Rennison v. Laub

2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 BRAD RENNISON dba TAHOE HOME Case No. 3:19-cv-00320-MMD-CLB REPAIR SERVICES, 7 ORDER Plaintiff, 8 v. 9 10 JOSEPH LAUB, et al., 11 Defendants. 12 13 I. SUMMARY 14 This action involves allegations of legal malpractice brought by Plaintiff Brad 15 Rennison dba Tahoe Home Repair Services against Defendants Joseph Laub and the 16 Law Firm of Laub & Laub (collectively, “Defendants”). Before the Court are Defendants’ 17 motion to dismiss (“Defendants’ Motion”) (ECF No. 24) and Plaintiff’s motion for summary 18 judgment (“Plaintiff’s Motion”) (ECF No. 36).1 For the reasons discussed below, the Court 19 grants Defendants’ Motion and denies Plaintiff’s Motion. 20 II. BACKGROUND 21 The following facts are undisputed unless noted otherwise. 22 In April 2016, Brad Rennison and Niseko Real Estate 2015, LLC entered into an 23 agreement for the rehabilitation of “Balboa” and “Pinter” properties located in South Lake 24 Tahoe, California. (ECF No. 36-6 at 3; ECF No. 36-7 at 3-4.) Primo Quitevis, a Property 25 Supervisor for Niseko’s nonmember manager Wedgewood, was responsible for 26 27 1The Court has reviewed the parties’ respective responses (ECF Nos. 25, 40) and 28 replies (ECF Nos. 26, 42). 2 property manager for the rehabilitation. (ECF No. 36-8 at 3.) Erik Hoover, another property 3 manager for Wedgewood, later replaced Stair on the Balboa property. (ECF No. 36-14 at 4 2.) 5 In March 2017, Laub wrote to Niseko on behalf of Plaintiff, alleging that Plaintiff had 6 not been paid $181,378.91 for work on the Balboa property. (ECF No. 36-16 at 2.) In April 7 2017, Laub filed a lawsuit on behalf of Plaintiff in the El Dorado County Superior Court of 8 California against Niseko and Wedgewood, alleging breach of contract, common counts, 9 and fraud (“State Court Case”). (ECF No. 36-17 at 2-6.) Niseko later brought a cross-claim 10 against Plaintiff for breach of contract, fraud, negligent misrepresentation, conversion, 11 unjust enrichment, and money had and received. (ECF No. 36-20.) 12 Laub did not serve any discovery requests on Niseko or Wedgewood for the cross- 13 claim. (ECF No. 36-3 at 21-22.) After Plaintiff failed to respond to Niseko’s discovery 14 requests, including requests for admission, Niseko filed motions to compel responses, to 15 establish admissions, and for sanctions. (ECF No. 36-5 at 5-6; ECF No. 36-27 at 8.) The 16 state court issued tentative rulings granting these motions, which were later fully adopted 17 after Plaintiff failed to request a hearing on the rulings. (ECF No. 36-5 at 6-11.) Niseko 18 moved for summary judgment on Plaintiff’s complaint in October 2018. (Id. at 12.) Plaintiff 19 failed to oppose the motion. (Id. at 12-14.) Two days before the hearing on Niseko’s 20 summary judgment motion, a substitution of attorney was filed removing Laub as Plaintiff’s 21 attorney. (ECF No. 36-5 at 14; ECF No. 36-34.) Plaintiff appeared pro se at the hearing. 22 (ECF No. 36-5 at 14.) The state court granted Niseko’s summary judgment motion. (Id.) 23 Plaintiff asserts two claims against Defendants for legal malpractice and breach of 24 fiduciary duty. (ECF No. 1 at 6-11.) 25 III. MOTION TO DISMISS (ECF NO. 24) 26 Defendants seek dismissal of Plaintiff’s breach of fiduciary duty claim because it is 27 duplicative of his legal malpractice claim under Nevada law. (ECF No. 24 at 2.) Plaintiff 28 counters that California law controls in this action, under which he has adequately pleaded 2 Because this is a diversity action filed in the District of Nevada, Nevada law governs 3 the Court’s analysis of the choice of law issue. See Cleary v. News Corp., 30 F.3d 1255, 4 1265 (9th Cir. 1994) (“A district court in diversity jurisdiction must apply the law of the 5 forum state to determine the choice of law.”); see also Klaxon Co. v. Stentor Elec. Mfg. 6 Co., 313 U.S. 487, 496 (1941). Nevada uses the most significant relationship test from the 7 Restatement (Second) of Conflict of Laws to govern choice of law issues. See Gen. Motors 8 Corp. v. Eighth Judicial Dist. Court of State of Nev. ex rel. Cty. of Clark, 134 P.3d 111, 116 9 (Nev. 2006); Restatement (Second) of Conflict of Laws § 145 (Am. Law Inst. 1971). 