Vahora v. Valley Diagnostics Lab., Inc., Case No. 1:16-cv-01624-SKO

Decision Date13 November 2019
Docket NumberCase No. 1:16-cv-01624-SKO
PartiesGULAMNABI VAHORA, Plaintiff, v. VALLEY DIAGNOSTICS LABORATORY, INC., et al., Defendants.
CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
ORDER DENYING DEFENDANTS' MOTION FOR NEW TRIAL OR TO AMEND THE JUDGMENT
ORDER DENYING DEFENDANTS' MOTION FOR JUDGMENT AS A MATTER OF LAW

(Docs. 155, 156)

I. INTRODUCTION

On May 17, 2019, a jury returned a verdict in favor of Plaintiff and judgment was entered on May 21, 2019. (Docs. 152, 153.) On June 4, 2019, Defendants filed post-trial motions for a new trial to amend the judgment, or for relief from the judgment, and for judgment as a matter of law. (Docs. 155, 156.) Plaintiff filed responses in opposition on June 14, 2019. (Docs. 158, 159.)

Defendant Naeem Qarni ("Qarni") filed a notice of bankruptcy filing on June 21, 2019, and the Court vacated the hearing on the post-trial motions and directed the parties to brief the issue of whether the automatic stay under 11 U.S.C. § 362(a) would apply to stay this case. (See Docs. 162, 163, 165.) Thereafter, the bankruptcy court granted relief from the automatic stay under 11 U.S.C. § 362(a) to allow any post-trial motions and appeals from the judgment in this case to proceed. (See Docs. 174, 176.) Upon review of the motions and supporting documents, the Court deemed the matters suitable for decision without oral argument pursuant to Local Rule 230(g). Accordingly, no hearing was set on the post-trial motions. (See Doc. 176 at 2.)

For the reasons that follow, the Court hereby denies the motions.

II. RELEVANT PROCEDURAL BACKGROUND1

This case involves a business dispute between Plaintiff and Defendants VDL and Naeem Qarni. In the operative Second Amended Complaint (SAC), Plaintiff alleged the following causes of action: breach of contract against Qarni as to the partnership agreement; breach of contract against both Defendants; breach of contract against Qarni as to the personal loan agreement; and conversion against VDL.2 (Doc. 43 at 22-27.)

Trial commenced on May 14, 2019.3 (Doc. 138.) Plaintiff testified at trial and completed his testimony on the second day of trial; Plaintiff then called Alfonso Flores ("Flores"), a former employee of VDL, as his second witness. (See Doc. 140.) Plaintiff rested his case on May 16, 2019. (Doc. 145.)

At the conclusion of Plaintiff's case in chief, Defendants filed a motion for judgment as a matter of law under Rule 50 of the Federal Rules of Civil Procedure, on which the Court deferred ruling until the close of evidence. (Doc. 139; see Doc. 145; Doc. 170 at 266.) In their Rule 50 motion, Defendants requested that the Court enter judgment as a matter of law on Plaintiff's first claim for breach of contract as to the partnership between Plaintiff and Qarni. (Doc. 139 at 1-2.) Defendants contended that because Plaintiff had not pleaded an accounting of the partnership assets, Plaintiff's first claim had not accrued because the partnership had never terminated, and further that a judicial dissolution and accounting is the only permissible action between partners. (See id.)

On May 17, 2019, the Court denied Defendants' Rule 50 motion on the record and outside the presence of the jury. (See Doc. 171 at 28.) In relevant part, the Court stated:

Defendant[s'] motion for judgment as a matter of law pursuant to Rule 50 of the Federal Rule[s] of Civil Procedure on plaintiff's partnership claim is essentially very similar if not essentially the same as defendant[s'] motion in limine number 4 in which defendant[s] contended that an accounting is a condition precedent to [a lawsuit] by one partner against another and that plaintiff has failed to plead a cause of action for an accounting. That motion in limine was denied.
And as in that motion in limine, here defendants contend that since plaintiff has failed to provide an accounting, he's failed to establish an essential element of the claim. There are several exceptions to the historical rule prohibiting one partner from suing another partner without an accounting of the partnership profits. One of these exceptions is a partner suing to enforce his or her rights under the partnership agreement pursuant to California Corporations Code 16405(b), which is the case here, and for the reasons that I just stated, the Rule 50 motion is denied.

(Id. at 27-28.)

