United States District Court, D. South Dakota, Southern Division
OPINION AND ORDER GRANTING MOTION FOR PARTIAL SUMMARY
ROBERTO A. LANGE UNITED STATES DISTRICT JUDGE.
December 16, 2016, this Court conducted a motion hearing on
the pending motions in this case and explained how it
intended to rule on certain motions. This opinion and order
formalizes and explains this Court's ruling on the
pending motion for partial summary judgment.
plaintiff Jerry Ruba sued third-party defendant Bailey Ridge
Partners, LLC (Bailey Ridge) for, among other things,
breaching a promissory note. Doc. 10. Because there are no
questions of material fact and Ruba is entitled to judgment
as a matter of law, this Court grants Ruba's motion for
summary judgment on his claim that Bailey Ridge breached the
March 2011, Bailey Ridge gave Ruba a promissory note in the
amount of $664, 581.30 in exchange for an account receivable
held by Ruba in the same amount. Doc. 30 at ¶ 3; Doc. 31
at 3. Ruba delivered and assigned the account receivable to
Bailey Ridge. Doc. 30 at ¶6. Bailey Ridge was capable of
contracting with Ruba, and its president Nicole Grubb-Nearman
properly executed the promissory note. Doc. 30 at
¶¶ 4, 5.
promissory note required Bailey Ridge to make payment in full
by March 24, 2014. Doc. 30 at ¶8; Doc. 31 at 3. Although
Bailey Ridge made two small payments on the promissory note,
it failed to fully pay the note by March 24, 2014. Doc. 30 at
¶¶ 9, 10; Doc. 70-1. Despite Ruba's demands on
Bailey Ridge to make payment, Bailey Ridge remains in default
under the promissory note. Doc. 30 at ¶¶ 11> 12.
January 2016, First Dakota National Bank (First Dakota) sued
Ruba in this Court for allegedly failing to pay First Dakota
money Ruba owed under a promissory note. Doc. 1. Ruba filed
an answer asserting that the promissory note was part of a
larger loan package between him, First Dakota, Bailey Ridge,
and Bailey Ridge's members. Doc. 7. Ruba also filed a
first- amended third-party complaint against Bailey Ridge and
its members Jack Grubb, Nicole Grubb-Nearman, Jason Grubb,
the Grubb Family Partnership, Floyd C. Davis, Verlyn Nafe,
Frank Manthei, and Paul Engle. Doc. 10.
20, 2016, Ruba moved for partial summary judgment on Count
III of his first-amended complaint, which alleged that Bailey
Ridge had breached the promissory note. Doc. 28. Bailey Ridge
initially opposed the motion under Federal Rule of Civil
Procedure 56(d), arguing that it was unable to fully respond
to Ruba's statement of undisputed material facts because
the parties were not scheduled to exchange initial
disclosures until July 22, 2016, and because it had yet to
depose Ruba. Docs. 35-38. The deadline for initial
disclosures has passed. At the motion hearing, the parties
acknowledged that Ruba had been deposed and that the
third-party defendants, including Bailey Ridge, had received
notice of the taking of Ruba's deposition.
October 3, 2016, the attorney for Bailey Ridge and its
members moved to withdraw, claiming that Bailey Ridge was
failing to communicate with him. Doc. 53. Bailey Ridge's
attorney filed an amended motion to withdraw on October 27,
2016, Doc. 55, after this Court denied the initial motion for
failure to comply with the local rules, Doc. 54. The Bailey
Ridge attorney averred that he had made multiple attempts to
communicate with Bailey Ridge and its members in an attempt
to comply with this Court's June 29, 2016 scheduling
order, but Bailey Ridge and its members had been
uncooperative. Doc. 55. The attorney further averred that
Bailey Ridge and its members were aware of the motion to
withdraw and had no objections to it. Doc. 55.
Court issued an order on November 16, 2016, granting the
attorney's motion to withdraw as counsel for Bailey Ridge
and its members. Doc. 61. The order cautioned Bailey Ridge
and its members to hire counsel and reminded them that a
corporate entity cannot proceed pro se. The order noted
that there are two pending motions in this case-Ruba's
motion for summary judgment on Count III of his first-amended
third-party complaint and Ruba's motion to compel
discovery responses-and explained that this Court would
likely grant the motions if Bailey Ridge and its members did
not participate in the hearing this Court planned on holding
in December 2016.
hearing took place on December 16, 2016. First Dakota, Ruba,
and Verlyn Nafe appeared through counsel while Jason Grubb,
Nicole Grubb-Nearman, Jack Grub, Paul Engle, and Floyd C.
Davis appeared pro se by telephone. Bailey Ridge and the
Grubb Family Partnership were unrepresented by counsel and
Frank Manthei did not appear at all. This Court explained
that it would grant Ruba's motion for summary judgment
once Ruba filed an updated affidavit establishing the amount
Bailey Ridge currently owes on the promissory note. Ruba
filed an affidavit showing that as of December 16, 2016,
Bailey Ridge owes $851, 271.59 under the promissory note.
Doc. 70 at 2.
complied with Local Rule 56.1(A) of the Civil Local Rules of
Practice of the United States District Court for the District
of South Dakota by filing a statement of material facts along
with his motion for summary judgment. Doc. 30. Local Rule
56.1(B) requires the party opposing a motion for summary
judgment to "respond to each numbered paragraph in the
moving party's statement of material facts with a
separately numbered response and appropriate citations to the
record." D.S.D. Civ. LR 56.1(B). All material facts set
forth by the moving party are deemed admitted "unless
controverted by the opposing party's response to the
moving party's statement of material facts." D.S.D.
Civ. LR 56.1(D). Rule 56 of the Federal Rules of Civil
Procedure contains a similar provision, stating that when a
party "fails to properly address another party's
assertion of fact as required by Rule 56(c), the court may .
. . consider the fact undisputed." Fed.R.Civ.P.
than responding to Ruba's statement of material facts as
required by Local Rule 56.1(B) and Federal Rule of Civil
Procedure 56(c), Bailey Ridge asked that Ruba's motion be
denied or continued under Rule 56(d) until it could complete
discovery. Docs. 35-38. Bailey Ridge made a general assertion
that discovery would show genuine disputes of material fact.
Doc. 36 at 4; Doc. 38 at 13. Rule 56(d) allows a court to
defer considering or deny a motion for summary judgment if
the "nonmovant shows by affidavit or declaration that,
for specified reasons, it cannot present facts essential to
justify its opposition." Fed.R.Civ.P. 56(d). Here,
Bailey Ridge claimed over five months ago that it could not
properly respond to Ruba's statement of material facts
because there had been no discovery or deposition of Ruba.
Docs. 36-38. There now has been discovery and a deposition in
the case of Ruba. Bailey Ridge has been unrepresented for
over a month and has not given any indication of any genuine
dispute of material fact. This Court denies Bailey Ridge's
request for relief under Rule 56(d) because Bailey Ridge has
failed to diligently pursue discovery, failed to secure
counsel, and failed to offer anything other than vague
assertions that additional discovery will show that there are
disputes of material fact. See United States v. Bob
Stofer Oldsmobile-Cadillac, Inc., 766 F.2d 1147, 1153
(7th Cir. 1985) ("A party who has been dilatory in
discovery may not use Rule 56[d] to gain a ...