United States District Court, D. Utah, Central Division
D. RAY STRONG, as Liquidating Trustee of the Consolidated Legacy Debtors Liquidating Trust, the Castle Arch Opportunity Partners I, LLC Liquidating Trust, and the Castle Arch Opportunity Partners II, LLC Liquidating Trust, Plaintiff,
KIRBY D. COCHRAN; JEFF AUSTIN; AUSTIN CAPITAL SOLUTIONS; WILLIAM H. DAVIDSON; ROBERT CLAWSON; HYBRID ADVISOR GROUP; ROBERT D. GERINGER, ROBERT D. GERINGER, P.C.; FINE ARTS ENTERTAINMENT; and DOES 1-50, Defendants.
ORDER AND MEMORANDUM OF DECISION
CAMPBELL, U.S. DISTRICT COURT JUDGE.
September 23, 2019, the court ruled on two motions for
partial summary judgment, one from Plaintiff D. Ray Strong
and one from Defendant Robert Geringer. Strong v.
Cochran, No. 2:14-cv-00788-TC-EJF, 2019 WL 4601636 (D.
Utah Sept. 23, 2019). Mr. Geringer and Defendants Jeff Austin
and William Davidson now ask the court to either clarify or
reconsider that order. (ECF Nos. 346, 347, 349, 350.) Mr.
Geringer has also filed a motion for additional discovery
under Rule 56(d). (ECF No. 367.)
Strong contends that that there is nothing to reconsider or
clarify from the order. Instead, he moves for the court to
bifurcate trial so that the few triable issues of fact
remaining for his second cause of action can be resolved.
(ECF No. 337.) 
reasons stated below, the motions for clarification and
reconsideration are granted in part and denied in part. The
motion for additional discovery and the motion to bifurcate
trial are both denied.
Strong's Motion for Summary
March 13, 2018, Mr. Strong moved for summary judgment on his
second claim for breach of certain state securities laws.
(ECF No. 221.) In ruling on the motion, the court reached the
1. California law applies to Mr. Strong's claims. Triable
issues of fact exist about whether Utah law also applies.
2. CAREIC violated California's securities fraud statute
when it failed to disclose Mr. Clawson's past SEC
violations in the CAS, CASDF, and Series E PPMs. Triable
issues of fact exist about whether [the] other
misrepresentation or omissions violated California's
securities fraud statute.
3. Mr. Austin, Mr. Clawson, Mr. Davidson, and Mr. Geringer
are all liable for the failure to disclose Mr. Clawson's
past, because (a) they are all directors of, or filled
similar roles with, CAREIC; (b) privity is not required to
establish liability; and (c) there are no triable issues of
fact about whether they reasonably should have been aware of
Mr. Clawson's past.
4. Although Mr. Strong has shown that Defendants are liable
for at least one omission in their securities offerings,
triable issues of material fact remain regarding whether
claims arising from these securities offerings are barred by
the statute of limitations.
Strong, 2019 WL 4601636 at *20. Because of this last
issue, the court denied the motion.
Defendants now ask the court to
clarify that only this final conclusion-that questions of
fact exist regarding the statute of limitations-is binding
going forward. (Def's Mot. Clarify at 2 (ECF No. 347).)
They contend that all of the court's other conclusions
should be treated as dicta, rather than as the law of the
case. In other words, Defendants maintain that the
applicability of California law, the materiality of Mr.
Clawson's prior SEC violations, Defendants' roles as
directors of CAREIC, and Defendants' knowledge of Mr.
Clawson's prior SEC violations all remain disputed issues
to be raised at trial.
was not the court's intent. To the extent the court was
unclear before, the court now clarifies that each of the
conclusions listed above are binding for purposes of this
litigation. See Fed.R.Civ.P. 56(g) (“If the
court does not grant all the relief requested by the motion,
it may enter an order stating any material fact . . . that is
not genuinely in dispute and treating the fact as established
in the case.”). Defendants claimed, both in their
motions and at the hearing, that they had no notice that the
court was going to enter an order that addressed issues
beyond their statute of limitations defense. They suggest
that their oppositions to Mr. Strong's motion would have
been handled differently had they known what was actually at
stake. (See Def.'s Mot. Clarify at 4 (“Had he been
alerted to the possibility that the Court might enter such
binding determinations on specific issues, Mr. Geringer could
and would have responded to the motion in a different manner,
rather than strategically rely[ing] on selective evidence and
affirmative defenses to defeat the motion as a
whole.”).) Defendants note that the official comment to
Rule 56(g) specifically cautions courts against issuing
orders that disregard the tactical choices of nonmoving
[Under] Subdivision (g) . . . the court may decide whether to
apply the summary-judgment standard to dispose of a material
fact that is not genuinely in dispute. The court must take
care that this determination does not interfere with a
party's ability to accept a fact for purposes of the
motion only. A nonmovant, for example, may feel confident
that a genuine dispute as to one or a few facts will defeat
the motion, and prefer to avoid the cost of detailed response
to all facts stated by the movant. This position should be
available without running the risk that the fact will be
taken as established under subdivision (g) or otherwise found
to have been accepted for other purposes.
