Marc Harris v. Dean Meiling

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 2, 2022
• Docket: 20-16931
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 2 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MARC HARRIS, an individual on behalf of No. 20-16931 himself and all others similarly situated, D.C. No. Plaintiff-Appellee, 3:19-cv-00339-MMD-CLB

v. MEMORANDUM* DEAN MEILING, an individual; et al.,

Defendants-Appellants,

and

JAMES PROCTOR; et al.,

Defendants.

Appeal from the United States District Court for the District of Nevada Miranda M. Du, Chief District Judge, Presiding

Argued and Submitted May 11, 2022 San Francisco, California

Before: W. FLETCHER and BUMATAY, Circuit Judges, and KANE,** District Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Yvette Kane, United States District Judge for the Middle District of Pennsylvania, sitting by designation. Appellants Chemeon Surface Technology, LLC, Dean Meiling, Madylon

Meiling, DSM Partners, LP, DSM P GP, LLC, and Suite B, LLC (collectively,

“Appellants”) appeal from the denial of their motion for attorneys’ fees sought

from Appellee Marc Harris (“Appellee”) and their subsequent motion for

reconsideration. Appellants contend that, following the dismissal of Appellee’s

suit by the district court, they are entitled to attorneys’ fees under the Metalast

International, LLC (“MILLC”) operating agreement (“Operating Agreement”), as

well as under Nevada Revised Statute § 18.010(2)(b). Appellants also request that

we remand to the district court the issue of whether joint and several liability for

fees is appropriate as to Appellee’s attorney, Marc Lazo, under 28 U.S.C. § 1927.

We have jurisdiction under 28 U.S.C. § 1291. The denial of attorneys’ fees

and a motion for reconsideration are reviewed on appeal for abuse of discretion.

Avery v. First Resol. Mgmt. Corp., 568 F.3d 1018, 1021 (9th Cir. 2009); Barber v.

Hawai’i, 42 F.3d 1185, 1198 (9th Cir. 1994). We reverse the district court’s denial

of attorneys’ fees, holding that Appellants were entitled to contractual attorneys’

fees, and remand for a reasonable fee award. However, we hold that the district

court did not abuse its discretion in denying fees under Nevada Revised Statute

§ 18.010(2)(b) and attorney joint and several liability under 28 U.S.C. § 1927.

The district court erred in ignoring binding judicial admissions in Appellee’s

First Amended Complaint (“FAC”), which establish that: (1) Appellants were

2 members of MILLC under the Operating Agreement; and (2) Appellants, as

members of MILLC, were “subject to [MILLC]’s [O]perating [A]greement, and

the various duties, rights, and obligations contained therein.” Pursuant to these

admissions, Appellee’s suit was to enforce the terms of the Operating Agreement,

which Appellants had purportedly breached.

“Factual assertions in pleadings . . . , unless amended, are considered judicial

admissions conclusively binding on the party who made them.” Am. Title Ins. Co.

v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988). “Judicial admissions are

formal admissions in the pleadings which have the effect of withdrawing a fact

from issue and dispensing wholly with the need for proof of the fact.” Id. (quoting

In re Fordson Eng’g Corp., 25 B.R. 506, 509 (Bankr. E.D. Mich. 1982)). The

Supreme Court has endorsed this standard in the context of a party’s attempt to

assert arguments contrary to its initial pleadings, finding that such factual

concessions are binding. Amgen, Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S.

455, 470 n.6 (2013) (citing Lacelaw, 861 F.2d at 226).

The admissions in the FAC establish that Appellants are entitled to

attorneys’ fees. Section 12.2 of the Operating Agreement provides that the

“prevailing parties” to an action to enforce the agreement’s terms are entitled to

attorneys’ fees. Appellants are prevailing parties in a lawsuit brought to enforce

the terms of the Operating Agreement. Cf. 145 E. Harmon II Tr. v. Residences at

3 MGM Grand – Tower A Owner’s Ass’n, 460 P.3d 455, 458-59 (Nev. 2020).

Additionally, per Appellee’s binding admissions, Appellants are MILLC members

with rights under § 12.2 of the Operating Agreement. Therefore, we reverse and

remand to the district court to determine a reasonable award of contractual

attorneys’ fees to Appellants.

Appellants also assert that they are entitled to fees under Nevada Revised

Statute § 18.010(2)(b) and request a remand to the district court to determine

whether attorney joint and several liability is warranted as to attorney Lazo.

However, the court is limited to reviewing the district court’s decision for abuse of

discretion and cannot alter its judgment simply because it may have ruled

differently had it been the court of initial review. Cf. Aircraft Serv. Intern, Inc. v.

Int. Broth. of Teamsters, 779 F.3d 1069, 1072 (9th Cir. 2015); United States v.

Doe, 705 F.3d 1134, 1150 (9th Cir. 2013). The district court did not abuse its

discretion in declining to find that this case was groundless or filed with intent to

harass. Relatedly, the district court did not abuse its discretion in declining to find

attorney Lazo jointly and severally liable for fees under 28 U.S.C. § 1927.

Therefore, we affirm the district court on these grounds.1

REVERSED AND REMANDED IN PART AND AFFIRMED IN

PART.

1 We deny Appellee’s motion for judicial notice (Dkt. No. 47).