Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-00419/USCOURTS-caed-2_07-cv-00419-1/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1332 Diversity-Breach of Contract

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28 This matter was determined to be suitable for decision without *

oral argument. L.R. 78-230(h).

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

LYNN T. CECIL and SUZIE CECIL, )

trustees of the CECIL FAMILY ) 2:07-CV-419-GEB-KJM 

REVOCABLE TRUST; RICK CECIL and )

LYNETTE CECIL, )

)

Plaintiffs, )

)

v. ) ORDER*

)

ROCKY MOUNTAIN RAILWAY AND MINING )

MUSEUM, a Colorado Non-Profit )

Corporation, and YREKA WESTERN )

RAILROAD, a California Corporation,)

)

Defendants. )

 )

)

YREKA WESTERN RAILROAD, )

)

Counter-claimant, )

)

v. )

)

LYNN T. CECIL and SUZIE CECIL, )

trustees of the CECIL FAMILY ) 

REVOCABLE TRUST; RICK CECIL and )

LYNETTE CECIL, )

)

Counter-defendants. )

)

)

And Related Actions. )

)

Plaintiffs and Counter-defendants Lynn T. Cecil and Suzie

Cecil, who are trustees of the Cecil Family Revocable Trust, and Rick

Cecil and Lynette Cecil (“Plaintiffs”) move for summary judgment on

their three claims against Defendants Rocky Mountain Railway and

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The summary judgment standards are well known and need not be 1

repeated. Although Defendants filed a non-opposition to Plaintiffs’

motion, “[e]ven where no evidence is presented in opposition to the

motion, summary judgment should not be granted if the evidence in

support of the motion is insufficient.” Hoover v. Switlik Parachute

Co., 663 F.2d 964, 967 (9th Cir. 1981).

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Mining Museum (“Rocky Mountain”) and Yreka Western Railroad (“Yreka

Western”) (collectively, “Defendants”). Plaintiffs claim (1) Rocky

Mountain breached a promissory note payable to Plaintiffs, (2) Yreka

Western breached a written guaranty of Rocky Mountain’s performance of

the promissory note, and (3) Plaintiffs are entitled to enforce the

security interest they hold in Yreka Western’s “Steam Locomotive No.

19,” which was part of the collateral securing the written guaranty. 

Plaintiffs also move for summary judgment on Yreka Western’s

counterclaim against them, which seeks a declaratory judgment stating

that the “Santa Rosa business coach” is the sole collateral securing

the written guaranty. Defendants filed a non-opposition to

Plaintiffs’ motion.

I. Summary Judgment Motion1

A. Breach of the Promissory Note

Plaintiffs seek summary judgment on their claim that Rocky

Mountain breached a promissory note contract payable to them. (Mot.

at 7:25-9:3.)

Plaintiffs’ breach of contract claim requires proof that a

valid contract existed between Plaintiffs and Rocky Mountain,

Plaintiffs performed their obligations under the contract, Rocky

Mountain breached the contract, and Plaintiffs were damaged. Reicher

v. Gen. Ins. Co., 68 Cal. 2d 822, 830 (1968). The uncontroverted

facts show that: (1) a valid promissory note contract existed between

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Plaintiffs indicate that they seek to establish a valid 2

security interest only as to Steam Locomotive No. 19. (See Mot. at 11

n.1.) Accordingly, Plaintiffs’ motion on this claim is confined to

Steam Locomotive No. 19.

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Plaintiffs and Rocky Mountain; (2) Plaintiffs fully performed all

conditions required under the note; (3) Rocky Mountain breached the

note by failing to make timely payments and by failing to pay the

entire balance of principal and interest; and (4) as a result of Rocky

Mountain’s breach, Plaintiffs have been damaged. (Plaintiffs’

Statement of Undisputed Facts (“SUF”) ¶¶ 1-4.) Therefore, Plaintiffs’

motion for summary judgment on this claim is granted.

B. Breach of the Written Guaranty

Plaintiffs also seek summary judgment on their claim that

Yreka Western breached the written guaranty between Plaintiffs and

Yreka Western, which guaranteed Rocky Mountain’s performance of the

promissory note contract. (Mot. at 9:6-27.)

