United States District Court, D. Arizona
ORDER
Honorable Steven P. Logan United States District Judge
Before
the Court is Defendant's Rule 56(d) Motion Re
Plaintiff's Motion for Summary Judgment on Claim for
Declaratory Judgment Regarding Arbitrability of Dispute as to
Michael Bird (Doc. 41), Plaintiff's Response (Doc. 42),
and Defendant's Reply (Doc. 45).
I.
Background
On
September 19, 2017, Plaintiff filed a complaint in this Court
seeking declaratory judgment on various issues. (Doc. 1.)
Specifically, Plaintiff asks the Court to declare that
Plaintiff, as a non-party to an agreement made between
Plaintiff's company, Bird Medical, LLC and Defendant, he
is not subject to the arbitration provision therein. (Doc. 1
¶ 39.) He also asks the Court to declare that he is not
the alter ego of his company. (Doc. 1 ¶ 40.)
On May
11, 2018, Plaintiff filed a motion for summary judgment as to
the arbitrability of Plaintiff (Doc. 29), and Defendant filed
a motion to stay briefing on that motion (Doc. 31). On June
2, 2018, Defendant filed a motion to strike Plaintiff's
summary judgment motion, which also served as Defendant's
response to that motion. (Doc. 36.) On November 30, 2018, the
Court denied Defendant's motion to strike and motion to
stay briefing as moot and ordered supplemental briefing on
Plaintiff's motion for summary judgment as to the issue
of alter ego status. (Doc. 40.) On December 13, 2018,
Defendant filed this Rule 56(d) motion in response to the
Court's supplemental briefing order regarding
Plaintiff's motion for summary judgment. (Doc. 41.) On
December 26, 2018, Plaintiff responded (Doc. 42), and on
January 8, 2019, Defendant replied (Doc. 45).
II.
Discussion
Defendant
argues that it cannot, at this time, file a supplemental
brief regarding the issue of alter ego status because the
parties never engaged in discovery in this case. (Docs. 41,
45.) Rather, Defendant argues that the parties apparently
decided to conserve resources and only conduct discovery in
the underlying arbitration case as they waited for this Court
to rule on two motions. (Doc. 45 at 1.) Therefore, Defendant
argues that it is disingenuous for Plaintiff to allege that
it failed to engage in discovery here when it diligently
prosecuted its claims in the arbitration, and it was actually
Plaintiff who essentially refused to participate in
discovery. (Doc. 41 at 4-5.) Thus, Defendant argues the Court
should not reward Plaintiff for failing in his discovery
duties in the arbitration and for now attempting to use the
lack of discovery in this case to his advantage. (Doc. 45 at
6.) In any event, however, Defendant argues that it has put
forth evidence sufficient to withstand summary judgment, and,
therefore, the Court should deny Plaintiff's motion.
(Doc. 45 at 4-5.) Additionally, Defendant asks the Court to
allow discovery on the issue of alter ego status and to
extend the deadline for dispositive motions as to that issue.
(Doc. 41.)
Plaintiff
does not address the parties' alleged “informal
agreement, ” and, instead, argues that Defendant did
not seek discovery in this case nor sought an extension of
the discovery or dispositive motion deadlines. (Doc. 42.) He
argues that Defendant cannot now file a Rule 56(d) motion
arguing he was unable to take discovery when he utterly
failed to engage in it or ask for extensions before filing a
response. (Doc. 42.) Further, Plaintiff argues that this
Court should not deny his motion for summary judgment because
he has put forth evidence of his alter ego claim-an affidavit
from Plaintiff stating that he does not co mingle funds,
etc.-and that Defendant can present no evidence to rebut it.
(Doc. 42.)
III.
Analysis
A.
Standard
“Rule
56(d) offers relief to a litigant who, faced with a summary
judgment motion shows the court by affidavit or declaration
that ‘it cannot present facts essential to justify its
opposition.'” Roosevelt Irrigation Dist. v.
Salt River Project Agric. Improvement & Power Dist.,
No. 2-10-CV-290-DAE-BGM, 2016 WL 3613278, at *1 (D. Ariz.
Feb. 22, 2016) (quoting Michelman v. Lincoln Nat'l
Life Ins. Co., 685 F.3d 887, 899 (9th Cir. 2012)).
“Rule 56(d) is in place ‘to ensure that parties
have a reasonable opportunity to prepare their
case.'” Id. (quoting Colson v.
Maghami, No. 08-2150-PHW, 2010 WL 2744682, at *14 (D.
Ariz. July 9, 2010)). “When determining whether to
grant a Rule 56(d) motion, the Court should consider whether
denying or deferring the motion for summary judgment would
promote greater justice.” Id. The court should
consider: (1) whether a party has failed to diligently pursue
discovery before summary judgment; (2) whether further
discovery would be futile; and (3) whether the parties
complied with the procedural requirements. Id., at *
2.
B.
Discussion
Preliminarily,
the Court agrees that discovery is severely lacking in this
case.[1] The docket shows that the parties
exchanged MIDP responses (Docs. 20, 21), Plaintiff
supplemented his response on the last day of the discovery
deadline (Doc. 28), and he filed a motion for summary
judgment on the last day of the dispositive motion deadline
(Doc. 29). Thus, Defendant was or should have been on notice
that at least Plaintiff was adhering to deadlines and
prosecuting this case. However, in response to
Plaintiff's motion for summary judgment, Defendant did
file a motion to stay its' briefing because the parties
were attempting to conduct discovery in the underlying
arbitration. (Doc. 31.) In that motion, Defendant noted that
the parties were moving forward with the case in the
arbitration because the arbitrator believed he had
jurisdiction over Plaintiff, and this Court had not yet ruled
on the relevant motion finding otherwise. (See Doc.
31.) Defendant also stated that Plaintiff had filed a largely
identical summary judgment motion in the arbitration and,
thus, to avoid issues of conflicting determinations between
this Court and the arbitrator, Defendant sought a status
conference to discuss the discovery and forum issues.
(See Doc. 31.) On June 2, 2018, Defendant filed a
motion to strike, which also served as his response to
Plaintiff's summary judgment motion. (Doc. 36.) The Court
denied Defendant's motion to stay briefing as moot and
Defendant's motion to strike on November 30, 2018, as the
Court ordered the parties to further brief the alter ego
issue, pursuant to Rule 56(e). (See Doc. 40.)
After
thoroughly reviewing the record in this case and taking into
consideration the evidence proffered by Defendant in his Rule
56(d) motion, the Court will grant Defendant's motion. In
doing so, the Court denies Plaintiff's motion for summary
judgment without prejudice and will allow discovery
to reopen as to the limited issue of alter ego status. The
Court agrees with Plaintiff that Defendant should have filed
something in this case to either extend the discovery
deadline or otherwise inform the Court of the issues taking
place in the arbitration prior to the close of discovery.
However, it appears that Defendant did not seek the extension
of a discovery deadline because ...