United States District Court, W.D. Oklahoma
STEPHEN CHESS, LOIS CHESS, BRUCE CALLANDER, JEFF DRAWDY and SUSAN DRAWDY, Plaintiffs/Counter-Defendants,
RICHARD E. ROMINE, an individual; STRIKER ENTITIES, LLC, a Wyoming limited liability company; and DOES 1-10, inclusive, Defendants/Counter-Claimants, THE STRIKER GROUP, LLC, STRIKER DEVELOPMENT, LLC, STRIKER 2004, LLC, STRIKER 2005, LLC, and STRIKER 2008, LLC, Intervening Defendants/ Counter-Claimants.
STEPHEN P. FRIOT UNITED STATES DISTRICT JUDGE
the court is Defendants' Motion for Summary Judgment,
filed May 2, 2019. Doc. no. 60. Plaintiffs have responded to
the motion and defendants have replied. Upon due
consideration, the court makes its determination.
originally commenced this action in the Superior Court of the
State of California, County of San Francisco. In their
petition, plaintiffs alleged claims of common-law fraud and
violation of the California Business and Professions Code
(“Cal. Bus. & Prof. Code”) § 17200
against defendants, Richard E. Romine (“Romine”),
Striker Entities, LLC and Does 1-10,  arising from their purchase
of ownership units in certain partnerships organized for the
purpose of conducting oil and gas operations.
Romine and Striker Entities, LLC, removed the action to the
United States District Court for the Northern District of
California, San Francisco Division. The case was assigned to
Magistrate Judge Jacqueline Scott Corley. Thereafter,
defendants filed a motion to dismiss plaintiffs'
complaint, pursuant to Rule 9(b), Rule 12(b)(6) and Rule
12(b)(7), Fed. R. Civ. P., or alternatively, to transfer the
action to this court pursuant to 28 U.S.C. § 1404(a).
After all parties consented to the jurisdiction of a
magistrate judge in accordance with 28 U.S.C. § 636(c),
Magistrate Judge Corley entered an order granting
defendants' motion to transfer. Because the action was
being transferred to this court, Magistrate Judge Corley
declined to rule on the motion to dismiss.
transfer, this court entered an order denying the motion to
dismiss. Subsequently, The Striker Group, LLC, Striker
Development, LLC, Striker 2004, LLC, Striker 2005, LLC, and
Striker 2008, LLC, moved, under Rule 24, Fed. R. Civ. P., to
intervene as defendants. The unopposed motion was granted.
All defendants then filed answers to the complaint and
alleged counterclaims of breach of contract/anticipatory
repudiation and fraud against plaintiffs. By way of their
breach of contract/anticipatory repudiation counterclaims,
defendants seek to collect on promissory notes executed by
plaintiffs relating to the purchase of ownership units in the
partnerships managed by defendants.
now seek summary judgment under Rule 56(a), Fed. R. Civ. P.,
with respect to plaintiffs' claims and defendants'
counterclaims for breach of contract/anticipatory
repudiation. Defendants argue that summary judgment is
appropriate on plaintiffs' claims for two reasons: (1)
the claims are barred by the statute of limitations; and (2)
two essential elements of the claims - false representation
and damages - cannot be established. As to their breach of
contract/anticipatory repudiation counterclaims, defendants
argue that summary judgment is warranted because the
promissory notes are valid and enforceable contracts as to
which no viable defense exists.
Rule of Civil Procedure 56(a) provides that “[a] party
may move for summary judgment, identifying each claim or
defense-or part of each claim or defense-on which summary
judgment is sought.” Rule 56(a), Fed.R.Civ.P. Summary
judgment is appropriate 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.”
Id. In deciding whether summary judgment is
appropriate, the court does not weigh the evidence and
determine the truth of the matter asserted, but only
determines whether there is a genuine issue of material fact
for trial. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 (1986). A dispute is “genuine” “if
the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Id. at 248.
A fact is “material” if under the substantive law
it is essential to the proper disposition of the claim.
Id. In adjudicating a motion for summary judgment, the
court views the evidence and draws all reasonable inferences
therefrom in the light most favorable to the nonmoving party.
McGehee v. Forest Oil Corporation, 908 F.3d 619, 624
(10th Cir. 2018).
Statute of Limitations
complaint alleges a common-law fraud claim and a statutory
claim under Cal. Bus. & Prof. Code § 17200.
Defendants' motion raises a choice-of-law question with
respect to plaintiffs' claims as well as their
counterclaims: whether California law or Oklahoma law
applies. Doc. no. 60, ECF pp. 12-16. As to plaintiffs'
claims, defendants assert that California law and Oklahoma
law conflict on the issue of the statute of limitations.
Id. at ECF pp. 14-15. California law recognizes a
three-year statute of limitations for a common-law fraud
claim, Cal. Civ. Pro. Code § 338(d), and a four-year
statute of limitations for the statutory claim, Cal. Bus.
& Prof. Code § 17208. On the other hand, Oklahoma
law recognizes a two-year statute of limitations for a
common-law fraud claim, 12 O.S. 2011 §95(A)(3) and a
three-year statute of limitations for a statutory claim, 12
O.S. 2011 § 95(A)(2). However, defendants contend that it is
not necessary to decide which law applies because
plaintiffs' claims are barred either way.
summary judgment purposes, the court agrees with defendants
that it not necessary to decide whether California law or
Oklahoma law applies to plaintiffs' claims, and
specifically, the issue of statute of
the court concludes that defendants are not entitled to
summary judgment on the claims of plaintiffs, Bruce
Callander, Jeff Drawdy and Susan Drawdy, based upon the
statute of limitations.
their motion, defendants contend that plaintiffs'
common-law fraud and statutory claims are time-barred because
the Internal Revenue Service (“IRS”) issued its
formal report on the tax audit involving Program
2007-A on February 10, 2012, more than six years
before the date plaintiffs filed suit. According to
defendants, plaintiffs were clearly on notice of their
common-law fraud and statutory claims, based on future tax
audits or tax deduction disallowances, on or shortly after
February 10, 2012. However, the evidentiary record pertaining
to defendants' motion does not indicate when plaintiffs,