MAF, Inc. v. Isaac

• Court: District Court, D. Nevada
• Decided: March 29, 2024
• Docket: 2:22-cv-01073
• Status: Unknown

Opinion

2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 MAF, INC., Case No. 2:22-cv-1073-ART-VCF 5 Plaintiff, ORDER GRANTING MOTION FOR 6 v. SUMMARY JUDGMENT (ECF NO. 26]

7 JOHN ISAAC, A/K/A JON ISAAC

8 Defendant.

9 10 11 12 Plaintiff MAF, Inc. (“MAF”) brings this case alleging breach of contract and 13 declaratory judgment under the Federal Declaratory Judgments Act against 14 Defendant John Isaac (“Isaac”) for failure to fully pay Plaintiff per the terms of 15 their contract. Before the Court is Plaintiff’s Motion for Summary Judgment (ECF 16 No. 26) which is unopposed. 17 I. BACKGROUND 18 MAF seeks to recover the remaining portion of fees Isaac owes according to 19 the parties’ contract. On November 22, 2019, parties executed a “Public Adjuster 20 Contract” in which MAF agreed to assist Isaac with resolving his insurance claim 21 for his property at 6855 Spyglass Lane in Rancho Sante Fe, CA. (ECF No. 26-3.) 22 Isaac agreed to pay MAF a fee based on the amount MAF received from his 23 insurance, specifically a 2.25% fee for what Isaac recovered between $0 to 24 $10,000,000, 4% for what he recovered between $10,000,000 to $15,000,000 and 25 6% for any amount recovered above $15,000,000. (Id. at 3.) On July 27, 2021, 26 the parties amended the contract to require MAF to share the cost of third-party 27 consultants hired by Isaac if MAF used any of their work. (ECF No. 26-4 at 2-3.) 28 1 According to the insurance company, they never used any of the third-party 2 consultants’ work in resolving the claim. (ECF No. 26-10 at ¶ 5.) 3 Isaac’s insurer paid him $26,500,000, (ECF No. 26-2 at ¶ 1), so MAF was 4 entitled to a fee of $1,115,000. (See ECF No. 26-3 at 2.) The insurer paid Isaac in 5 three installments; Isaac was supposed to pay MAF $690,000 from the final 6 payment. (ECF No. 26-5.) While Isaac paid MAF the amount due from the first 7 two installments, he never paid MAF the $690,000 owed on the final installment. 8 (ECF No. 26-1 at ¶ 21.) The insurer had made a check out to both Isaac and MAF 9 for $11.5 million. (ECF No. 26-6.) Isaac and Michael A. Fusco (“Fusco”), Founder 10 and CEO of MAF, agreed that MAF would deposit the check into Isaac’s account 11 with Bank of America and then Isaac would pay MAF by check for the $690,000 12 he owed. (ECF No. 26-7 at 3-4.) 13 MAF alleges that it has not received the required payment. Isaac wrote a check 14 dated May 23, 2022, to Plaintiff for $690,000 and shipped it overnight to Fusco. 15 (Id. at 4; ECF No. 26-8.) MAF deposited the $11.5 million check from the insurer 16 into Isaac’s Bank of America account on May 27, 2022, which cleared on May 31, 17 2022. (ECF No. 26-9 at 2-3.) On May 31, 2022, MAF brought Isaac’s check to his 18 bank, and Jenny Marek, Vice President of Bank of America, strongly advised MAF 19 not to deposit the check and implied there were insufficient funds in the account. 20 (ECF No. 26-2 at ¶ 21.) Fusco contacted Isaac who told Fusco that he had put a 21 stop payment on the check. (Id.) To date, Isaac has not paid the remaining 22 $690,000. (Id.) 23 MAF filed the instant action on July 6, 2022, asserting breach of contract and 24 declaratory judgment claims against Isaac. (ECF No. 1.) Isaac filed his Original 25 Answer and Counterclaim on September 12, 2022 (ECF No. 18.) MAF amended 26 its complaint on October 3, 2022. (ECF No. 19.) Isaac filed an Amended Answer 27 and Counterclaim on October 17, 2022. (ECF No. 24.) In the motion, Isaac asserts 28 six claims of relief: 1) breach of contract; 2) breach of the implied covenant of 1 good faith and fair dealing; 3) fraudulent misrepresentation; 4) negligent 2 misrepresentation; and 5) intentional interference with contractual relations; and 3 6) unjust enrichment. (Id. at 17-25.) On February 22, 2023, MAF filed a Motion 4 for Summary Judgment. (ECF No. 26.) Despite the Court granting multiple 5 stipulations for extensions of time to respond to the Motion for Summary 6 Judgment (ECF Nos. 32, 38, 43, 47, 51), Isaac never filed any opposition to MAF’s 7 Motion for Summary Judgment. 