Resource Recovery Corporation v. Inductance Energy Corporation

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] Resour ce Recovery Corporation, ) No. CV-20-00764-PHX-SPL ) [9] ) 10 Plaintiff, ) ORDER vs. ) ) [11] ) Inductance Energy Corporation, et al., ) [12] ) 13 Defendants. ) ) 14 ) 15 I. BACKGROUND 16 On April 20, 2020, Plaintiff filed a Complaint against Defendants seeking to enforce 17 a “Terms Sheet” (which expressly contemplated, and laid out the terms of, a later Final 18 Settlement Agreement) entered into by the parties following a mediation. (Doc. 1 at 2). The 19 Complaint seeks to enforce the Terms Sheet, alleging that “Defendants have unaccountably 20 repudiated the validity of the agreement and refused to pay.” (Doc. 1 at 2). 21 On June 17, 2020, Plaintiff filed a Motion for Summary Judgment alleging that “the 22 four corners of the Term Sheet and the undisputed documentary evidence show that the 23 Term Sheet is binding and enforceable, jointly and severally, against all Defendants as a 24 matter of law” and that “[n]o amount of discovery can change this conclusion.” (Doc. 28 25 at 4). Thus, Plaintiffs assert that because the parties all agreed to be bound by the Terms 26 Sheet, the Court must enforce the agreement—even though the Final Settlement 27 Agreement (“FSA”) was not later executed. (Doc. 28 at 3, 5, 8). 28 On July 17, 2020, Defendants filed a “Motion to Strike Plaintiff’s Motion for 1 Summary Judgment Or, Alternatively, Rule 56(d) Relief,” arguing that Plaintiff’s Motion 2 was “impermissibly premature” because “there has been no discovery conducted 3 whatsoever in this case.” (Doc. 36 at 2). Defendants submit a declaration of Tyler Q. 4 Swensen, Defendants’ attorney, identifying depositions that need to be taken (namely of 5 the signatories to the Terms Sheet) to establish “the intent and understanding of the various 6 signors of the Term Sheet as to its meaning and effect.” (Doc. 37); (Doc. 36 at 2). For the 7 foregoing reasons, the Court will grant Defendants’ request for Rule 56(d) relief. 8 II. LEGAL STANDARD 9 Summary judgment is appropriate if “the movant shows that there is no genuine 10 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 11 Fed. R. Civ. P. 56(a). A party seeking summary judgment always bears the initial burden 12 of establishing the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, [13] 477 U.S. 317, 323 (1986). The moving party can satisfy this burden by demonstrating that 14 the nonmoving party failed to make a showing sufficient to establish an element essential 15 to that party’s case on which that party will bear the burden of proof at trial. See id. at 322– 16 23. When considering a motion for summary judgment, a court must view the factual 17 record and draw all reasonable inferences in a light most favorably to the nonmoving party. 18 Leisek v. Brightwood Corp., 278 F.3d 895, 898 (9th Cir. 2002). 19 Federal Rule 56(d) provides that “[i]f a nonmovant shows by affidavit or declaration 20 that, for specified reasons, it cannot present facts essential to justify its opposition, the court 21 may . . . defer considering the motion or deny it.” Fed. R. Civ. P. 56(d). The Rule is “a 22 device for litigants to avoid summary judgment when they have not had sufficient time to 23 develop affirmative evidence.” United States v. Kitsap Physicians Serv., 314 F.3d 995 , 24 1000 (9th Cir. 2002). A party seeking Rule 56(d) relief must “explain what further 25 discovery would reveal that is ‘essential to justify [its] opposition’ to the motion[ ] for 26 summary judgment.” Program Eng’g, Inc. v. Triangle Publ’ns, Inc., 634 F.2d 1188 , 1194 27 (9th Cir. 1980) (first alteration in original); see also Mackey v. Pioneer Nat’l Bank, 867 28 F.2d 520, 523 (9th Cir. 1989) (finding that a party opposing summary judgment under Rule 1 56(d) must “show how additional discovery would preclude summary judgment and why 2 [it] cannot immediately provide specific facts demonstrating a genuine issue of material 3 fact”) (internal quotations omitted). 4 III. ANALYSIS 5 “Whether a writing constitutes a final agreement or merely an agreement to make 6 an agreement depends primarily upon the intention of the parties.” First Nat. Mortg. Co. v. 7 Fed. Realty Inv. Tr., 631 F.3d 1058, 1065 (9th Cir. 2011). Additionally, “[w]hether the 8 parties intended only to be bound upon the execution of a written, signed agreement is a 9 factual issue.” Callie v. Near, 829 F.2d 888 , 890–91 (9th Cir. 1987) (emphasis in original). 10 Thus, summary judgment is improper where differing views of the parties’ intent raise a 11 genuine issue of fact. U.S. v. Sacramento Municipal Utility Dist., 652 F.2d 1341, 1344 (9th 12 Cir.1981) (“[S]ummary judgment is improper as differing views of the intent of parties will 13 raise genuine issues of material fact.”). Here, there remains a factual dispute regarding 14 whether the contract is itself binding or is conditioned upon the execution of an FSA, for 15 which further discovery is needed to resolve. 16 On the one hand, the Terms Sheet states that “[b]y signing this document, the parties 17 agree to be bound by the terms set forth herein.” (Doc. 1-9 at 3). On the other hand, the 18 Terms Sheet also states that the terms “will be incorporated within a final settlement 19 agreement,” that payment is due “after the signing of the final settlement agreement,” and 20 that the parties “shall provide a final settlement agreement.” (Doc. 1-9 at 2, 3). This 21 contradictory language of the Terms Sheet evinces an ambiguity on the agreement’s face 22 regarding whether the parties intended it to be binding or instead conditioned on the 23 execution of an FSA. The existence of such ambiguity precludes summary judgment. See 24 Tabler v. Indus. Comm’n of Arizona, 202 Ariz. 518, 522 (Ct. App. 2002) (“[W]ithout a 25 clear factual finding establishing the parties’ intent, a correct legal conclusion cannot be 26 made regarding the existence or non-existence of a binding [] contract.”). Further, 27 Defendants have adequately addressed why additional discovery (i.e., the depositions of 28 the Terms Sheet signatories) is necessary to resolve this ambiguity and “justify [their] 1 | opposition” to summary judgment. Fed. R. Civ. P. 56(d). Accordingly, 2 IT IS ORDERED that Defendants’ Motion to Strike Plaintiff’s Motion for 3 | Summary Judgment Or, Alternatively, Rule 56(d) Relief (Doc. 36) is granted in part as 4| to Defendants’ request for Rule 56(d) relief. 5 IT IS FURTHER ORDERED that Plaintiff’s Motion for Summary Judgment (Doc. 28) is denied without prejudice. 7 Dated this 21st day of October, 2020. [8] 10 United States District kadge