Georgiou Studio, Inc. v. Boulevard Invest, LLC

• Decision Date: 06 October 2009
• Docket Number: No. 2:07-cv-00997-RCJ-LRL.,2:07-cv-00997-RCJ-LRL.
• Citation: 663 F.Supp.2d 973
• Parties: GEORGIOU STUDIO, INC., a California corporation, Plaintiff, v. BOULEVARD INVEST, LLC., a Delaware limited liability company d/b/a Desert Passage; and Does 1 through 10, inclusive, Defendants. Boulevard Invest, LLC., a Delaware limited liability company, Third-Party Plaintiff, v. Related Urban Management Company, LLC, a Delaware limited liability corporation, Third-Party Defendant.
• Court: U.S. District Court — District of Nevada

663 F.Supp.2d 973

GEORGIOU STUDIO, INC., a California corporation, Plaintiff, v. BOULEVARD INVEST, LLC., a Delaware limited liability company d/b/a Desert Passage; and Does 1 through 10, inclusive, Defendants.

Boulevard Invest, LLC., a Delaware limited liability company, Third-Party Plaintiff, v. Related Urban Management Company, LLC, a Delaware limited liability corporation, Third-Party Defendant.

No. 2:07-cv-00997-RCJ-LRL.

United States District Court, D. Nevada.

October 6, 2009.

As Amended October 7, 2009.

COPYRIGHT MATERIAL OMITTED

Herbert Sachs, Herbert Sachs, Esq., Las Vegas, NV, for Plaintiff.

Annie J. Kung, Kung & Associates, Brandy L. Brown, Kung & Wilson, Las

Vegas, NV, for Defendants, Third-Party Plaintiff.

Jean A. Weil, Jeremy R. Kilber, Weil & Drage, APC, Las Vegas, NV, for Third-Party Defendant.

ORDER

ROBERT C. JONES, District Judge.

I. INTRODUCTION

This lawsuit arises out of Plaintiff Georgiou Studio, Inc.'s ("Georgiou") claim against Defendant Boulevard Invest, LLC. ("Boulevard") for breach of contract, fraud and deceit, negligent representation, and abuse of process in regards to Boulevard's ejection of Georgiou and subsequent denial of a lease agreement between the two parties. Boulevard then filed a third party complaint against their former property management company, Related Urban Management Company, LLC ("Related"). Now before the Court is Boulevard's Motion for Leave to File Second Amended Answer to Complaint and Third Party Complaint pursuant to Rule 15(a) and Boulevard's Motion for Summary Judgment pursuant to Rule 56. (#89, 91). Boulevard argues in its Motion to Amend that amendments are needed due to previously adjudicated issues. Additionally, Defendant wishes to add claims against Related and additional Third Party Defendants Pohlen and Donovan on the grounds that the claims were inadvertently omitted or not yet discovered by Defendant's prior counsel. In its Motion for Summary Judgment, Defendant argues that there is no genuine issue of material fact supporting Plaintiff's claims.

The Court has considered Plaintiff's Motion and the pleadings on file on behalf of all parties. IT IS HEREBY ORDERED that Boulevard's Motion to Amend (# 71, 89) are DENIED and Boulevard's Motion for Summary Judgement (# 91) is GRANTED. Furthermore, Georgiou's Motion to Strike (# 97) is DENIED.

II. FACTS

Boulevard owns and operates a shopping center known as the Miracle Mile Shops (previously known as Dessert Passage) located at 3663 Las Vegas Blvd., Las Vegas, NV 89109. In February 2005, Boulevard entered into a Property Management and Leasing Agreement with Related, wherein Related agreed to represent Boulevard as its property manager and leasing agent with regards to the Miracle Mile Shops. Boulevard specifically reserved the authority and discretion to make the final decision on whether or not to enter into any lease. During the relevant times to this lawsuit Related employed proposed Third Party Defendant Kimberly Pohlen ("Pohlen") as its leasing agent. After failing to acquire the appropriate permits and licenses regarding their property management, in July 2006, Related hired proposed Third Party Defendant Vic Donovan and Vic Donovan Real Estate Services, Inc. (collectively "Donovan") to monitor Related's leasing transactions and bring them into compliance with appropriate licenses and permits. Throughout the period during which Related was not properly licensed it collected the fees and rent payments from Boulevard's leases.

In 2002, Boulevard's predecessor-in-interest entered into a lease agreement with Georgiou for space in the Miracle Mile Shops. Starting in 2005 Georgiou began to receive notices of default. Boulevard alleges that Georgiou was late in paying rent throughout the course of their tenancy. Georgiou alleges that it received these notices for over a year but was directed by Boulevard's management (presumably Related) that they were not in fact in default and the notices were to maintain the accounting as though there was a ten year lease in effect (though this was not true). After receiving a notice of default in early July 2006, Georgiou was evicted by Boulevard and locked out of the premises on July 28, 2006. Boulevard and Georgiou entered into an agreement settling their dispute regarding the outstanding rent.

