Scarff v. Intuit, Inc.

318 F. App'x 483
Court of Appeals for the Ninth Circuit·Decided November 24, 2008·No. No. 07-15458·Published·Cited by 2 cases

Opinion

MEMORANDUM **

Edward L. Scarff and two partnerships in which he has an ownership interest, Scarff, Sears & Associates (“SSA”) and Pentoga Partners (“Pentoga”) (collectively “plaintiffs”), appeal the district court’s (1) grant of Intuit, Inc., Computing Resources, Inc. (“CRI”), Kelly Hvengholm, [485] and Lisa Ciccotti’s (collectively “defendants”) Federal Rule of Civil Procedure 12(b)(6) motion to dismiss the plaintiffs’ negligence claim; (2) denial of the plaintiffs’ motion for leave to present “further argument”; and (3) grant of the defendants’ motion for summary judgment on plaintiffs’ fraud and conversion claims.

We affirm the district court’s (1) denial of the plaintiffs’ motion for leave to present “further argument” and (2) grant of the defendants’ motion for summary judgment as to plaintiffs SSA and Pentoga only. We reverse the district court’s (1) grant of the defendants’ Rule 12(b)(6) motion to dismiss the negligence claim; (2) grant of the defendants’ motion for summary judgment as to plaintiff Scarff; and (3) grant of the defendants’ motion for summary judgment as to defendants Intuit and CRI.

1. Negligence Claim

We review claims of error in a district court’s order granting a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) de novo. Hurlic v. S. Cal. Gas Co., 539 F.3d 1024, 1028 (9th Cir.2008).

Under California law, CRI and Intuit owed a duty to audit and review the accounts of SSA and Pentoga if there was sufficient objective indicia of the embezzlement scheme that CRI and Intuit should have been on notice to investigate the SSA and Pentoga accounts. See Sun 'n Sand, Inc. v. United Cal. Bank, 21 Cal.3d 671, 148 Cal.Rptr. 329, 582 P.2d 920, 937 (1978).

We find that four facts alleged in the instant complaint, if taken as true, were sufficiently suspicious that a reasonable jury could conclude Intuit and CRI owed a duty to investigate the SSA and Pentoga accounts. First, the plaintiffs allege the defendants knew Scarff owned SSA and Pentoga and that the defendants had Scarffs telephone number. Second, the plaintiffs allege that Hvengholm had told her supervisors that Huang had ordered large salary “adjustments” early in the scheme. Third, the plaintiffs allege that in 1996, Hvengholm left the employ of CRI, but continued to play a major role in the payroll processing for Huang,.and often contacted Ciccotti (who remained at CRI) to provide payroll information for Huang. Fourth, the plaintiffs allege that in 2002, when Huang fled the United States, Hvengholm—still not employed by CRI—arranged to have the SSA and Pen-toga payroll reports sent to her home in Nevada, at least until Scarff learned of the scheme later that year.

A complaint should not be dismissed under Rule 12(b)(6) unless the complaint fails to allege “enough facts to state a claim to relief that is plausible on its face.” Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588-89 (9th Cir.2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007)). Accordingly, we reverse the district court’s dismissal of the negligence claim.

2. Motion for Leave to Present “Further Argument”

We review claims of error in a district court’s denial of a motion for leave to present “further argument” for abuse of discretion. See Planned Parenthood of S. Ariz. v. Neely, 130 F.3d 400, 402 (9th Cir.1997).

The district court did not abuse its discretion by denying the plaintiffs’ motion for leave to file further argument. “A party opposing summary judgment must direct [the court’s] attention to specific, triable facts. General references without page or line numbers are not sufficiently specific.” S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir.2003) (citations omitted). The district court con-[486] eluded no such facts were raised in the plaintiffs’ opposition to the defendants’ summary judgment motion, and issued an “intended disposition” that stated it intended to grant the motion, but did so only so the parties might have an opportunity to request a stay for settlement negotiations.

On receiving the “intended disposition,” however, the plaintiffs moved for leave to present “further argument,” in which the plaintiffs purported to delineate the specific citations to evidence the district court had found absent from the opposition to summary judgment. The plaintiffs contended they had planned to provide this information during “extensive” oral argument, but the court did not give them sufficient time fully to present this evidence at the hearing. The court correctly noted, however, that “[ojral argument ... is an opportunity for the court to ask questions, often to give counsel a chance to address a particular judge’s tentative conclusions to clarify or even persuade the judge to change his or her mind,” Kennedy v. Lockyer, 379 F.3d 1041, 1058 (9th Cir.2004) (Fisher, J., concurring), and not a chance for a party to respond to major issues unaddressed in its papers. Further, the district court observed that allowing the plaintiffs to present “further argument” would be tantamount to permitting the plaintiffs to file a sur-reply. The plaintiffs offered no equitable reasons for failing to file a complete written opposition to the summary judgment motion.

Given these justifications, the district court did not abuse its discretion by denying the motion to present “further argument.”

3. Summary Judgment

This court reviews claims of error in a district court’s grant of a motion for summary judgment de novo. Ins. Co. of N. Am. v. Fed. Express Corp., 189 F.3d 914, 917 (9th Cir.1999).

A. Lack of Damages

Federal Rule of Civil Procedure 56(e)(2) expressly permits a district court to enter summary judgment against a party who fails to oppose issues raised in a motion for summary judgment, “if appropriate.” Summary judgment is “appropriate” under Rule 56(e)(2) if a motion for summary judgment adequately contends there are no triable issues of fact, and such contention is unopposed. Fed.R.Civ.P. 56(e)(2); cf. Henry v. Gill Indus., Inc., 983 F.2d 943, 950 (9th Cir.1993).

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Scarff v. Intuit, Inc., 318 F. App'x 483 (9th Cir. 2008).

318 F. App'x 483 (Scarff v. Intuit, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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