McKenzie Law Firm, P.A. v. Ruby Receptionists, Inc.

• Decision Date: 18 November 2020
• Docket Number: Case No. 3:18-cv-1921-SI
• Citation: 501 F.Supp.3d 965
• Parties: MCKENZIE LAW FIRM, P.A., and Oliver Law Offices, Inc., on behalf of themselves and all others similarly situated, Plaintiffs, v. RUBY RECEPTIONISTS, INC., Defendant.
• Court: U.S. District Court — District of Oregon

501 F.Supp.3d 965

MCKENZIE LAW FIRM, P.A., and Oliver Law Offices, Inc., on behalf of themselves and all others similarly situated, Plaintiffs,

v.RUBY RECEPTIONISTS, INC., Defendant.

Case No. 3:18-cv-1921-SI

United States District Court, D. Oregon.

Signed November 18, 2020

Keith S. Dubanevich, Cody O. Berne and Megan K. Houlihan, Stoll Berne pc, 209 SW Oak Street, Suite 500, Portland, OR 97204; Laurence D. King, Matthew B. George, and Mario M. Choi, Kaplan Fox & Kilsheimer llp, 350 Sansome Street, Suite 400, San Francisco, CA 94104; Robert I. Lax, Lax llp, 380 Lexington Avenue, 31st Floor, New York, NY 10168; Jon M. Herskowitz, Baron & Herksowitz, 9100 S. Dadeland Blvd, # 1704, Miami FL; Gregory J. Brod, Brod Law Firm pc, 96 Jessie Street, San Francisco, CA 94105. Of Attorneys for Plaintiffs.

Misha A.D. Isaak, Renee E. Rothauge, Julia E. Markley, Philip R. Higdon, Patrick L. Rieder, Edward Choi, and Gregory J. Mina, Perkins Coie llp, 1120 NW Couch Street, Tenth Floor, Portland, OR 97209; Andrew R. Escobar and Austin Rainwater, DLA Piper llp, 701 Fifth Avenue, Suite 6900, Seattle, WA 98104. Of Attorneys for Defendant.

OPINION AND ORDER

Michael H. Simon, District Judge.

Plaintiffs and class representatives McKenzie Law Firm, P.A. and Oliver Law Offices, Inc. are former clients of Defendant Ruby Receptionists, Inc. ("Ruby"), a business that provides virtual receptionist services. In this class action, Plaintiffs allege breach of contract, breach of the duty of good faith and fair dealing, money had and received, and unjust enrichment, all based on Ruby's allegedly misleading practices relating to the billing of what Ruby calls a "receptionist minute." Under Rule 23(b)(3) of the Federal Rules of Civil Procedure, the Court certified a class consisting of:

All persons or entities in the United States who obtained receptionist services from Defendant Ruby Receptionists between November 2, 2012 and May 31, 2018, pursuant to its form Service Agreements.

Order Certifying Class (ECF 128); McKenzie Law Firm PA. v. Ruby Receptionists, Inc. , 2020 WL 1970812, at *11 (D. Or. April 24, 2020). In that Order, the Court also summarized the facts of this case. Id. at *2-4. The parties have waived their right to a jury, and the Court has scheduled a 13-day bench trial to begin on January 11, 2021.

Now before the Court are the following seven motions:

1. Defendant's First Motion for Summary Judgment (Contract Interpretation) (ECF 163);

2. Defendant's Second Motion for Summary Judgment (Affirmative Defenses and Damages) (ECF 164);

3. Defendant's Motion to Decertify the Class (ECF 165);

4. Defendant's Third Motion for Summary Judgment (Terms and Conditions) and Second Motion to Decertify the Class (ECF 199);

5. Plaintiffs' Motion for Partial Summary Judgment (Breach of Contract) (ECF 198);

6. Plaintiffs' Motion to Exclude Defendant's Expert Lori Bocklund (ECF 203); and

7. Plaintiffs' Objections to and Motion to Exclude Certain Evidence from the Declaration and Supplemental Declaration of Diana Stepleton (ECF 208).

In these motions, Plaintiffs and Defendant argue, among other things, that they are each entitled to summary judgment on Plaintiffs' claim of breach of contract. Ruby argues that it should receive summary judgment on this claim because extrinsic evidence of the parties' intent shows that a critical mass of class members understood at the time of contracting that Ruby measured a "receptionist minute" by always rounding up to the next 30-second increment. According to Ruby, this understanding by a critical mass resolves any ambiguity in the term "receptionist minute." Taking the opposite position, Plaintiffs argue that they should receive summary judgment on their breach of contract claim because the Court should resolve any ambiguity in the meaning of "receptionist minute" by construing that term against the contract's drafter, Ruby.

