Kanaway Seafoods, Inc. v. Pacific Predator, AK Registration No. AK3565AN

Opinion

1 IN THE UNITED STATES DISTRICT COURT

2 FOR THE DISTRICT OF ALASKA

3 KANAWAY SEAFOODS, INC., et al., 4 Plaintiffs, 5 v. Case No. 3:22-cv-00027-JMK-KFR 6 PACIFIC PREDATOR, et al. 7 Defendants. 8

9 FINDINGS AND RECOMMENDATIONS ON DEFENDANTS’

10 MOTION FOR SUMMARY JUDGMENT

11 The Court recommends Defendants’ Motion for Summary Judgment at Docket

12 91 be DENIED. In considering the facts and drawing reasonable inferences in favor

13 of the non-moving party, Defendants have not met their burden of proving the

14 absence of genuine issues of material fact. Rather, the claims Defendants raise

15 appear to be hotly contested and the disputed facts are well-suited for the trier of

16 fact to determine. Summary judgment is inappropriate at this time.

17 I. Relevant Proffered Facts1

18 Starting in 2019, Defendants Dana and Bryan Howey entered into a series of

19 agreements with Plaintiffs Liberty Packing LLC (“Liberty”), and Kanaway Seafoods

20 Inc. (“Kanaway”), doing business as Alaska General Seafoods (“AGS”). On or about

21 April 17, 2019, the Howeys entered into a Loan and Security Agreement with Liberty

22 (“the Loan Agreement”).2 Under the Loan Agreement, Liberty loaned $800,000 to

23 the Howeys in order to pay off the outstanding balance on another loan from ALPS

24 Federal Credit Union.3 In exchange for this loan from Liberty, the Howeys agreed to 25

26 1 The Relevant Proffered Facts are limited to those facts necessary to decide the motion before the Court. The Court does not intend for the Relevant Proffered Facts to constitute 27 binding findings of fact should this matter proceed to trial. 2 Doc 64-1. 28 3 Doc. 64 at 3. 1 enter into a Fishing Agreement with AGS to deliver and sell seafood products to AGS

2 for a fixed period.4 The Liberty loan was further documented by a Promissory Note

3 reciting loan terms dated April 17, 2019 (“the Liberty Note”).5

4 On or about June 30, 2019, Bryan Howey entered into a Promissory Note with

5 AGS documenting a loan from AGS to How ey in the amount of $23,949.32 (“the AGS

6 Note”).6 In addition to the AGS Note, AGS loaned Bryan Howey and the Pacific

7 Predator (“the Vessel”), a 58-foot seiner used by Defendants to commercially fish

8 Alaskan waters, additional sums between 2019 and 2021 on an “open account,” to be

9 repaid under standard AGS terms and conditions, which included interest on the

10 open amounts at 10% per annum (“AGS Open Account Loan”). These funds were

11 loaned on the credit of the Vessel and some of these funds were used by Bryan Howey

12 for necessaries of the Vessel, including but not limited to a vessel permit lease.7

13 As to each of these loans, Plaintiffs allege in their Amended Complaint that 14 Defendants have failed to comply with their terms. According to Plaintiffs, the 15 Howeys, individually and through their company Alaska Wild Exports, LLC. (“AWE”), 16 allegedly defaulted on the obligations under the Liberty Loan Agreement and Liberty 17 Note by failing to make agreed principal and interest payments, and failing to 18 register the Vessel in Washington and provide documentation of that registration to 19 Liberty.8 Plaintiffs contend that these, and other acts and omissions of Defendants, 20 constitute default under both the Loan Agreement and Liberty Note.9 Plaintiffs state 21 that as of January 14, 2022, the principal due on the Liberty Loan was $746,666.67, 22 and that the accrued interest as of February 1, 2022, was $113,166.62, which 23 continues to accrue at a rate of $368.22 per day.10 24 4 Id. 25 5 Id. at 4. 26 6 Id. at 5. 7 Id. 27 8 Id. 9 Id. 28 10 Id. 1 Regarding the AGS matters, Plaintiffs claim that Bryan Howey never repaid

2 the AGS Note nor fully repaid the AGS Open Account Loan. Plaintiffs allege that

