Arroyo Escondido, LLC v. Balmoral Farm, Inc.

ARROYO ESCONDIDO, LLC, Plaintiff, v. BALMORAL FARM, INC., et al., Defendants.

No. 2:19-cv-08464-ODW (DFMx)

United States District Court, C.D. California

August 19, 2021

ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT [50] AND GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT [49]

OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Plaintiff Arroyo Escondido, LLC initiated this action against Defendants Balmoral Farm, Inc., Traci Brooks, and Carleton Brooks claiming Defendants fraudulently induced Arroyo into purchasing a pony that was unsuitable for its intended purpose-competing in high-level sporting events. (Compl., ECF No. 1.) Presently before the Court are the parties' Motions for Partial Summary Judgment. (Pl.'s Mot. Partial Summ. J. (“PMPSJ”), ECF No. 50; Defs.' Mot Partial Summ. J. (“DMPSJ”), ECF No. 49.) For the reasons discussed below, the Court DENIES Arroyo's Motion and GRANTS Defendants' Motion.^[1]

II. BACKGROUND^[2]

Arroyo Escondido breeds, sells, and leases horses; its principal manager and sole member is Dr. Cristina Payan. (Defs.' Statement of Uncontroverted Facts (“DSUF”) 1, ECF No. 48-2.) Defendants Traci Brooks and Carleton Brooks are joint owners of Defendant Balmoral Farm, Inc., which is a professional equestrian business that buys and sells horses and ponies. (Id.)

Payan wanted to purchase Defendants' pony, Neon Moon (the “Pony”), for her daughter, so Arroyo enlisted Peter Pletcher to serve as Arroyo's agent in obtaining the Pony. (DSUF 22; Pl.'s Statement of Uncontroverted Facts (“PSUF”) 39, ECF No. 50-2.) The Pony has been identified by several names, including Tucker, Angus, and Little Big Shot. (PSUF 31.) Prior to purchasing the Pony, Arroyo had the Pony examined by a veterinarian, and Payan's daughter tried out the Pony by riding him in five small pony competitions. (DSUF 25.) After the riding trial and veterinarian exam, on August 18, 2018, Arroyo purchased the Pony from Balmoral Farm for $190, 000. (DSUF 27; PSUF 37.)

The United States Equestrian Federation (“USEF”) is the governing body for equestrian competition in the United States. (DSUF 8.) By January 2019, Payan's daughter competed on the Pony in more than forty-five USEF small pony equestrian classes. (DSUF 29.) However, Payan's daughter never developed the ability to ride the Pony. (DSUF 32.) On March 13, 2019, Arroyo delivered the Pony back to Balmoral Farm without a written agreement. (DSUF 30.)

On October 1, 2019, Arroyo initiated this action claiming Defendants misrepresented the Pony's size and medical history and asserted seven claims: violation of California Business and Professions Code section 19525 (Count I); concealment (Count II); intentional misrepresentation (Count III); negligent misrepresentation (Count IV); fraudulent inducement (Count V); unjust enrichment (Count VI); and violation of California Penal Code section 496(a) (Count VII). (Compl. ¶¶ 15-43.) Before the Court are the parties' cross Motions for Partial Summary Judgment.

III. LEGAL STANDARD

A court “shall grant 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). Courts must view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007). A disputed fact is “material” where the resolution of that fact might affect the outcome of the suit under the governing law, and the dispute is “genuine” where “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Conclusory or speculative testimony in affidavits is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill Publ'g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). Moreover, though the Court may not weigh conflicting evidence or make credibility determinations, there must be more than a mere scintilla of contradictory evidence to survive summary judgment. Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000).

Once the moving party satisfies its burden, the nonmoving party cannot simply rest on the pleadings or argue that any disagreement or “metaphysical doubt” about a material issue of fact precludes summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987). Nor will uncorroborated allegations and “self-serving testimony” create a genuine issue of material fact. Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002). The court should grant summary judgment against a party who fails to demonstrate facts sufficient to establish an element essential to his case when that party will ultimately bear the burden of proof at trial. See Celotex, 477 U.S. at 322.

