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Estate of Petersen v. Bitters

United States District Court, D. Nebraska

June 22, 2018



          Robert F. Rossiter, Jr. United States District Judge.

         This matter is before the Court on defendants Robert W. Boland, Jr.'s (“Boland”) and William E. Bitters's (“Bitters”) respective Motions for Summary Judgment (Filing Nos. 182 and 184). See Fed. R. Civ. P. 56. Plaintiff Estate of Joyce Rosamond Petersen (the “estate”) responded (Filings Nos. 193 and 194) to the motions, and Bitters and Boland have jointly moved (Filing No. 195) to strike those responses and sanction the estate and defendant John L. Henry (“Henry”).[1] The estate then moved to continue (Filing No. 208) summary-judgment disposition under Fed.R.Civ.P. 56(d)(2). With jurisdiction under 28 U.S.C. § 1332, the Court grants Boland's motion, grants Bitters's motion in part and denies it in part, grants the joint motion in part and denies it in part, and denies the estate's motion to continue summary-judgment disposition.

         I. BACKGROUND

         Joyce Rosamond Petersen (“Petersen”), a long-time resident of Omaha, Nebraska, met Bitters, a financial advisor based out of Sioux City, Iowa, in 2006.[2] Bitters sold several financial products to Petersen over the years, and, in 2008, prepared a promissory note for a $150, 000 unsecured loan from Petersen to Henry. Henry never repaid the loan, and Petersen died on October 20, 2013.

         On December 1, 2014, the estate filed suit in the United States District Court for the Eastern District of Texas against Bitters, [3] Boland, and Henry (collectively, the “defendants”) for damages arising from the unpaid loan. After the case was transferred to the District of Nebraska, the estate filed an Amended Complaint (Filing No. 99) containing ten claims, seven of which survived the defendants' motions to dismiss (Filing Nos. 104, 106, and 112): (1) breach of fiduciary duty, (2) negligence, (3) fraud, (4) negligent misrepresentation, (5) breach of contract, (6) breach of the implied duty of good faith and fair dealing, and (7) assumpsit. A chronology of this case can be found at Filing No. 203 and most recently at Filing Nos. 219 and 220.[4] Suffice it to say after years of acrimony, finger-pointing and thousands of pages of motions, affidavits and other filings, the estate still claims it needs additional discovery and is not ready for trial. The estate requests further time to prepare, even though the matter has been pending since 2014, and the parties were less than diligent in approaching discovery in this matter.


         A. Standard of Review - Motion to Continue

         Rule 56(d)(2) permits the Court to defer considering a motion for summary judgment and to allow additional discovery when “a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition[.]” A party moving for a continuance under Rule 56(d)(2) must make a good faith showing that the additional evidence discovered might rebut the opposing party's demonstration of the absence of a genuine issue of material fact. Robinson v. Terex Corp., 439 F.3d 465, 467 (8th Cir. 2006). It would not suffice for a party to simply recite facts it thinks may possibly be gleaned from further discovery. Anzaldua v. Ne. Ambulance & Fire Prot. Dist., 793 F.3d 822, 836-37 (8th Cir. 2015). Parties invoking Rule 56(d)(2) must do so by affirmatively demonstrating why they cannot respond to a movant's affidavits as otherwise required and “how postponement of a ruling on the motion will enable [them], by discovery or other means, to rebut the movant's showing of the absence of a genuine issue of fact.” Jackson v. Riebold, 815 F.3d 1114, 1121 (8th Cir. 2016) (quoting Toben v. Bridgestone Retail Operations, LLC, 751 F.3d 888, 894 (8th Cir. 2014).

         In short, Rule 56(d)(2) does not permit a “fishing expedition.” Anzaldua, 793 F.3d at 837. And the Court enjoys wide discretion in deciding Rule 56(d)(2) motions. Id.

         The Eighth Circuit has consistently found no abuse of discretion in the denial of Rule 56(d)(2) motions filed after the close of discovery or after extensive opportunity for discovery has already has been presented. Elkharwily v. Mayo Holding Co., 823 F.3d 462, 471 (8th Cir. 2016) (reasoning that after two years of “exhaustive” discovery, the district court did not abuse its discretion in denying additional discovery under Rule 56(d)(2)); Roe v. St. Louis Univ., 746 F.3d 874, 887 (8th Cir. 2014) (finding no abuse of discretion in denying Rule 56(d)(2) motion where the discovery period lasted more than a year, discovery deadlines were extended four times, and there was not a sufficient showing that additional discovery was necessary).