3 Bryan Howey failed to repay the sums loaned to him under the AGS Note by

4 September 30, 2019, and that the $23,949.32 balance on the AGS Note remains

5 unpaid with interest continuing to accru e.11 In addition, Plaintiffs state that by

6 making deliveries of fish to AGS, Bryan Howey repaid a total of $326,644.13 toward

7 the AGS Note and AGS Open Account Loan.12 The result, Plaintiffs allege, is that the

8 unpaid balance on these two AGS loans is $115,953.48, which continues to accrue

9 interest.13 Plaintiffs further state that AGS advanced additional sums after 2021 for

10 necessaries of the Vessel, and that the sums from the AGS Open Account Loan that

11 remain unpaid were advanced and used for necessaries of the Vessel.14

12 II. Procedural History and Motion Presented

13 On February 23, 2022, Liberty and Kanaway filed a complaint, in rem and in 14 personam, against the Howeys, AWE, and the Vessel. This complaint alleged breach 15 of contract and promissory note, and corporate disregard by Defendants; sought to 16 foreclose maritime liens; and sought a warrant to arrest the Vessel, pursuant to Rule 17 C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims 18 (hereinafter “Admiralty Rule”).15 19 This Court issued a warrant for the arrest of the Vessel on March 16, 2022.16 20 Upon the execution of the arrest warrant, the Howeys and AWE filed a motion for a 21 hearing to either vacate the arrest pursuant to Admiralty Rule E(4)(f), or set the 22 amount of a special bond to secure the release of the Vessel under Admiralty Rule 23 24

25 11 Id. 26 12 Id. at 7. 13 Id. 27 14 Id. 15 Docs. 1 and 3. 28 16 Doc. 7. 1 E(4)-(5).17 The Court heard argument on the motion on May 3, 2022,18 and ordered

2 additional briefing on the matter.

3 On July 29, 2022, the Court denied the motion to vacate the arrest, and granted

4 the motion to set a special bond in the amount of $148,000 to secure the release of

5 the Vessel. In that order, the Court found that maritime liens existed, thus creating

6 subject matter jurisdiction over Plaintiffs’ claims. The Court declined at that time

7 to issue a ruling on the strength of Defendants’ argument that a “maritime lien

8 cannot attach to a limited entry permit,” and whether $46,964.32 of the unpaid

9 balance, plus interest, must be discounted from the bond amount.19

10 Plaintiffs filed an Amended Complaint on September 7, 2022.20

11 On September 25, 2022, Defendants filed a motion to dismiss a portion of the

12 Amended Complaint, under Fed. R. Civ. P. 12(b)(1), for lack of admiralty jurisdiction.

13 The portion Defendants sought to have dismissed involved a claim relating to money 14 loaned by AGS to Defendants that was used to pay for the temporary emergency 15 transfer of Alaska state limited entry fishing permits.21 The motion also sought to 16 reduce the Court’s previously-ordered special bond under Admiralty Rule E(6) by the 17 amount of the money advanced for the permits.22 Plaintiffs responded in opposition, 18 and Defendants replied.23 19 The Court recommended this motion be denied because Plaintiffs’ Amended 20 Complaint contained allegations sufficient to invoke federal jurisdiction.24 21 Specifically, as it related to money advanced by Plaintiffs for Defendants’ purchase 22 of three limited entry fishing permits, maritime jurisdiction under 46 U.S.C. § 31342 23 17 Doc. 15. 24 18 Doc. 28. 19 Doc. 52. 25 20 Doc. 64. The Amended Complaint included an itemized accounting of the losses alleged 26 by Plaintiffs. All of the original claims remained unchanged. 21 Doc. 66. 27 22 Id. 23 Docs. 77 and 80. 28 24 Doc. 87. 1 existed because these permits could properly be considered necessaries essential for

2 the operation of Defendants’ commercial fishing enterprise.25 The District Court

3 agreed and adopted the Report and Recommendation, thereby denying Defendants

4 Motion to Dismiss under 12(b)(1).26

5 Shortly after, Defendants filed a se cond motion to dismiss, under Fed. R. Civ.

6 P. 12(b)(6), for failure to state a claim regarding the AGS Note and for an award of

7 attorney’s fees and costs, along with another Admiralty Rule E(6) Motion to reduce

