United States District Court, D. Arizona
ORDER
This
matter is before the Court on Plaintiff's Motion for
Partial Judgment on the Pleadings (“Motion”)
(Doc. 55). Defendants filed a Response (Doc. 56) and
Plaintiff filed a Reply (Doc. 57).
I.
BACKGROUND
Plaintiff
filed its Complaint on April 28, 2017, alleging breach of
contract, breach of the implied covenant of good faith and
fair dealing, open account, stated account, post-termination
use of trademarks, state and federal trademark infringement,
false designation of origin and unfair competition, and
common law trademark infringement against Defendants NM
Hospitality Roswell, LLC; Frist Capital Real Estate
Investments, LLC; and Ron Cobb, an individual (collectively
“Defendants”). (Doc. 1). Shortly thereafter, the
parties reached a settlement agreement and requested that the
Court stay the matter to allow the parties to finalize the
terms of the agreement. (Doc. 19). Accordingly, the Court
stayed the case and ordered the parties to file a stipulation
to dismiss or status report by September 15, 2017. (Doc. 20).
On
September 20, 2017, Plaintiff filed a Motion to Enforce
Settlement Agreement (Doc. 26), in which Plaintiff argued
that the parties entered into a fully enforceable Settlement
Agreement on June 26, 2017, and that Defendants failed to
timely remit payment under its terms. (Id.) In their
Response to Plaintiff's Motion to Enforce Settlement
Agreement, Defendants stated that they “still
intend[ed] to perform under the settlement agreement, ”
but were unable to do so by the original deadline of August
31, 2017. (Doc. 27 at 2). Defendants stated that they would
be able to perform under the settlement agreement by October
31, 2017, and would work with Plaintiff to either file a
stipulation to dismiss the action or a status report on that
day. (Doc. 27 at 2). Without waiving their rights to enforce
the settlement agreement, Plaintiff agreed to the extension
and requested the Court hold its Motion to Enforce in
abeyance until October 31, 2017. (Doc. 28). The Court so
ordered. (Doc. 29). On October 31, 2017, Plaintiff
unilaterally filed a Status Report, informing the Court that
Defendants had not remitted payment by October 31, 2017.
(Doc. 30). Accordingly, Plaintiff requested the Court rule on
its pending Motion to Enforce the Settlement Agreement.
(Id.) For the reasons articulated in Plaintiff's
Motion to Enforce, which were uncontested by Defendants, the
Court found that the parties entered into a binding agreement
to settle this case. (Doc. 32).
Following
the Court's Order, Defendants made a partial payment to
Plaintiff. (Docs. 48, 67). The partial payment was
approximately forty-three percent of the total settlement
amount. (Docs. 67, 68). On August 20, 2018, Plaintiff filed
an Amended Complaint, which included a claim for breach of
the Settlement Agreement, as well as seven causes of action
that were initially plead in Plaintiff's original
Complaint. (Compare Doc. 48, with Doc.
1).[1]
On November 16, 2018, Plaintiff filed the pending Motion for
Partial Judgment on the Pleadings with respect to its claim
for breach of the Settlement Agreement. (Doc. 55). On
February 4, 2019, the parties filed a Joint Report, in which
the parties represented that Defendants “expect[ed] to
complete performance and make reminder of the payment due
under the Settlement Agreement by February 15, 2019.”
(Doc. 58). On February 22, 2019, the parties filed another
Joint Status Report, in which they provided that
“Defendants still intend to comply with their
obligations under the Settlement Agreement, but were unable
to make the remainder of the payment due by February 15,
2019. They hope to be able to do so in the near
future.” (Doc. 60). On March 29, 2019, the parties
filed a third Joint Status Report, in which they provide that
“Defendants still intend to comply with their
obligations under the Settlement Agreement. Defendants
anticipate paying 15-20% of the amount outstanding under the
Settlement Agreement on or before April 9, 2019, and the
remainder outstanding by April 30, 2019.” (Doc. 62). On
May 6, 2019, the parties filed a fourth Joint Status Report,
in which they provide that “Defendants still intend to
comply with their obligations under the Settlement Agreement.
Defendants anticipate being able to pay the amount
outstanding under the Settlement Agreement within 15 business
days.” (Doc. 64). Plaintiff further provided that
“[g]iven [Defendants'] history of failing to
perform, however, [Plaintiff] has no confidence that the
balance will be paid. [Plaintiff] therefore seeks a ruling on
its fully-briefed Motion for Judgment on the Pleadings (Docs.
55, 56, 57).” (Doc. 64 at 2).
On May
7, 2019, the Court ordered the parties to file supplemental
briefing to address the effect of the Settlement Agreement on
the causes of action plead in the original Complaint and the
Amended Complaint.[2] (Doc. 65 at 1). In its supplemental
briefing, Plaintiff argued that the “pre-Settlement
Agreement claims are still alive because Defendants have not
paid [Plaintiff] the full amount owed under the Settlement
Agreement, and payment in full was a condition precedent to
[Plaintiff's] obligation to release and dismiss its
claims.” (Doc. 69 at 2). Defendants contend that
“payment was not the only consideration for the
Settlement Agreement” and that Plaintiff cannot
simultaneously pursue breach of the Settlement Agreement and
the underlying claims that the Settlement Agreement
purportedly extinguished. (Doc. 70).
I.
PARTIAL JUDGMENT ON THE PLEADINGS
Plaintiff
has moved for Partial Judgment on the Pleadings with respect
to its claim for breach of the Settlement Agreement, which is
Count VIII of the Amended Complaint. (Doc. 55 at 2-4).
Pursuant
to the Federal Rules of Civil Procedure (“Rule”)
12(c), any party may move for judgment on the pleadings
“after the pleadings are closed but within such time as
not to delay the trial.” The pleadings are closed once
a complaint and an answer have been filed. See Fed.
