389 Orange Street Partners v. Arnold

• Citation: 170 F.3d 1200
• Decision Date: 22 March 1999
• Docket Number: Nos. 97-35877,X-C,98-35005 and 98-35240,s. 97-35877
• Parties: , 99 Cal. Daily Op. Serv. 2018, 99 Cal. Daily Op. Serv. 4287, 1999 Daily Journal D.A.R. 2633, 1999 Daily Journal D.A.R. 5473 389 ORANGE STREET PARTNERS, a Connecticut Partnership, Defendant Cross-Claimant Appellee, and Clifford Robinson, Defendant-laim Third-Party Plaintiff Appellant, v. Richard L. ARNOLD; Kyle Arnold; Regis Conlon, Third-party Defendant Cross-Claimants Appellees. and Trail Blazers Inc., an Oregon Corporation, Plaintiff-Cross Defendant-Appellee, v. Sebastian S. Ciarcia, and Law Office of Sebastian Ciarcia, a Connecticut Corporation, Third-Party Defendant Appellee. Clifford Robinson, Defendant Cross-Claimant Third-Party Plaintiff Appellant, v. Sebastian S. Ciarcia, and Law Office of Sebastian Ciarcia, a Connecticut Corporation, Richard L. Arnold; Kyle Arnold; Regis Conlon, Third-Party Defendants Cross-Claimants Appellees. Trail Blazers Inc., an Oregon Corporation, Plaintiff-Cross Defendant, and 389 Orange Street Partners, Defendant-Cross Claimant. Trail Blazers Inc., an Oregon Corporation, Plaintiff, v. 389 Orange Street Partners, a Connecticut Partnership, Defendant-Cross Claimant Appellee. and Clifford Robinson, Defendant Cross-Claimant Third-Party Plaintiff Appellant, v. Sebastian S. Ciarcia, and Law Office of Sebastian Ciarcia, a Connecticut Corporation, Richard L. Arnold; Kyle Arnold; Regis Conlon, Third-Party Defendants Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1200

170 F.3d 1200

43 Fed.R.Serv.3d 930, 99 Cal. Daily Op. Serv. 2018,

99 Cal. Daily Op. Serv. 4287,

1999 Daily Journal D.A.R. 2633,

1999 Daily Journal D.A.R. 5473

389 ORANGE STREET PARTNERS, a Connecticut Partnership, Defendant Cross-Claimant Appellee, and Clifford Robinson, Defendant-X-Claim Third-Party Plaintiff Appellant, v. Richard L. ARNOLD; Kyle Arnold; Regis Conlon, Third-party

Defendant Cross-Claimants Appellees.

and

Trail Blazers Inc., an Oregon Corporation, Plaintiff-Cross Defendant-Appellee, v. Sebastian S. Ciarcia, and Law Office of Sebastian Ciarcia, a

Connecticut Corporation, Third-Party Defendant Appellee.

Clifford Robinson, Defendant Cross-Claimant Third-Party Plaintiff Appellant, v. Sebastian S. Ciarcia, and Law Office of Sebastian Ciarcia, a

Connecticut Corporation, Richard L. Arnold; Kyle

Arnold; Regis Conlon, Third-Party

Defendants Cross-Claimants Appellees.

Trail Blazers Inc., an Oregon Corporation, Plaintiff-Cross Defendant,

and

389 Orange Street Partners, Defendant-Cross Claimant.

Trail Blazers Inc., an Oregon Corporation, Plaintiff, v. 389 Orange Street Partners, a Connecticut Partnership, Defendant-Cross Claimant Appellee. and Clifford Robinson, Defendant Cross-Claimant Third-Party Plaintiff Appellant, v. Sebastian S. Ciarcia, and Law Office of Sebastian Ciarcia, a

Connecticut Corporation, Richard L. Arnold; Kyle

Arnold; Regis Conlon, Third-Party

Defendants Appellees.

