Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-01368/USCOURTS-casd-3_08-cv-01368-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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1 08cv1368

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

PINNACLE FITNESS AND RECREATION

MANAGEMENT, LLC, a Delaware limited

liability company,

Plaintiff,

v.

THE JERRY AND VICKIE MOYES

FAMILY TRUST, an Arizona Trust,

Defendants. 

AND RELATED COUNTER CLAIMS.

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Case No.: 08cv1368 AJB (BGS)

ORDER DENYING REQUEST 

FOR ORAL ARGUMENT ON

RECONSIDERATION

[Doc. No. 199]

The Defendants, The Jerry and Vickie Moyes FamilyTrust, (hereinafter the “Trust” or

“JVMFT”) filed a motion, [Doc. No. 199], requesting oral argument that essentially seeks

reconsideration of two issues: “(1) whether, as a matter of law, the parties could have possibly entered

into an enforceable agreement for the Trust to “buy out” Pinnacle’s membership interest in MFC; and

(2) whether the Trust is entitled to pursue damages relating to substantial liabilities it incurred in

operating the gyms after Pinnacle ultimately ceased participating in the business.” Doc. No. 199, at 2-3. 

Plaintiff, Pinnacle Fitness and Recreation Management, (hereinafter “Pinnacle”), filed an opposition,

[Doc. No. 202], and the Trust filed a reply, [Doc. No. 203]. The hearing on this motion set for March 2,

2012 at 1:30 p.m. is hereby VACATED as the Court finds this motion appropriate for submission on the

papers without oral argument pursuant to Civil Local Rule 7.1.d.1. Based upon the parties moving

Case 3:08-cv-01368-GPC-BGS Document 205 Filed 03/01/12 Page 1 of 7
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papers and for the reasons set forth below, the Trust’s motion for oral argument on reconsideration is

hereby DENIED.

Legal Standard

A motion for reconsideration is “appropriate if the district court is provided with (1) newly

discovered evidence; (2) clear error or manifest injustice, or (3) if there is an intervening change in

controlling law.” School Dist. No. 1J, Multnomah County, Or. v. AcandS, Inc., 5 F.3d 1255, 1263 (9th

Cir.1993). In addition, Local Civil Rule 7.1(i)(1) provides that a motion for reconsideration must include

an affidavit or certified statement of a party or attorney “setting forth the material facts and

circumstances surrounding each prior application, including inter alia: (1) when and to what judge the

application was made, (2) what ruling or decision or order was made thereon, and (3) what new and

different facts and circumstances are claimed to exist which did not exist, or were not shown upon such

prior application.” Local Civ. R. 7.1(i)(1).

Discussion

The Trust’s request for oral argument seeks reconsideration of the following two issues decided

by the Court in Ruling on the Trust’s motion for summary judgment, [Doc. No. 169], and Pinnacle’s

motion for partial summary judgment, [Doc. No. 170]: (1) whether the alleged Buy-Out Agreement

violated Nevada’s Statute of Frauds; and (2) whether the Trust is entitled to Operational Damages

sought in its counterclaims. Doc. No. 199, at 2-3.

I. Whether the Alleged Buyout Agreement Violates Nevada's Statute of Frauds 

The Trust argues that the Court should reconsider the purely legal issue of whether the alleged

buyout agreement violates Nevada’s Statute of Frauds. See Georgiou Studio, Inc. v. Boulevard Invest.,

LLC, 663 F. Supp. 2d 973, 980 (D. Nev. 2009) (sufficiency of a writing under the Nevada Statute of

Frauds is a question of law); Valdez v. Employers Ins. Co. of Nev., 123 Nev. 170, 174 (2007) (statutory

interpretation is a question of law). Although the Court denied the Trust’s Motion for Summary

Judgment on Pinnacle’s Buy-Out claims on the grounds that the Trust failed to demonstrate “the

absence of a genuine dispute of material fact . . .,” the Trust argues that the Court did not expressly

resolve the issue of whether the statute of frauds applied to preclude enforcement of the Buy-Out

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1 See In re JDS Uniphase Corp. Securities Lit., 2007 WL2900276, *2 (N.D. Cal. Sept. 27, 2007)

(granting motion for reconsideration where the court did not specifically rule on a particular issue). Cf.

Sierra Club, Hawaii Chapt. v. City and County of Honolulu, 486 F. Supp. 2d 1185, 1189 (D. Haw.

2007) (“Although Plaintiffs made similar arguments in their summary judgment motion,”

reconsideration proper as “Rule 60(b) may be used to reconsider legal issues” the court failed to

previously address).

2 Sierra Club, Hawaii Chapt. v. City and County of Honolulu, 486 F. Supp. 2d 1185, 1189 (D.

Haw. 2007) (“Plaintiffs claim that this Court denied the third and fourth claims on a mistaken belief that

it was compelled to do so since it denied their twelfth claim. Plaintiffs contend that their third and fourth

claims are not dependant upon their twelfth claim.”)

