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Dcci, LLC v. Keith

United States District Court, D. Oregon

July 31, 2014

DCCI, LLC, and ROBERT GONZALEZ, Plaintiffs,
v.
MIKE KEITH, Defendant. MIKE KEITH, Third-Party Plaintiff,
v.
ALICIA GONZALEZ; and DOUGLAS CONTRACTING CORPORATION, Third-Party. Defendants.

ORDER

MICHAEL McSHANE, District Judge.

This case concerns the sale of a 1970 Dodge Challenger gone very bad. Unfortunately, the cost of litigating this simple breach of contract case now likely approaches or exceeds the value of the car. Pending are motions for summary judgment by plaintiffs DCCI, LLC and Robert Gonzalez (ECF No. 92), third-party defendants Alicia Gonzalez and Douglas Contracting Corporation (ECF No. 56), and a motion for sanctions by defendant Mike Keith (ECF No. 97). The parties are familiar with the facts, which I outlined in my opinion granting Keith's motion for summary judgment on his breach of contract claim. (March 26, 2014 Opinion, ECF No. 80.)

STANDARD OF REVIEW

The court must grant summary judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). An issue is "genuine" if a reasonable jury could return a verdict in favor of the non-moving party. Rivera v. Phillip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A fact is "material" if it could affect the outcome of the case. Id. The court reviews evidence and draws inferences in the light most favorable to the non-moving party. Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 988 (9th Cir. 2006) (quoting Hunt v. Cromartie, 526 U.S. 541, 552 (1999)). When the moving party has met its burden, the nonmoving party must present "specific facts showing that there is a genuine issue for. trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (quoting Fed.R.Civ.P. 56(e)).

DISCUSSION

I. Third-Party Defendants' Motion for Summary Judgment

There is no doubt Alicia Gonzalez and her company Douglas Contracting Corporation (collectively, "DCC") were involved in the sale of the Challenger. However, upon review of the record, their involvement appears limited, and does not rise to liability on any of Keith's claims. At plaintiffs' request, DCC paid for half of the purchase price of the vehicle, which plaintiffs later repaid. Alicia Gonzalez arranged for the travel and payment of the expert plaintiffs hired to inspect the car. Alicia Gonzalez had some communications with the expert's secretary about the scheduling. In fact, most of DCC's actions appear to be done not for its own benefit, but in the capacity as an agent of plaintiffs. While there are some questions regarding DCC's business, and Alicia Gonzalez's knowledge of that business, none of those facts relate to the purchase of the Challenger. Rather, it appears Alicia Gonzalez simply performed some ministerial functions related to the purchase of the car because her father asked her to. Even viewed in the light most favorable to Keith, the facts do not support his claims against Alicia Gonzalez or DCC.

That is not to say the claims against DCC were frivolous or that Keith lacked an objectively reasonable basis for bringing the claims. Although DCC was involved in the sale, the extent of its involvement was only learned via discovery. Additionally, the relationship between plaintiffs and DCC is not transparent. This relationship too was only revealed in discovery. Although Alicia Gonzalez owns her own business, it appears-at least when viewing her testimony at deposition-that the company does not do much. Alicia Gonzalez apparently rents an office in her father's office, and Alicia Gonzalez appears to act, at least in regard to the transaction at issue, as a sort of personal secretary for her father. While Alicia Gonzalez may have performed some actions on her father's behalf, those actions do not create liability to Keith in this instance. That Alicia Gonzalez merely acted as her father's agent, and not in connection with her father in a conspiracy to allegedly defraud Keith, was revealed only in depositions.

Third-party defendants' motion for summary judgment, (ECF No. 56), is GRANTED.

II. Plaintiffs' Motion for Summary Judgment

Keith's UTPA and conversion claims each depend on Keith owning the Challenger. The parties, however, agree that title to the car passed to plaintiffs when the car was transported from Ohio to Oregon with the agreement that plaintiffs would pay Keith a total of $200, 000. Although Keith argues title reverted back when plaintiffs later attempted to reject the Challenger, my ruling on Keith's motion for summary judgment concluded as a matter of law that the attempted rejection was neither timely nor reasonable and therefore ineffective as a matter of law. Therefore, title never reverted back to Keith, and Keith's conversion and UTPA claims necessarily fail.

As to the fraud claim, plaintiffs argue no admissible evidence supports Keith's theory that plaintiffs knew all along they were attempting to gain possession of the Challenger and then negotiate a much lower price. I disagree. Although Keith lacks a direct admission by Gonzalez that he intended to defraud Keith, there is an abundance of circumstantial evidence supporting Keith's claim.

Viewed in the light most favorable to Keith, Gonzalez agreed to pay $200, 000 for the Challenger on the condition the Challenger passed Gonzalez's inspection. After having an expert inspect the car, Gonzalez agreed to pay half the purchase price, with the other half paid after transporting the car to Oregon. After obtaining possession of the car, Gonzalez informed Keith the car was not as advertised. When Keith offered to drive to Oregon to pick up the Challenger and refund plaintiff's money, Gonzalez refused. Instead, in a letter from his attorney, Gonzalez informed Keith he would have to pay over $30, 000 in alleged out-of-pocket costs, such as a $10, 000 broker fee, insurance and transportation costs, and even the cost of the experts Gonzalez flew out to inspect the vehicle. On top of that, Gonzalez informed Keith he had only a few days to accept the offer before Gonzalez would file a lawsuit against Keith. Plaintiffs shortly thereafter filed this action, and later attempted, as part of a purported "settlement negotiation, " to buy the car (and apparently dismiss this action) for just over half of the agreed purchase price. Viewing all of the evidence together, a reasonable juror could conclude plaintiffs intended all along to obtain possession of the Challenger and then use that possession as leverage to negotiate a substantially discounted price.

Additionally, although I ruled for Keith on his breach of contract claim, there is enough evidence to send the ...


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