Nos. 97-35877, 98-35005 and 98-35240.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Nov. 3, 1998.

Decided March 22, 1999. ^*

John Clinton Geil, Geil & Clark, P.C., Portland, Oregon, for defendant cross-claim third-party plaintiff-appellant Clifford Robinson.

Steven M. Rose, Rose, Senders and Bovarnick, Portland, Oregon, for defendant cross-claimant appellee 389 Orange Street Partners.

Sebastian S. Ciarcia (In Pro Per), Law Office of Sebastian Ciarcia, a Connecticut Corporation, Meriden, Connecticut, for third-party defendants cross-claimants appellees Sebastian S. Ciarcia, Richard L. Arnold, Kyle Arnold and Regis Conlon.

Appeals from the United States District Court for the District of Oregon; Malcolm B. Marsh, District Judge, Presiding. D.C. No. CV-96-01010-MFM.

Before: NOONAN, THOMPSON, and TROTT, Circuit Judges.

Opinion by Judge TROTT; Dissent by Judge NOONAN.

TROTT, Circuit Judge:

I

Overview

Clifford Robinson appeals three final judgments of the District of Oregon in favor of cross-claim defendants Orange Street Partners ("OSP"), Regis Conlon, Sebastian Ciarcia, and Richard and Kyle Arnold (collectively, "Appellees"). The action originated as an interpleader action brought by Trailblazers, Inc. against Robinson and OSP to determine the appropriate recipient of wages earned by Robinson. Robinson brought several cross-claims against Appellees. The first judgment awarded the wages to OSP under a promissory note and security agreement and dismissed Robinson's claims against all but Ciarcia as time-barred. The second judgment granted attorneys' fees to OSP. The third judgment dismissed Robinson's claims against Ciarcia as time-barred. We have jurisdiction under 28 U.S.C. § 1291 (1994), and we affirm in all respects.

II

Background

Acting through his then-agent, Larry Gillman, Robinson built a home in Connecticut at a total cost of approximately $1,500,000. Under a power of attorney, Gillman obtained initial financing on Robinson's behalf from Shawmut Mortgage Co. and Berkshire Bank, which was later replaced by a loan from Sears Mortgage Co. in the amount of $1,125,000. Ciarcia was responsible for disbursing the Sears funds at Gillman's direction. Gillman obtained additional financing from Stillwater Pond Partners. OSP, a partnership of the Arnolds, Conlon, Ciarcia, Stillwater, and several non-parties, also made a loan to Robinson, and the loan from Stillwater was "rolled over" into the loan from OSP, for a debt to OSP of $468,000. OSP disbursed these funds at Gillman's direction.

Robinson signed a promissory note for the OSP loan in Connecticut on June 25, 1993, when his house purchase closed. At the same time, Robinson executed an "Assignment of Security and Security Agreement" to OSP, assigning his wages from Trailblazers to OSP in the event of default on the promissory note. Robinson then signed a letter to Trailblazers, placing the organization on notice of the assignment and instructing that his wages be paid to OSP on demand.

Following the terms of the promissory note, Robinson made thirty-five monthly interest payments between June, 1993, and May, 1996. The principal was due in a balloon payment on May 26, 1996, which Robinson failed to make. OSP demanded the full amount of the principal plus a penalty of $23,269.16, for a total demand of $488,269.16, from Trailblazers. Trailblazers brought the instant interpleader action against Robinson and OSP.