3 See Doc. No. 170-4, Ex. L, at Appendix F.

3 08cv1368

Agreement. In support of the instant request, the Trust cites several cases,1 however, these cases do not

support the reconsideration requested. In Sierra Club, Hawaii Chapt. the Court allowed reconsideration

because it had mistakenly denied summary judgment on two of the plaintiffs’ claims.2 In In re JDS

Uniphase Corp. Securities Lit., the Court allowed Defendants to file a motion for reconsideration,

because the Court had not ruled on particular issue. In the instant case, the Trust was required to prove

its statute of frauds defense as a matter of law on a summary judgment motion and failed to do so. The

Court denied the Trust’s motion for summary judgment finding the Trust failed to demonstrate the

absence of a genuine dispute of material fact with regard to Pinnacle’s Buy-Out claims, because the

documents and emails cited by the parties' supported conflicting positions. 

Furthermore, the Trust does not base their argument on newly discovered evidence, clear error, 

or an intervening change in controlling law. School Dist. No. 1J, Multnomah County, Or. v. AcandS,

Inc., 5 F.3d 1255, 1263 (9th Cir.1993). The Trust has not presented any new arguments entitling them to

reconsideration under the rules and is simply rehashing the same arguments they made in their motion

for summary judgment. As such, the Trust’s request for reconsideration is DENIED.

II. The Trust’s Request for Reconsideration of its Damages Counterclaims

A. Relevant Background

Pinnacle moved for partial summary judgment on the Trust’s counterclaim for damages

categorized as Operation Damages.3

 Pinnacle argued that the Trust’s response to Interrogatory No. 16,

which asked the Trust to identify the funding entity for each capital contribution to the gyms, indicated

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4

 Specifically, the Trust’s last payment relating to the gyms occurred on July 3, 2008. See Doc.

No. 170-4, Ex. E, at 5-6. Beginning on July 10, 2008, Mr. Moyes himself began funding CAC

Holdings. Id. 

5

 Fed. R. Civ. P. 56(e); T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626,

630 (9th Cir. 1987); John v. City of El Monte, 515 F.3d 936, 941 (9th Cir. 2008).

6

 The Trust states that Ms. Penrod chose to delineate pre-Pinnacle involvement from

post-Pinnacle involvement and in doing so, simply labeled the funding source in its QuickBooks as

“Jerry C. Moyes” instead of “JVMFT.” See Doc. No. 203, at 5, n. 5.

7 Schuyler v. United States, 987 F. Supp. 835, 840 (S.D. Cal. 1997) (“[A] party opposing

summary judgment cannot create a genuine issue of fact by contradicting or repudiating his own sworn

deposition testimony”); Martinez v. Marin Sanitary Serv., 349 F. Supp. 2d 1234, 1242 (N.D. Cal. 2004).

4 08cv1368

that from July 2008 forward, Mr. Moyes, and not the Trust, funded gym operations.4 [Doc. No. 170-1,

p. 6-7.] In response to Pinnacle’s motion, the Trust submitted the declaration of Elly Penrod, in which

she stated that: (1) Mr. Moyes never personally funded MFC; (2) the source of the inconsistency in the

Trust’s interrogatory answer was a ministerial labeling in the Trust’s QuickBooks accounting entries;

and (3) the Trust used the same -8308 bank account to fund all gym operations. [Doc. No. 175, Ex. 5.] 

Pinnacle’s reply argued that Ms. Penrod’s declaration should be barred by the sham affidavit rule

because it contradicted the Trust’s prior interrogatory responses and was not supported by any credible

or admissible evidence. 

The Court found that Pinnacle demonstrated the absence of a genuine issue of material fact that

as to the funding source based upon the Trust own interrogatory answers, which shifted the burden of

production to the Trust to demonstrate, by affidavit or admissible evidence,5

 that there is a genuine issue

for trial. Upon review of the Trust’s unsupported affidavit from Ms. Penrod, the Court found the

explanation provided by Ms. Penrod6

 and the contradictory nature of the declaration unpersuasive in

light of the Trust’s failure to provide documentary support in thier opposition to the motion or to amend

their prior response to Interrogatory No. 16. The Court found the sham affidavit rule precluded the

Trust from creating a genuine dispute of material fact by contradicting its prior interrogatory answers

and granted Pinnacle’s motion for summary judgment on the Trust’s counterclaim for Operational

Damages.7

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8

 Federal Rule of Civil Procedure Rule 26(e) entitled Supplementing Disclosures and Responses,

states:

(1) In General. A party who has made a disclosure under Rule 26(a)--or who has responded to an

interrogatory, request for production, or request for admission--must supplement or correct its

disclosure or response:

(A) in a timely manner if the party learns that in some material respect the disclosure or

response is incomplete or incorrect, and if the additional or corrective information has not

otherwise been made known to the other parties during the discovery process or in

5 08cv1368

B. The Trust’s Request for Reconsideration

The Trust argues that it has been unfairly deprived of significant relief by this Court’s Order

granting Pinnacle’s motion for summary judgment, which held that the Trust could not, as a matter of

law, recover millions of dollars in Operational Damages on its Counterclaim. The Trust argues that 

because Pinnacle raised the sham affidavit rule, for the first time in its Reply, the Trust has “suffered

real prejudice” because it did not have a full and fair opportunity to respond to Pinnacle’s argument.

