NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS AUG 2 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
PACESETTER CONSULTING, LLC, an No. 21-16244 Arizona limited liability company, D.C. No. 2:19-cv-00388-DWL Plaintiff-Appellant,
v. MEMORANDUM*
HERBERT A. KAPREILIAN, a California citizen; et al.,
Defendants-Appellees,
and
DANIEL DUDA, a Florida citizen; et al.,
Defendants.
Appeal from the United States District Court for the District of Arizona Dominic Lanza, District Judge, Presiding
Argued in part and submitted July 25, 2022 Pasadena, California
Before: TASHIMA, WATFORD, and FRIEDLAND, Circuit Judges.
Pacesetter Consulting, LLC (“Pacesetter”) appeals from the district court’s
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. grant of summary judgment in favor of AgriCare, Inc. and Tom Avenelis (the
“AgriCare Defendants”); Eastside Packing, Inc., Fruit World Nursery, Inc., and
Craig and Herbert Kapreilian (the “Kapreilian Defendants”); and Mark Bassetti on
all claims raised in Pacesetter’s Third Amended Complaint (“TAC”). Pacesetter
also appeals from the district court’s dismissal of the claims in the TAC against A.
Duda & Sons, Inc. and Duda Farm Fresh Foods, Inc. (the “Duda corporate
entities”) and Daniel Duda for insufficient service of process. We have jurisdiction
under 28 U.S.C. § 1291. We affirm in part and reverse in part.
1. The district court did not abuse its discretion in declining on evidentiary
grounds to consider two exhibits, the “Ball Declaration” and the “Fact Worksheet,”
that Pacesetter submitted in opposition to Defendants’ summary judgment motions.
See Block v. City of Los Angeles, 253 F.3d 410, 416 (9th Cir. 2001) (“Evidentiary
decisions made in the context of summary judgment motions are reviewed for an
abuse of discretion.”). Regarding the Ball Declaration, the district court
reasonably determined that many of the statements in the declaration referred to
materials outside the record, including to materials allegedly produced through
discovery in the parallel state-court litigation. Because Pacesetter failed to
introduce those materials into the record, the district court was unable to determine
whether any evidence they contained would be admissible at trial. Similarly, the
district court reasonably determined that many other statements in the declaration
2 were conclusory and, further, were not based on the personal knowledge of the
declarant, but rather on vague assertions of what he “learned” at some unspecified
time after the events in question. See Fed. R. Civ. P. 56(e) (“An affidavit or
declaration used to support or oppose a motion must be made on personal
knowledge, set out facts that would be admissible in evidence, and show that the
affiant or declarant is competent to testify on the matters stated.”).
Regarding the Fact Worksheet, the district court reasonably determined that
the document was an inappropriate way to introduce deposition testimony at the
summary judgment stage, given Pacesetter’s failure to include direct quotations
from the relevant depositions or to attach the underlying deposition transcripts and
given its inclusion of argumentative summaries. See Planned Parenthood of
Columbia/Willamette, Inc. v. Am. Coal. of Life Activists, 290 F.3d 1058, 1083 (9th
Cir. 2002) (en banc) (recognizing that the district court has discretion whether to
permit presentation of deposition testimony in the form of summaries); United
States v. Leon-Reyes, 177 F.3d 816, 820 (9th Cir. 1999) (“Summaries are normally
prepared by an interested party and therefore may not be completely accurate or
may be tainted with the preparing party’s bias.”).
Accordingly, the district court did not abuse its discretion in refusing to
consider the exhibits, and we likewise do not consider them in conducting our
summary judgment analysis.
3 2. Reviewing de novo, and mindful of our obligation to view the evidence in
the light most favorable to Pacesetter, we agree with the district court that
Pacesetter failed to offer any cognizable evidence of damages, and that the
AgriCare Defendants, Kapreilian Defendants, and Bassetti were therefore entitled
to summary judgment. See Weinberg v. Whatcom County, 241 F.3d 746, 751 (9th
Cir. 2001) (“Because [the plaintiff] failed to offer competent evidence of damages,
dismissal on summary judgment was appropriate with respect to all claims for
which [the plaintiff] bore the burden of establishing the amount of actual harm he
suffered.”).
