THE U.S. Court of Appeals for the Ninth Circuit has affirmed the District Court for the NMI’s decision to deny Imperial Pacific International LLC’s request to postpone summary judgment in the lawsuit of Pacific Rim Land Development LLC.
IPI sought to postpone summary judgment because it had not yet been able to conduct discovery on its affirmative defense of “fraud in the inducement.”
The district court denied IPI’s request, concluding that IPI failed to satisfy the requirements of Federal Rule of Civil Procedure 56(d). IPI appealed.
According to the Ninth Circuit, “A party seeking to postpone summary judgment pending additional discovery must show that (1) it has set forth in affidavit form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose summary judgment.”
The party must also provide the “basis or factual support for [its] assertions that further discovery would lead to the facts and testimony described in the affidavit.”
IPI did not meet those requirements, said Ninth Circuit Judges Sandra S. Ikuta, Eric D. Miller and Kenneth K. Lee.
In support of its Rule 56(d) request, IPI submitted a three-paragraph declaration stating that Pacific Rim possessed employment records for the workers assigned to IPI’s construction project.
“The declaration identified the documents sought but not the facts within those documents that would assist IPI in opposing summary judgment. IPI later clarified that it sought the records to prove that Pacific Rim misrepresented the skill of its workers and the amount of work completed on IPI’s construction job, fraudulently inducing IPI to sign the promissory note,” the Ninth Circuit judges said.
But IPI provided no “basis or factual support” for its belief that Pacific Rim engaged in fraud or that the discovery sought would yield such factual support,” the Ninth Circuit judges added.
“Quite to the contrary, in the district court, IPI admitted that it was ‘fishing’ for more information.
“We likewise reject IPI’s argument that the facts set forth in Pacific Rim’s motion to quash satisfy IPI’s burden under Rule 56(d).
“To be sure, a Rule 56(d) request need not predict with perfect clarity what discovery will reveal. But a barebones declaration stating only that a category of document exists — without explaining the basis for belief that there are specific facts within them essential to the party’s opposition to summary judgment — does not satisfy Rule 56(d). The district court did not abuse its discretion,” the Ninth Circuit judges said.
As Pacific Rim has prevailed in the appeal, the parties will appear before Chief Judge Ramona V. Manglona for an order directing how the security fund of $5,599,975 in an investment portfolio will be distributed.
Previously, Judge Manglona issued an order restricting the security provided as an alternative to bond, and staying enforcement of the judgement pending appeal.
Based on a stipulation from Pacific Rim and IPI, the casino investor deposited security in an investment portfolio consisting of short-term U.S. government bonds with Merrill Lynch, Pierce, Fenner & Smith Inc. First Hawaiian Bank Bldg. 400 Route 8, STE 403 in Guam.
In her order establishing security pending appeal, Judge Manglona noted that Pacific International Property Management LLC or PIPM resolved to place $5,525,363.98 within the absolute discretion of this court for the purpose of securing a stay and paying on the judgment in the event that Pacific Rim prevailed in the appeal.
The court noted that PIPM has increased the amount to be deposited to $5,599,975 to cover post-judgment fees, costs and interest.
According to the stipulation filed by Pacific Rim and IPI, PIPM is not owned by IPI and PIPM does not own IPI. PIPM is a separate and independent business entity from IPI.
PIPM agreed to pledge its own funds in the amount of $5,599,975.00 as security under FRCP Rule 62 as an alternative to a bond.
The “fund” shall be available in full to satisfy the judgment, including fees, costs, interest, and damages for delay that may be awarded, if the appeal should be dismissed or the judgment affirmed, Judge Manglona said.
Pacific Rim, represented by attorney Colin Thompson, sued IPI for breach of contract for refusing to pay for services in the amount of $5.65 million after Pacific Rim substantially completed or completed agreed-upon construction work for IPI’s casino- resort project on Sept. 30, 2018.
On April 27, 2020, Judge Manglona entered a judgment in favor of Pacific Rim in its lawsuit against IPI for breach of contract and breach of promissory note.
On May 2, 2020, the federal court entered an amended civil judgment in favor of Pacific Rim in the amount of $6.8 million including the principal amount and attorney’s fees and costs.
