United States District Court, W.D. Washington, Seattle
MARC LILLY, NOT IN HIS INDIVIDUAL CAPACITY BUT AS THE REPRESENTATIVE FOR THE FORMER SHAREHOLDERS OF VIEOSOFT, INC., Plaintiff,
ENVOY, LLC; EMDEON, INC.; EMDEON BUSINESS SERVICES, LLC; TOM GROOM named as an indispensable party, Defendants.
ORDER DENYING PLAINTIFF'S MOTION FOR RELIEF FROM
RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE.
MATTER comes before the Court on Plaintiff's Motion for
Relief from Judgment pursuant to Federal Rules of Civil
Procedure 59(e) and 60(b). Dkt. #101. Plaintiff asserts that
this Court committed manifest error by failing to address his
claim for the minimum payment due under the contract at
issue, and by failing to fairly credit the evidence he
presented in opposition to summary judgment when construing
the contract. Id. Defendants oppose the motion,
noting that Plaintiff did not make a claim for the minimum
payment due in his Complaint, and that Plaintiff merely
reasserts the same arguments this Court already rejected with
respect to interpreting the contract language. Dkt. #103. For
the reasons set forth below, the Court agrees with Defendants
and DENIES Plaintiff's motion.
Court has previously set forth the pertinent background facts
to this dispute and incorporates them by reference herein.
See Dkt. #99 at 2-10.
motion for relief from judgment under Rule 59(e) should be
granted when the Court: “(1) is presented with newly
discovered evidence; (2) committed clear error or the initial
decision was manifestly unjust; or (3) if there is an
intervening change in the controlling law.” In re
Syncor ERISA Litigation, 516 F.3d 1095, 1100 (9th Cir.
2008) (citation omitted). In the instant case, Plaintiff
argues that the Court committed clear error by dismissing his
breach of contract claim without “resolving the
termination fee breach.” Dkt. #101 at 6. The Court
Plaintiff was not the moving party on summary judgment. The
Court noted Plaintiff had argued in his opposition brief that
Defendants breached the contract in part by failing to pay
the guaranteed termination fee; however, Plaintiff did not
ask the Court to make any ruling in his favor. See
Dkt. #85. In fact, he did not cross-move for summary judgment
on any of his claims, nor did he file his own motion for
summary judgment. He did not even ask the Court to find
alternatively that he was due the termination fee if the
Court ruled in Defendants' favor on their motion.
Instead, he simply asked the Court to deny summary judgment
on the breach of contract claim. Dkt. #85 at 25.
Plaintiff did not raise such a breach of contract claim based
on the failure to pay the termination fee in his Complaint.
While Plaintiff lists several alleged breaches of the
contract as the basis of his claim, he does not include the
failure to pay the guaranteed termination payment.
See Dkt. #1 at ¶ ¶ 73-77. Indeed,
Plaintiff acknowledges that he did not raise the claim in his
Complaint because he thought at the time Defendants would pay
the termination fee as promised. Dkt. #104 at 2. He also
acknowledges that he never amended his Complaint to add such
a claim, asserting that he was not required to because
Defendants had fair notice of the claim. Id.
misconstrues the law regarding fair notice. As this Court has
“summary judgment is not a procedural second chance to
flesh out inadequate pleadings.” Wasco Prods., Inc.
v. Southwall Techs., Inc., 435 F.3d 989, 992 (9th Cir.
2006). Where a plaintiff “fail[s] to assert any factual
allegations in its complaint” to support a theory or
claim, the plaintiff's “provision of affidavits and
declarations supporting [that theory or claim] at the summary
judgment stage is ineffectual.” La Asociacion de
Trabajadores de Lake Forest v. City of Lake Forest, 624
F.3d 1083, 1088-89 (9th Cir. 2010). Indeed, courts routinely
decline to consider evidence proffered in response to a
motion for summary judgment when the evidence is untethered
from the factual allegations made in the complaint. See
id.; In re TFT-LCD (Flat Panel) Antitrust
Litig., No. M 07-1827 SI, 2012 U.S. Dist. LEXIS 160337,
2012 WL 5411590, at *2 (N.D. Cal. Nov. 6, 2012); Edinger
v. City of Westminster, No. SA CV 14-0145-DOC (RNB),
2015 U.S. Dist. LEXIS 167801, 2015 WL 8770002, at *7 (C.D.
Cal. Dec. 14, 2015) (“Because these allegations [of
retaliatory speech] have not been properly pleaded, they are
not properly before the Court in response to a motion for
summary judgment.”); Corona v. Time Warner Cable,
Inc., No. CV 13-5521 PSG (VBKx), 2014 U.S. Dist. LEXIS
186736, 2014 WL 11456535, at *4 (C.D. Cal. Oct. 16, 2014)
(finding that the plaintiff's complaint did not encompass
the theory raised in response to a motion for summary
judgment). When a complaint fails to contain factual
allegations later raised in opposition to a motion for
summary judgment, the defendant may not have fair notice of
“‘the grounds upon which [the plaintiff's
claim] rests.” TFT-LCD Antitrust Litig., 2012
U.S. Dist. LEXIS 160337, 2012 WL 5411590, at *2 (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127
S.Ct. 1955, 167 L.Ed.2d 929 (2007)) and declining to consider
breach of a contract other than the purchase orders
identified in the complaint in response to a motion for
summary judgment because the complaint did not give the
defendant fair notice). The rationale for this rule rests
primarily on the threat of prejudice from a late change in
the plaintiff's theory, but the court need not make a
finding of prejudice to reject a plaintiff's new theory.
See Id. (rejecting argument based on factual
allegations not in complaint without making a finding of
prejudice); City of Lake Forest, 624 F.3d at
Roufa v. Constatine, 2017 U.S. Dist. LEXIS 4966,
*26-28 (W.D. Wash. Jan. 11, 2017).
Plaintiff relies on an Eastern District of California case,
Franco v. United StatesForest Serv., that
is not helpful to his motion. Dkt. #104 at 2. Notwithstanding
that such authority is not binding on this Court, Plaintiff
fails to set forth ...