Jalin Realty Capital Advisors, LLC v. A Better Wireless, NISP, LLC

917 F. Supp. 2d 927, 2013 WL 101869, 2013 U.S. Dist. LEXIS 2461
CourtDistrict Court, D. Minnesota
DecidedJanuary 8, 2013
DocketCivil No. 11-165 (JRT/LIB)
StatusPublished
Cited by8 cases

This text of 917 F. Supp. 2d 927 (Jalin Realty Capital Advisors, LLC v. A Better Wireless, NISP, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jalin Realty Capital Advisors, LLC v. A Better Wireless, NISP, LLC, 917 F. Supp. 2d 927, 2013 WL 101869, 2013 U.S. Dist. LEXIS 2461 (mnd 2013).

Opinion

MEMORANDUM OPINION AND ORDER ON DEFENDANT/COUNTERCLAIM PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

JOHN R. TUNHEIM, District Judge.

A Better Wireless, NISP, LLC (“ABW”) sought a loan from Rhythm Stone Media Group, LLC, d/b/a Jalin Realty Capital Advisors, LLC (“Jalin”) and the parties entered into an agreement under which Jalin would attempt to fund the loan in exchange for a $37,500 commitment fee. After Jalin did not fund the loan and did not refund the commitment fee, ABW created a website with the domain name “jrcainfo” and used the website to warn other consumers about what it perceived to be Jalin’s fraudulent business practices. These postings are the basis of Jalin’s numerous claims against ABW, which include cybersquatting, trademark infringement, trade dress infringement, deceptive trade practices, appropriation of personal name and likeness, intentional interference with economic relations, and defamation. [931]*931ABW brought counterclaims against Jalin alleging breach of contract, fraud, RICO violations, conversion, and unjust enrichment. ABW now moves for summary judgment on all of Jalin’s claims against it, as well as on its counterclaims for breach of contract and fraud.

The Court will grant ABW’s motion with respect to all of Jalin’s claims, which are variously unsupported, insufficiently pled, and entirely without merit. The Court will also grant ABW’s motion with respect to its breach of contract counterclaim. However, the Court will deny ABW’s motion with respect to its fraud counterclaim.

BACKGROUND

I. THE PARTIES

ABW is a Minnesota company with a mission to bring affordable, high quality broadband service to rural areas of Minnesota. (First Decl. of Mitchell Duane Koep ¶ 2, May 30, 2012, Docket No. 80.) Jalin holds itself out as a “boutique hard money lender for commercial Real Estate.” (Id. ¶ 3 & Ex. B.) Jalin’s website states that the company was established in 2006 (id., Ex. B) and Jalin’s complaint states that it was established in 2008 and incorporated in Ohio in 2009. (Compl. ¶¶ 12-13, Jan. 21, 2011, Docket No. 1.) In fact, “Jalin Realty Capital Advisors LLC” was registered as a trade name of Rhythm Stone Media Group, LLC (“Rhythm”) in September 2009 in Ohio (as opposed to being “incorporated” as an independent company).1 (Decl. of Kathryn M. McDonald, Ex. A, June 17, 2011, Docket No. 29.) The trade name was cancelled in April 2011. (Id.) Jalin has since been dissolved and its owner is in bankruptcy in Ohio. (Aff. of C. David Manns ¶20, June 20, 2012, Docket No. 83.) ABW alleges that Jalin’s address is now vacant and its phones are disconnected. (First Koep Decl. ¶ 13.)

II. JALIN’S DISCOVERY VIOLATIONS

The factual record before the Court is quite sparse, due in large part to the conduct of Jalin’s counsel during discovery. ABW served a set of interrogatories and requests for production of documents on August 19, 2011, and a second set of requests on August 23, 2011. (Decl. of Erin O. Dungan, Ex. B-C., Jan. 12, 2012, Doc. No. 56.) Jalin did not respond within 30 days, in violation of Fed.R.Civ.P. 33(b)(2) and 34(b)(2)(A). (Id., Ex. D.) Jalin responded on October 10, 2011, but did not produce a single document and provided almost no information in response to the interrogatories. (Id., Ex. G.) Jalin repeatedly objected to ABW’s interrogatories as “incomprehensible as drafted” and “overly broad,” claimed that its complaint contained the information requested, and referred ABW to Jalin’s website to find information. (Id.)

