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Hammes Company Healthcare, LLC, A v. Tri-City Healthcare District

December 21, 2012

HAMMES COMPANY HEALTHCARE, LLC, A WISCONSIN LIMITED LIABILITY COMPANY, AND HC TRI-CITY I, LLC, A WISCONSIN LIMITED LIABILITY COMPANY, PLAINTIFFS,
v.
TRI-CITY HEALTHCARE DISTRICT, A
CALIFORNIA PUBLIC ENTITY, ET AL.
DEFENDANTS,



The opinion of the court was delivered by: Hon. Gonzalo P. CURIELUnited States District Judge

ORDER: ) (1) DISMISSING CLAIMS FOR ) DECLARATORY RELIEF; (2) TERMINATING 09-CV-2334; )) (3) DENYING MOTION TO DISMISS ) AS MOOT; )) (4) SETTING PRETRIAL AND RELATED ACTION. ) CONFERENCE

INTRODUCTION

On December 14, 2012, this Court held a hearing to address two outstanding matters in the above cases ("2324 case" and "2334 case"). The first is an order to show cause why the declaratory relief claims in both cases should not be dismissed, (2324 ECF No. 134; 2334 ECF No. 75), to which the parties have filed responses, (2324 ECF Nos. 135, 136; 2334 ECF Nos. 76, 77).

The second outstanding matter is a motion to dismiss pursuant to FRCP 41(b) for failure to prosecute and for failure to comply with a court order that defendants and counter-claimants HC Tri-City I, LLC and Hammes Company Healthcare, LLC filed in the 2334 case. (2334 ECF No. 78.)

For the reasons that follow, the Court DISMISSES WITHOUT PREJUDICE the claims for declaratory relief in both the 2324 case and the 2334 case, TERMINATES the 2334 case, DENIES AS MOOT the motion to dismiss filed therein, and sets a pretrial conference for February 1, 2013, at 1:30 p.m.

BACKGROUND

On January 26, 2012, prior to the transfer of these related cases to this Court, Judge Sammartino held a pretrial conference. Judge Sammartino found that the parties had not filed the appropriate pretrial documents and that it was clear the matters were not ready to proceed to trial. Judge Sammartino ordered the parties to submit briefing addressing several issues that required resolution before the final pretrial conference could take place. The issues included establishing the scope of the parties' declaratory relief claims, determining whether the cases should be consolidated for trial, deciding whether Hammes and HC should be granted leave to amend their answer in the 2334 case, and providing a more realistic and thoroughly supported time estimate for trial.*fn1

In the 2324 case, Hammes*fn2 asserted seven claims against Tri-City for: (1) breach of the letter of intent, (2) breach of the ground lease and space lease, (3) breach of the implied covenant of good faith and fair dealing, (4) fraud, (5) tortious interference with the space lease, (6) promissory estoppel, and (7) declaratory relief. (See 2324 ECF No. 1.) On July 11, 2011, Judge Sammartino granted Tri-City's motion for summary judgment as to the second through sixth claims. (2324 ECF No. 85.) Consequently, only Hammes' claim for breach of the letter of intent and the claim for declaratory relief remain.*fn3 In the 2334 case, the only claim asserted in the operative Second Amended Complaint is Tri-City's claim for declaratory relief. (See 2334 ECF No. 52.) As observed by Judge Sammartino, these cases essentially boil down to the breach of the letter of intent claim, and dueling requests for declaratory relief.*fn4

DISCUSSION

I. Order to Show Cause re Declaratory Relief Claims

Judge Sammartino observed the parties' supplemental briefs following the first pretrial conference in January 2012 barely addressed the scope of their respective declaratory reliefs claims and the impact of these claims upon the upcoming trial, in spite of her order to do so. She further observed that both parties seemed to acknowledge the duplicative nature of the claims, noting that Tri-City admitted that its remaining "claim" for declaratory relief in the 2334 case is merely the "flip side" of claims in the 2324 case and that proceeding with both would be a waste of resources.

Judge Sammartino agreed there is significant overlap between the two cases and questioned the utility in proceeding with either party's declaratory relief claim. She noted that granting the declaratory relief requested would potentially foreclose any remaining state law contract claims, which is why she ordered the parties to clarify the scope of declaratory relief sought. Judge Sammartino, concluded, stating:

These discretionary claims threaten to add significant complication to the resolution of this dispute and to re-open for trial many issues that have already been adjudicated.

Nor can the Court see any useful purpose in granting either party's request for declaratory relief, where both appear to be sought merely to determine issues which are involved in a case already pending and can be or have already been properly disposed of therein, and where ...


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