Ruby also argues that the extrinsic evidence showing that many class members shared Ruby's understanding of the term "receptionist minute" destroys the commonality and predominance of questions of law or fact necessary to sustain a class action. Ruby adds that affirmative defenses like account stated, waiver, and modification, as well as changes Ruby made to its Terms and Conditions in 2018 and 2019 entitle Ruby to partial summary judgment against some class members and on some periods and measures of damage. Ruby also contends that these affirmative defenses warrant decertification of the class. Finally, Ruby added a mandatory arbitration clause to its Terms and Conditions in September 2019 and now asks the Court to enforce that clause against applicable class members.

Finally, Plaintiffs ask the Court to exclude the expert report of Lori Bocklund as well as summary evidence and portions of a declaration from Ruby's Vice President for Legal Affairs Diana Stepleton. Plaintiffs argue that Bocklund's testimony—on which Ruby's rebuttal expert on damages relies—is not proper opinion testimony. Instead, Plaintiffs assert, Bocklund's statements concern only evidentiary facts and Bocklund lacks personal knowledge of those facts. Plaintiffs also contend that the Court should exclude Stepleton's summary evidence and portions of her declaration because Ruby has not complied with the requirements of Rule 1006 of the Federal Rules of Evidence, which governs the admissibility of summary evidence.

STANDARDS

A. Summary Judgment

A party is entitled to summary judgment if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc. , 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment," the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient ...." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).

When parties cross-move for summary judgment, a court "evaluate[s] each motion separately, giving the non-moving party in each instance the benefit of all reasonable inferences." A.C.L.U. of Nev. v. City of Las Vegas , 466 F.3d 784, 790-91 (9th Cir. 2006) (quotation marks and citation omitted); see also Pintos v. Pac. Creditors Ass'n , 605 F.3d 665, 674 (9th Cir. 2010) ("Cross-motions for summary judgment are evaluated separately under [the] same standard."). In evaluating these motions, a court "must consider each party's evidence, regardless under which motion the evidence is offered." Las Vegas Sands, LLC v. Nehme , 632 F.3d 526, 532 (9th Cir. 2011). "Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case." In re Oracle Corp. Sec. Litig. , 627 F.3d 376, 387 (9th Cir. 2010). The non-moving party then bears the burden of designating "specific facts demonstrating the existence of genuine issues for trial." Id. "This burden is not a light one." Id. The Supreme Court has directed that in such a situation, the non-moving party must do more than raise a "metaphysical doubt" as to the material facts at issue. Matsushita , 475 U.S. at 586, 106 S.Ct. 1348.

B. Contract Interpretation under Oregon Law

Under Oregon law, the primary objective for any court interpreting a contract is to give effect to the parties' agreed-upon intentions. See, e.g., Connall v. Felton , 225 Or. App. 266, 272, 201 P.3d 219 (2009). Oregon courts have established a three-step process for interpreting contracts. See Yogman v. Parrott , 325 Or. 358, 361, 937 P.2d 1019 (1997) ; Ross Dress For Less, Inc. v. Makarios-Oregon, LLC , 210 F. Supp. 3d 1259, 1263 (D. Or. 2016). First, a court must determine whether the relevant contract provision is ambiguous. See Apeldyn Corp. v. Eidos, LLC , 943 F. Supp. 2d 1145, 1149 (D. Or. 2013) (citing McKay's Mkt. of Coos Bay, Inc. v. Pickett , 212 Or. App. 7, 12, 157 P.3d 291 (2007) ).

After finding that a contractual provision is ambiguous, a court proceeds to the second step in the Yogman analysis. At the second step, the trier of fact must look beyond the four corners of the agreement to determine the parties' mutual intention, if a mutual and common intention in fact existed. Id. "At the second step, the trier of fact examines extrinsic evidence of the contracting parties' intent and construes the disputed contractual provision consistent with that intent, if such a resolution can be determined." Id. Oregon follows the objective theory of contracts, and thus relevant evidence at step two may include manifestations of intent, including any expressions of any common understanding communicated by the parties. Id. Without direct evidence of the parties' intent, a court also may look to the parties' course of dealing or their performance during the term of the contract as relevant circumstantial, or inferential, evidence of their common understanding, if any, of the ambiguous provision. See Apeldyn , 943 F. Supp. 2d at 1149 ; Yogman , 325 Or. at 363-64, 937 P.2d 1019.

Without either direct or circumstantial evidence to aid the trier of fact in determining the parties' intent, or if the contract...