8 security and costs.27 Plaintiffs responded in opposition and Defendants replied.28

9 The Court recommended this motion be denied because Plaintiffs’ Amended

10 Complaint contained allegations that on their face sufficiently stated a claim for

11 breach of contract.29 The District Court agreed and adopted the Report and

12 Recommendation denying Defendants’ Motion to Dismiss under 12(b)(6).30

13 Defendants then filed a third motion to dismiss, under Fed. R. Civ. P. 12(b)(1), 14 for lack of admiralty jurisdiction regarding Rule D “Petitory Action” and under the 15 Preferred Ship Mortgage Act, which Plaintiffs opposed.31 The Court recommended 16 this motion be denied because Plaintiffs’ action for possession of the Vessel was a 17 proper basis for jurisdiction pursuant to Admiralty Rule D.32 The District Court 18 granted Defendant’s Motion to Dismiss as it related to Liberty’s claim for petitory or 19 possessory relief under Supplemental Admiralty Rule D, finding Liberty was never 20 in physical possession of the Vessel nor did it acquire legal title to the Vessel such 21 that it constructively possessed the Vessel.33 Additionally, the District Court granted 22 Defendant’s motion to dismiss as it related to Liberty’s claims under the Preferred 23 25 Id. 24 26 Doc. 110 at 10. 27 Doc. 71. 25 28 Docs. 78 and 81. 26 29 Doc. 100. 30 Doc. 106. 27 31 Docs. 76, 82, and 83. 32 Doc. 87. 28 33 Doc. 110 at 5. 1 Ship Mortgage Act, finding no admiralty or diversity jurisdiction existed over

2 Liberty’s lien claims.34 However, the District Court denied Defendant’s Motion to

3 Dismiss as it related to Liberty’s state law lien claim finding that the Court has

4 supplemental jurisdiction over this claim because AGS’s maritime lien and the

5 Liberty state law lien are so closely re lated that they form part of the same

6 controversy.35

7 Prior to any of the above decisions from the District Court regarding

8 Defendants’ three motions to dismiss, Defendants filed this Motion for Summary

9 Judgment against AGS.36 In addition to repeating their argument that no maritime

10 lien exists against the Vessel, Defendants raise “three major errors” regarding AGS’s

11 debt claim.37 First, Defendants fault AGS for the way it prioritized the loan

12 repayment and claim that the AGS Promissory Note was paid in full by performance

13 by 2019. Second, Defendants claim that AGS made an “unauthorized overpayment” 14 toward the Liberty loan by keeping that loan current. Finally, Defendants claim AGS 15 “underpaid” Defendants by at least $42,392.12 in 2021. Plaintiffs responded in 16 opposition,38 and Defendants replied.39 17 The Court considers all filings related to Defendants’ Motion for Summary 18 Judgment in issuing this Report and Recommendation to the District Court. The 19 matter is fully briefed and the Court finds that oral argument is not necessary. 20 // 21 // 22 // 23 // 24 34 Doc. 110 at 6. 25 35 Doc. 110 at 9. 26 36 Doc. 91. In support of their Motion for Summary Judgment Defendants filed three declarations, and an Errata. See Dockets 92-94, 97. 27 37 Doc. 91 at 4, 6. 38 Doc. 98. Plaintiffs also filed one supporting declaration. See Docs. 99. 28 39 Doc. 104. Defendants also filed two supporting declarations. See Docs. 102-103. 1 III. Applicable Law

2 a. Motion For Summary Judgment

3 Federal Rule of Civil Procedure 56(a) directs a court to “grant summary

4 judgment if the movant shows that there is no genuine dispute as to any material

5 fact and the movant is entitled to judgm ent as a matter of law.”40 If the moving

6 party meets this burden, the non-moving party must present specific factual

7 evidence demonstrating the existence of a genuine issue of fact.41 The non-moving

8 party may not rely on mere allegations or denials.42 Rather, that party must

9 demonstrate that enough evidence supports the alleged factual dispute to require a

10 finder of fact to make a determination at trial between the parties’ differing versions

