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Hermenegildo ("Jay") Martinez, An v. the Welk Group

April 26, 2012

HERMENEGILDO ("JAY") MARTINEZ, AN
INDIVIDUAL, ON HIS OWN BEHALF AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
PLAINTIFF,
v.
THE WELK GROUP, INC.; WELK RESORT GROUP INC.; WELK MUSIC GROUP, INC.; SOLEIL COMMUNICATIONS, INC.; AND DOES 1 THROUGH 25, DEFENDANTS.



The opinion of the court was delivered by: Hon. Anthony J. BattagliaU.S. District Judge

ORDER DENYING MOTION FOR SUMMARY JUDGMENT [Doc. 93]

Presently before the Court is Counter-Defendant Wade Brent's Motion for Summary Judgment. (Doc. 93.) In accordance with Civil Local Rule 7.1.d.1, the Court finds this motion suitable for determination on the papers and without oral argument. Accordingly, the motion hearing scheduled for May 3, 2012 is hereby vacated. For the reasons set forth below, the Court DENIES the motion.

I.

BACKGROUND

This matter is a putative class action brought by Plaintiff Martinez on behalf of a class of timeshare interest owners, alleging that Defendants failed to abate and disclose the presence of mold at the Welk Resort San Diego (the "Resort"). Plaintiff initially purchased Platinum Points from Welk Resort Group, Inc. in 2007, which provided him with the opportunity to stay at Welk resorts around the world or at any other time-share resort that accepts Platinum Points for vacation stays. (Fourth Amended Complaint filed Feb. 1, 2011 ("4AC"), ¶ 23; Exhibit A to the 4AC, p. 24; Exhibit B to the 4AC, p. 54.)

Mr. Brent is a former employee of Defendants. Although he originally was a named plaintiff representing a class of Defendants' current and former employees, that class no longer exists in the 4AC. He nonetheless remains a party because in September 2010 (when Mr. Brent was still a named plaintiff), Defendant The Welk Group, Inc. ("WGI") filed a counterclaim against him for fraud, conversion, breach of fiduciary duty, breach of the duty of loyalty, and violation of Labor Code section 2854. WGI alleges that as Chief Engineer for the Resort, Mr. Brent delayed and hindered the Resort's mold assessment and abatement efforts by refusing to take reports of water intrusion or mold seriously, and that he also failed to properly retain and oversee mold consultants to assess and remediate conditions at the Resort. (Doc. 38.)

At issue here is the alternative dispute resolution policy ("ADR Agreement") between Mr. Brent and WGI. Mr. Brent signed the ADR Agreement on April 2, 2009 as part of his employment with WGI. The ADR Agreement sets forth specific requirements for proceeding with any claim arising from Mr. Brent's employment.*fn1 It provides that failure to follow its procedures "shall constitute a waiver of all rights to raise or present any claims in any forum."

II.

LEGAL STANDARD "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 genuine issue of material fact exists if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006).

In order to prevail, a party moving for summary judgment must show the absence of a genuine issue of material fact with respect to an essential element of the nonmoving party's claim, or to a defense on which the nonmoving party will bear the burden of persuasion at trial. Nissan Fire & Marine Ins. Co. v. Fritz Cos. Inc., 210 F.3d 1099, 1102 (9th Cir. 2000). When the nonmoving party would bear the burden of proof at trial, the moving party may satisfy its burden on summary judgment by simply pointing out to the Court an absence of evidence from the nonmoving party. Miller, 454 F.3d at 987. "The moving party need not disprove the other party's case." Id.

Once the movant has made that showing, the burden shifts to the opposing party to produce "evidence that is significantly probative or more than 'merely colorable' that a genuine issue of material fact exists for trial." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009) (citing FTC v., 265 F.3d 944, 954 (9th Cir. 2001)); see also Miller, 454 F.3d at 988 ("[T]he nonmoving party must come forward with more than 'the mere existence of a scintilla of evidence.'") (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

III.

DISCUSSION Mr. Brent seeks summary judgment of all causes of action contained in WRI's counterclaim against him. Mr. Brent argues that because WGI failed to follow the procedures and requirements delineated in the ADR Agreement before filing its counterclaim, it has waived its right to raise its claims against him.

WGI responds that Mr. Brent's earlier noncompliance with the ADR Agreement excuses WGI's subsequent failure to do the same. It argues that Mr. Brent was the first party to breach the ADR Agreement when he sued WGI and the other Defendants in the initial class action complaint filed in November 2009. Prior to filing the complaint, Mr. Brent did not follow any of the ADR Agreement procedures. He again breached the agreement by filing a wrongful termination lawsuit against WGI in San Diego Superior Court in September 2011. According to WGI, ...


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