Arguedas v. Carson

1

Juan Carlos ARGUEDAS, et al., Plaintiffs, v. Jesus Alberto CARSON, et al., Defendants.

No. 20-cv-2044-AGS-BGS

United States District Court, S.D. California

January 22, 2024

ORDER GRANTING IN PART DEFENDANTS' SUMMARYJUDGMENT MOTION (ECF 85)

Andrew G. Schopler United States District Judge.

In this breach-of-contract and fraud case, the defense moves for summary judgment.

BACKGROUND^[1]

In 2015, plaintiffs met with defendant Alberto Carson in person to discuss doing business together on medical-evacuation flights. (ECF 88-2, at 2-3.) The plan was for plaintiffs to provide medevac services to patients, while Carson would bill and collect payments from those patients and their insurance companies. (Id.) Everyone agrees that Carson was to remit plaintiffs' share of the bills collected. (Id. at 8-9.)

Over the next few years, plaintiffs flew hundreds of medevac flights. (ECF 85-1, at 6-7; ECF 88-1, at 94-95.) The parties dispute how involved Carson's wife-defendant Marcella Meraux-Carson-was in this operation. But two of the Carsons' businesses- defendants Aeromedical Consulting Group, LLC, and Global Medevac Rescue, Inc.- handled much of the billing and collections for these medical trips. (ECF 88-1, at 20.)

In 2016 and 2017, plaintiffs claim that they flew many flights for which they were never paid, amounting to over $1.7 million. (ECF 28, at 7.) They eventually sued Carson, Meraux-Carson Aeromedical, and GMR for breach of contract, fraud, and violations of the Uniform Voidable Transactions Act. (See ECF 19 & 28.) The defense now moves for partial summary judgment.

DISCUSSION

A. Legal Standard

Summary judgment is proper when the record, taken in the light most favorable to the nonmoving party, demonstrates 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). A “material” fact is one “that might affect the outcome of the suit.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is “genuine” if “a reasonable jury could return a verdict for the nonmoving party.” Id.

When the “nonmoving party will bear the burden of proof at trial,” the party urging summary judgment shoulders the initial burden of demonstrating that “there is an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317 324-25 (1986). This may be accomplished by “‘showing'-that is, pointing out through argument-the absence of evidence ” Fairbank v Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir. 2000). The burden then shifts to the nonmoving party to “go beyond the pleadings and identify facts which show a genuine issue for trial.” Id. at 531. The summary-judgment “opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

B. Discussion

1. Breach of Contract

(a) 98 Unpaid Flights

The parties agree that plaintiffs were not entitled to any payment for a medevac flight until Carson collected some revenue for it. (ECF 88-2, at 8-9.) Defendants argue there is no evidence of collected payments for 98 of the 174 flights at issue, and thus move for partial summary judgment on the breach-of-contract claim for those 98 trips. (ECF 85-1, at 20.) Rather than provide contradictory evidence, plaintiffs cry foul about discovery. They complain that defendants “blatantly withheld” collections evidence on these flights, despite “repeated requests.” (ECF 88, at 16.)

For summary-judgment purposes, defendants met their initial burden by pointing out the lack of evidence on these flights. The burden then shifts to plaintiffs to pinpoint “specific facts” in the record “showing that there is a genuine issue for trial.” Fairbank, 212 F.3d at 532. Discovery-misconduct accusations do not conjure such evidence, nor carry that burden. If discoverable evidence was improperly withheld, plaintiffs should have moved to compel its production. Discovery is now closed, and the time for wrangling over disclosure violations is long past. The summary-judgment stage is the “‘put up or shut up' moment in a lawsuit, when the nonmoving party must show what evidence it has that would convince a trier of fact to accept its version of events.” Sorayama v. Robert Bane, Ltd., Inc., No. CV 05-1431 FMC (MCX), 2006 WL 8432085, at *4 (C.D. Cal. Jan. 27, 2006). In other words, plaintiffs must come forward with admissible evidence that raises a triable issue about whether Carson collected revenue on these disputed flights. They have not.

Even if the Court were to recast plaintiffs' argument as a Rule 56(d) request to deny the motion or receive additional discovery, summary judgment would still be proper. For Rule 56(d) relief, a plaintiff must show “by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition.” Fed.R.Civ.P. 56(d). Although plaintiffs offer a declaration (see ECF 88-1), it does not speak to any Rule 56(d) prerequisite. And “[f]ailure to comply with these requirements is a proper ground for denying discovery and proceeding to summary judgment.” Fam. Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir. 2008) (cleaned up).