10 Under this test, “[t]he rights and liabilities of the parties with respect to an issue in 11 tort are determined by the local law of the state which . . . has the most significant 12 relationship to the occurrence and the parties . . ..” Restatement (Second) of Conflict of 13 Laws § 145(1). The factors relevant to deciding which state has the most significant 14 relationship to the issues includes: “(a) the place where the injury occurred, (b) the place 15 where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place 16 of incorporation and place of business of the parties, and (d) the place where the 17 relationship, if any, between the parties is centered.” Id. at § 145(2). No one factor is 18 dispositive, as each should “be evaluated according to their relative importance with 19 respect to the particular issue.” Id. 20 Here, factors (a), (b), and (d) weigh heavily in favor of California. Plaintiff alleges 21 that the underlying conduct giving rise to the State Court Case occurred in California, a 22 California court entered judgment against Plaintiff because of Defendants’ actions, and 23 24 2Plaintiff also argues that Defendants’ 12(b)(6) motion is untimely because they 25 have already filed their answer. (ECF No. 25 at 7-8.) However, the Ninth Circuit instructs that where “[d]efendants filed their motion to dismiss after their answer” courts should treat 26 the motion “as a motion for judgment on the pleadings, pursuant to Rule 12(c) or 12(h)(2).” Elvig v. Calvin Presbyterian Church, 375 F.3d 951, 954 (9th Cir. 2004); c.f. Gregg v. 27 Hawaii, Dep’t of Pub. Safety, 870 F.3d 883, 887 (9th Cir. 2017) (citation and internal quotation marks omitted) (“Because a Rule 12(c) motion is functionally identical to a Rule 28 12(b)(6) motion, the same standard of review applies to motions brought under either rule.”). 2 6.) Accordingly, Plaintiff’s alleged injuries occurred in California, not Nevada. Factor (c) is 3 split between California and Nevada—Plaintiff is a California resident, Laub is a Nevada 4 resident, and the Law Firm of Laub & Laub is a Nevada company who regularly does 5 business in California. (Id. at 2.) Because the Court finds that factors (a), (b), and (d) 6 substantially outweigh factor (c), the Court will apply California law to Plaintiff’s claims.3 7 See Thornell v. Seattle Service Bureau, Inc., 742 F. App’x. 189, 193 (9th Cir. 2018) 8 (“[D]etermining which state’s law applies is appropriate at the motion to dismiss stage, if 9 the pleaded facts allow it.”). 10 However, the Court agrees with Defendants that even under California law, 11 Plaintiff’s breach of fiduciary duty claim is duplicative.4 (See ECF No. 26 at 2-3) (citing 12 Broadway Victoria, LLC v. Norminton, Wiita & Fuster, 217 Cal. Rptr. 3d 414 (Cal. App. 2 13 Dist. 2017) (depublished).5 Plaintiff’s claims arise from the same facts and allege the same 14 injury. (See ECF No. 1 at 6-11); see also Afont v. Poynter Law Grp., No. SACV 17-01388 15 JVS (KESx), 2018 WL 6136147, at *6-7 (C.D. Cal. Nov. 5, 2018) (granting summary 16 judgment for defendants on plaintiff’s breach of fiduciary duty claim “because the 17 allegations underlying the fiduciary duty claim are duplicative of those underlying the legal 18 malpractice claim”). Accordingly, the Court dismisses Plaintiff’s breach of fiduciary duty 19 20 3Because of the weight of factors (a), (b), and (d) the Court would reach the same conclusion if the factors listed under general contract principles were applied. Restatement 21 (Second) of Conflict of Laws § 188(2). 22 4The elements of legal malpractice and breach of fiduciary duty are similar under California law. Compare Coscia v. McKenna & Cuneo, 25 P.3d 670, 672 (Cal. 2001) (“In 23 a legal malpractice action arising from a civil proceeding, the elements are (1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession 24 commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage 25 resulting from the attorney’s negligence.”), with Gutierrez v. Girardi, 125 Cal.Rptr.3d 210, 215 (Cal. App. 2 Dist. 2011) (“The elements of a cause of action for breach of fiduciary 26 duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.”). 