Fed. Deposit Ins. Corp. v. Johnson
| Decision Date | 17 October 2014 |
| Docket Number | Case No. 2:12-CV-209-KJD-PAL |
| Parties | FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff, v. COREY L. JOHNSON, et. al., Defendants. |
| Court | U.S. District Court — District of Nevada |
Before the Court is Defendant Johnson's Motion for Summary Judgment (#162). Plaintiff FDIC-R responded (#185) and filed an errata to the response (#193). Defendant replied (#206). Supplemental Authority was also filed (##211, 218, 221, 223). Also before the Court are Defendant Johnson's Motions to Strike Notice of Supplemental Authority (##213, 225). Plaintiff responded to the first motion (#214), and the time for Defendant to reply has long since passed. FDIC-R objects (#224) to Johnson's Notice of Supplemental Authority # 218, and Defendant has replied (#226).1
As a preliminary matter, without seeking leave of the Court, Johnson's Motion is 44 pages—nearly 50% overlength—a violation of Local Rule 7-4. The Court will overlook thesefailures in the interest of judicial economy. However, the parties are admonished to follow all Local and Federal Rules. Future failures in this regard will result in sanctions under Rule 11 and this Court's inherent authority.
Also, FDIC-R asserts that Johnson's repeated "failure to provide proper citations in support of his factual statements" is prejudicial (#185). The Court acknowledges that this practice could indeed prejudice FDIC-R by substantially impeding its ability to respond to asserted facts, but only if the Court were to accept such bald assertions. However, "[a] trial court can only consider admissible evidence in ruling on a motion for summary judgment." Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002). Further, the standard for summary judgment eviscerates any evidentiary value in such bald assertions.2 Thus, no prejudice will lie against FDIC-R as all such unsupported assertions are inconsequential to this Court's analysis.
On a related note, the vast majority of Johnson's assertions lack any citation of any sort. The few which contain citations typically cite to exhibits which are buried and mislabeled, making the Court's review exceptionally difficult. Regardless, the simple fact that many crucial assertions lack citations is a poor beginning.
Id. at 1859. Johnson is wrong. Any misunderstanding FDIC-R may have regarding Defendants' arguments is not evidenced here. Further, this case assists the Court by affirming the common-sense proposition that "fluctuations in property values" are "foreseeable." For all of the above reasons, Johnson's Motion to Strike Notice of Supplemental Authority (#213) is DENIED.
As above, the present motion (#225) is DENIED because the citations are not redundant, immaterial, impertinent, or scandalous . . . ." Fed. R. Civ. P. 12(f). However, the Court will construe both motions as replies to the relevant Notice of Supplemental Authority, considering all proper explanations of the impact of cited authority.
As the parties—particularly Johnson—persist in avoiding the meat of this matter, engaging instead in irrelevant motions, the Court will be quite clear regarding any future notices of supplemental authority. Such notice will include the relevant citation, with the full text of the opinion appended. The body of the notice will be no longer than three pages, explaining briefly how it relates to the pleadings or motions currently before the Court. No other content is permissible, nor will other content will be considered by the Court. The opposing party may file a reply consisting of no more than three pages, discussing solely how the citation is or is notapplicable to the pleadings or motions currently before the Court. Any overlength material, or content which does not directly relate to how the supplied citation pertains to the matters before the Court will not be considered by the Court.
The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Summary judgment may be granted if the pleadings, depositions, affidavits, and other materials of the record show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Uncorroborated and self-serving testimony, without more, will not create a genuine issue of material fact. See Villiarimo v. Aloha Island Air Inc., 281 F.3d 1054, 1061 (9th Cir. 2002). Conclusory or speculative testimony is also insufficient to raise a genuine issue of fact. Anheuser Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337, 345 (9th Cir. 1995).
The moving party bears the initial burden of showing the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323. Once that burden is met, the nonmoving party then has the burden of setting forth specific facts demonstrating that a genuine issue exists. See Matsushita, 475 U.S. at 587; Fed. R. Civ. P. 56(e). Mere "metaphysical doubt as to the material facts" is not enough. Matsushita, 475 U.S. at 586. If the nonmoving party fails to make a sufficient showing of an essential element for which it bears the burden of proof, the moving party is entitled to summary judgment. See Celotex, 477 U.S. at 322-23. All evidence must be viewed in the light most favorable to the non-moving party. Nolan v. Heald Coll., 551 F.3d 1148, 1150 (9th Cir. 2009).
FDIC-R alleges both gross negligence and breach of fiduciary duty against Johnson and his co-defendants. In the context of directors and officers, these claims are potentially identical. At minimum, there are substantial overlaps. For example, the business judgment rule does not apply to claims of gross negligence, which constitutes a breach of the fiduciary duty of care. Shoen v. SAC Holding Corp., 137 P.3d 1171, 1184 (Nev. 2006).
Additionally, it is axiomatic that contested factual questions are best reserved for the trier of fact. Both gross negligence and breach of fiduciary duty are factual questions.
The determination whether a corporate director has properly discharged his duties is a question of fact. In particular, the determination of whether a party is liable for gross negligence is a matter of fact that must be left to the determination of the reasonable persons making up the trier of fact.
F.D.I.C. v. Jackson, 133 F.3d 694, 700 (9th Cir. 1998) (internal quotation marks and citations omitted). Nor is this axiom absent from Nevada's jurisprudence. The Supreme Court of Nevada is "reluctant to affirm summary judgment in negligence cases because, generally, the question of whether a defendant was negligent in a particular situation is a question of fact for the jury to resolve." Butler ex rel. Biller v. Bayer, 168 P.3d 1055, 1063 (Nev. 2007).
The Court will address each claim in turn.
The only way Johnson can prevail in this motion for summary judgment is to show that FDIC-R's prima facie case is "clearly lacking as a matter of law" one of the elements of gross negligence. Id. This is a particularly heavy burden given the factually intensive nature of the inquiry before the Court. Johnson's failure to provide citations for the bulk of his factual assertions substantially undercuts his ability to meet his burden.
Liability is determined by Nevada law. 12 U.S.C. § 1821(k); Atherton v. F.D.I.C., 519 U.S. 213, 216 (1997). Nevada has also provided the following definition of gross negligence:
Gross negligence is substantially and appreciably higher in magnitude and more culpable than ordinary negligence. Gross negligence is equivalent to the failure to exercise even a slight degree of care. It is materially more want of care than constitutes simple inadvertence. It is an act or omission respecting legal duty of an aggravated character as distinguished from a mere failure to exercise ordinary care. It is very great negligence, or the absence of slight diligence, or the want of even scant care. It amounts to indifference to present legal duty, and to utter forgetfulness of legal obligations so far as other persons may be affected. It is a heedless and palpable...
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