Thus, summary judgment on the breach-of-contract claim is granted for the defense regarding the 98 unpaid flights. Plaintiffs may still pursue this cause of action as to the remaining 76 flights, for which some revenue was collected. (See ECF 85-1, at 20.)

(b) Aeromedical, GMR, and Meraux-Carson

Defendants move for summary judgment on the breach-of-contract claim as to Aeromedical, GMR, and Meraux-Carson on the ground that they were not parties to the alleged oral contract. (ECF 85-1, at 17.) The defense notes that Meraux-Carson did not attend the 2015 meeting at which the oral contract was purportedly formed. (ECF 88-2, at 3.)

Even according to plaintiffs' testimony, Meraux-Carson had “nothing” to do with the agreement, nor did she later have any “business dealings.” (ECF 88-2, at 4; ECF 85-4, at 14.) Finally, the defense points out that during the crucial meeting, Carson never mentioned Aeromedical, GMR, or Meraux-Carson, nor did he indicate they would be parties to the contract. (ECF 88-2, at 4; ECF 88-3 at 2.) This recitation more than meets the defense's initial burden on summary judgment.

Plaintiffs don't contest those facts. They instead maintain that there is a triable breach-of-contract case against these defendants because: (1) the “course of conduct certainly established GMR and Aeromedical as parties to the business agreement” (ECF 88, at 15); (2) plaintiff Juan Carlos Arguedas testified that he “understood” that Aeromedical and GMR “would be performing the billings and collections” (id.); and (3) Aeromedical, GMR, and Meraux-Carson are all liable as “alter egos” of each other (id. at 11-13, 15).

(1) Course of Conduct

Regarding the “course of conduct” argument, plaintiffs' legal theory is unclear, and they cite no caselaw to shed light on their rationale. They may be arguing that this Court should include Aeromedical and GMR as parties to the alleged oral contract, based on the course of conduct. Or perhaps plaintiffs contend that there is a separate implied contract between plaintiffs and these two businesses that is evidenced by the parties' conduct. After all, assent to an implied contract “may be manifested by words or other conduct,” including “course of dealing or usage of trade or course of performance.” Binder v. Aetna Life Ins. Co., 89 Cal.Rptr.2d 540, 551 (Ct. App. 1999) (quoting Restatement (Second) of Contracts § 4, cmt. a (Am. Law Inst. 1981), and citing Cal. Civ. Code §§ 1619, 1621).

At any rate, plaintiffs have not carried their burden of pointing to “specific facts” about the course of conduct that create “a genuine issue for trial.” See Fairbank, 212 F.3d at 532. The only fact they offer in favor of this thesis is that, between “2015 and 2019, Defendants utilized both Aeromedical and GMR to bill and collect[] on medevac flights carried out by Plaintiffs.” (ECF 88, at 11; see also ECF 88-1, at 20.) Even so, that doesn't mean those businesses were in a contractual relationship with plaintiffs, nor that those companies were required to perform under the alleged contract between plaintiffs and Carson. In fact, plaintiffs admit that defendants didn't always use Aeromedical and GMR for billing and collections, as they “outsourced 92 flights to Skyborne Resources, Inc.” (See ECF 88, at 7.)

(2) Juan Carlos Arguedas's Understanding

Next, plaintiffs point to Juan Carlos Arguedas's somewhat equivocal testimony about the contracting parties. He initially omitted Carson's companies entirely when listing “the three groups to [the] oral contract,” which he identified as “Alberto Carson,” plaintiffs, and “the doctors who referred patients for medevac flights.” (ECF 85-4, at 9-10.) Yet he later stated that, “as far as I understand,” the oral contract “was with an individual, Alberto Carson, but that would include all of his companies.” (ECF 85-4, at 12.) Still later, Arguedas rephrased that as: “[I]t was with him as an individual. But that does not exclude each and every one's companies.” (Id. at 12-13; see also id. at 12 (noting that Carson's membership in the company they were forming “does not exclude his other companies”).) Ultimately, Arguedas cautioned: “[R]emember that this happened seven years ago, so I don't have an exact recollection of what was said.” (Id. at 13.)

Regardless of Arguedas's precise understanding, it is unclear how or why he came to that belief, or that anyone else shared it. His personal interpretation of the meeting does not rebut testimony that Carson...