Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-05776/USCOURTS-cand-3_06-cv-05776-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1331 Fed. Question: Breach of Contract

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LEONARD AND ELIZABETH FOSTER,

Plaintiffs,

 v.

LORI SCHOEB; THE HARTFORD

UNDERWRITERS INSURANCE COMPANY; and

DOES 1 through 20, Inclusive,

Defendants.

 

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Case No. 06-05776 SC

ORDER GRANTING

DEFENDANTS' MOTION

FOR SUMMARY JUDGMENT

I. INTRODUCTION

This matter comes before the Court on Defendants' Motion for

Summary Judgment; Plaintiffs' Motion to Withdraw Automatic

Admissions ("Motion to Withdraw"); Defendants' Request for Order

to Show Cause Why Sanctions Should Not Issue ("Request for

Sanctions"); and Defendants' Request for Judicial Notice.

After reviewing the parties' submissions, the Court GRANTS

Defendants' Motion for Summary Judgment and DENIES Defendants'

Request for Sanctions. For the reasons stated below, the Court

need not decide Plaintiffs' Motion to Withdraw and Defendants'

Request for Judicial Notice.

II. BACKGROUND

On March 1, 2003, Plaintiffs Leonard and Elizabeth Foster

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For the Northern District of California

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were injured in a single-vehicle automobile accident. Pls.' Opp'n

to Summ. J., Docket No. 18, at 1. According to Plaintiffs the

accident was caused by a blow-out of the right rear tire. Id.

Defendants in the present action, Lori Schoeb and Hartford

Underwriters Insurance Company ("Defendants" or "Hartford"), were

the insurers of the vehicle at the time of the accident. Id. As

insurers, Defendants took possession of the badly damaged vehicle

and tire after the accident to safeguard them for evidence. 

Defs.' Evid. Supp. for Mot. for Summ. J., Docket No. 16 ("Defs.'

Evidence"), Ex. 2. Defendants, in a letter to Plaintiffs dated

April 16, 2003, stated that they had the vehicle "on safeguard at

our salvage yard since it was moved there." Id. In addition,

Defendants stated that they had given authorization to the salvage

yard for Plaintiffs to inspect the vehicle. Id.

Approximately five months later, on September 11, 2003,

Defendants released the damaged vehicle and tire from safeguard

and the salvage yard then sold them to an unknown third party. 

Id. at Ex. 3. Plaintiffs had not inspected the tire or vehicle

and Plaintiffs were not notified that the vehicle and tire were

being sold. Opp'n to Summ. J. at 2. As detailed below,

Plaintiffs did not learn that the vehicle and tire had been sold

until June 21, 2006, more than three years after the accident.

On February 8, 2005, Plaintiffs filed suit in California

Superior Court ("Underlying Action") against Cooper Tires, Inc.,

the manufacturer of the tire, and against City Tire Sales, the

seller of the tire. See Decl. of Anthony Edwards ("Edwards

Decl."), Ex. C, Docket No. 20. Plaintiffs brought three causes of

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1

 This is chronicled in detail below.

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action against the defendants in the Underlying Action:

negligence, intentional tort and products liability. Id. 

On January 25, 2006, almost three years after the accident

and almost a year after filing the lawsuit in state court,

Plaintiffs' counsel filed a Deposition Subpoena in state court

seeking the tire that allegedly caused the accident. See Edwards

Decl., Ex. D, Docket No. 20. On February 8, 2006, Hartford

responded in a letter, stating that they had "requested Foster's

file from archives . . . ." See id., Ex. E. On March 9, 2006,

Plaintiffs had still not received the tire and sent a letter to

Hartford inquiring about the tire's location. See id., Ex. G. On

June 13, 2006, Plaintiffs' counsel sent a letter to Hartford

seeking "a copy of the report that is in your archives re the tire

that failed on the Foster's vehicle on 1 March 03." See id., Ex.

F. Finally, on June 21, 2006, Hartford informed Plaintiffs that

the tire had been taken out of safeguard and sold and its location

was unknown. See id., Ex. H.

After Plaintiffs initiated the Underlying Action but before

they tried to locate the tire, Plaintiffs repeatedly failed to

respond to the state court defendants' discovery requests. As a

result, the state court issued numerous orders to compel discovery

and, over the course of the Underlying Action, sanctioned

Plaintiffs almost $5,000.1 Eventually, on July 6, 2006, the state

court dismissed Plaintiffs' claim in a minute order, sanctioned

Plaintiffs $920.00 and requested that the defendants present a

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2 On August 29, 2006, the formal order was issued. See Defs.'

Evidence, Ex. 12. The relevant content of the minute order and the

formal order is identical save for the fact that the formal order

includes a provision that the dismissal was with prejudice. See

id.

