Relevant Grp. v. Nourmand

• Decision Date: 25 July 2022
• Docket Number: 2:19-cv-05019-ODW (KSx)
• Parties: RELEVANT GROUP, LLC, et al., Plaintiffs, v. STEPHAN “SAEED” NOURMAND, et al., Defendants.
• Court: U.S. District Court — Central District of California

RELEVANT GROUP, LLC, et al., Plaintiffs, v. STEPHAN “SAEED” NOURMAND, et al., Defendants.

No. 2:19-cv-05019-ODW (KSx)

United States District Court, C.D. California

July 25, 2022

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT[121] AND DENYING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT [123] [124]

OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Plaintiffs Relevant Group, LLC; 1541 Wilcox Hotel LLC; 6516 Tommie Hotel LLC; and 6421 Selma Wilcox Hotel LLC (together “Relevant”) bring suit against Defendants Stephan “Saeed” Nourmand; his company, The Sunset Landmark Investment LLC (“Sunset Landmark”); his son, Michael Nourmand; and Nourmand & Associates (“N&A”) under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C §§ 1961-1968. As alleged, Defendants operated an enterprise that reflexively initiated a series of legal challenges to Relevant's construction projects under the California Environmental Quality Act (“CEQA”) in order to delay construction and pressure Relevant to pay money and make non-environmental alterations and concessions.

Three Motions for Summary Judgment are at issue. First, Relevant seeks summary judgment on the issue of the effect of releases in its settlement agreements with Sunset Landmark. (Pls.' Mot. Summ. J. (“Pl. Mot.”), ECF No. 121.) Second, Sunset Landmark and Saeed^[1] (“Sunset Defendants”) move for summary judgment as to Relevant's Third Amended Complaint and the three RICO claims asserted therein. (Sunset Defs.' Mot. Summ. J. (“S. Mot.”), ECF No. 124.) Finally, N&A moves for summary judgment, also as to Relevant's three RICO claims. (N&A's Mot. Summ. J. (“N&A Mot.”), ECF No. 123.) Having carefully considered the papers filed in connection with the Motions, the Court deemed these matters appropriate for decision without oral argument. Fed.R.Civ.P. 78; C.D. Cal. L.R. 7-15. For the reasons that follow, the Court GRANTS IN PART and DENIES IN PART Relevant's Motion; DENIES the Sunset Defendants' Motion; and DENIES N&A's Motion.

II. EVIDENTIARY OBJECTIONS

The parties raise a host of evidentiary objections in support of and in opposition to the Motions. (Pls.' Obj. re: S. Statement Uncontroverted Facts, ECF No. 141-1; Defs.' Joint Obj. re: Pls.' Statement Uncontroverted Facts (“Defs. Joint Obj.”), ECF No. 143-1; Pls.' Obj. re: S. Joint Statement Uncontroverted Facts, ECF No. 155-1; S. Defs.' Obj. re: Pls.' Additional Material Facts re: S. Mot., ECF No. 157-3.)^[2] Having reviewed these objections, the Court notes that the many of the objections fall into four general categories, based on (1) relevance; (2) lack of foundation or improper legal conclusion; (3) “objections” that are not true evidentiary objections but are instead rejections of an offered fact on the grounds that the evidence does not support the fact, including objections that a citation to a particular item of evidence is incomplete; and (4) hearsay. The Court addresses each of these categories in turn.

First, as a general rule, most relevance-based evidentiary objections are moot in the context of summary judgment motions. This is because at summary judgment, the question is whether there are genuine disputes of material fact, and accordingly, the relevance inquiry inheres throughout the determination of summary judgment motions. See Burch v. Regents of Univ. of Cal., 433 F.Supp.2d 1110, 1119 (E.D. Cal. 2006) (“A court can award summary judgment only when there is no genuine dispute of material fact. It cannot rely on irrelevant facts, and thus relevance objections are redundant. Instead of objecting parties should simply argue that the facts are not material.”). Accordingly, Defendants' relevance-based objections are all OVERRULED.

Second, the same is true of objections that an assertion lacks foundation or calls for a legal conclusion. These objections are duplicative of the summary judgment standard itself and are accordingly OVERRULED. See id.; see also S.E.C. v. Criterion Wealth Mgmt. Svcs., Inc., --- F.Supp.3d ---, 2022 WL 1215786, at *6 (C.D. Cal. Apr. 25, 2022).

As for the third category, these “objections” are merely arguments that certain assertions in a statement of facts do not follow from the cited evidence; they are not arguments that a particular piece of evidence is inadmissible because the declarant or deponent lacks personal knowledge of the subject matter. Objections are to be made to individual items of evidence, not to non-evidentiary assertions. (See Scheduling & Case Management Order 8 (providing an example of a properly submitted evidentiary objection).) Accordingly, all such objections are OVERRULED.

