Court Opinion

ID: 6346240
Source: CourtListenerOpinion
Date Created: 2022-06-02 20:00:30.122872+00
Date Added: 2024-06-11T09:15:50.267353
License: Public Domain

FILED
                            NOT FOR PUBLICATION
                                                                             JUN 2 2022
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

JERRY ALEXANDER; et al.,                         No.   20-16688

              Plaintiffs-Appellants,             D.C. No.
                                                 3:16-cv-00572-MMD-CLB
 v.

DEAN MEILING; et al.,                            MEMORANDUM*

              Defendants-Appellees.

JERRY ALEXANDER; et al.,                         No.   21-15223

              Plaintiffs-Appellees,              D.C. No.
                                                 3:16-cv-00572-MMD-CLB
 v.

DEAN MEILING; et al.,

              Defendants-Appellants,

 and

JANET CHUBB; et al.,

              Defendants.

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                   Appeal from the United States District Court
                            for the District of Nevada
                  Miranda M. Du, Chief District Judge, Presiding

                       Argued and Submitted May 11, 2022
                            San Francisco, California

Before: W. FLETCHER and BUMATAY, Circuit Judges, and KANE,** District
Judge.

      In appeal No. 20-16688, Plaintiffs—twenty-two investors in and former

members of Metalast International, LLC (“MILLC”)—appeal from the district

court’s grant of a Rule 12(b)(6) motion to dismiss brought by Defendants Dean

Meiling; Madylon Meiling; Janet Chubb; Chemeon Surface Technology, LLC;

Metalast Surface Technology, LLC; D&M-MI, LLC; DSM Partners, Ltd.; Meiling

Family Partners, Ltd.; Meridian Advantage; and James Proctor. Plaintiffs allege

that Defendants conspired to fraudulently convert and acquire the assets of MILLC

through a Nevada state court receivership proceeding.

      In appeal No. 21-15223, Defendants Dean Meiling; Madylon Meiling;

Chemeon Surface Technology, LLC; Metalast Surface Technology, LLC; D&M-

MI, LLC; Metalast Surface Technology, LLC; DSM Partners, Ltd.; and Meiling

Family Partners, Ltd. (collectively, “Meiling Defendants”), appeal from the district

      **
            The Honorable Yvette Kane, United States District Judge for the
Middle District of Pennsylvania, sitting by designation.

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court’s denial of their motion for attorneys’ fees. The Meiling Defendants contend

that they are entitled to attorneys’ fees under the MILLC operating agreement

(“Operating Agreement”), as well as under Nevada Revised Statute § 18.010(2)(b).

      We have jurisdiction under 28 U.S.C. § 1291. We affirm in appeal No. 20-

16688, and affirm in part and reverse in part in appeal No. 21-15223.

      1. We review a grant of a Rule 12(b)(6) motion to dismiss de novo. Lacey v.

Maricopa Cnty., 693 F.3d 896, 911 (9th Cir. 2012) (en banc). To survive a motion

to dismiss, the complaint “must contain sufficient factual matter, accepted as true,

to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (internal quotation marks omitted) (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007)). We review the denial of leave to amend for

abuse of discretion. Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 798 (9th Cir. 1991).

      Plaintiffs argue that the district court erred in holding that their claims are

barred by Nevada’s litigation privilege. The privilege is “quite broad” under

Nevada law. Fink v. Oshins, 49 P.3d 640, 644 (Nev. 2002) (per curiam). The

privilege “immunizes from civil liability communicative acts occurring in the

course of judicial proceedings, even if those acts would otherwise be tortious,”

Greenberg Traurig v. Frias Holding Co., 331 P.3d 901, 902 (Nev. 2014) (en banc),

including statements made “when the motives behind them are malicious and they

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are made with knowledge of the communications’ falsity,” Jacobs v. Adelson, 325

P.3d 1282, 1285 (Nev. 2014) (en banc). It extends to “communication[s] [] made

before a judicial proceeding is initiated,” but “only if the communication is made

in contemplation of initiation of the proceeding.” Fink, 49 P.3d at 644 (internal

quotation marks omitted). The communication “need not be strictly relevant to any

issue involved in the proposed or pending litigation, it only need be in some way

pertinent to the subject of controversy.” Id. (footnote and internal quotation marks

omitted). It applies to communications made by both attorneys and non-attorneys

relating to both judicial and quasi-judicial proceedings. Jacobs, 325 P.3d at 1285.