27 5The Court may not rely on Broadway Victoria, LLC because it has been de- 28 published by the California Supreme Court. See Cal. Rules of Court, Rule 8.1115(a). 2 IV. MOTION FOR SUMMARY JUDGMENT (ECF NO. 36) 3 A. Legal Standard 4 “The purpose of summary judgment is to avoid unnecessary trials when there is no 5 dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., 18 6 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, 7 the discovery and disclosure materials on file, and any affidavits “show that there is no 8 genuine issue as to any material fact and that the moving party is entitled to a judgment 9 as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is 10 “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could 11 find for the nonmoving party and a dispute is “material” if it could affect the outcome of the 12 suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 13 Where reasonable minds could differ on the material facts at issue, however, summary 14 judgment is not appropriate. See id. at 250-51. “The amount of evidence necessary to 15 raise a genuine issue of material fact is enough ‘to require a jury or judge to resolve the 16 parties’ differing versions of the truth at trial.’” Aydin Corp. v. Loral Corp., 718 F.2d 897, 17 902 (9th Cir. 1983) (quoting First Nat’l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 18 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all 19 inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. 20 Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986). 21 The moving party bears the burden of showing that there are no genuine issues of 22 material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the 23 moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting the 24 motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 25 26 6Plaintiff argues that because Defendants deny the existence of a prior attorney- 27 client relationship between the parties, he should be permitted to plead in the alternative that Defendants owed him a separate fiduciary duty. (ECF No. 25 at 5-7.) However, 28 Plaintiff has not alleged facts supporting the existence of any fiduciary duty outside of the attorney-client relationship. (See ECF No. 1 at 3-6.) 2 produce specific evidence, through affidavits or admissible discovery material, to show 3 that the dispute exists,” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), 4 and “must do more than simply show that there is some metaphysical doubt as to the 5 material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting 6 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). “The mere 7 existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient.” 8 Anderson, 477 U.S. at 252. 9 B. Discussion 10 Plaintiff seeks summary judgment on his legal malpractice claim, arguing that the 11 undisputed evidence establishes that Defendants’ inaction resulted in a total defeat of 12 Plaintiff’s State Court Case. (ECF No. 36 at 7.) Defendants counter that Plaintiff cannot 13 establish the elements of causation and damages because his State Court Case was likely 14 to fail even without Defendants’ alleged malpractice. (ECF No. 40 at 2.) 15 In a legal malpractice suit, “[t]he measure of damages . . . is the value of the claim 16 lost . . ..” Ferguson v. Lieff, Cabraser, Heimann & Bernstein, 69 P.3d 965, 973 (Cal. 2003) 17 (citation and internal quotation marks omitted). Thus, to demonstrate causation and 18 damages, a plaintiff must establish that “but for the alleged negligence of the defendant 19 attorney, the plaintiff would have obtained a more favorable judgment or settlement in the 20 action in which the malpractice allegedly occurred.” Viner v. Sweet, 30 Cal.4th 1232, 1241 21 (Cal. 2003). Under this “trial-within-a-trial” approach, “the goal is to decide what the result 22 of the underlying proceeding or matter should have been, an objective standard.” Hecht, 23 Solberg, Robinson, Goldberg & Bagley LLP v. Superior Court, 40 Cal.Rptr.3d 446, 450 24 (Cal. App. 4 Dist. 2006). 