As for the hearsay objections, a court may not grant a summary judgment motion on the basis of hearsay evidence, but it may deny a summary judgment motion on the basis of hearsay evidence “as long as a court finds that [the] hearsay evidence could be presented in an admissible form at trial.” Cherewick v. State Farm Fire & Cas., ___ F.Supp.3d ___, 2022 WL 80429, at *14 (S.D. Cal. Jan. 7, 2022); Burch, 433 F.Supp.2d at 1121 (“Material in a form not admissible in evidence may be used to avoid, but not to obtain summary judgment.” (quoting Tetra Techs. Inc. v. Harter, 823 F.Supp. 1116, 1120 (S.D.N.Y. 1993))).

Therefore, hearsay objections raised by parties moving for summary judgment “are very unlikely to move the needle in a significant way unless the challenged evidence is key and no other admissible evidence on the matter is available.” Criterion, 2022 WL 1215786, at *5; see Burch, 433 F.Supp.2d at 1120 (“[W]hen evidence is not presented in an admissible form in the context of a motion for summary judgment, but it may be presented in an admissible form at trial, a court may still consider that evidence.”). Under this principle, the majority of hearsay-based objections raised in connection with these Motions are DENIED.

Moreover, the Court need not rule on objections to evidence the Court does not examine in ruling on the Motions, see Burch, 433 F.Supp.2d at 1122 (proceeding with only necessary rulings on evidentiary objections); this rule applies to several more of the parties' objections, and those objections are DENIED AS MOOT.

This leaves a small number of specific objections to evidence the Court considers in ruling on these Motions. These objections are analyzed in footnotes as they arise below.

III. FACTUAL BACKGROUND

Relevant Group, LLC is an umbrella entity that manages the three other LLC Plaintiffs. (Third Am. Compl. (“TAC”) ¶ 23, ECF No. 89.) Each of these three LLC Plaintiffs is a special purpose entity formed to support the development of a hotel in the Hollywood area. (Id.) As the distinctions among the four Plaintiff entities are generally not germane to resolving these Motions, the Court refers to all four Plaintiffs as “Relevant,” in the singular.

Sunset Landmark owns the historic Hollywood Athletic Club located at the intersection of Sunset Boulevard and Schrader Boulevard in Los Angeles, California. (Sunset Defs.' Corrected Statement of Uncontroverted Facts (“S. SUF”) 1, ECF No. 127-7.) Saeed is Sunset Landmark's principal, (id.), and Sunset Landmark is represented by nonparty The Silverstein Law Firm and attorney Robert Silverstein, (Pls.' Statement of Uncontroverted Facts (“PSUF”) 1, ECF No. 121-2). The Sunset Defendants aver that the Hollywood Athletic Club is used primarily as office space, (Mem. ISO S. Mot. (“S. Mem.”) 15, ECF No. 124-1; see S. SUF 80), but Relevant disputes this contention, pointing out that the Club is also used as a nightlife and event space, (Pl. Resp. S. SUF 80, ECF No. 141).

N&A is a residential real estate brokerage. (N&A's Statement of Undisputed Facts (“N&A SUF”) 39, ECF No. 123-2.) Saeed founded N&A over thirty years ago but has since sold his interest in N&A. (N&A SUF 41; Pls.' Additional Material Facts re: N&A Defs.' Mot. (“PAMF re: N&A”) 74, ECF No. 148.) Saeed's son Michael currently serves as CEO and President of N&A, and Michael's mother is N&A's majority shareholder and sole director. (N&A SUF 42, 44; PAMF re: N&A 82.) N&A operates its Hollywood branch office in space leased to it by Sunset Landmark, and Saeed maintains his personal office in this office space. (PAMF re: N&A 81, 83.)

In 2007, Relevant began developing a series of hotels within a block of the Hollywood Athletic Club. (S. SUF 65.) The three special purpose entity Plaintiffs in this case correspond to three such hotels: the Thompson Hotel, associated with 1541 Wilcox Hotel LLC, (TAC ¶ 18); the Tommie Hotel, associated with 6516 Tommie Hotel LLC, (TAC ¶ 90); and the Selma Hotel, associated with 6421 Selma Wilcox Hotel LLC, (TAC ¶ 105). Relevant raised capital for these projects from several sources, including the EB-5 Immigrant Investor Program. (Pls.' Additional Material Facts re: S. Defs.' Mot. (“PAMF re: S.”) 82-83, ECF No. 141.) Under the EB-5 program, foreign investors contribute capital to a specific project, and provided that the project creates ten local jobs per investor, the investors earn permanent residency visas. 8 U.S.C. § 1153(b)(5)(A); see generally R.L. Inv. Ltd. Partners v. I.N.S., 86 F.Supp.2d 1014, 1016-17 (D. Haw. 2000), aff'd, 273 F.3d 874 (9th Cir. 2001). This need to create jobs as planned pressured Relevant to meet its project timelines. (See PAMF re: S. 107.)

As this action involves Sunset Landmark's challenges to these hotels under CEQA, the Court pauses for a brief overview of CEQA.

A. General Principles of CEQA

“[T]he overriding purpose of CEQA is to ensure that agencies regulating activities that may affect the quality of the environment give primary consideration to preventing environmental damage.” Save Our Carmel River v Monterey Peninsula Water Mgmt. Dist., 141...