With respect to the OSP loan, Robinson brought cross-claims of breach of fiduciary duty, negligence, conversion, fraud, and breach of contract against OSP and Ciarcia. With respect to the Sears loan, Robinson brought cross-claims of breach of trust, quasi The district court granted summary judgment to OSP on its contract claim, awarding $517,734.02 for late fees, prejudgment interest, and principal, and awarded attorneys' fees to OSP under a provision in the promissory note. The court granted summary judgment to Appellees on the claims arising from the OSP loan and summary judgment to Ciarcia on the claims arising from the Sears loan, holding all of these claims barred by both the Connecticut and the Oregon statutes of limitation. Robinson moved for reconsideration of summary judgment. The district court denied the motion.

contract, legal malpractice, negligent misrepresentation, and deceit against Ciarcia. Robinson also alleged that the Arnolds and Conlon were jointly and severally liable for OSP's and Ciarcia's breaches of contract and liable under agency law principles for OSP's and Ciarcia's potential liabilities to Robinson. Robinson filed his claims on August 8, 1996, more than three years after the loans closed. OSP cross-claimed against Robinson for payment on the promissory note.

III

Standard of Review

This court reviews the district court's grant of summary judgment de novo. Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir.1998). Viewing the evidence in the light most favorable to Robinson, we must determine whether any genuine issues of material fact remain and whether the district court correctly applied the relevant substantive law. See id.

We review a district court's refusal to grant a motion for reconsideration of summary judgment under Federal Rule of Civil Procedure 59(e) for an abuse of discretion. Bellus v. United States, 125 F.3d 821, 822 (9th Cir.1997). We review the district court's award of attorneys' fees made pursuant to state law for an abuse of discretion. St. Paul Fire & Marine Ins. Co. v. F.H., 117 F.3d 435, 439 (9th Cir.1997), overruled on other gnds., Government Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1227 (9th Cir.1998) (en banc).

IV

Summary Judgment on Robinson's Cross-Claims

Connecticut and Oregon law provide materially different results when the statutes of limitation are applied to Robinson's cross-claims against Appellees. In order to review the district court's summary judgment on statute of limitation grounds, we first must decide what law supplies the statute of limitation for these claims. We hold that Connecticut law applies, and that under Connecticut law the district court correctly held that Robinson's claims were time-barred. ¹

A Which State's Law Applies

When a federal court sitting in diversity hears state law claims, the conflicts laws of the forum state are used to determine which state's substantive law applies. Alaska Airlines, Inc. v. United Airlines, Inc., 902 F.2d 1400, 1402 (9th Cir.1990) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941)). Under Oregon law, the statute of limitation is provided by the state which supplies the substantive law. Or.Rev.Stat. § 12.430(1)(b) (1997).

Oregon courts follow the Restatement (Second) of Conflict of Laws § 145 (1971) approach to determining the appropriate substantive law. Casey v. Manson Const. & Eng'g Co., 247 Or. 274, 428 P.2d 898, 900 (Or.1967) (adopting the approach in the tentative draft to the Restatement, which later became § 145). The Restatement focuses on the place where the injury occurred, the place where the conduct occurred, the domicil, nationality, place of incorporation and place of business of the parties, and the place where the relationship between the parties is centered. Id. Comparable factors are applied In the instant case, the alleged tortious conduct occurred in Connecticut. Most of the Appellees are residents of Connecticut. The relationship between Robinson and Appellees is centered at the house in Connecticut. OSP is a Connecticut partnership. The only factor favoring Oregon substantive law is Robinson's residence in Oregon. Applying the factors specific to a claim of misrepresentation yields the same result. Robinson signed the allegedly fraudulent documents in Connecticut, and the alleged misrepresentations were contained in the documents. Robinson was supposed to render performance under the promissory note by paying money to the Connecticut defendants. The Restatement factors militate in favor of applying Connecticut substantive law and, therefore, the Connecticut statutes of limitation.

when an Oregon court considers the appropriate law for a claim of misrepresentation. Western Energy, Inc. v. Georgia-Pacific Corp., 55 Or.App. 138, 637 P.2d 223, 228-29 (Or.Ct.App.1981) (citing the Restatement § 148).

B Connecticut Statutes of Limitation

Robinson's cross-claims were time-barred under Connecticut's statutes of limitation. The statute for negligence actions provides for two years with a discovery rule, not to exceed three years from the date...