This argument misses the mark. The subject interrogatory was advanced by Pinnacle in their motion as

the key evidence driving the disposition of the issue. The Trust had a full opportunity to present all the

evidence they wanted in disputing Pinnacle’s point. The Trust chose, instead, to submit the unsupported

declaration of Ms. Penrod, rather than any of the documents it claims exists, and would have presumably

existed at the time the Trust’s opposition was filed. 

The Trust states that subsequent to the filing of Pinnacle’s Reply, it sought to promptly

supplement the record with the very documents Pinnacle claimed did not exist, documents that would

confirming that the amounts funded from July 2008 forward came from the same -8308 bank account as

the amounts funded by the Trust. The Court notes, however, that the Trust has not to date actually

produced any such documents or evidence. Even if the Trust were to do so at this late juncture, such

production would be extremely untimely because the Trust hasn’t provided any explanation as to why

these documents could not have been provided in conjunction with their opposition and the filing of Ms.

Penrod’s declaration. The Court finds the Trust’s argument without any citation that testimony need not

be supported by a document to be "credible" or admissible unavailing in light of contradictory and

unsupported nature of Ms. Penrod’s declaration and the requirements of Rule 56. 

The Court also finds the Trust’s contention that it has supplemented its response to Interrogatory

No. 16 equally unpersuasive. The Trust argues that “Rule 26(e)8

 expressly allows a party to supplement

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writing; or

(B) as ordered by the court. 

9

The definition of what is “seasonable” is left to the “sound discretion of the court.” Phil

Crowley Steel Corp. V. Macomber, 601 F.2d 342 (8th Cir. 1979). See also, the 1993 Committee Note to

Rule 26 (e) that “[S]upplementations . . . should be made at appropriate intervals.”

6 08cv1368

or correct an interrogatory response (or other disclosure) either (1) in writing or (2) by making the

correction known to the opposing party during the discovery process.” See Reply, Doc. No. 203, at 7, n.

9. See Fed. R. Civ. P. 26(e)(1)(A). The Trust contends that it has complied with Rule 26(e) by making

Pinnacle “abundantly aware of its position, including through Ms. Penrod’s declaration, in multiple

letters and during discovery proceedings before Magistrate [Judge] Bernard Skomal.” Id. However,

none of this was not advanced in opposition to the motion itself, and as described, suggests something

less than the type of amendment contemplated by the clear language of Rule 26(e). Further it’s

timeliness as an “amendment” or “supplement” under the Rule is suspect and certainly not

“seasonably”9 made in the face of Plaintiff’s motion.

The Trust’s final argument contends that the Trust “suffered real prejudice as a result of being

denied oral argument,” because the Trust was not afforded an opportunity to address the substance of

Pinnacle’s sham declaration arguments and summary judgment was granted on the Trust’s counterclaim. 

See Doc. No. 203, at 8. The Ninth Circuit has held that “[a] district court's failure to grant an oral

hearing on a motion for summary judgment does not constitute reversible error in the absence of

prejudice.” Fernhoff v. Tahoe Reg'l Planning Agency, 803 F.2d 979, 983 (9th Cir.1986); see also

Houston v. Bryan, 725 F.2d 516, 518 (9th Cir.1984). “When a party has [had] an adequate opportunity

to provide the trial court with evidence and a memorandum of law, there is no prejudice [in a refusal to

grant oral argument] since any error can be rectified by an appeal of the summary judgment.” Lake at

Las Vegas Investors Group, Inc. v. Pacific Malibu Dev. Corp., 933 F.2d 724, 729 (9th Cir.1991). In

other words, a district court can decide the issue without oral argument if the parties have an opportunity

to submit their papers to the court. That opportunity was given to the parties in this case and there is no

evidence or explanation for why the Trust failed to provide these documents in response to Pinnacle’s

motion. Furthermore, nothing in the district court record suggests that Trust was prejudiced by the lack

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of oral argument. The Trust’s suggestion that they would have provided these documents for the first

time at the hearing, without any justification for such delay, mistakes the purpose of oral argument.

Conclusion

For the reasons set forth above, the Trust’s motion for oral argument on reconsideration, and

reconsideration itself, is hereby DENIED.

DATED: March 1, 2012

Hon. Anthony J. Battaglia

U.S. District Judge

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