The uncontroverted facts show a valid written guaranty

existed which obligated Yreka Western to fulfill Rocky Mountain’s

duties under the promissory note contract and pay Plaintiffs the sums

due once Rocky Mountain breached; and that Yreka Western breached the

guaranty by failing to pay Plaintiffs sums due from Rocky Mountain

under the note. (SUF ¶¶ 4, 7, 14.) Therefore, Plaintiffs’ motion for

summary judgment on this claim is granted.

C. Foreclosure of Security Interest

Plaintiffs further seek summary judgment on their

foreclosure of security interest claim, arguing they have a security

interest in Steam Locomotive No. 19 that is enforceable against Yreka

Western. (Mot. at 11:1-2.) 2

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Although Plaintiffs’ claim is titled “Foreclosure of Security 3

Interest” and Plaintiffs’ Complaint seeks “an order directing public

sale of the collateral” (Pls.’ Compl. at 8:21-22), Plaintiffs state they

“have chosen to exercise their judicial remedies here by asking the

Court to enter a judgment. If entered, Plaintiffs would be entitled to

enforce that judgment as permitted under the Commercial Code and State

Law enforcement procedures.” (Mot. at 10:10-14.) Thus, Plaintiffs’

motion for summary judgment on this claim seeks only to establish a

valid security interest in Steam Locomotive No. 19 which is enforceable

against Yreka Western, and does not seek to initiate a “public sale” of

that security interest.

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“[A] security interest is enforceable against the debtor and

third parties with respect to the collateral if . . . value was

given[,] [t]he debtor has rights in the collateral . . . [and] the

debtor has authenticated a security agreement that provides a

description of the collateral . . . .” Cal. Com. Code § 9203(b)(1)-

(3). The uncontroverted facts show that: (1) value was given by

Plaintiffs in exchange for a security interest in Steam Locomotive No.

19; (2) Yreka Western has rights in Steam Locomotive No. 19; (3) there

is a valid security agreement that provides a description of the

collateral (Steam Locomotive No. 19); (4) Rocky Mountain breached the

guaranteed obligation (the promissory note); and (5) Yreka Western has

not paid Plaintiffs any sums due from Rocky Mountain under the note in

accordance with the written guaranty. (SUF ¶¶ 10-14.) Plaintiffs

have shown that the uncontroverted facts demonstrate they have a valid

security interest in Steam Locomotive No. 19 which is enforceable

against Yreka Western. Therefore, Plaintiffs’ motion for summary

judgment on this claim is granted.3

D. Yreka Western’s Counterclaim

Plaintiffs also seek summary judgment on Yreka Western’s

counterclaim against them, arguing that the Santa Rosa business coach

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is not the sole collateral set forth in the security agreement between

Yreka Western and Plaintiffs. (Mot. at 12:3-13:4.)

In its counterclaim against Plaintiffs, Yreka Western seeks

a declaratory judgment that the Santa Rosa business coach “was and is

the sole collateral under the Security Agreement” with Plaintiffs. 

(Yreka Western’s Counterclaim ¶ 8.) However, the security agreement

states that Steam Locomotive No. 19 also serves as collateral until

certain conditions precedent have been met by Rocky Mountain. (See

Pls.’ Compl. Ex. C.) It is uncontroverted that these conditions

precedent were not met. (SUF ¶ 16.) Therefore, Plaintiffs’ summary

judgment motion is granted on Yreka Western’s counterclaim for

declaratory judgment.

II. Entry of Final Judgment

Lastly, Plaintiffs “request a judgment against the liable

parties.” (Mot. at 10:25.) However, Rule 54(b) provides:

When an action presents more than one claim for

relief--whether as a claim, counterclaim,

crossclaim, or third-party claim--or when multiple

parties are involved, the court may direct entry

of a final judgment as to one or more, but fewer

than all, claims or parties only if the court

expressly determines that there is no just reason

for delay.

Fed. R. Civ. P. 54(b). Since Yreka Western’s third party claim

against third party defendant Ralph Domenici (“Domenici”) remains in

this action, entry of a final judgment for Plaintiffs would require

this Court to “ma[ke] specific findings setting forth the reasons” for

entering a final judgment under Rule 54(b). Morrison-Knudsen Co. v.

Archer, 655 F.2d 962, 965 (9th Cir. 1981). Since Plaintiffs have not

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addressed the required “specific findings,” Plaintiffs’ request for

entry of final judgment is denied.

IT IS SO ORDERED.

Dated: February 26, 2008

 

GARLAND E. BURRELL, JR.

United States District Judge

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