Subsequent to the eviction Georgiou and Related, through the actions of Pohlen, began discussions with Georgiou about leasing another space in the Miracle Mile Shops. Boulevard alleges that these discussions were in furtherance of Pohlen and Related's interest in obtaining commission (both at the Miracle Mile location and another location in Phoenix) and at no time was Boulevard interested in retaining Georgiou again as a tenant. During this time Pohlen communicated on behalf of Related that "Ownership" had agreed to the "economics discussed" and sent letters of intent to Georgiou regarding the agreement to lease space. Included on the letter of intent sent to Georgiou was the provision that "neither party shall be bound unless and until a mutually agreeable lease is executed and delivered by both parties." In January 2007, Georgiou made an agreement to an oral lease with Related and Pohlen to lease a location in the Miracle Mile Shops for ten years. This oral agreement was confirmed in an email from Pohlen in which she relayed to Georgiou that "Ownership has approved the deal." In March a lease was forwarded Georgiou, which they signed and sent back with a check for the first month's rent. In April they were notified that Boulevard would not execute the lease.

In December 2007, Boulevard also terminated their agreement with Related on the grounds that Related had breached their contract in the events that gave rise to this dispute. Related was also added as a third-party defendant to this suit. In January 2009, summary judgment was granted in favor of Related against Boulevard on the matters of breach of contract, breach of implied covenant of good faith and fair dealing, indemnity and contribution, application of the economic loss doctrine, and fiduciary duty. (# 60, entered Jan. 22, 2009). The proposed Amended Complaint presently before this Court makes these additional claims against Related and proposed Third Party Defendant Pohlen: breach of contract by their failure to obtain the necessary licenses; gross negligence due to failure to obtain the necessary licenses, making fraudulent statements, and acting outside the scope of delegated authority; fraud due to Related's failing to refund all fees collected by Related as well as the payment for services from Boulevard; and conversion on the grounds that Related failed to return the monies held in trust in Boulevard's operational account. The claims against proposed Third Party Defendant Donovan are based on Boulevard's allegations that Donovan was negligent in its duties to Related/Boulevard, and secondly, that Vic Donovan Real Estate Services, Inc. is the alter ego of Vic Donovan.

III. DISCUSSION

A. Boulevard's Motion to Amend (# 89).

Federal Rule of Civil Procedure 15(a)(2) provides that "a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." FED R. CIV. P. 15(a)(2). Whether an amendment to a pleading should be permitted is ordinarily a matter within the discretion of the trial court. Caddy-Imler Creations, Inc. v. Caddy, 299 F.2d 79, 84 (9th Cir.1962). District courts are directed to apply this rule with "extreme liberality." See, e.g., Forsyth v. Humana, Inc., 114 F.3d 1467, 1482 (9th Cir. 1997). However, leave to amend is not absolute. Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir.1990). Among the factors mitigating against allowing parties to amend their pleadings are undue delay in litigation, prejudice to the opposing party, and futility for lack of merit. Id. (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). A showing of the factors overcomes the presumption in favor of granting leave to amend. See Eminence Capital, LLC. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.2003).

1. Undue Delay

Boulevard contends that its Motion for Leave to Amend is, in sum, an attempt to add parties and claims it finds necessary to the litigation. The failure to include Pohlen and Donovan are attributed to oversight on the part of Boulevard's previous counsel or insufficient information to name them as parties. However the timing of this motion is significant as this Court has already issued an order granting Summary Judgment to Related regarding all but one of Boulevard's original claims against Related and denied Boulevard's Motion for Reconsideration less than ten months ago. As one court framed the issue, "delay may become undue when a movant has had previous opportunities to amend a complaint." Cureton v. National Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3rd Cir.2001). In Jackson the Court stated that evaluation needs be made "whether the moving party knew or should have known the facts and theories raised by the amendment in the original pleadings." Jackson, 902 F.2d at 1388.

In the present case Boulevard has not sufficiently justified their delay in amending their complaint. The additional parties that Boulevard is attempting to include as third party defendants were not added due to some new information that they did not, or could not have known earlier in this litigation. This litigation has been ongoing for over two years. There is not articulated reason that Boulevard should not have known that they could or should include Pohlen and Donovan in the suit. Specifically, their delay in waiting until after the large majority of their claims were disposed of via summary judgment, suggests rather a wait and see approach, rather than discovery of new information. Discovery has now closed and trial is currently scheduled for September 22, 2009, less than six...