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Rajesh Patel, Charulata Patel, Robert Murphy, and Georgia Murphy v. Tricia A. Callies

September 27, 2011


The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge



The Court has before it two summary judgment motions. Defendants move for summary judgment on all of plaintiffs' claims, and plaintiffs move for summary judgment on all of defendant Auroresky Investment, LLC's counter-claims. The motions were fully briefed and argued before Judge William F. Downes on January 26, 2010. Before rendering a decision, Judge Downes stayed the case on February 12, 2010. When Judge Downes retired, the case was transferred back to this Court on September 3, 2011. This Court lifted the stay, and the motions are now at issue. For the reasons explained below, the Court will deny defendants' motion and grant plaintiffs' motion.


Preliminarily, the Court notes that defendants have failed to comply with the Local Rule requiring submission of a separate statement of undisputed facts. See D. Idaho L. Civ. R. 7.1(b)(1); 7.1(c)(2). The Court might be inclined to overlook this failure if defendants' supporting memorandum contained a recitation of facts (with evidentiary citations), but they have not supplied that either. Instead, their three-paragraph Introduction simply refers the Court to its earlier decision granting in part and denying in part defendants' motions for judgment on the pleading. See Dkt. 103. Defendants assert that the "background of this case has been substantially set forth" in that order. See Defendants' Opening Brief (Dkt. No. 136-1) at p. 1.

The careless treatment of the evidence continues at times in the argument section, where defendants often fail to cite any evidence to support factual assertions. Defendants also have a habit of referring the Court to an entire affidavit along with hundreds of pages of exhibits to support a particular fact.*fn1 Plaintiffs do a better job, although they are not always careful with the evidence either; for example, they cite hundreds of pages of multiple deposition transcripts to support a particular fact.

The upshot is that the Court is left to scour the record on its own to determine precisely which facts the parties rely upon and whether there is evidentiary support for those facts. Plus, the file in this case is a thick one -- and the record voluminous. The parties have submitted multiple affidavits, hundreds of pages of deposition transcripts, and thousands of pages of exhibits. (Most exhibits are scanned into the Court's electronic system, but the Court's records also contain two large expandable files stuffed with exhibits that were too voluminous to scan. See Dkt. Nos. 137, 140, 141.)

Under these circumstances, the Court is tempted to simply deny the motion because defendants failed to properly support the factual assertions made in their motion, thus failing to demonstrate that the underlying material facts are undisputed. Cf. Carmen v. San Francisco Unified School Dist., 237 F.3d 1026 (9th Cir. 2001) (discussing obligations of a party opposing summary judgment, and noting that "[i]t is absurdly difficult for a judge to perform a search, unassisted by counsel, through the entire record, to look for such evidence"). However, in the interests of deciding motions on their merits and moving this case along, the Court will do its best with the submissions before it.*fn2

This controversy arises out of plaintiffs' investment in a commercial real estate development in Boise, Idaho.*fn3 The project -- a six-building complex on Five Mile Road -- was to be administered and developed by defendant Tricia Callies, a real estate agent, through a limited liability company, defendant Auroresky Investments. Auroresky was to hire Ms. Callies' husband, defendant Randall Callies, to construct the six buildings.

The plaintiffs are two couples -- Rajesh and Charulata Patel and Robert and Georgia Murphy. Each couple contributed $125,000 to Auroresky to become members of the LLC. More specifically, each couple was to own 12.5% of the company, for a total of a 25% interest between the two couples. In exchange, each couple was "guaranteed" the return of their initial investment, as well as the distribution of an additional flat $125,000 from the profits of the project. Plaintiffs assert that each couple was to receive its guaranteed $250,000 payment before any profits were distributed to any other recipient. Plaintiffs were also to receive a security interest in the land to back their investment in Auroresky. Ultimately, plaintiffs did not receive a valid security interest in the property and they lost their entire investment.

In any event, before plaintiffs invested in Auroresky in March and April 2006, the Callies say they spent roughly $178,000 of their own money developing the project. See First T. Callies Aff. ¶ 2, Dkt. 137.*fn4 Plaintiffs contend they were unaware that Auroresky owed any money to the Callies at the time they made their investment.

Defendants indicate that emails Ms. Callies sent to the Murphys beforehand "show[] that on March 31, 2006, plaintiffs were advised of encumbrances . . . ." Defendant's Opening Brief (Dkt. No. 136-1) at p. 10. In particular, defendants point to a spreadsheet, dated March 10, 2006, entitled "AuroreSky Land Purchase Projected Cash Requirements Entitlement Process." First T. Callies Affidavit (Dkt. No. 137), Ex. 1 thereto, at 183. The spreadsheet sets forth land costs, closing costs, loan fees, and fees for "arch/eng/planning/re-zone." Id. There is no specific mention in that document, however, of the $178,000 the Callies say they had already spent on the project. See id. In her deposition, Ms. Callies indicated she did not expressly inform Plaintiffs of money she had already spent because Plaintiffs did not ask for the information and the "tax returns would have reflected" it. See Plaintiffs' Brief (Dkt No. 159) at p. 18 (quoting T. Callies Deposition).


One of the principal purposes of summary judgment "is to isolate and dispose of factually unsupported claims . . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut," but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

The evidence must be viewed in the light most favorable to the non-moving party, id. at 255, and the Court must not make credibility findings. Id. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir. 1988). And a court is not obligated to take the non-movant's version of events as true when the account is blatantly contradicted by video evidence. Scott v. Harris, 550 U.S. 372, 378-81 (2007).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001)(en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the ...

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