Nevada courts are to “apply the absolute privilege liberally, resolving any doubt in

favor of its relevancy or pertinency.” Fink, 49 P.3d at 644 (internal quotation

marks omitted).

       We accept the allegations in Plaintiffs’ complaint as true. We agree with the

district court that all of Plaintiffs’ claims necessarily entail a challenge to

Defendants’ communications made either in anticipation of or during the Nevada

receivership proceeding in which Defendant D&M-MI, LLC, purchased the assets

of insolvent MILLC. The Meilings’ alleged false promises to lend additional funds

to MILLC, in addition to Proctor’s and Chubb’s misrepresentations about their

relationship with the Meilings, were all made with the intention of obtaining

                                            4
MILLC’s financial information for use in support of the receivership action.

Defendants’ alleged collective orchestration of the appointment of Proctor as

receiver, Proctor’s placement of the Meilings in charge of operations at MILLC,

and the sale and transfer of MILLC’s assets to D&M-MI, LLC, all occurred during

the receivership proceeding. The litigation privilege thus bars Plaintiffs’ claims,

and the district court did not err in so holding. The district court did not abuse its

discretion in denying Plaintiffs’ request for leave to amend, concluding that

amendment would be futile. See AmerisourceBergen Corp. v. Dialysist W., Inc.,

465 F.3d 946, 951 (9th Cir. 2006).

      2. We review a denial of attorneys’ fees for abuse of discretion. Avery v.

First Resol. Mgmt. Corp., 568 F.3d 1018, 1021 (9th Cir. 2009); Barber v. Hawai’i,

42 F.3d 1185, 1198 (9th Cir. 1994).

      “Factual assertions in pleadings . . . , unless amended, are considered judicial

admissions conclusively binding on the party who made them.” Am. Title Ins. Co.

v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988). “Judicial admissions are

formal admissions in the pleadings which have the effect of withdrawing a fact

from issue and dispensing wholly with the need for proof of the fact.” Id. (quoting

In re Fordson Eng’g Corp., 25 B.R. 506, 509 (Bankr. E.D. Mich. 1982)). The

Supreme Court has endorsed this standard in the context of a party’s attempt to

                                           5
assert arguments contrary to its initial pleadings, finding that such factual

concessions are binding. Amgen, Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S.

455, 470 n.6 (2013) (citing Lacelaw, 861 F.2d at 226).

      The Meiling Defendants are entitled to attorneys’ fees as a result of the

binding admissions in the First Amended Complaint. These admissions establish

that: (1) the Meiling Defendants were members of MILLC under the Operating

Agreement; and (2) the Meiling Defendants, as members of MILLC, were “subject

to [MILLC]’s [O]perating [A]greement, and the various duties, rights, and

obligations contained therein.” Pursuant to these admissions, Plaintiffs sued to

enforce the terms of the Operating Agreement, which the Meiling Defendants had

purportedly breached. Section 12.2 of the Operating Agreement provides that the

“prevailing parties” to an action to enforce the agreement’s terms are entitled to

attorneys’ fees, and the Meiling Defendants are prevailing parties in such an action.

Cf. 145 E. Harmon II Tr. v. Residences at MGM Grand – Tower A Owner’s Ass’n,

460 P.3d 455, 458-59 (Nev. 2020). The district court erred in ignoring these

binding judicial admissions, and we therefore reverse and remand to the district

court to determine a reasonable award of contractual attorneys’ fees to the Meiling

Defendants.

                                           6
      The Meiling Defendants also assert that they are entitled to fees under

Nevada Revised Statute § 18.010(2)(b). However, we are limited to reviewing the

district court’s decision for abuse of discretion and cannot alter its judgment

simply because we may have ruled differently had we been the court of initial

review. Cf. Aircraft Serv. Int’l, Inc. v. Int’l. Broth. of Teamsters, 779 F.3d 1069,

1072 (9th Cir. 2015); United States v. Doe, 705 F.3d 1134, 1150 (9th Cir. 2013).

The district court did not abuse its discretion in declining to find that this case was

groundless or filed with intent to harass.1

      AFFIRMED in No. 20-16688. REVERSED AND REMANDED IN

PART AND AFFIRMED IN PART in No. 21-15223.

      1
       We grant Plaintiffs’ request for judicial notice in appeal No. 21-15223
(Dkt. No. 28).

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