11 of the truth.43

12 When considering a motion for summary judgment, a court views the facts in

13 the light most favorable to the non-moving party and draws “all justifiable 14 inferences” in the non-moving party’s favor.44 To reach the level of a genuine 15 dispute, the evidence must be such “that a reasonable jury could return a verdict for 16 the non-moving party.”45 If the evidence provided by the non-moving party is 17 “merely colorable” or “not significantly probative,” summary judgment is 18 appropriate.46 19 IV. Discussion and Analysis 20 In addition to repeating their argument that no maritime lien exists against 21 the Vessel, Defendants raise “three major errors” in their motion regarding AGS’s 22 debt claim.47 First, Defendants fault AGS for the way it prioritized the loan 23

24 40 Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). 41 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986). 25 42 Id. 26 43 Id. citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253 (1968). 44 Id. at 255 citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158–59 (1970). 27 45 Anderson, 477 U.S. at 248. 46 Id. at 249. 28 47 Doc. 91 at 4, 6. 1 repayment and claim that the AGS Promissory Note was paid in full by performance

2 by 2019. Second, Defendants claim that AGS made an “unauthorized overpayment”

3 toward the Liberty loan by keeping that loan current. Lastly, Defendants claim AGS

4 “underpaid” Defendants by at least $42,392.12 in 2021.48

5 a. Maritime Lien

6 Defendants re-assert prior arguments made in this case that AGS has no

7 maritime lien against the Vessel based on the AGS Open Account Loan and the AGS

8 Note.49 Defendants contend that their previously filed motions to dismiss support

9 their argument.

10 Plaintiffs counter that AGS has a valid maritime lien claim against the Vessel,

11 that the court’s previous ruling supports that understanding, and that nothing else

12 has changed as to this claim, except that AGS has confirmed that its presentation on

13 those claims remains accurate.50 14 This Court has already twice made findings and recommended51 that Plaintiff 15 AGS sufficiently asserted that a maritime lien exists in this case, and the District 16 Court has adopted those findings and recommendations.52 While the District Court 17 adopted in part Defendants’ motion to dismiss at Docket 76 for lack of jurisdiction 18 as it relates to Liberty’s claims under Rule D and under the Preferred Ship Mortgage 19 Act and accepted supplemental jurisdiction over Liberty’s state law lien claim, those 20 issues do not impact Defendants’ argument regarding the maritime lien claim that 21 the District Court previously found existed.53 22 In this motion for summary judgment, Defendants have not offered any new 23 or different arguments for the Court to reconsider its previous rulings and have

24 48 Doc. 91 at 4. 49 Doc. 91 at 3. 25 50 Doc. 98 at 4-5. 26 51 See Docs. 52, 65, 86, and 87. 52 In response to Defendants’ Motion to Dismiss at Docket 66, the District Court denied 27 claims relating to the maritime lien. See Doc. 110. In response to Defendants’ Motion to Dismiss at Docket 71, the District Court denied claims relating to the AGS Note. See Doc. 106. 28 53 Doc. 110. 1 failed to meet their burden for this summary judgment motion. The Court finds that

2 there is a genuine issue of material fact between the parties as to this issue and that

3 Defendants are not entitled to judgment as a matter of law. The Court will not

4 belabor the point further and directs Defendants to its previous rulings.

5 b. AGS Promissory Note Balan ce

6 Defendants argue that they paid the AGS Note in full by performance by the

7 “the summer of 2019” through the delivery of fish in accordance with the Note

8 terms.54 Therefore, Defendants claim, “the entry in the Open Account in the amount

9 of $23,949.32 on July 12, 2019, is incorrect.”55 In support of their motion, Defendants

10 incorporated by reference arguments contained in their motion to dismiss under

11 Rule 12(b)(6), as did Plaintiffs in their opposition. Defendants motion to dismiss

12 under 12(b)(6) has since been denied by the District Court.56 Nonetheless, the

13 arguments Defendants made in their motion to dismiss under Rule 12(b)(6) are 14 summarized as follows: 15 1. In accordance with its terms, the AGS Note was paid for by performance as 16 of August 16, 2019.57 17 2. The unpaid balance in the AGS Note was “counted twice.”58 18 3. AGS waived its right to payment from Bryan Howey because “AGS and 19 Liberty [] vigorously assert they are completely independent entities. 20 Therefore, $23,949.32 in fishing proceeds AGS did not take to pay off the note 21 has been waived[.]”59 22 4. None of the agreements permit AGS to disregard the terms of its promissory 23 note. 24

25 54 Doc. 91 at 19. 26 55 Doc. 91 at 4. 56 Doc. 106. 27 57 Doc. 71 at 3-4. 58 Id. at 4. 28 59 Id. at 7. 1 5. Defendants are entitled to attorney’s fees and expenses of defense.