25 Genuine issues of material fact exist regarding whether Defendants’ alleged 26 malpractice caused Plaintiff’s injury. The elements of Plaintiff’s underlying breach of 27 contract claim are “(1) the existence of the contract, (2) plaintiff’s performance or excuse 28 for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” 2 produced evidence that Plaintiff would not have established the performance or excuse 3 for nonperformance element of his claim in the State Court Case. Quitevis stated in an 4 affidavit that Plaintiff’s work “was not performed to a workmanlike quality” and that Plaintiff 5 double-billed Niseko for work that had already been paid for. (ECF No. 40-3 at 5.)8 Quitevis 6 and Hoover testified that Niseko paid Plaintiff for work that was not performed and that 7 because of Plaintiff’s unsatisfactory work Niseko was forced to hire additional contractors 8 to correct Plaintiff’s mistakes and finish the project. (Id.; ECF No. 40-11 at 46, 70.)9 9 Quitevis estimated that Plaintiff’s allegedly inadequate performance caused $354,341.25 10 in damages to Niseko. (ECF No. 40-3 at 6.) Viewing the evidence and drawing all 11 inferences in the light most favorable to Defendants as the nonmoving party, a rational 12 trier of fact could find that Plaintiff would not have received a more favorable outcome in 13 the State Court Case even if Defendants had provided adequate representation. See 14 Smith v. Lewis, 530 P.2d 589, 596 (Cal. 1975), overruled on other grounds by In re 15 Marriage of Brown, 544 P.2d 561 (Cal. 1976) (“Whether defendant’s negligence was a 16 cause in fact of plaintiff’s damage . . . is a factual question for the jury to resolve.”). The 17 Court therefore denies summary judgment on Plaintiff’s legal malpractice claim.10 18 19 7While Plaintiff also asserted claims for common counts and fraud in his State Court Case (ECF No. 36-17 at 4-6), neither the Plaintiff’s Motion nor the reply address these 20 claims. 21 8Defendants also reference statements made by Quitevis in his deposition, but has not supplied the deposition—instead, it appears that Quitevis’ sworn declaration has been 22 attached twice by mistake. (Compare ECF No. 40 at 27 with ECF No. 40-2.) 23 9Plaintiff argues that Hoover’s statements do not raise a genuine issue of material fact because of his limited involvement and his lack of memory regarding the project. (ECF 24 No. 36 at 26-27.) Plaintiff similarly contests Quitevis’ statements, arguing that he does not have the relevant knowledge or expertise to evaluate Plaintiff’s work. (Id. at 27-28; ECF 25 No. 42 at 7-8.) These attacks are credibility determinations that are properly reserved for trial. See Foster v. Metro. Life Ins. Co., 243 F. App’x. 208, 210 (9th Cir. 2007) (stating that 26 the credibility of plaintiff’s statements was “fair game for cross-examination and a decision by a jury”). 27 10Plaintiff also argues that Laub’s prior statements that Plaintiff’s underlying claims 28 were meritorious preclude him from now asserting that Plaintiff was unlikely to prevail on (fn. cont…) V. CONCLUSION 2 The Court notes that the parties made several arguments and cited to several cases 3 || not discussed above. The Court has reviewed these arguments and cases and determines 4 || that they do not warrant discussion as they do not affect the outcome of the motions before 5 || the Court. 6 It is therefore ordered Defendants’ motion to dismiss (ECF No. 24) is granted. The 7 || Court dismisses Plaintiff's breach of fiduciary duty claim as duplicative of the legal 8 || malpractice claim. 9 It is further ordered that Plaintiff's motion for summary judgment (ECF No. 36) is 10 || denied. 11 DATED THIS 24* day of July 2020. 13 / ~ MIRANDA M. DU 14 CHIEF UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 2 the claims in the State Court Case. (ECF No. 42 at 10-11.) But Laub’s subjective 27 || statements are not determinative of the issue because the trial-within-a-trial inquiry applies an objective standard. See Hecht, Solberg, Robinson, Goldberg & Bagley LLP, 40 28 || Cal.Rptr.3d at 450.