ABW moved for sanctions and United States Magistrate Judge Leo I. Brisbois granted the motion. (Order, Feb. 22, 2012, Docket No. 60.) The Magistrate Judge chastised Jalin for its uncooperative and improper behavior as follows:

[932]*932[L]ooking at all of [Jalin]’s discovery-responses, [Jalin] provides almost no relevant information useful to [ABW] to defend against [Jalin]’s claim. [Jalin] continually directs [ABW] to its website for information as if [ABW] should be required to search on [Jalin]’s website to find information that supports [Jalin]’s case or speculate as to the factual basis for [Jalin]’s claim. The type of objections provided by [Jalin] not only disrespect the judicial process, but such objections thwart discovery’s purpose of providing both parties with information essential to the proper litigation of all relevant facts, to eliminate surprise, and to promote settlement....
... [Combined with [Jalin]’s late responses to discovery, late submission of a verification of discovery responses ... by a corporate representative, and failure to even appear at the present motion hearing, suggests that [Jalin]’s discovery responses were formulated for an improper purpose and intended to delay and harass [ABW].

(Id. at 9-10 (internal quotation marks omitted).) The Magistrate Judge ordered Jalin’s counsel to personally pay $1,610 in attorneys’ fees to ABW. (Id. at 13.) More importantly, the Magistrate Judge concluded that “more than mere monetary sanctions are necessary” and ordered “that in any subsequent judicial proceeding regarding this matter, the Plaintiff cannot rely on or offer into evidence any information, documents, or other materials which were not provided in response to the Defendant’s original sets of discovery requests.” (Id. at 11.)

The Court was not asked to review the Magistrate Judge’s strong sanction and, in any event, believes that it was appropriate. The Court will note the ways in which the sanction impacts the analysis throughout this opinion.

III. THE LOAN AGREEMENT

The seeds of this action were planted when ABW sought financing from Jalin and the two entered into a Loan Commitment Agreement on July 29, 2010. (First Koep Decl. ¶¶ 4, 6.) The Agreement embodied Jalin’s “commitment to provide financing,” (id., Ex. A at 1), and stated that Jalin “intends to bring co-lenders to facilitate this loan” and would “manage all aspects of the co-lending.” (Id., Ex. A at 5.) The Agreement required ABW to pay a “commitment fee” of $37,500 for “processing, underwriting, and due diligence.” (Id., Ex. A at 2.) The Agreement stated that ABW was “entitled to a refund less any cost incurred if [Jalin] does not fund a loan under [the] terms stated.” (Id., Ex. A at 3.) More specifically, the Agreement provided that “[i]f [Jalin] is unable to bring co-lenders into the transaction, or if [Jalin] does not perform its obligations under the terms of this commitment for whatever reason, [Jalin] shall only be obligated to refund the paid portion of the commitment fee.” (Id., Ex. A at 5.) Pursuant to the Agreement, ABW’s commitment fee was paid by another entity, Ride Ocean Zoom, Inc., (id., Ex A at 2.), which apparently also sought financing from Jalin. ABW’s attorney asserted at oral argument that ABW still owes Ride Ocean Zoom $37,500, though there is no litigation presently underway.

ABW alleges that the Commitment Agreement was fraudulent, that Jalin never attempted to comply with the Agreement, and that its representatives did not even possess licenses that were required to provide the loan. (First Koep Decl. ¶¶ 9-10, 12.) According to ABW, Jalin has failed to refund the commitment fee despite multiple requests. (Id.

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Cite This Page — Counsel Stack

Bluebook (online)
917 F. Supp. 2d 927, 2013 WL 101869, 2013 U.S. Dist. LEXIS 2461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jalin-realty-capital-advisors-llc-v-a-better-wireless-nisp-llc-mnd-2013.