8 II. LEGAL STANDARD 9 “The purpose of summary judgment is to avoid unnecessary trials when there 10 is no dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. Dep’t 11 of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate 12 when the pleadings, the discovery and disclosure materials on file, and any 13 affidavits “show there is no genuine issue as to any material fact and that the 14 movant is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 15 U.S. 317, 322 (1986). An issue is “genuine” if there is a sufficient evidentiary 16 basis on which a reasonable fact-finder could find for the nonmoving party and 17 a dispute is “material” if it could affect the outcome of the suit under the 18 governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). The 19 court must view the facts in the light most favorable to the non-moving party and 20 give it the benefit of all reasonable inferences to be drawn from those facts. 21 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 22 The party seeking summary judgment bears the initial burden of informing 23 the court of the basis for its motion and identifying those portions of the record 24 that demonstrate the absence of a genuine issue of material fact. Celotex, 477 25 U.S. at 323. Once the moving party satisfies Rule 56’s requirements, the burden 26 shifts to the non-moving party to “set forth specific facts showing that there is a 27 genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may 28 not rely on denials in the pleadings but must produce specific evidence, through 1 affidavits or admissible discovery material, to show that the dispute exists[.]” 2 Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). 3 III. DISCUSSION 4 a. Breach of Contract Claim 5 Plaintiff is entitled to summary judgment on its breach of contract claim. 6 To succeed on a breach of contract claim, the plaintiff must show “(1) the 7 existence of a valid contract, (2) a breach by the defendant, and (3) damage as a 8 result of the breach.” Saini v. Int’l Game Tech., 434 F.Supp.2d 913, 919-920 (D. 9 Nev. 2006) (citing Richardson v. Jones, 1 Nev. 405, 405 (Nev. 1865)). 10 The parties executed a valid contract. “Basic contract principles require, 11 for an enforceable contract, an offer and acceptance, meeting of the minds, and 12 consideration.” May v. Anderson, 119 P.3d 1254, 1257 (Nev. 2005). Parties agreed 13 to a written contract meeting all of these elements. In the contract between the 14 parties, MAF agreed to assist Isaac with his insurance claim in return for 15 payment based on the written fee arrangement. (ECF No. 26-3). No evidence 16 suggests that this contract lacked any of the required elements for contract 17 formation. In fact, Isaac agrees that he and MAF had a valid contract. (ECF No. 18 24 at 17.) 19 Isaac breached the contract, resulting in damages for MAF. MAF had 20 fulfilled its portion of the contract by assisting Isaac in making his insurance 21 claim, including analyzing his insurance policy, building estimates, and 22 attending meetings with Isaac’s insurer. (ECF Nos. 26-2 at ¶¶ 9-13; 26-3 at 2.) 23 As a result of MAF’s work, Isaac received $26.5 million from his insurer. (ECF No. 24 26-2 at ¶ 12.) Isaac put a stop payment on the $690,000 check he wrote to MAF 25 and has not paid the $690,000 owed under the contract. (Id. at ¶ 21.) Thus, Isaac 26 breached the contract by not fully paying MAF for its services, and MAF was 27 damaged in the amount of $690,000 it is owed under the contract. 