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Silaev v. Swiss-America Trading Corp.

United States District Court, D. Arizona

January 30, 2017

Serguei Silaev, Plaintiff,
Swiss-America Trading Corporation, Defendant.


          James A. Teilborg, Senior United States District Judge.

         Pending before the Court are Defendant Swiss-America Trading Corporation's (“Defendant”) motion for attorney fees and nontaxable costs (Doc. 54) and motion for sanctions (Doc. 55). Also pending before the Court is Plaintiff Serguei Silaev's (“Plaintiff”) motion to alter or amend the judgment (Doc. 58). The Court now rules on the motions.

         I. Background

         The facts of this case are explained in detail in this Court's order granting summary judgment (Doc. 50 at 2-3), and it will not recite them here. It is sufficient to note that Plaintiff filed suit against Defendant, a dealer of numismatic and precious metal coins, after Plaintiff's investment in coins proved unsuccessful. Plaintiff alleged that Defendant committed fraud, breach of contract, negligent misrepresentation, and breach of warranty involving several sales of coin-based investments. (Doc. 23 at 2).

         Defendant moved for summary judgment, which this Court granted in Defendant's favor. (Doc. 50 at 18). In its order, this Court explained that Plaintiff's response to Defendant's summary judgment motion was insufficient and failed to comply with the local rules governing summary judgment filings. (Doc. 50 at 5). Plaintiff filed no controverting statement of facts as required by Local Rule of Civil Procedure 56.1(b), and his opposition to Defendant's motion was unsupported by legal authority. (Doc. 50 at 5-6). This Court nevertheless expanded its analysis on summary judgment to consider the affidavit and deposition testimony provided by Plaintiff. Even in so doing, Plaintiff was unable to provide enough factual support for his claims to survive summary judgment. (Doc. 50 at 13-16). The Court found that Plaintiff had not proven the existence of a genuine issue of material fact, and granted judgment in favor of Defendant. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         Defendant then filed a motion for attorney fees (Doc. 54) and a motion for sanctions against Plaintiff (Doc. 55), and Plaintiff filed a motion requesting this Court alter or amend the its summary judgment order under Rule 59 (Doc. 58).[1]

         II. Motion to Alter or Amend the Judgment

         First, the Court considers Plaintiff's motion under Federal Rule of Civil Procedure (“Rule”) 59, asking the Court to vacate the summary judgment ruling on Plaintiff's claims for fraud and negligent misrepresentation.[2] (Doc. 58). This Court may grant a Rule 59 motion if (1) it is “presented with newly discovered evidence, ” (2) it “committed clear error or the initial decision was manifestly unjust, ” or (3) there has been “an intervening change in controlling law.” School Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). Rule 59 relief is an “extraordinary remedy, ” and should be granted only when the Court is left with a firm conviction that a mistake was made. Kona Enter., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000); Smith v. Clark Cnty. Sch. Dist., 727 F.3d 950, 955 (9th Cir. 2013).

         Plaintiff asserts that newly discovered evidence should compel this Court to conclude it was error to grant judgment in Defendant's favor. (Doc. 58 at 3). The “evidence” on which Plaintiff's motion relies includes a formal declaration of counsel and Plaintiff's May 24, 2016 affidavit. (Doc. 58 at 4). Neither of these documents, however, contains newly discovered evidence. First, the declaration of counsel is not evidence at all; it is merely an explanation as to why Plaintiff's counsel failed to comply with Local Rule 56.1 and a list of reasons why this Court should now accept his untimely attempt at filing a controverting statement of facts. See L.R. Civ. P. 56.1(b). (Doc. 58-2; see also Doc. 50 at 5-7). Second, Plaintiff's affidavit is not newly discovered. Despite counsel's prior failure to properly file a controverting statement of facts, this Court independently expanded its summary judgment analysis to include evidence contained in the May 24, 2016 affidavit.[3] (See Doc. 50 at 6-7, 9, 10, 12, 14). Plaintiff's motion is therefore unsupported by any newly discovered (or previously unconsidered) evidence.

         Moreover, Plaintiff's motion advances no cognizable legal argument as to why the Court's summary judgment ruling was error. Each of Plaintiff's objections to Defendant's statements is based on a contrary statement Plaintiff made in either his affidavit or his deposition. But as noted above, this Court already considered Plaintiff's statements in its ruling on summary judgment. Rule 59 motions may not be used to raise arguments already made, or to present arguments that could have been made at an earlier stage in the litigation. Kona Enter., 229 F.3d at 890. Accordingly, Plaintiff's motion fails because it advances no new legal argument, but merely repeats the arguments made in Plaintiff's response in opposition to summary judgment - arguments this Court has already considered and rejected. (See Doc. 50).

         III. Motions for Sanctions and Attorneys' Fees

         This Court's order granting summary judgment directed Defendant to file a motion to recover fees and costs under whatever theory Defendant deemed appropriate. (See Doc. 50 at 18). In compliance with that directive, Defendant filed a timely motion for attorney's fees and non-taxable expenses (Doc. 54) and a motion for sanctions (Doc. 55).

         A. Rule 11 Sanctions

         First, the Court turns to Defendant's motion for attorneys' fees sanctions against Plaintiff's counsel (“Counsel”) for violating Rule 11 of the Federal Rules of Civil Procedure. Sanctions are justified under Rule 11 “when a filing is frivolous, legally unreasonable, or without factual foundation, or brought for an improper purpose.” Estate of Blue v. Cnty. of L.A., 120 F.3d 982, 985 (9th Cir. 1997). A filing is frivolous if it is “both baseless and made without a reasonable and competent inquiry.” Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1362 (9th Cir. 1990). The purpose of Rule 11 is to promote judicial economy by ...

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