2 Plaintiffs deny all allegations made by Defendants as to this claim and

3 maintain that the Amended Complaint sufficiently alleges that Plaintiff AGS loaned

4 Bryan Howey $23,949.32, that this loan was not paid by the due date, and that it

5 remains unpaid, accruing interest and cos ts.61

6 Further, Plaintiffs argue that AGS did not prioritize repayment of the AGS Note

7 since it was secured by a maritime lien against the Vessel as an advance for

8 necessaries.62 According to Plaintiffs, “[o]nce the [AGS] Note went into default, that

9 priority did not change … since the Vessel has been in a negative debt position since

10 the end of the 2019 season, there has never been sufficient funds to pay off all the

11 sums due, including the AGS Note.”63 Plaintiffs go on to argue that “[s]imply because

12 Defendants would prefer that AGS applied fishing credits in a certain way does not

13 make it so – and it certainly does not present an issue of undisputed fact.”64 14 Plaintiffs cite Washington law65 to argue that, “absent an agreement to the contrary, 15 a creditor “may apply payments to any part of the debt, as he sees fit”66 … even with 16 different types of debts owed to the same creditor.”67 17 The inquiry under the summary judgment standard is whether the evidence

18 60 Id. at 7-8. 19 61 Doc. 78 at 6; Doc. 98 at 8. 62 Doc. 98 at 7. 20 63 Id. 64 Id. 21 65 Washington law is cited since the AGS Note, as well as the Fishing Agreement and Liberty 22 Loan documents, all agree on the application of Washington law. Even so, Alaska law is in accord on this issue, permitting a creditor to apply payments at its discretion unless there 23 is an agreement otherwise. See, e.g., Black v. Whitestone Estates Condo. Homeowners' Ass'n, 446 P.3d 786, 792 (Alaska, 2019). 24 66 Oakes Logging, Inc. v. Green Crow, Inc., 66 Wn. App. 598, 601, 832 P.2d 894 (1992); See also, LRS Elec. Controls v. Hamre Constr., 153 Wn.2d 731, 743, 107 P.3d 721, 727 (2005) 25 (same); Armour & Co. v Becker, 167 Wash. 245, 248-49, 9 P.2d 63 (1932) (“the seller had the 26 legal right to apply the credits of payments as desired.”) 67 See United States Fid. & Guar. Co. v. Feenaughty Mach. Co., 197 Wash. 569, 579, 85 P.2d 27 1085, 1090 (1939) (“It is not necessary that the debts be of the same character; so where one is due on a note and the other on a running account, the creditor may apply a payment 28 to either.”) 1 presents a sufficient disagreement to require submission to a jury or whether it is

2 so one-sided that one party must prevail as a matter of law.68 The evidence of the

3 non-movant is to be believed, and all justifiable inferences are to be drawn in his

4 favor.69

5 The Court finds that Defendants’ cla im regarding the balance of the AGS Note

6 is clearly disputed, as is the argument over which entity should have been credited

7 first upon the delivery of fish. Defendants argue they paid the AGS Note off in full as

8 of the summer of 2019, specifically August 16, 2019, by delivering fish in accordance

9 with the AGS Note terms. To the contrary, Plaintiff’s claim that Defendants did not

10 pay off the AGS Note in full, and that they remain in debt and overdue on payment.