3

Federal jurisdiction is premised on diversity; Hartford

Insurance is located in Arizona and the Fosters are residents of

California. The amount in controversy is satisfied. See 28 U.S.C.

1338(a).

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formal order within 20 days.2 See Defs.' Reply, Ex. 1, Docket No.

22. According to the minute order, the case was dismissed because

of terminating sanctions against Plaintiffs. Id. 

On September 20, 2006, less than one month after the

Underlying Action was dismissed, Plaintiffs filed the present

action against Hartford in federal court.3

 See Docket No. 1. 

Plaintiffs subsequently filed a First Amended Complaint

("Complaint") on December 29, 2006. See Docket No. 4. In this

Complaint, Plaintiffs allege that Hartford's failure to produce

the tire caused the dismissal of Plaintiffs' Underlying Action

against the manufacturer and seller of the tire. Compl. ¶ 18. 

Plaintiffs' Complaint contains three causes of action: (1) breach

of contractual duty to preserve evidence; (2) promissory Estoppel;

and (3) negligent infliction of emotional distress. Id. at ¶¶ 23,

30, 36.

III. LEGAL STANDARDS

Entry of summary judgment is proper "if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is

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4

 Plaintiffs' counsel has had similar trouble responding to

discovery requests and meeting filing deadlines in the present

case. First, Defendants served Plaintiffs with Requests for

Admission on April 27, 2007. Pls.' Mot. to Withdraw at 1, Docket

No. 21. The responses were due June 1, 2007. Id. Plaintiffs did

not respond until August 7, 2007, almost two months after the

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entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). 

"Summary judgment should be granted where the evidence is such

that it would require a directed verdict for the moving party.” 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Thus,

"Rule 56(c) mandates the entry of summary judgment . . . 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

Corp. v. Catrett, 477 U.S. 317, 322 (1986). In addition, entry of

summary judgment in a party's favor is appropriate when there are

no material issues of fact as to the essential elements of the

party's claim. Anderson, 477 U.S. at 247-49.

IV. DISCUSSION

Plaintiffs assert that the failure by Defendants to safeguard

the allegedly defective tire caused the dismissal of the

Underlying Action in state court. Compl. ¶ 18. Plaintiffs,

however, have failed to present any evidence supporting their

assertion. To the contrary, other than a declaration from

Plaintiffs' counsel, all of the evidence submitted by the parties

indicates that the Underlying Action was dismissed because of the

chronic failure by Plaintiffs' counsel to respond to discovery

requests and court orders.4

 

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deadline. Id. In addition, Plaintiffs' Opposition to Summary

Judgment was filed seven days late. See Opp'n at 5. Finally,

Plaintiffs' Motion to Withdraw was filed 14 days before the noticed

hearing, a violation of Civil Local Rule 7-2(a), which requires

that motions be filed at least 35 days before the scheduled

hearing.

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A brief time-line of events in the Underlying Action makes

clear that the case was dismissed for reasons unrelated to

Hartford's conduct regarding the tire. On August 31, 2005, the

state court issued an order compelling Plaintiffs to respond to

Defendants' form interrogatories and sanctioning Plaintiffs

$250.00. See Defs.' Evidence, Ex. 8. In its order the court

stated: "The court additionally finds that plaintiffs' failure to

comply with discovery was willful, and was without substantial

justification." Id. On November 1, 2005, the state court issued

another order compelling Plaintiffs to respond to Defendants'

discovery requests. Id. at Ex. 9. Sanctions of $400.00 were

imposed against Plaintiffs for the same reasons stated above. Id.

On November 29, 2005, the state court granted another motion to

compel Plaintiffs to respond to discovery requests and again

sanctioned Plaintiffs $400.00. Id. at Ex. 10. 

These orders and sanctions apparently had little impact on

Plaintiffs and on December 16, 2005, the state court issued an

order stating: 

The Court is giving the Plaintiffs in

this matter immediate notice that they

have one more opportunity to comply [with

discovery]. Plaintiffs shall serve

complete verified responses without

objections, on the defense no later than

December 30, 2005[,] or this matter will

be dismissed. 

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Pursuant to California state law, terminating sanctions are

authorized for "failure to obey order compelling response or

further response to interrogatories." Mileikowsky v. West Hill

Hosp. Med. Ctr., 64 Cal. Rptr. 3d 888, 898 n.13 (Ct. App. 2007)

(citing Code of Civil Procedure §§ 2030(l), (m), (n)) (internal

citations and quotations omitted).

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Id. at Ex. 11. In this order the court again sanctioned

Plaintiffs and their attorney, this time for $3,000, for their

repeated failures to respond to discovery requests. Id. 

