Court Opinion

ID: 4211398
Source: CourtListenerOpinion
Date Created: 2017-10-12 20:00:58.796953+00
Date Added: 2024-06-11T14:41:32.768846
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            OCT 12 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

WESTERN ALLIANCE BANK,                           No.   16-15077

              Plaintiff-counter-                 D.C. No. 2:14-cv-00761-JWS
              defendant-Appellee,

 v.                                              MEMORANDUM*

RICHARD A. JEFFERSON,

              Defendant-counter-claim-
              3rd-party-plaintiff-
              Appellant,

  v.

THEODORE KRITZA, a married man and
MICHELLE KRITZA, a married woman,

              Third-party-defendants.

                    Appeal from the United States District Court
                             for the District of Arizona
                    John W. Sedwick, District Judge, Presiding

                    Argued and Submitted September 12, 2017
                            San Francisco, California

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                                                                             Page 2 of 4
Before: WALLACE, TASHIMA, and WATFORD, Circuit Judges.

      1. The district court properly granted summary judgment in favor of

Western Alliance Bank on its breach of contract claim against Richard Jefferson.

In the forbearance agreement, Jefferson agreed to accept liability for the

outstanding balance on the line of credit, notwithstanding his contention that the

documents comprising the line of credit had been forged. In return, the Bank

agreed that it would not pursue immediate legal action against Jefferson,

notwithstanding its contention that Jefferson was liable under the line of credit and

already in default. The Bank agreed to forgo pursuing its legal remedies under the

line of credit until January 15, 2014.

      The forbearance agreement thus represented a pre-litigation settlement of the

parties’ impending legal dispute over whether Jefferson was liable notwithstanding

the alleged forgery. Jefferson gave up the right to contest his liability for the

outstanding balance in return for independent consideration from the Bank. There

is no dispute that the Bank performed its end of the bargain (by not suing Jefferson

before January 15, 2014), and it is undisputed that Jefferson breached the

agreement by not paying the outstanding balance by January 15, 2014.

Accordingly, the Bank was entitled to summary judgment on its breach of contract

claim. Our disposition renders it unnecessary to decide whether Jefferson’s
                                                                           Page 3 of 4
entering into the forbearance agreement had the effect of ratifying the forgery,

whether Arizona law permits ratification in these circumstances, and whether the

Bank was judicially estopped from arguing ratification.

      Jefferson contends that the Bank induced him into signing the forbearance

agreement through misrepresentation and concealment, because the Bank led him

to believe that there was one continuous line of credit when in fact there were

several different lines of credit. The undisputed facts show that the Bank provided

Jefferson and his legal team with all relevant documents relating to the line or lines

of credit, and that Jefferson had the advice of counsel before he decided to enter

into the forbearance agreement. Jefferson may now regret signing the agreement,

but he was not defrauded into doing so.

      2. The district court did not abuse its discretion in denying Jefferson’s

request to modify the scheduling order so that he could amend his answer and

counterclaims. To obtain such relief under Federal Rule of Civil Procedure 16,

Jefferson was required to show good cause and diligence, but he failed to do so.

See Santillan v. USA Waste of Cal., Inc., 853 F.3d 1035, 1048 (9th Cir. 2017). As

the district court found, Jefferson knew at the time the scheduling order was

entered that the deadline for amendments would pass before the period for

conducting discovery closed. Thus, if Jefferson anticipated using information
                                                                            Page 4 of 4
produced during discovery as the basis for amending his pleadings, he should have

objected then. Instead, Jefferson waited eight months to seek leave to amend.

Even then, he did not make a persuasive showing that the proposed amendments

were based on information that he obtained only after the original deadline for

amendments had passed.

      3. The district court properly dismissed Jefferson’s counterclaims. As held

above, when Jefferson entered into the forbearance agreement, he gave up the right

to contest his liability for the outstanding balance owed under the line of credit,

notwithstanding his contention that he owed nothing in light of the alleged forgery

that occurred. Jefferson’s counterclaims simply sought to relitigate that dispute by

alleging that the Bank was negligent in failing to catch the alleged forgery. The

bargain Jefferson struck under the forbearance agreement precluded him from

pursuing his counterclaims.

      AFFIRMED.

      Jefferson’s Request for Judicial Notice (Docket Entry 42) is DENIED.