         Put differently, Rule 56(d)(2) “is not designed to give relief to those who sleep upon their rights” and a district court need not “spare litigants from their own lack of diligence.” Rivera-Almodovar v. Instituto Socioeconomico Comunitario, Inc., 730 F.3d 23, 29 (1st Cir. 2013). Delays caused by a party's dilatory behavior, and a failure to timely utilize the discovery mechanisms and remedies available under the Federal Rules, are a sufficient basis for denial of a motion under Rule 56(d)(2). Id.

         The estate did not begin discovery until seven months after the final progression order. Even after a continuance was granted at the parties' request (Filing No. 128), the estate's counsel did not depose Bitters or Boland until the April 16, 2018, deposition deadline. While the estate argues additional discovery is necessary because Bitters and Boland violated a discovery order (Filing No. 160), the alleged deficient discovery was served on March 5, 2018, and supplemented on March 10, 2018. The summary-judgment motions were filed on March 20, 2018, and the estate waited until May 24, 2018 (Filing No. 208) and June 5, 2018 (Filing No. 215) to file any motions to resolve discovery issues.

         The estate's attorneys have neither worked diligently to prepare for nor timely responded to the pending summary-judgment motions. The estate has not affirmatively explained why it was unable to fully respond to Boland's and Bitters's summary-judgment motions by the deadline imposed under the local rules, and it has not explained what evidence could be presented if additional discovery and time was granted. The Court has denied (Filing No. 220) the estate's motions requesting adverse inferences against Bitters and Boland or prohibiting the consideration of evidence supporting their affirmative defenses.

         This case is set for trial beginning on July 9, 2018, with a pretrial conference on June 26, 2018. The estate's motion for a Rule 56(d)(2) continuance will be denied.

         B. Standard of Review - Summary Judgment

         “The 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). “A party asserting that a fact cannot be or is genuinely disputed must support the assertion by . . . citing to particular parts of materials in the record” or by “showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1).

         “A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.” Fed.R.Civ.P. 56(c)(2). Bitters and Boland have objected to and moved to strike various statements and documents submitted by the estate. The motion to strike is granted in part and denied in part. Without separately addressing each piece of challenged evidence, the Court notes it has reviewed each of the identified statements and documents, the cited evidence in support, and has considered, for the purpose of summary judgment, the evidence the Court has found to be relevant, admissible, and supported by the record.[5] The Court specifically finds Henry's affidavit, though somewhat self-serving and inconsistent, is not directly contradicted by clear deposition testimony such that this Court finds it (at this time) to be a “sham affidavit.”

         The Court views the evidence in the light most favorable to the nonmoving party, “[b]ut there must still be enough evidence to allow a rational trier of fact to find for the [estate] on the required elements of [its] claim[s].” Estate of Barnwell v. Watson, 880 F.3d 998, 1004 (8th Cir. 2018). “If the party with the burden of proof at trial is unable to present evidence to establish an essential element of that party's claim, summary judgment on the claim is appropriate because ‘a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.'” St. Jude Med., Inc. v. Lifecare Int'l, Inc., 250 F.3d 587, 595 (8th Cir. 2001) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). “The nonmoving party may not rely on allegations or denials, but must demonstrate the existence of specific facts that create a genuine issue for trial.” Mann v. Yarnell, 497 F.3d 822, 825 (8th Cir. 2007).

         C. The Estate's Claims Against Boland

         The claims against Boland are predicated only on the estate's claim that Boland entered into a partnership with Bitters and “is jointly and severally liable for Bitters's misconduct.” Boland argues he and Bitters are not partners and he has no relationship to any of the other parties involved in the case.

         “The association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.” Neb. Rev. Stat. § 67-410(1).[6] “The objective indicia of co-ownership are commonly considered to be: (1) profit sharing, (2) control sharing, (3) loss sharing, (4) contribution, and (5) co-ownership of property.” In re Keytronics, 744 N.W.2d 425, 441 (Neb. 2008). “The five indicia of co-ownership are only that; they are not all necessary to establish a partnership relationship, and no single indicium of co-ownership is either necessary or sufficient to prove co-ownership.” Id. The estate bears the burden of establishing the existence of the partnership by a preponderance of the evidence. Id. at 438.

         The estate fails to present sufficient evidence to create a genuine issue of fact about the existence of any partnership because, although Bitters and Boland clearly entered into some form of association, there is no evidence of co-ownership. The only evidence the estate has presented is (1) the presence of Boland's profile on Bitters's website; (2) Boland's testimony that they “have collaborated on speaking engagements, made referrals, and exchanged financial and legal ideas over the years”; and (3) Bitters's testimony that he and Boland wrote articles together and he sometimes referred clients to Boland for trust work. This evidence does not support the existence of any of the objective indicia of co-ownership. The estate argues that the element of co-ownership is present “since they both financially benefited from their association together.” But mere mutual financial benefit between two separate entities- standing alone-is not sufficient to establish ...

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