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Sparks v. Allstate Medical Equipment, Inc.

United States District Court, D. Idaho

September 29, 2016

DAVID SPARKS, Plaintiff,
v.
ALLSTATE MEDICAL EQUIPMENT, INC., a California Corporation; and TODD KAPLAN, an individual, Defendants.

          ORDER ON REPORT AND RECOMMENDATION

          EDWARD J. LODGE, UNITED STATES DISTRICT JUDGE

         The United States Magistrate Judge Candy W. Dale issued a Report and Recommendation in this matter. (Dkt.46.) Pursuant to 28 U.S.C. § 636(b)(1), the parties had fourteen days in which to file written objections to the Report and Recommendation. Plaintiff David Sparks filed an objection and Defendant Kaplan responded to the objections. The matter is now ripe for review by this Court.

         DISCUSSION

         Pursuant to 28 U.S.C. § 636(b)(1)(C), this Court “may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge." Where the parties object to a report and recommendation, this Court “shall make a de novo determination of those portions of the report which objection is made." Id. Where, however, no objections are filed the district court need not conduct a de novo review. In United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003), the court interpreted the requirements of 28 U.S.C. § 636(b)(1)(C):

The statute [28 U.S.C. § 636(b)(1)(C)] makes it clear that the district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise. As the Peretz Court instructed, Ato the extent de novo review is required to satisfy Article III concerns, it need not be exercised unless requested by the parties." Peretz, 501 U.S. at 939 (internal citation omitted). Neither the Constitution nor the statute requires a district judge to review, de novo, findings and recommendations that the parties themselves accept as correct. See Ciapponi, 77 F.3d at 1251 (“Absent an objection or request for review by the defendant, the district court was not required to engage in any more formal review of the plea proceeding."); see also Peretz, 501 U.S. at 937-39 (clarifying that de novo review not required for Article III purposes unless requested by the parties) . . . .

See also Wang v. Masaitis, 416 F.3d 993, 1000 & n.13 (9th Cir. 2005). Furthermore, to the extent that no objections are made to certain parts of a Report and Recommendation, arguments to the contrary to those non-objected parts are waived. See Fed. R. Civ. P. 72; 28 U.S.C. § 636(b)(1) (objections are waived if they are not filed within fourteen days of service of the Report and Recommendation).

         BACKGROUND

         The Court adopts and incorporates Judge Dale's factual background set forth on pages 2 and 3 of the Report and Recommendation as such facts are undisputed and not part of Plaintiff's objection.

         This instant action is a breach of contract action. In approximately 2006, Kaplan approached Sparks about loaning him money for use in starting a durable medical equipment business. Sparks ultimately agreed to loan Kaplan money. On February 1, 2007, Sparks received a Promissory Note stating Allstate Medical Equipment, LLC (Kaplan's business) would repay Sparks the principal amount of $110, 000, plus interest at 14.0% per annum.

         Under the terms of the promissory note, the payment of the principal was initially due in February of 2009; however, Sparks agreed to extend the principal payment deadline in 2009, 2010, 2011, and 2012. In January of 2013, Sparks contacted Kaplan and requested Kaplan repay the principal balance of $110, 000 on the loan. Kaplan did not reply and Sparks stopped receiving interest payments after January of 2013. On April 29, 2014, Sparks filed the instant suit for breach of contract seeking to hold Allstate and Kaplan liable for the past-due interest and principal payments owed to Sparks pursuant to the terms of the Promissory Note.[1]

         On June 15, 2015, Kaplan moved for summary judgment on the personal liability claim. (Dkt. 20.) During the pendency of the motion for summary judgment, the three parties participated in mediation on October 21, 2015. (Dkt. 31-1 at 2.) However, their attempts to settle were unsuccessful. On December 7, 2015, the Court issued its Memorandum Decision and Order granting summary judgment in favor of Kaplan. (Dkt. 27.) In support of its conclusion, the Court found there was no evidence that the Promissory Note was between Sparks and Kaplan and no evidence to pierce the corporate veil or to otherwise hold Kaplan liable that would not be barred by the statute of frauds. Id. The only surviving issue was Sparks' breach of contract claim against Allstate for the $110, 000 due under the Promissory Note plus interest, attorney's fees and costs. Trial was set to begin on January 19, 2016. (Dkt. 18.)

         On January 6, 2016, Allstate filed a request for the Court to enter judgment in favor of Sparks and against Allstate in the amount of $110, 000, and sought also to vacate the trial on the ground that no triable issues of fact remained. (Dkt. 31.) The Court agreed with Allstate, granted Allstate's request, and entered judgment in favor of Sparks and against Allstate in the amount of $110, 000. (Dkt. 32.) The Court specifically reserved the issues of interest, attorney's fees and costs to be determined after the parties made such appropriate motions. Id.

         On January 28, 2016, Sparks and Defendant Kaplan each filed motions for attorney's fees and costs. Sparks seeks attorney's fees in the amount of $7, 125 and costs in the amount of $1, 030.12. (Dkt. 34.) Kaplan seeks attorney's fees ...


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