On May 17, 2019, the jury returned a verdict in favor of Plaintiff on all four claims. (Doc. 152.) On Plaintiff's first claim for relief (breach of the partnership agreement by Qarni), the jury determined that Qarni breached the partnership agreement with Plaintiff, the partnership did not terminate before October 26, 2014, and Qarni's breach of the partnership agreement caused Plaintiff $100,000 in damages. (Id. at 2.) On the second claim (breach of the VDL loan agreement by VDL), the jury found that VDL breached its contract with Plaintiff; VDL was not profitable before October 26, 2014; and VDL's breach of the loan agreement caused Plaintiff $158,175 in damages. (Id. at 3-4.) On Plaintiff's third claim (breach of the VDL loan agreement by Qarni), the jury found that Qarni breached his contract with Plaintiff, and the breach caused Plaintiff $65,232 in damages. (Id. at 4-5.) On the fourth claim for relief4 (breach of the personal loan agreement by Qarni), the jury determined that Qarni breached his agreement with Plaintiff, and the breach caused Plaintiff $75,000 in damages. (Id. at 5-6.) Thus, the monetary judgmentawarded against Qarni totaled $240,232 and the judgment awarded against VDL totaled $158,175. (See id.) The Court entered judgment pursuant to the jury's verdict on May 21, 2019. (Doc. 153.)

On June 4, 2019, Defendants filed post-trial motions seeking relief under Rule 59 and Rule 60. (Docs. 155, 156.) Defendants' motions are presently before the Court.

III. LEGAL STANDARDS
A. Rule 59 Motion for New Trial

Under Rule 59 of the Federal Rules of Civil Procedure, a district court has discretion to grant a new trial "for any reason for which a new trial has heretofore been granted in an action at law in federal court." Fed. R. Civ. P. 59(a)(1)(A). As "Rule 59 does not specify the grounds on which a motion for a new trial may be granted," courts are "bound by those grounds that have been historically recognized." Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1035 (9th Cir. 2003). Grounds recognized as permitting a new trial include (1) a verdict that is contrary to the weight of the evidence, (2) a verdict that is based on false or perjurious evidence, or (3) to prevent a miscarriage of justice. Molski v. M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007). The decision whether to grant a motion for a new trial lies within the discretion of the trial judge. See Merrick v. Paul Revere Life Ins. Co., 500 F.3d 1007, 1013 (9th Cir. 2007). The Ninth Circuit has provided the following guidance for ruling on such motions:

A decent respect for the collective wisdom of the jury, and for the function entrusted to it in our system, certainly suggests that in most cases the judge should accept the findings of the jury, regardless of his own doubts in the matter . . . If, having given full respect to the jury's findings, the judge on the entire evidence is left with the definite and firm conviction that a mistake has been committed, it is to be expected that he will grant a new trial.

Landes Const. Co., Inc. v. Royal Bank of Canada, 833 F.2d 1365, 1371-72 (9th Cir. 1987) (citing C. Wright & A. Miller, Federal Practice & Procedure § 2806 at 48-49 (1973)). "The judge can weigh evidence and assess the credibility of witnesses, and need not view the evidence from the perspective most favorable to the prevailing party." Id.

While the court has discretion to assess the evidence under the three grounds identified in Molski, 481 F.3d at 729 (clear weight of the evidence, seriously erroneous result, and miscarriage of justice), the standard for finding insufficient evidence warranting a new trial remains high. Roy v. Volkswagen of Am., 896 F.2d 1174, 1176 (9th Cir. 1990) ("While the trial court may weigh the evidence and credibility of the witnesses, the court is not justified in granting a new trial 'merely because it might have come to a different result from that reached by the jury.'") (quoting Wilhelm v. Associated Container Transp. (Australia) Ltd., 648 F.2d 1197, 1198 (9th Cir. 1981)).

Under Rule 59, to obtain a new trial based on newly discovered evidence, "the movant must show the evidence '(1) existed at the time of the trial, (2) could not have been discovered through due diligence, and (3) was 'of such magnitude that production of it earlier would have been likely to change the disposition of the case.'" Jones v. Aero/Chem Corp., 921 F.2d 875, 878 (9th Cir. 1990) (quoting Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 211 (9th Cir. 1987)).

B. Rule 59 Motion to Amend the Judgment

Rule 59 also provides that a party may file a motion to alter or amend a judgment within 28 days after the entry of the judgment. Fed. R. Civ. P. 59(e). "To succeed" on a Rule 59(e) motion, "a party must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision." United States v. Westlands Water Dist., 134F. Supp. 2d 1111, 1131 (E.D. Cal. 2001).

However, "[a] Rule 59(e) motion may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation." Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003); see also Garcia v. Biter, 195 F. Supp. 3d 1131, 1133 (E.D. Cal. 2016). "[I]n certain limited circumstances, a court has discretion to reconsider its prior decisions." Ameripride Servs., Inc. v. Valley Indus. Servs., Inc., No. 2:0-cv-00113-MCE-EFB, 2016 WL 4540557, at *1 (E.D. Cal. Aug. 30, 2016). Specifically, the Ninth Circuit identified thefollowing "four grounds upon which a Rule 59(e) motion may be granted": (1) "the motion is necessary to correct...

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