Pursuant to the Local Rules, parties moving for summary judgment must file a proposed “Statement of Uncontroverted Facts and Conclusions of Law” that sets out “the material facts as to which the moving party contends there is no genuine dispute.” C.D. Cal. L.R. 56-1. A party opposing the motion must file a “Statement of Genuine Disputes” setting forth all material facts as to which it contends there exists a genuine dispute. C.D. Cal. L.R. 56-2. “[T]he Court may assume that material facts as claimed and adequately supported by the moving party are admitted to exist without controversy except to the extent that such material facts are (a) included in the ‘Statement of Genuine Disputes' and (b) controverted by declaration or other written evidence filed in opposition to the motion.” C.D. Cal. L.R. 56-3.

IV. ARROYO'S MOTION FOR PARTIAL SUMMARY JUDGMENT

The Court first addresses Arroyo's Motion, which seeks partial summary judgment on Counts II (fraudulent concealment), III (intentional misrepresentation), IV (negligent misrepresentation), V (fraudulent inducement), and VII (violation of California Penal Code section 496(a)).

A. Fraudulent Concealment

Arroyo moves for partial summary judgment on Count II (fraudulent concealment), in which Arroyo asserts Defendants concealed: (a) the Pony was medium and not small; and (b) Defendants' agent changed the Pony's name and obtained a new USEF record number for the Pony prior to its sale. (PMPSJ 13-15.) Arroyo claims Defendants “were under a duty to disclose” these alleged material facts before the sale and if Arroyo's agent, Pletcher, was aware of these facts “he would not have instructed” Arroyo to purchase the Pony. (Id. at 14-15.) However, as Defendants argue in opposition, genuine issues of material fact preclude partial summary judgment on this claim.

The required elements for fraudulent concealment are: (1) “concealment or suppression of a material fact”; (2) “by a defendant with a duty to disclose the fact to the plaintiff”; (3) “the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact”; (4) “the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact”; and (5) “plaintiff sustained damage as a result of the concealment or suppression of the fact.” Hambrick v. Healthcare Partners Med. Grp., Inc., 238 Cal.App.4th 124, 162 (2015).

1. The Pony's Size

First, there are genuine issues of material fact concerning the first element- whether Defendants concealed the Pony was “medium.” Arroyo argues that Defendants concealed this alleged fact, but Arroyo puts forth no evidence demonstrating that is the Pony's official size classification. On the other hand, Defendants submit evidence demonstrating in November 2017, the USEF measured the Pony at 12.2 hands, which is a “small pony” measurement. (Defs.' Statement of Genuine Issues (“DSGI”) 81, ECF No. 54-1.) The Pony is still registered with the USEF as a “small pony, ” and from January 2018 to August 2018 the Pony competed in approximately sixty USEF small pony competitions. (DSGI 82, 83.) Indeed, Plaintiff's daughter competed on the Pony in forty-five USEF small pony classes without protest from USEF officials. (See DSGI 87.)

Second, there are genuine issues of material fact regarding the fourth element- whether Arroyo would have purchased a medium pony. Arroyo contends that if Pletcher was aware the Pony was medium, Pletcher would not have instructed Arroyo to purchase the Pony. (PMPSJ 14-15.) However, Arroyo relies on Pletcher's conflicting and speculative deposition testimony, which fails to demonstrate the Pony's purported medium size would have affected his recommendation. At one point, Pletcher testified, “[t]o say we wouldn't buy [the Pony] because he was measured [medium], I can't say that.” (Decl. of T. Randolph Catanese, Ex. E, Dep. of Peter Pletcher (“First Pletcher Dep.”) 124:22-23, ECF No. 50-5; see also Decl. of Robert Scapa ¶ 10 (“Second Pletcher Dep.”), ECF No. 54-5.) And later, Pletcher testified that, “if we had gone back and seen [all of the evidence]” he would “probably not” have recommended Arroyo purchase the Pony. (First Pletcher Dep. 125:5-8.) Thus, on this record, it is not clear the Pony's size would have affected Pletcher's recommendation.

These genuine disputes of material fact preclude partial summary judgment on Arroyo's claim Defendants concealed the Pony's size.

2. The Pony's Name and USEF Number

Next Arroyo contends Traci Brooks changed the Pony's name from “Angus” to “Little Big Shot, ” and obtained a new USEF record number for the Pony prior to its sale. (PMPSJ 14.) But there are genuine issues regarding whether D...