In a separate lawsuit filed in Arizona state court, Pacesetter won rescission
of the investment contract at issue in this case, including a return of the $400,000
principal with interest and attorney’s fees. In the federal case, Pacesetter seeks
additional relief in the form of damages, but it has vacillated between two different
theories of damages throughout the course of the litigation in the district court. At
various times, Pacesetter has appeared to seek “benefit-of-the-bargain” or “lost-
profit” damages, asserting that it is entitled to up to $63 million—calculated based
on the projected 22.4% annual return over the 25-year investment period that
appeared in the Executive Summary of the materials offering the investment
opportunity. At other times, however, Pacesetter has appeared to seek
“opportunity-cost” damages of an uncertain amount—i.e., damages based on what
4 Pacesetter could have earned from other investments if the $400,000 principal had
not been tied up during the investment period.
Pacesetter cannot prevail under either theory. In its Rule 30(b)(6)
deposition, Pacesetter expressly denied that it was seeking the $63 million in
benefit-of-the-bargain damages in the federal lawsuit. Instead, Pacesetter’s
representative said that he did not have an estimate of damages because he had not
“asked [his expert] to do those calculations for [him] yet.” Because Pacesetter
disclaimed any reliance on a benefit-of-the-bargain theory in its deposition, a
benefit-of-the-bargain approach cannot provide a damages theory sufficient to
survive summary judgment.
Pacesetter also has not offered any evidence of lost-opportunity-cost
damages. To the contrary, Pacesetter’s representative at its Rule 30(b)(6)
deposition stated that, at the time he made the $400,000 investment, he “had plenty
of money on hand,” agreed that he “could have” and “did make investments in
other things” and was “well able to make any investment [he] want[ed] at any
time,” and affirmed that the $400,000 did not “keep [him] from making other
investments” and did not “keep [him] awake at night, either.” Those concessions
are fatal to Pacesetter’s assertion that it sustained lost-opportunity costs from not
having use of the $400,000 to put toward other investments during the investment
period.
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS AUG 2 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
PACESETTER CONSULTING, LLC, an No. 21-16244 Arizona limited liability company, D.C. No. 2:19-cv-00388-DWL Plaintiff-Appellant,
v. MEMORANDUM*
HERBERT A. KAPREILIAN, a California citizen; et al.,
Defendants-Appellees,
and
DANIEL DUDA, a Florida citizen; et al.,
Defendants.
Appeal from the United States District Court for the District of Arizona Dominic Lanza, District Judge, Presiding
Argued in part and submitted July 25, 2022 Pasadena, California
Before: TASHIMA, WATFORD, and FRIEDLAND, Circuit Judges.
Pacesetter Consulting, LLC (“Pacesetter”) appeals from the district court’s
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. grant of summary judgment in favor of AgriCare, Inc. and Tom Avenelis (the
“AgriCare Defendants”); Eastside Packing, Inc., Fruit World Nursery, Inc., and
Craig and Herbert Kapreilian (the “Kapreilian Defendants”); and Mark Bassetti on
all claims raised in Pacesetter’s Third Amended Complaint (“TAC”). Pacesetter
also appeals from the district court’s dismissal of the claims in the TAC against A.
Duda & Sons, Inc. and Duda Farm Fresh Foods, Inc. (the “Duda corporate
entities”) and Daniel Duda for insufficient service of process. We have jurisdiction
under 28 U.S.C. § 1291. We affirm in part and reverse in part.
1. The district court did not abuse its discretion in declining on evidentiary
grounds to consider two exhibits, the “Ball Declaration” and the “Fact Worksheet,”
that Pacesetter submitted in opposition to Defendants’ summary judgment motions.
