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Guice v. Emerson

United States District Court, N.D. California, Oakland Division

April 21, 2014

KENNETH W. GUICE, Plaintiff,
JAMES L. EMERSON, a natural person; et al., Defendants.



This is a diversity jurisdiction action brought by pro se Plaintiff Kenneth Guice ("Guice") against JLE Investors, Inc. ("JLE") and JLE officers James Emerson, Joseph Emerson and Gonzalo Arjona. Guice alleges two claims for fraud and unfair business practices under California Business and Professions Code § 17200. The parties are presently before the Court on Defendants' Amended Motion to Dismiss or Motion for Summary Judgment Based on Res Judicata, or Alternatively Motion to Transfer Venue. Dkt. 29. Having read and considered the papers filed in connection with this matter and being fully informed, the Court hereby GRANTS Defendants' motion for summary judgment. Defendants' alternative motion to transfer venue is DENIED AS MOOT. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See N.D. Cal. Civ. L.R. 7-1(b).



On August 27, 2007, Guice executed a Promissory Note payable to JLE in the principal amount of $238, 000 for the purpose of constructing a residence located at 3320 Roya Court, Port Arthur, Texas ("The Property"). Arjona Decl. Ex. 1-A, Dkt. 29-1. The loan was due within one year and secured by a Deed of Trust on the Property. Id . On September 28, 2009, Guice and JLE executed a Modification and Extension Agreement which extended Guice's deadline to repay the loan to March 27, 2010. Id . Ex. 1-B. In addition, Guice agreed to release JLE and its agents of any and all liability relating to the Property or the Promissory Note. Id . ¶ 7.

Guice failed to repay the sums owed under the Promissory Note by the extended deadline. Thus, on June 30, 2010, JLE filed a breach of contract action against Guice in the District Court of Harris County, Texas, to recover the unpaid balance owed by Guice. Arjona Decl. at 1-2; Ex. 1-D.[1] Shortly thereafter, Guice filed a separate lawsuit in the District Court of Jefferson County, Texas, against JLE for fraud and breach of contract, among other claims, in connection with the construction of the Property. Id . Exs. 1-E, 1-F. On January 11, 2011, Guice's lawsuit was transferred to Harris County and consolidated with JLE's pending action. Id . Ex. 1-G. In March 2011, JLE foreclosed on the Property. Compl. ¶ 20, Dkt. 1.

On February 24, 2012, the Harris County District Court issued a 20-page ruling granting JLE's motion for summary judgment as to its claims against Guice and the counterclaims filed by Guice against JLE. Id . Ex. 1-I. The court found that there was no genuine issue as to any material dispute of fact that the Promissory Note was valid and enforceable, and that Guice had failed to perform his obligation to timely repay the outstanding principal balance of the loan. Id. at 5-6. As to Guice's counterclaims, the court found that they were barred by the release of liability set forth in the modification agreement under which he released JLE of any and all liability for claims "related [to] the loans and the properties." Id. at 11. There is no indication in the record that Guice appealed that ruling.


On May 16, 2013, Guice filed the instant action against Defendants in this Court alleging claims for fraud and unfair business practices in connection with the aforementioned Promissory Note. Dkt. 1. The pleadings aver that Defendants fraudulently induced Guice into entering into the loan agreement so that they could later foreclose on the Property. Id. at 3-4. Guice alleges that the Court has subject matter jurisdiction based on the diversity of the parties, 28 U.S.C. § 1332.

Defendants now move for summary judgment on the ground that Guice's claims are barred under the doctrine of res judicata by virtue of the final judgment rendered in the Texas litigation. Alternatively, Defendants seek to transfer venue to Harris County, Texas, pursuant to the forum selection clause contained in the note and modification agreement. As will be discussed below, the Court finds that Plaintiff's claims are barred by res judicata.


Federal Rule of Civil Procedure 56 provides that a party may move for summary judgment on some or all of the claims or defenses presented in an action. Fed.R.Civ.P. 56(a)(1). "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." Id .; see Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48 (1986). The movant bears the initial burden of demonstrating the basis for the motion and identifying the portions of the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file that establish the absence of a triable issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986); Fed.R.Civ.P. 56(c)(1)(A) (requiring citation to "particular parts of materials in the record"). If the moving party meets this initial burden, the burden then shifts to the non-moving party to present specific facts showing that there is a genuine issue for trial. See Celotex , 477 U.S. at 324; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586-87 (1986).

"On a motion for summary judgment, facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine' dispute as to those facts.'" Ricci v. DeStefano , 557 U.S. 557, 586 (2009) (quoting in part Scott v. Harris , 550 U.S. 372, 380 (2007)). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson , 477 U.S. at 248. A factual dispute is genuine if it "properly can be resolved in favor of either party." Id. at 250. Accordingly, a genuine issue for trial exists if the non-movant presents evidence from which a reasonable jury, viewing the evidence in the light most favorable to that party, could resolve the material issue in his or her favor. Id . "If the evidence is merely colorable, or is not significantly ...

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