Maas v. Zymbe, LLC

Background

Eric Maas sued Zymbe, LLC; Blue Oar Consulting, Inc.; Vystar Corporation; Greg Rotman; Jamie Rotman; Steven Rotman; Sarah Hawthorne; Michael X. Ianacone; Keith Osborn; Bryan Stone; and Joseph Allegra, Jr. The case began in California state court and was later removed to federal court based on federal-question jurisdiction. Maas alleged 27 federal and state-law claims arising primarily from a 2015 consulting agreement with Zymbe and his consulting work for the company.

Maas moved for partial summary judgment on nine of his claims against Zymbe, Greg Rotman, and Steven Rotman: defamation, promissory estoppel, fraud and deceit, breach of contract, breach of the implied covenant of good faith and fair dealing, an unfair-business-practices claim, quantum meruit, state-law securities fraud, and secondary liability for state-law securities fraud. He also moved for summary judgment on all claims in the defendants’ first amended cross-complaint. That cross-complaint asserted claims against Maas and Jason Leaf for breach of fiduciary duty, accounting, conversion, unjust enrichment, fraud, constructive fraud, interference with contractual relations, statutory misappropriation of trade secrets, and slander and libel.

Preliminary rulings

The court granted Maas’s unopposed request for judicial notice of an SEC filing for Vystar, a business-entity summary for Blue Oar from the Massachusetts Secretary of State’s website, and a state-court motion to stay litigation.

The court struck Maas’s later filing seeking to replace part of his motion with new arguments about requests for admission because he had not obtained permission to file it. The court also struck portions of an amended declaration and new exhibits that went beyond an earlier order allowing a redacted version of the original materials.

Maas’s claims

Under Federal Rule of Civil Procedure 56, summary judgment is appropriate only when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. Because Maas was seeking judgment on his own claims, he had to present evidence that would support judgment in his favor if it were not contradicted at trial.

The court found pervasive evidentiary problems in Maas’s motion. His 306-paragraph declaration largely contained legal conclusions and argument, contrary to the local rule requiring declarations to contain facts and avoid argument. The court also noted that an unverified complaint is not evidence at the summary-judgment stage, so Maas could not convert allegations from the complaint into evidence simply by repeating them in his declaration. The court therefore struck the declaration in its entirety.

The court also rejected Maas’s reliance on requests for admission that he said had become admitted because Zymbe and Greg Rotman did not respond. Under California law, a party must take affirmative steps and obtain a court order treating unanswered requests for admission as admitted. The record did not show that Maas had obtained such an order. The court therefore concluded that the requests were not deemed admitted for purposes of the federal motion. It also declined to search through deposition transcripts to assemble evidence that Maas’s motion had not adequately identified.

Based on these evidentiary deficiencies, the court denied Maas’s motion for partial summary judgment on his claims under Rules 56(c) and 56(e). The court stated that the motion could not be refiled without its prior permission.

Cross-claims

The court considered Maas’s motion concerning the first amended cross-complaint even though Maas had attached and cited an earlier cross-complaint rather than the amended version. The defendants had addressed the amended cross-complaint in their opposition and later submitted a copy of it.

The defendants argued that summary judgment was premature because they had not completed discovery, including Maas’s deposition and Jason Leaf’s deposition. The court rejected that argument under Rule 56(d), finding that Zymbe and Greg Rotman had not adequately explained why they lacked an opportunity to conduct sufficient discovery during the state-court proceedings.

The court nevertheless denied Maas’s motion on the cross-claims because he did not meet his initial burden of showing that no genuine dispute of material fact existed. His supporting declaration consisted of blanket denials, legal conclusions, and assertions that the defendants had no evidence. A summary-judgment movant cannot shift the burden to the opposing party merely by asserting that the opposing party lacks evidence. The court therefore denied Maas’s motion for summary judgment on the first amended cross-complaint.

Disposition

The court denied Maas’s motion for partial summary judgment. Judge Jacqueline Scott Corley signed the order on May 29, 2020.