On May 17, 2006, the state court ordered that the "truth of

all matters specified in Defendant's Requests for Admission, Set

One to Plaintiff Leonard Foster are deemed admitted" for failure

to respond. Id. at Ex. 14. In addition, the court sanctioned

Plaintiffs $400.00. Id. Finally, on July 6, 2006, the state

court issued a minute order granting the defendants' motions for

monetary and terminating sanctions. Defs.' Reply, Ex. 1. This

order dismissed Plaintiffs' Underlying Action and sanctioned

Plaintiffs $920.00. Id. The order also requested that the

defendants present a formal order to the court within twenty days. 

Id. On August 29, 2006, this formal order was signed by the state

court. See Defs.' Evidence, Ex. 12.

On August 3, 2006, after the minute order dismissing the case

had issued but before the formal order was signed, Plaintiffs

filed a Request for Dismissal. See Edwards Decl., Ex. I. Thus,

at the time that Plaintiffs filed a Request for Dismissal, the

state court had already issued terminating sanctions and the case

had been dismissed.5

Thus, Plaintiffs' assertion that they were "forced . . . to

dismiss the case . . .," Edwards Decl. ¶ 10, stands in stark

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contrast to the facts contained in the state court documents

submitted to the Court, which clearly demonstrate that the

Underlying Action had already been dismissed when Plaintiffs filed

their Request for Dismissal.

In addition, Plaintiffs' argument is seriously undercut by

the time-line they have provided. Plaintiffs, by their own

admission, did not subpoena the tire until January 25, 2006,

almost a year after the case was initially filed on February 8,

2005. See Edwards Decl., Ex. D. By this time, the state court

had already issued four orders compelling Plaintiffs to comply

with discovery. As noted above, each of these orders contained

sanctions against Plaintiffs. Thus, before Plaintiffs made a

formal attempt to locate the tire they had already been sanctioned

numerous times, in amounts totaling more than $3,000, for failing

to respond to discovery. It is clear that these failures had

nothing to do with the missing tire.

Had the tire truly been necessary in order for Plaintiffs to

respond to the remaining discovery requests, Plaintiffs would have

been perfectly justified in responding by stating that they were

unable to fully answer the question because Hartford had not made

the tire available for inspection. Instead, Plaintiffs simply did

not respond. Whatever motivated Plaintiffs not to respond, if

this silence was in fact a choice, is now irrelevant. What is

relevant is that Plaintiffs' case was dismissed because Plaintiffs

failed to abide by the rules, not because Hartford safeguarded the

tire for only five months. 

Nowhere in any of the documents relating to the state court

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6 Mr. Edwards was counsel of record for Plaintiffs during the

Underlying Action as well.

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 Defendants moved for summary judgment on essentially two

theories: the first is based on the record of the Underlying

Action in state court and the second is based on Plaintiffs'

admissions in the present action. The Court's holding is based on

the record of the Underlying Action and does not reach the issue of

whether Plaintiffs' admissions in the present action are also

grounds for summary judgment.

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proceedings is the missing tire even mentioned. Nor have

Plaintiffs submitted any evidence in support of their Opposition

except for a declaration by Plaintiffs' counsel asserting that

"[t]he case was dismissed with prejudice because the defendants

demanded production of the tire for inspection and testing and

Plaintiffs were unable to produce the tire." Edwards Decl. ¶ 10.6

In the face of overwhelming evidence to the contrary, however,

this declaration is simply not credible.

All three causes of action brought by Plaintiffs hinge on a

causal connection between Hartford's treatment of the tire and the

dismissal of the Underlying Action in state court. Plaintiffs

have failed to submit any evidence, other than their attorney's

declaration, that such a connection existed. "Rule 56(c) mandates

the entry of summary judgment . . . against a party who fails to

make a showing sufficient to establish the existence of an element

essential to that party's case . . . ." Celotex, 477 U.S. at 322. 

Therefore, the Court GRANTS summary judgment against Plaintiffs.7

As this holding is based on the record of the Underlying

Action, the issue of whether Plaintiffs may now be permitted to

withdraw their admissions in the present action is irrelevant and

the Court does not address it. For the same reason, the Court

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does not reach Defendants' Request for Judicial Notice. Finally,

the Court denies Defendants' Request for Order to Show Cause Why

Sanctions Should Not Issue.

The Court is cognizant of the fact that Plaintiffs have

presented essentially the same claims in federal court as those

that were dismissed with prejudice for procedural reasons in state

court. Plaintiffs have attempted to clothe the underlying state

court claims in new causes of action against new defendants. This

effort, however, to now recoup damages from Defendants, after

Plaintiffs' counsel so badly bungled the action in state court, is

unavailing.

V. CONCLUSION

For the reasons discussed herein, Defendants' Summary

Judgment Motion is GRANTED and Defendants' Request for Order to

Show Cause Why Sanctions Should Not Issue is DENIED.

IT IS SO ORDERED.

Dated: September 28, 2007 

UNITED STATES DISTRICT JUDGE

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