28 Isaac is not entitled to a reduction in the amount he owes MAF based on 1 the amendment to the contract. On July 27, 2021, the parties amended the 2 contract to require MAF to share the cost of third-party consultants hired by Isaac 3 if MAF used any of their work. (ECF No. 26-4 at 2-3.) However, MAF, citing to 4 testimony from the insurer’s adjuster, asserts that it never utilized any of the 5 third-party consultants’ work (ECF No. 26-10 at ¶ 5), and Isaac provides no 6 evidence to contradict this point. In fact, the adjuster claimed that the third-party 7 vendors’ work was neither useful nor reliable. (Id.) The Court finds that MAF was 8 not responsible for sharing the costs of the third-party vendors based on the 9 contract amendment. 10 b. Declaratory Judgment Claim 11 In addition to its breach of contract claim, MAF argues it is entitled to 12 declaratory judgment. Specifically, MAF asks the Court to find as a matter of law 13 that 1) the contract is enforceable, 2) MAF is entitled to $690,000 under the 14 contract; and 3) Isaac is not entitled to any reduction of the $690,000 pursuant 15 to the July 2021 amendment to the contract. Because the Court has already 16 resolved these issues in its discussion of the breach of contract claim, the 17 declaratory judgment claim is redundant, and the Court will dismiss the claim. 18 See Clifford v. Geico Cas. Co., 428 F.Supp.3d 317, 326 (D. Nev. 2019) (citing U.S. 19 v. State of Wash., 759 F.2d 1353, 1357 (9th Cir. 1985) (en banc)). 20 c. Isaac’s Affirmative Defenses and Counterclaims 21 The Court finds that Isaac’s affirmative defenses and counterclaims are 22 without merit. Isaac raises a variety of affirmative defenses in his answer. Isaac 23 also brings the following counterclaims: 1) breach of contract; 2) breach of the 24 implied covenant of good faith and fair dealing; 3) fraudulent misrepresentation; 25 4) negligent misrepresentation; 5) intentional interference with contractual 26 relations; and 6) unjust enrichment. Because Isaac failed to meet his burden for 27 his affirmative defenses and counterclaims and there are no genuine issues of 28 material fact, the Court will grant summary judgment on all of these claims in 1 favor of MAF. 2 i. Affirmative Defenses 3 In his Answer to MAF’s Complaint (ECF No. 24 at 7-8), Isaac raises a variety 4 of affirmative defenses. Because the Answer provides no factual basis for these 5 affirmative defenses, and Isaac failed to file any responsive motions to expand 6 upon these affirmative defenses, the Court concludes that none of these 7 affirmative defenses prevent judgment in MAF’s favor. 8 ii. Breach of Contract 9 The Court is unpersuaded by Isaac’s breach of contract counterclaim. Isaac 10 alleges that MAF breached the contract by not sharing the costs of Isaac’s third- 11 party consultants and failing to complete all of the duties outlined in their 12 contract. (ECF No. 24 at 17-18.) The facts of this case contradict such a claim. 13 With regards to sharing the costs of the third-party consultants, the Court has 14 already found that MAF was not obligated to share the costs because neither MAF 15 nor the insurer relied on their work, which was a condition precedent for MAF 16 having to pay for the services. (ECF Nos. 26-4 at 2-3; 26-10 at ¶ 5.) The other 17 bases for the breach of contract also fail because Isaac never provides any 18 evidence that MAF did not fully perform under the contract, and MAF asserts 19 that it fully performed, resulting in Isaac recovering $26,500,000. (ECF No. 26-2 20 at ¶¶ 9-13.) Thus, the Court will grant MAF summary judgment on this claim. 