Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-05232/USCOURTS-cand-5_04-cv-05232-22/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1331 Fed. Question

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28 1 The holding of this court is limited to the facts and the particular circumstances

underlying the present motion.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

DAN L. WHITNEY, JANET R.

HADLEY, MARGARET A. KORNOWBROWN, ERIC BRELLE,

Plaintiffs,

v.

CHARLES WURTZ, VERISCAPE, INC.,

RENEE TADLOCK, REGINA

RYGELIS, WILL ARNTZ, SAM

JACOBS, GARY BERKOWITS, BRIAN

ROE and DOES 1-20,

Defendants. __________________________________

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Case No. C 04-05232 PVT

ORDER GRANTING REQUEST TO

CONTINUE HEARING ON

DEFENDANTS’ MOTIONS FOR

SUMMARY JUDGMENT

I. INTRODUCTION

On October 6, 2006, Defendants’ Arntz and Jacobs (for purposes of this order

“Defendants”) moved for summary judgment, claiming that there is no evidence that they are the

alter egos of Veriscape and that later ego is the sole basis for liability against them.1

 The hearing

is currently set for November 14, 2006. Opposition was due on October 24, 2006. On October

18, 2006, Whitney moved to continue the summary judgment hearings under Local Rule 6-3. 

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 2Plaintiffs and Defendants are now on notice that any future failure to comply with all of the

requirements of the Civil Local Rules and the Federal Rules of Civil Procedure may result in

sanctions up to and including denial of a defective motion.

Whitney claims that he needs further discovery to oppose the motion. Whitney is seeking both

responses to discovery already propounded as well as depositions which have not yet been

scheduled. On October 25, 2006, Defendants opposed the motion to continue. Defendants claim

that no continuance is warranted because Plaintiffs have had sufficient time to take discovery

and that written discovery is closed.

II. PROCEDURAL HISTORY

 On July 18, 2006, the Court held a Case Management Conference and set November 9,

2006 as the date by which the parties were “to have propounded and responded to all document

requests, interrogatories and requests for admissions.” (CMC Order at p.2). Motions to compel

discovery were allowed after the November 9, 2006 deadline. The Court allowed for the filing

of a summary judgment motion at any time, but cautioned that a continuance would likely be

granted for a motion filed before the close of discovery. A further Case Management

Conference was set for November 21, 2006 at which time a discovery cut-off would be set and

any remaining depositions would be scheduled. 

III. DISCUSSION

Defendants first assert that the motion must be denied because it is procedurally defective

in that it lacks a supporting declaration and proposed order. The Court notes that Defendants’

Opposition is also not in conformity with Civil Local Rule 6-3, which allows for any opposition

to motion to change time to be filed “no later than the third court day after receiving the motion.” 

Defendants did not oppose the motion until the fifth court day. The Court agrees that the motion

is defective. However, it is not so defective as to warrant denying Plaintiff’s adequate discovery

to oppose the motion for summary judgment, especially in light of Defendants’ own failure to

comply with the rules.2

Defendants next argue that Plaintiffs have failed to show good cause for a continuance. 

Although it is a close call, in part due to the Plaintiffs’ failure to provide a supporting declaration

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or the text of discovery requests at issue, Plaintiffs have shown good cause to continue the

hearing. First, discovery is not closed, only written discovery. Second, the deadline to file

motions to compel has not yet passed. Third, Plaintiffs have indicated specific discovery which

they believe will assist them in defeating the summary judgment motion on the alter ego issue. 

In particular, Plaintiffs assert they have requested in discovery, but not yet received, payroll tax

returns, information about payments to Defendants, general ledger, checkbook register and bank

statements and cancelled checks. These documents are relevant to show that Defendant

Veriscape was undercapitalized and to show commingling of funds, two factors often used to

show alter ego liability. Sonora Diamond Corp. v. Superior Court, 83 Cal.App.4th 523, 538-39

(2000). 

Finally, Defendants argue that a continuance will deny them a just, efficient, speedy and

economical determination of the case. This case has been pending for almost two years and is

still in the discovery. However, a short delay in hearing the summary judgment motion will not

unduly prejudice Defendants. Nonetheless, all parties are hereby put on notice that they are

expected to make their best efforts to move this case along in a just, efficient, speedy and

economical manner.

IV. CONCLUSION

For the foregoing reasons, It Is Hereby Ordered that:

1. Defendants’ Motion for Summary Judgement will not be heard on November 14,

2006;

2. Prior to the November 21, 2006 Case Management Conference, Plaintiffs and

Defendants shall meet and confer to attempt to resolve outstanding discovery

disputes over documents relevant to the alter ego issue;

3. Plaintiffs and Defendants shall include in their updated case management

conference a proposed date for hearing the summary judgment motion. If

agreement cannot be reached, Plaintiffs and Defendants shall each submit a

proposed date for the hearing; and

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4. A date for hearing the summary judgment motion shall be set at the November 21,

2006 Case Management Conference.

 IT IS SO ORDERED 

 

DATE: November 6, 2006 

 ___________________________

PATRICIA V. TRUMBULL

United States Magistrate Judge

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