Source: http://ks.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180725_0001092.DKS.htm/qx
Timestamp: 2019-04-25 18:20:24+00:00

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Pacific National Capital, LLC, et al., Defendants.
In 2016, plaintiff Watchous Enterprises was attempting to secure financing for its oil and gas explorations. Defendant Pacific agreed to act as a broker to find a lender or joint venture partner for Watchous. To help secure the financing, Watchous alleges it gave a $175, 000 deposit to the Waterfall Mountain Group,  a proposed investor endorsed by Pacific and its officers.
Watchous never obtained the financing from Waterfall, and alleges it lost the deposit. It filed this action against Pacific and Waterfall on December 7, 2016, alleging breach of contract, negligence, and fraud claims against Defendants relative to agreements relating to the proposed funding of a joint venture with Watchous. The Waterfall corporate defendants failed to appear and were ordered to show cause why they should not be held in default. On November 6, 2017, the court entered judgment against Waterfall in the amount of $175, 000. (Dkt. 82).
The matter is before the court following Watchous's motion to enforce an alleged April 3, 2017 settlement agreement against Pacific, and its motion for leave to file a Second Amended Complaint presenting RICO claims against the remaining defendants.
Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, the court must examine all evidence in a light most favorable to the opposing party. McKenzie v. Mercy Hospital, 854 F.2d 365, 367 (10th Cir. 1988). The party moving for summary judgment must demonstrate its entitlement to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir. 1985). The moving party need not disprove plaintiff's claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir. 1987).
In resisting a motion for summary judgment, the opposing party may not rely upon mere allegations or denials contained in its pleadings or briefs. Rather, the nonmoving party must come forward with specific facts showing the presence of a genuine issue of material fact for trial and significant probative evidence supporting the allegation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Once the moving party has carried its burden under Rule 56(c), the party opposing summary judgment must do more than simply show there is some metaphysical doubt as to the material facts. "In the language of the Rule, the nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)) (emphasis in Matsushita). One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and the rule should be interpreted in a way that allows it to accomplish this purpose. Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
On February 8, 2017, Watchous's attorney Jim Walker emailed a settlement offer to Charles Hyland, counsel for the defendants, asking for $175, 000 to settle the case. Of this amount, $35, 000 was to paid in ten days, with the remaining balance to be paid in two equal installments and bearing interest at 10% per annum pursuant to K.S.A. § 16-201.
The next day, Hyland forwarded the offer to William Mournes and Gordon Duval of Waterfall, and Charles Elfsten, the President of Pacific).
On February 24, Hyland responded to Walker, writing that his "clients are in general agreement with the offer, that is they will pay $175, 000, but we will have some suggested edits to the terms you provided in the next couple of days."
On March 1, Elfsten of Pacific emailed Hyland about a draft counter-offer, and asked to see the draft because Pacific was a party to the lawsuit. Hyland sent Elfsten a redline version showing his proposed changes to Watchous' offer.
On March 3, 2017, Hyland sent Walker a counteroffer to settle the case.
Watchous's counsel responded by another counteroffer on March 9. Hyland forwarded this to Mournes, Duval and Elfsten.
Additional negotiations occurred during March, and Elfsten was included in communications relating to those negotiations.
On March 22, Watchous's counsel wrote to Hyland that "I appreciate your efforts to get this matter resolved. However, since we have yet to reach a settlement and the case's deadlines remain in place, we must move forward with litigation." He then asked for dates in April for the depositions of Elfsten, Mournes, Duval, and Pacific Senior Vice President Mark Hasegawa.
2. Upon full payment of the amount described in #1, Plaintiff will dismiss the case with prejudice with full release to all defendants, their officers and employees.
3. If Defendants do not pay the amount in #1, then Defendants agree that the unpaid amount will accelerate and Defendants well pay reasonable attorney fees to Plaintiff incurred enforcing the settlement agreement.
4. If Defendants do no [sic] pay the amount in #1, then the releases will not be effective, but Defendants will receive credit for any payment.
5. All agreements between the parties will be terminated and released as part of the settlement agreement, with the payments described herein the only payments owed.
6. The parties will jointly move the court to delay the pending deadlines to allow this agreement to be completed.
7. Each side will bear its own costs and fees (except as modified by #3 if Defendants breach the agreement).
Except for the payment dates, this offer is substantially identical to the offer that Watchous accepted.
Based on our conversation this morning, I thought you were going to send me an email confirming your responses and the open issues and those features of the settlement that appeared to be acceptable. The reason I thought that is because you said you would send me a confirming email.
On March 31, Hyland forwarded the prior email from Watchous's counsel to Mournes, Duval, Elfsten and Hasegawa, writing: "I did not get you're [sic] okay yesterday on what I proposed. If what I proposed is acceptable, then let's let him know and we can avoid the requested discovery."
Elfsten replied to Hyland, "Charles, I was told yesterday that Gordon and Bill will talk to you this morning. Please let me know if they are OK with your proposal as I am told they are by Bill. Thanks for your help."
Hyland wrote back to Elfsten, "I just need confirmation from Bill that what I draft is okay to send to Watchous."
Later on March 31, Elfsten emailed: "Per my conversation with Bill Mournes just now, he told me to add 10 days to the April 10th date and let's add 10 days to the other two dates and submit it. Bill and I approve that." He also wrote that Mournes had said "he will call you shortly and I'm giving him your cell phone to do that."

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