11 Considering the facts in favor of the non-moving party, there is a sufficient

12 disagreement of material fact regarding payment of the AGS Note that requires

13 submission to a jury, and the Court find this issue “is [not] so one-sided that one 14 party must prevail as a matter of law.70 15 c. August 2019 Loan Payment to Plaintiff Liberty is Disputed 16 Defendants claim that AGS transferred to Liberty “far more than it was 17 authorized to transfer” to pay off the Liberty Note.71 Specifically, “AGS debited the 18 Open Account on August 31, 2019 for $72,150.76 for the transfer to [Plaintiff 19 Liberty,]” however, “AGS was only authorized to transfer a maximum of $29,743.75, 20 and exceeded its authority by $42,407.01.”72 In other words, Defendants claim that 21 AGS was only authorized to deduct 25% from gross proceeds from delivery of 22 seafood product to pay Plaintiff Liberty on the Liberty Note.73 Defendants interpret 23 Liberty’s actions as an advance to “help(sic) Defendants pay their loan to Liberty;” 24 however, Defendants claim this was no help, rather it was in violation of the Liberty

25 68 Anderson, at 251–52. 26 69 Id. 70 Id. 27 71 Doc. 91 at 7. 72 Doc. 91 at 7. 28 73 Id. 1 Note terms and “the mechanism by which [Plaintiffs] could give the appearance that

2 [Defendants] were in debt on the mutual Open Account, accrue interest on the

3 alleged debt, and manufacture a maritime lien claim for [Plaintiff] AGS.”74

4 Plaintiffs assert that the loan payment to Liberty was proper and authorized.75

5 Plaintiffs assert that “by making paym ent on the Liberty loan, AGS was not

6 increasing the debt owed by [Defendant,]” rather, Plaintiffs were complying with

7 the explicit terms of the Liberty Note which “permitted an automatic deduction that

8 would not be considered when evaluating addition loan requests that year.”76

9 Plaintiffs contend that the “only practical effect of AGS’s payment was that it kept

10 Defendants from defaulting on the Liberty Loan.”77

11 According to Plaintiffs, the Liberty Note shows that the Parties agreed: (1) that

12 an automatic 25% deduction from gross proceeds will be applied to the Liberty Loan

13 (“Fishing Proceeds Payments”) and (2) additional payments (“other than Fishing 14 Proceeds Payments”) shall be made either by direct payment by Defendants or “out 15 of funds owed to Borrower for Delivery of Seafood Products …”78 Plaintiffs argue 16 that the Liberty Note language “unambiguously authorizes the deduction of 25% 17 toward the Liberty Loan and the payment of any additional balance due by using 18 funds owed from fish deliveries.”79 19 The Court finds that there is a clear dispute about a genuine issue of material 20 fact as it relates to the interpretation of the Liberty Note. Specifically, whether AGS’ 21 debit of the Open Account on August 31, 2019 for $72,150.76 was an “unauthorized 22 overpayment”80 as Defendants claim, or merely consistent with the Liberty Note 23 terms as Plaintiffs argues. Therefore, Defendants have not met their burden in 24 74 Doc. 91 at 7-8. Doc. 64-2. 25 75 Doc. 98 at 13. 26 76 Doc. 98 at 14; Doc. 64-2. 77 Doc. 98 at 14. 27 78 Id. at 15. 79 Doc. 98 at 15 (emphasis in original). 28 80 Doc. 91 at 7. 1 proving the absence of a genuine dispute of material fact and the Court finds that 2 summary judgment in favor of Defendants is inappropriate at this time. 3 d. Whether or Not Plaintiff’s Underpaid Defendants is Disputed 4 Defendants claim that AGS underpaid them by between $42,392.12 and 5 $49,403.42 for fish they delivered in 2 021.81 The $7,011.30 difference reflects 6 whether or not “dock delivery is added for the Sitka deliveries.”82 In support of their 7 argument and in order to account for the number of pounds they delivered “of each 8 specie, where it was delivered to, and the price[,]”83 Defendants submit official data 9 for 2021 landings from the State of Alaska Department of Fish and Game, after 10 Plaintiff allegedly ignored Defendants’ request for the information.84 Defendants 11 explain how the price is calculated for each specie of salmon and argue they should 12 have been credited an additional $42,392.12 or $49,403.42 for fish they delivered in 13 2021.85 14 Defendants further assert that in 2022, Bryan Howey received a statement 15 from Sitka Sound Seafoods for a post-season price adjustment for pink salmon 16 delivered in 2021, reflecting a six cent per pound increase. Defendants contend that 17 AGS never applied this price adjustment to their pink salmon deliveries to Ketchikan 18 but assert that AGS did apply the “retro” credit to another fisherman delivering pink 19 salmon to Ketchikan. As a result of the unapplied price adjustment and previously 20 owed balance, Defendants maintain that Plaintiffs owe Defendants another 21 $3,537.99 in fishing credits, bringing the total owed up to $58,101.26.86 22 Simply put, Plaintiffs claim that Defendants’ assertion that Plaintiffs 23 incorrectly credited them for fish deliveries in 2021 is “massively flawed and 24 factually incorrect” which, by itself suggests to the Court that the parties clearly 25 81 Id. at 11. 26 82 Id. at 14. 83 Id. at 12. 27 84 Id. at 11. 85 Id. at 13-14. 28 86 Doc. 91 at 16. 1 dispute this material fact, therefore making summary judgment inappropriate at this 2 time. Specifically, Plaintiffs fault Defendants for submitting inadmissible evidence 3 pertaining to accounting that a defense paralegal prepared in support of Defendants’ 4 claim. Plaintiffs assert that Defendants have not provided any information 5 suggesting the paralegal who performed t he analysis regarding fish credits “has any 6 qualifications to perform this analysis as an expert witness or otherwise. He is also 7 not a percipient witness and has not relevant knowledge.”87 Therefore, Plaintiffs 8 claim, Defendants’ accounting regarding fishing credits is “totally inadmissible and 9 objectionable.”88 In addition, Plaintiffs describe five mistakes in the analysis, which 10 yield incorrect results.89 Further, Plaintiffs contend that based on the accounting by 11 AGS’s Controller, who maintained the records for the Defendants’ account, the 12 account statement and amounts included in the Amended Complaint reflect correct