See Block v. City of Los Angeles, 253 F.3d 410, 416 (9th Cir. 2001) (“Evidentiary
decisions made in the context of summary judgment motions are reviewed for an
abuse of discretion.”). Regarding the Ball Declaration, the district court
reasonably determined that many of the statements in the declaration referred to
materials outside the record, including to materials allegedly produced through
discovery in the parallel state-court litigation. Because Pacesetter failed to
introduce those materials into the record, the district court was unable to determine
whether any evidence they contained would be admissible at trial. Similarly, the
district court reasonably determined that many other statements in the declaration
2 were conclusory and, further, were not based on the personal knowledge of the
declarant, but rather on vague assertions of what he “learned” at some unspecified
time after the events in question. See Fed. R. Civ. P. 56(e) (“An affidavit or
declaration used to support or oppose a motion must be made on personal
knowledge, set out facts that would be admissible in evidence, and show that the
affiant or declarant is competent to testify on the matters stated.”).
Regarding the Fact Worksheet, the district court reasonably determined that
the document was an inappropriate way to introduce deposition testimony at the
summary judgment stage, given Pacesetter’s failure to include direct quotations
from the relevant depositions or to attach the underlying deposition transcripts and
given its inclusion of argumentative summaries. See Planned Parenthood of
Columbia/Willamette, Inc. v. Am. Coal. of Life Activists, 290 F.3d 1058, 1083 (9th
Cir. 2002) (en banc) (recognizing that the district court has discretion whether to
permit presentation of deposition testimony in the form of summaries); United
States v. Leon-Reyes, 177 F.3d 816, 820 (9th Cir. 1999) (“Summaries are normally
prepared by an interested party and therefore may not be completely accurate or
may be tainted with the preparing party’s bias.”).
Accordingly, the district court did not abuse its discretion in refusing to
consider the exhibits, and we likewise do not consider them in conducting our
summary judgment analysis.
3 2. Reviewing de novo, and mindful of our obligation to view the evidence in
the light most favorable to Pacesetter, we agree with the district court that
Pacesetter failed to offer any cognizable evidence of damages, and that the
AgriCare Defendants, Kapreilian Defendants, and Bassetti were therefore entitled
to summary judgment. See Weinberg v. Whatcom County, 241 F.3d 746, 751 (9th
Cir. 2001) (“Because [the plaintiff] failed to offer competent evidence of damages,
dismissal on summary judgment was appropriate with respect to all claims for
which [the plaintiff] bore the burden of establishing the amount of actual harm he
suffered.”).
In a separate lawsuit filed in Arizona state court, Pacesetter won rescission
of the investment contract at issue in this case, including a return of the $400,000
principal with interest and attorney’s fees. In the federal case, Pacesetter seeks
additional relief in the form of damages, but it has vacillated between two different
theories of damages throughout the course of the litigation in the district court. At
various times, Pacesetter has appeared to seek “benefit-of-the-bargain” or “lost-
profit” damages, asserting that it is entitled to up to $63 million—calculated based
on the projected 22.4% annual return over the 25-year investment period that
appeared in the Executive Summary of the materials offering the investment
opportunity. At other times, however, Pacesetter has appeared to seek
“opportunity-cost” damages of an uncertain amount—i.e., damages based on what
4 Pacesetter could have earned from other investments if the $400,000 principal had
not been tied up during the investment period.
Pacesetter cannot prevail under either theory. In its Rule 30(b)(6)
deposition, Pacesetter expressly denied that it was seeking the $63 million in
benefit-of-the-bargain damages in the federal lawsuit. Instead, Pacesetter’s
representative said that he did not have an estimate of damages because he had not
“asked [his expert] to do those calculations for [him] yet.” Because Pacesetter
disclaimed any reliance on a benefit-of-the-bargain theory in its deposition, a
benefit-of-the-bargain approach cannot provide a damages theory sufficient to
survive summary judgment.