21 iii. Breach of the Implied Covenant of Good Faith and Fair Dealing 22 Isaac similarly fails to prove his claim that MAF breached the implied covenant 23 of good faith and fair dealing. Isaac alleges MAF breached the implied covenant 24 of good faith and fair dealing by not exercising reasonable care and oversight in 25 performing its duties resulting in Isaac having to rely on the third-party 26 consultants in resolving the insurance claim and also not admitting it was 27 required to share the costs of Isaac’s third-party consultants. (ECF No. 24 at 18- 28 20.) As previously discussed, the insurer’s adjustor stated that they did not rely 1 on any of the third-party consultants’ work, so MAF had no duty to help Isaac 2 pay for their work. (ECF No. 26-10 at ¶ 5.) Similarly, the Court has no facts before 3 it suggesting that MAF did not exercise reasonable care and oversight in its work, 4 so there is no genuine issue of material fact preventing the Court from granting 5 summary judgment on this claim. 6 iv. Fraudulent and Negligent Misrepresentation 7 Isaac’s claims of fraudulent and negligent misrepresentation lack any merit. 8 Isaac alleges that Fusco fraudulently misrepresented “MAF’s experience and 9 expertise in handling complex residential claims” like the one Isaac hired them 10 to help resolve. (ECF No. 24 at 20-21.) The only example Isaac presents is that 11 “Fusco, on behalf of MAF, made false representations that MAF would share in 12 the costs of the third-party experts, consultants and professionals incurred by 13 Isaac for the benefit of the insurance claims.” (Id. at 20.) Isaac fails to point to 14 any examples of MAF fraudulently representing its capabilities, and the Court 15 has already explained that MAF was only obligated to help pay for the third-party 16 consultants if they used their work, which never happened. Similarly, while Isaac 17 claims that MAF made negligent representations, he never gives examples of such 18 representations. Thus, Isaac fails to meet the pleading requirements established 19 by FRCP 9. See FED. R. CIV. PRO. 9(b) (“In alleging fraud or mistake, a party must 20 state with particularity the circumstances constituting fraud or mistake.”) The 21 Court will grant summary judgment in favor of MAF for this claim. 22 v. Intentional Interference with Contractual Relations 23 Isaac’s allegation that MAF interfered with his contracts with the third- 24 party contractors lacks any evidentiary support. Isaac states that MAF 25 intentionally made inaccurate statements to the third-party consultants to harm 26 or otherwise interfere with Isaac’s contracts with the consultants. (ECF No. 26 at 27 23-24.) Isaac provides no facts to justify this allegation. The Court is unclear what 28 inaccurate statements Isaac claims MAF allegedly made, and what supposed 1 || harm Isaac faced, so the Court will grant summary judgment in favor of MAF. 2 vi. Unjust Enrichment 3 Lastly, Isaac alleges that MAF was unjustly enriched by Isaac hiring the third- 4 || party consultants to do work MAF was supposed to have completed, not having 5 || to do the full work MAF was hired to do and receiving a higher fee by virtue of the 6 || third-party consultants’ work. (ECF No. 26 at 24-25.) The Court will grant 7 || summary judgment in favor of MAF because neither MAF nor the insurer used 8 || the third-party contractors’ work in resolving the claim (ECF No. 26-10 at 4 5), 9 || and Isaac fails to provide any evidence that MAF did not fully perform and earn 10 || its fee. Instead of being unjustly enriched, MAF was underpaid for its services, 11 || necessitating the current lawsuit. 12 IV. CONCLUSION 13 It is therefore ordered that MAF’s Motion for Summary Judgment (ECF No. 26) 14 || is granted in part and denied in part. The Court finds in favor of MAF’s breach of 15 || contract claim but denies MAF’s declaratory relief claim for being duplicative. The 16 || Court also finds in favor of MAF with regards to all of Isaac’s counterclaims. 17 It is further ordered that MAF is entitled to a judgment in the amount of 18 || $690,000. 19 The Clerk of Court is directed to enter judgment accordingly and close the 20 || case. 21 22 23 DATED THIS 29t day of March 2024. 24 25 en 2 Aprox Wasted 27 ANNE R. TRAUM UNITED STATES DISTRICT JUDGE 28