13 pricing credits for Defendants’ account.90 14 Based on the pleadings, the Court finds that the fishing credits at issue are 15 material to this litigation and that the parties genuinely dispute how those fishing 16 credits were applied and whether they were applied correctly and that Defendants 17 have not met their burden in proving the absence of a genuine dispute of material 18 fact. Credibility determinations, the weighing of the evidence, and the drawing of 19 legitimate inferences from the facts are jury functions, not those of a judge ruling 20 on a motion for summary judgment.91 Rather, the accounting at issue in this case is 21 appropriate for the trier of fact to consider. 22 // 23 // 24 // 25 87 Doc. 98 at 9. 26 88 Id. at 10. 89 Id. at 10-12. Since it is abundantly clear that the parties dispute this claim, the Court will 27 not delve into the details of these mistakes at this time. 90 Doc. 98 at 12. 28 91 Anderson, 477 U.S. 255. 1 V. Conclusion 2 Considering the facts in the light most favorable to the non-moving party, 3 genuine issues of material fact exist as to each of Defendants’ claims. Defendants 4 have not met their burden in proving otherwise. Therefore, the Court recommends 5 Defendants’ Motion for Summary Judgmen t be DENIED. 6 DATED this 4th day of August, 2023, at Anchorage, Alaska. 7 8 s/ Kyle F. Reardon KYLE F. REARDON 9 United States Magistrate Judge District of Alaska 10 NOTICE OF RIGHT TO OBJECT 11 Under 28 U.S.C. § 636(b)(1), a district court may designate a magistrate judge 12 to hear and determine matters pending before the Court. For dispositive matters, a

13 magistrate judge reports findings of fact and provides recommendations to the 14 presiding district court judge.92 A district court judge may accept, reject, or modify, 15 in whole or in part, the magistrate judge’s order.93 16 A party may file written objections to the magistrate judge’s order within 14 17 fourteen days.94 Objections and responses are limited to five (5) pages in length and 18 should not merely reargue positions previously presented. Rather, objections and 19 responses should specifically identify the findings or recommendations objected to, 20 the basis of the objection, and any legal authority in support. Reports and 21 recommendations are not appealable orders. Any notice of appeal pursuant to Fed. 22 R. App. P. 4(a)(1) should not be filed until entry of the district court’s judgment.95 23 24 25 26 92 28 U.S.C. § 636(b)(1)(B). 27 93 28 U.S.C. § 636(b)(1)(C). 94 Id. 28 95 See Hilliard v. Kincheloe, 796 F.2d 308 (9th Cir. 1986).