Pacesetter also has not offered any evidence of lost-opportunity-cost
damages. To the contrary, Pacesetter’s representative at its Rule 30(b)(6)
deposition stated that, at the time he made the $400,000 investment, he “had plenty
of money on hand,” agreed that he “could have” and “did make investments in
other things” and was “well able to make any investment [he] want[ed] at any
time,” and affirmed that the $400,000 did not “keep [him] from making other
investments” and did not “keep [him] awake at night, either.” Those concessions
are fatal to Pacesetter’s assertion that it sustained lost-opportunity costs from not
having use of the $400,000 to put toward other investments during the investment
period.
5 Pacesetter does not dispute that the existence of damages is an essential
element of all claims alleged in the TAC. Accordingly, the district court did not
err in granting summary judgment on that basis in favor of the AgriCare
Defendants and Bassetti. For the same reason, we affirm the district court’s grant
of summary judgment in favor of the Kapreilian Defendants, even though the
district court relied on other grounds with respect to them. See Atel Fin. Corp. v.
Quaker Coal Co., 321 F.3d 924, 926 (9th Cir. 2003) (“We may affirm a district
court’s judgment on any ground supported by the record, whether or not the
decision of the district court relied on the same grounds or reasoning we adopt”).
3. The district court did not err in dismissing the claims in the TAC against
A. Duda & Sons, Inc. and Duda Farm Fresh Foods, Inc. (the “Duda corporate
entities”). Pacesetter acknowledges that service of the First Amended Complaint
(“FAC”) on A. Duda & Sons, Inc. did not satisfy Federal Rule of Civil Procedure
4, because that complaint mistakenly named a non-existent entity, “Duda and Sons,
LLC,” as the defendant. Accordingly, Pacesetter was obligated to comply with
Rule 4 when it served the Second Amended Complaint (“SAC”), which named the
Duda corporate entities for the first time, or when it served the TAC. See Emp.
Painters’ Tr. v. Ethan Enters., Inc., 480 F.3d 993, 995-96 (9th Cir. 2007) (“[A]n
amended complaint can often be served in the same manner as any other pleading
[under Rule 5] if the original complaint is properly served [under Rule 4] and the
6 defendants appeared in the first instance.” (emphasis added)). Because Pacesetter
served the SAC and TAC on attorneys for the Duda corporate entities using the
district court’s electronic docketing system—which is a method permitted by Rule
5, but not by Rule 4, see Fed. R. Civ. P. 5(b)(2)(E)—the district court correctly
dismissed the claims in the TAC against the Duda corporate entities for insufficient
service of process.
The district court erred, however, in dismissing the claims in the TAC
against Daniel Duda. Daniel Duda was properly served with the FAC under Rule
4. Although the district court dismissed the FAC’s claims against Daniel Duda for
lack of personal jurisdiction, the district court ultimately gave Pacesetter the
opportunity to attempt to cure the jurisdictional defect by granting leave to file the
SAC and TAC. Once proper service of the FAC was accomplished pursuant to
Rule 4, Pacesetter was permitted to serve the later-amended complaints on Daniel
Duda’s attorney through the district court’s electronic filing system, as allowed by
Rule 5. See Emp. Painters’ Tr., 480 F.3d at 999 (noting that an “amended
complaint . . . qualifies as a ‘pleading subsequent to the original complaint,’ thus
allowing it to be served in any manner prescribed in Rule 5(b)” (footnote
omitted)); Fed. R. Civ. P. 5(b)(1), (b)(2)(E).
Accordingly, we affirm the district court’s dismissal of the claims in the
TAC against the Duda corporate entities, reverse the dismissal of the claims in the
7 TAC against Daniel Duda, and remand for further proceedings.
All parties shall bear their own costs on appeal.
AFFIRMED IN PART, REVERSED IN PART, and REMANDED.