Court Opinion

ID: 4528757
Source: CourtListenerOpinion
Date Created: 2020-04-24 21:00:27.357206+00
Date Added: 2024-06-11T09:26:46.841285
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        APR 24 2020
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

LUX EAP, LLC, a Wyoming Limited                 No.    19-55453
Liability Company,
                                                D.C. No.
      Plaintiff-counter-                        5:17-cv-01359-DMG-SP
      defendant-Appellant,

 v.                                             MEMORANDUM*

KATHLEEN A. BRUNER; ROBERT
BRUNER,

      Defendants-counter-
      claimants-Appellees,

 v.

PHIL NEUMAN; COLIN C. CONNER II,

      Counter-defendants-
      Appellants.

                   Appeal from the United States District Court
                      for the Central District of California
                     Dolly M. Gee, District Judge, Presiding

                     Argued and Submitted February 12, 2020
                              Pasadena, California

Before: BERZON, TALLMAN, and R. NELSON, Circuit Judges.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Lux EAP, LLC (“Lux”) appeals from a certified final judgment pursuant to

Federal Rule of Civil Procedure 54(b) in favor of Appellees Kathleen and Robert

Bruner following the district court’s grant of partial summary judgment on all of

the claims raised by Lux and some of the counterclaims raised by the Bruners, and

its denial of Lux’s motions to withdraw admissions and to strike pursuant to

Federal Rules of Civil Procedure 36(b) and 12(f). On appeal, Lux argues that the

district court abused its discretion by not granting its motions, and also that the

district court erred in its interpretation of the parties’ contracts. We have

jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm.

      The district court did not abuse its discretion in denying Lux’s motion to

withdraw admissions. The court concluded after a hearing that both prongs of

Rule 36(b) were met. But it nonetheless exercised its discretion to deny Lux’s

motion, holding that Lux had not shown good cause for its delay in seeking relief

from the deemed admissions because, although Lux had been aware of its

admissions for weeks, it failed to file a motion to withdraw them prior to the

summary judgment hearing. The court could have granted Lux’s motion to

withdraw on these facts, but it was not obligated to do so. See Fed. R. Civ. P.

36(b); Conlon v. United States, 474 F.3d 616, 621–25 (9th Cir. 2007). The court

properly weighed the Rule 36(b) factors, considered the relevant caselaw, the

history of the parties’ conduct of the litigation, and exercised its discretion to deny

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Lux’s motion.

      The district court likewise did not abuse its discretion in denying Lux’s

motion to strike. The timeliness argument Lux sought to strike was raised in the

Bruners’ summary judgment motion. But even if the argument were first raised in

the Bruners’ reply brief, it was not an abuse of discretion for the district court to

consider it because the district court gave Lux the opportunity to respond in

supplemental briefing—an offer Lux declined. See El Pollo Loco, Inc. v. Hashim,

316 F.3d 1032, 1040–41 (9th Cir. 2003).

      Since the district court did not err in refusing the request to withdraw the

damaging admissions and relying upon them in awarding partial summary

judgment to the Bruners, we need not reach the alternative ground that the contract

language did not support LUX’s argument that the management agreement was in

fact a sale of the company.

      Costs are awarded to Appellees.

      AFFIRMED.

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                                                                      FILED
LUX EAP, LLC v. Bruner, No. 19-55453
                                                                      APR 24 2020
BERZON, Circuit Judge, dissenting:                                 MOLLY C. DWYER, CLERK
                                                                    U.S. COURT OF APPEALS

      I respectfully dissent. I would hold that the district court abused its

discretion when it denied Lux’s motion to withdraw admissions.

      This case is quite different from Conlon v. United States, 474 F.3d 616,

625 (9th Cir. 2007), in which the defendant warned the plaintiff repeatedly

over a two-month period that he had missed the deadline to respond to the

defendant’s requests for admissions and the plaintiff “could not show good

cause for his dilatory conduct.” Here, Lux e-mailed its responses to the

Bruners on the day they were required to be served, and served them by

mail two days later. There is no dispute that the Bruners received the e-

mailed responses on the day Lux sent them. Thus, the “delay” relied upon

by the district court was just a technical failure to follow the service rules,

which did not allow service by e-mail. There was no actual delay in

communicating responses, and so no possible prejudice to the Bruners.

      Moreover, the Bruners themselves did not identify the e-mail service

problem in their opening brief on summary judgment. Instead, they

miscalculated the deadline and argued that Lux had failed to meet the

incorrectly calculated deadline. It was not until their reply brief that the
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Bruners first indicated that Lux’s responses were late because e-mail

service was not permitted. At that point, Lux’s counsel made the unwise

but understandable decision to wait to move to withdraw the admissions

until the already-scheduled hearing on the motions for summary judgment

two weeks later, instead of filing a disfavored ex parte motion.

      Given the mistakes on both sides and the lack of any prejudice

whatsoever to the Bruners, it was an abuse of discretion to deny Lux’s

motion. Lux should have been permitted to withdraw the admissions. I

would therefore reverse and remand the claims on which the district court

concluded that the Bruners were entitled to summary judgment based

solely on the admissions. As the majority does not reach the contract-

interpretation claim on the merits, I do not either.

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