North v. Thomas

Background

Gerald D.W. North, an attorney representing himself, brought this action against Anthony and Wendi Thomas. The Thomases had retained North in connection with a petition seeking Supreme Court review of an unfavorable Ninth Circuit decision and other matters. The Supreme Court rejected the petition.

North's First Amended Complaint asserts four causes of action: breach of written contract, promissory fraud, quantum meruit, and civil theft. He seeks unpaid legal fees under a Limited Legal Representation Agreement dated December 4, 2019, and an amendment dated January 24, 2020.

The court considered two motions filed by North: a motion for partial summary judgment on the breach-of-contract claim and a motion to strike the Thomases' affirmative defense of offset. An affirmative defense is a defense that, if established, can reduce or defeat liability even if the plaintiff proves the basic claim. The parties had consented to the jurisdiction of a magistrate judge.

Requests Concerning Documents

The court granted North's request for judicial notice of specified records from federal court actions involving North or the defendants. Judicial notice allows a court to accept certain facts that are not reasonably disputed, including the existence of public court records; the court stated that it was not accepting disputed facts contained in those records as true.

The court denied judicial notice of the 2020 Year End Report on the Federal Judiciary because North did not rely on that document in either motion and judicial notice was unnecessary.

The court declined to incorporate by reference the two fee agreements and various communications attached to North's request. Incorporation by reference is a doctrine that can allow a court to treat certain documents as part of a complaint. The court said that doctrine was unnecessary here because this was a summary-judgment motion, where properly supported pleadings, declarations, and other evidence may be considered directly. The court did not decide whether every document attached to North's declaration was admissible, although it noted that some communications might raise hearsay questions.

Partial Summary Judgment

Summary judgment is appropriate when there is no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. Because North sought judgment on his own breach-of-contract claim, he had to establish every essential element beyond dispute. Those elements are the contract, North's performance or legally excused nonperformance, the defendants' breach, and resulting damages.

The court found at least one genuine dispute of material fact about whether the Thomases breached the payment terms. The December 4, 2019 agreement contains provisions stating that the client, defined as Anthony Thomas, would pay North. But it also refers to payments from TMI being applied to amounts owed and to assignments of finder’s fees from TMI. The court concluded that the agreement was, at best, ambiguous about whether TMI was to pay North directly or whether TMI was to pay Anthony Thomas, who would then pay North.

That issue mattered because North did not provide a declaration clearly stating how much he had been paid or who had paid him. North relied in part on admissions in the Thomases' answer that certain payments had not been made, but the court concluded that those admissions did not resolve whether North had received payment from TMI on the Thomases' behalf. North's supplemental declaration also stated that fees earned by Anthony Thomas through TMI were to be transmitted through TMI, while maintaining that Anthony Thomas remained liable for fees not covered by actual receipts. The court found that these statements further highlighted the factual dispute.

The court therefore denied North's motion for partial summary judgment on the breach-of-contract claim. Because North had not met his initial burden, the defendants were not required to produce evidence to avoid summary judgment. The court nevertheless noted that Anthony Thomas submitted a declaration stating that he believed North was being paid by Paul Mula of TMI from Anthony Thomas's commissions and that he did not know how much TMI had paid North.

Motion to Strike

North also moved to strike the defendants' affirmative defense of offset under Federal Rule of Civil Procedure 12(f). The court stated that such motions may be used to remove an insufficient, redundant, immaterial, impertinent, or scandalous defense, but are generally disfavored.

The court denied the motion to strike because North filed it without obtaining leave of court, contrary to the court's Civil and Discovery Referral Matters Standing Order. The court did not strike the offset defense.

Disposition

Judge Susan Van Keulen denied North's motion for partial summary judgment and denied North's motion to strike the affirmative defense of offset. The order also directed the parties to complete alternative dispute resolution within three weeks and set a further case-management conference for May 12, 2026.