cause of action for intentional spoliation of evidence, it is unclear which limitation[s] period (two years for torts or six years for a claim sounding in fraud) would apply"). And if a two-year limitations period applies, then Plaintiff's Spoliation claim would unquestionably be time-barred. Indeed, in addressing Plaintiff's Motion, the court might assume that a two-year period applies — in which case, the limitations defense would certainly be proper. In any event, however, it is premature for the court to determine as a matter of law that a six-year limitations period applies — the parties have not briefed or analyzed which period would be proper under Hawaii law, especially where it is not even clear whether Hawaii recognizes a Spoliation claim in the first place.
The court thus denies Plaintiff's Motion as to Defendant's statute of limitations defense. Granting such a motion is inappropriate at this stage, both factually and legally.
Plaintiff's Motion also refers — without much argument — to Defendant's fourth affirmative defense (res judicata/collateral estoppel). Pl.'s Mot. at 2. But this court's September 1, 2016 Order has already analyzed this defense, having determined that three claims in the FAC are barred by res judicata, and that a Spoliation claim is not barred by the defense. See Jou II, 2016 WL 4582042, at *18. To be clear, the SAC sufficiently alleges that Plaintiff's Spoliation claim "arises out of the SCV Limited Partnership," and is not "with regard to the Notes." Accordingly, the Motion as to the res judicata defense is DENIED as MOOT.
Likewise, Plaintiff's Motion mentions Defendant's eighth affirmative defense, which asserts that "Plaintiff's claims are barred, in whole or in part, because Plaintiff lacks standing." Answer ¶ 42. Neither party, however, addresses this defense of "standing" (which, in any event, appears to be mere "boilerplate"). Plaintiff would certainly appear to have standing to assert a Spoliation claim as a member of the SCV Limited Partnership, see, e.g., SAC ¶ 3; it is unclear, however, whether others, or the partnership itself, might be more proper parties to assert such a claim. But because this defense was not clearly briefed, the court DENIES the Motion as to the eighth affirmative defense without prejudice.
Because genuine issues of material fact exist on the current record, Plaintiff's Renewed Motion for Partial Summary Judgment/Summary Adjudication, ECF No. 127, is DENIED.
IT IS SO ORDERED.
In short, Plaintiff has not met his burden to demonstrate that this court should ignore Defendant's Declarations. See Yeager, 693 F.3d at 1080 ("[T]he sham affidavit rule should be applied with caution because it is in tension with the principle that the court is not to make credibility determinations when granting or denying summary judgment.") (quotation marks and citations omitted). "[T]he non-moving party is not precluded from elaborating upon, explaining or clarifying prior testimony elicited by opposing counsel on deposition and minor inconsistencies that result from an honest discrepancy, a mistake, or newly discovered evidence afford no basis for excluding an opposition affidavit." Id. at 1081 (quotation marks and citations omitted).