R. Civ. P. 7(a); see also Doe v. U.S., 419 F.3d
1058, 1061 (9th Cir. 2005). A motion for judgment on the
pleadings is functionally identical to a motion to dismiss
brought under Rule 12(b)(6); the same legal standard applies.
See Cafasso v. General Dynamics C4 Sys., Inc., 637
F.3d 1047, 1055 n.4 (9th Cir. 2011). However, unlike Rule
12(b)(6), a Rule 12(c) motion for judgment on the pleadings
may be made by either party. A plaintiff may move for
judgment on the pleadings if the answer fails to controvert
material facts alleged in the complaint. Qwest
Commc'ns Corp. v. City of Berkeley, 208 F.R.D. 288,
290 (N.D. Cal. 2002). The allegations of the non-moving party
must be accepted as true, and are construed in the light most
favorable to that party. See Jones v. Town of
Quartzsite, 2014 WL 12617038, at *2 (D. Ariz. Feb. 24,
2014); see also Lyon v. Chase Bank USA, N.A., 656
F.3d 877, 882 (9th Cir. 2011). “Uncontested allegations
to which the other party had an opportunity to respond are
taken as true.” Qwest Commc'ns
Corp., 208 F.R.D. at 290.
Judgment
on the pleadings is appropriate “when there are no
issues of material fact, and the moving party is entitled to
judgment as a matter of law.” 3550 Stevens Creek
Assocs. v. Barclays Bank, 915 F.2d 1355, 1357 (9th Cir.
1990). In considering a motion for judgment on the pleadings,
the court reviews the pleadings only. However, a document
that is not attached to the complaint may be considered if it
is referred to in the complaint and the authenticity of the
document is not questioned. See The Armored Group, LLC v.
Supreme Corp., 2010 WL 2595280, at *2 (D. Ariz. June 24,
2010) (citing Branch v. Tunnell, 14 F.3d 449, 453
(9th Cir. 1994)).
In its
present Motion, Plaintiff contends that it is entitled to
judgment on the pleadings with respect to its claim for
breach of the Settlement Agreement because the Court has
already found that the Settlement Agreement was valid and
enforceable, and Defendants have admitted in their Answer to
every fact necessary to establish its liability for breach of
the Settlement Agreement. (Doc. 55 at 2-3); see also
Honey v. Distelrath, 195 F.3d 531, 532-33 (9th Cir.
1999). Plaintiff did not attach a copy of the Settlement
Agreement as an exhibit to the Amended Complaint; however,
the Court will consider the Settlement Agreement (Doc. 68),
because Plaintiff refers to the Settlement Agreement in the
Amended Complaint, and there is no dispute over the
authenticity of the document. See The Armored Group,
2010 WL 2595280, at *2. The Court agrees that judgment on
Plaintiff's breach of the Settlement Agreement claim is
warranted.
In the
Amended Complaint, Plaintiff alleges that on June 26, 2017,
Plaintiff and Defendants entered into an enforceable
Settlement Agreement; however, Defendants failed to make the
full payment that was required under the Settlement
Agreement. (Doc. 48 ¶¶ 68, 69). Plaintiff further
claims that despite numerous demands for payment of the
remaining balance under the Settlement Agreement, Defendants
have failed to make payment. (Id. ¶¶
74-76). Thus, Plaintiff alleges Defendant's failure to
make full payment under the Settlement Agreement is a breach
of the Settlement Agreement. (Id. ¶¶
127-32).
To
prevail on its breach of settlement claim, Plaintiff must
allege the existence of a contract between Plaintiff and
Defendants, a specific breach of that contract by Defendant,
and resulting damage to Plaintiff. See Coleman v.
Watts, 87 F.Supp.2d 944, 955 (D. Ariz. 1998) (citing
Clark v. Compania Ganadera de Cananea, S.A., 387
P.2d 235, 237 (Ariz. 1963)). Here, Defendants agree that the
Settlement Agreement is a valid contract and concede that
they failed to make the full required payment under the terms
of the Settlement Agreement. (Doc. 51 ¶¶ 65-76,
127-33). Furthermore, in their Response, Defendants failed to
address or otherwise defend against the merits of
Plaintiff's Motion and therefore have implicitly conceded
to granting it.[3] (Doc. 56 at 2); see also Pepper
Hamilton L.L.P. v. Intelligent Water Sols., Inc., 2008
WL 4080358, at *1 (D. Ariz. Sept. 2, 2008) (holding that
defendant's failure to respond to plaintiff's motion
for judgment on the pleadings may be deemed a consent to the
granting of the motion and the court may dispose of the
motion summarily) (citing LRCiv. 7.2(i))). In fact,
Defendants provide that they “still intend to perform
under the Settlement Agreement in the near future when the
Defendants' financial situation permits them to render
performance.” (Id. at 2). Thus, Defendants
concede that the Settlement Agreement is valid and that they
have not performed as required by the Settlement Agreement.
Furthermore, Defendants do not dispute or otherwise contest
that Plaintiffs have been damaged as a result of
Defendants' breach. (Compare Doc. 55 at 3-4,
with Doc. 56 at 1-2). For the reasons articulated in
Plaintiff's Motion, which go uncontested by Defendants,
the Court finds that Plaintiff is entitled to judgment as to
liability on its breach of the Settlement Agreement claim.
While Plaintiff has established that it was damaged as a
result of the breach, Plaintiff however has not established
the amount of damages. Thus, the Court will not rule on the
amount of damages at this time and provide the parties with
an opportunity to submit briefing regarding amount of damages
stemming from Defendant's breach of the Settlement
Agreement.
II.
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