Fed. R. Civ. P. 56(g), Advisory Committee's Note to 2010
warning has little relevance here. Defendants did address
every aspect of the second claim, thoroughly and at length.
The claim that they lacked sufficient notice has no
legitimate basis in fact. The court reviewed over 1, 500
pages of briefs and evidence filed by Defendants in
opposition to Mr. Strong's motion, as well as another 1,
000 pages submitted in support of Mr. Geringer's own
motion for summary judgment, which effectively served as an
additional opposition. In those briefs, Defendants made
specific arguments regarding every element of Mr.
Strong's second cause of action. Defendants clearly
foresaw that the summary judgment order could include
conclusive findings on disputes other than the statute of
limitations, and they responded accordingly.
recent Seventh Circuit opinion, Kreg Therapeutics, Inc.
v. Vitalgo, 919 F.3d 405 (7th Cir. 2019), is directly on
point. There, the plaintiff moved for summary judgment on its
entire breach of contract claim. Id. at 411. The
district court “decided that . . . [the plaintiff] had
established the first three elements of a breach of contract:
the existence of a contract, its performance, and [the
defendant's] breach. But it found [the plaintiff's]
case lacking with respect to the fourth element:
damages.” Id. At a status conference the next
month, the plaintiff indicated that, in its view, damages
were the only unresolved issue remaining for trial. The
defendant disagreed, arguing that because the court never
cited Rule 56(g) in its order, “the issues of
performance and breach should still be on the table.”
Id. at 412. The court “admitted that it should
have cited Rule 56(g) in its first opinion, but it affirmed
that its previous opinion established performance and breach
as undisputed facts of the case.” Id.
appeal, the Seventh Circuit upheld the district court's
order. “Rule 56(g) is ancillary to the ultimate
summary-judgment analysis, operating to salvage some results
from the time and resources spent in deciding unsuccessful
summary-judgment motions. . . . The district court properly
used the rule here.” Id. at 415 (internal
quotations omitted). While the Seventh Circuit acknowledged
that the “best practice” would have been to
specifically cite Rule 56(g) in the order, it nevertheless
held that “the district court's opinion was clear
enough and no one paying reasonable attention to the
litigation after the first summary-judgment opinion could
have thought [the plaintiff's] performance and [the
defendant's] breach were still open questions.”
same is true here. The motion put the entirety of Mr.
Strong's second claim at issue. Defendants'
understood this, as demonstrated by their thorough arguments
in opposition to each element of that claim. The court's
order clearly and conclusively ruled on most parts of the
claim, even though the motion as a whole was ultimately
denied because of triable issues regarding the statute of
limitations. “[N]o one paying reasonable
attention” to the motion for summary judgment could
doubt that these issues were properly before the court and
had been definitively resolved. Id. Accordingly, the
court's conclusions regarding Mr. Strong's partial
motion for summary judgment are final and shall not be
revisited at trial.
related to the above, Defendants represent that they would
have filed a request under Rule 56(d) to allow further
discovery before the motion was heard, had they known how
many issues the court was going to address. In fact, in
pursuit of this goal, Mr. Geringer has now filed a Rule 56(d)
motion. (ECF No. 367.) He suggests that the court could
revisit its order once Mr. Geringer has had an opportunity to
conduct additional discovery and supplement his earlier
opposition to the partial motion for summary judgment.
reasons already discussed, Defendants should have
realized-and, based on their briefing, did in fact
realize-that every element of the second claim was before the
court. If Defendants believed additional discovery was
necessary to oppose Mr. Strong's motion, they should have
asked for that discovery before the court ruled on the
event, at Defendants' request, multiple extensions to
respond to Mr. Strong's motion for summary judgment were
provided. (See ECF Nos. 233, 234, 240.) The motion was on
March 13, 2018. Defendants opposition briefs were not filed
until nearly four months later, between July 6 and July 8
(depending on the Defendant). (ECF Nos. 245, 248, 250.)
Clearly, they could have engaged in discovery during that
period. Moreover, the motions were not heard by the court for
another seven months. (ECF No. 316.) Again, Defendants could
have conducted further discovery in that time and then asked
for permission to supplement their briefs if needed. This
history further supports denying Mr. Geringer's very late
request for additional discovery.
Geringer's Motion for Summary
Geringer's motion for partial summary judgment was based
on his statute of limitations affirmative defense. The court
denied the motion on the first, eighth, and ninth claims, and
granted it in part and denied it in part on the second and
fourth claims. Strong, 2019 WL 4601636 at *31.
general, the discussion above regarding Mr. Strong's
motion applies equally here. Where the court fully resolved
certain issues (even without fully resolving an entire cause
of action or affirmative defense), the court's
conclusions are the law of the case and will not be revisited
said, the court does clarify two aspects of its previous
Calculating the Statute of Limitations
Defendants complain that for Mr. Strong's first, eighth,
and ninth causes of action, the court's order summarily
concludes that “the claims are timely.”
Id. at *25. Defendants ask whether that means their
statute of limitations affirmative defense is completely
foreclosed for those claims.
the opinion in context, that was clearly not the court's
intent. The order actually states:
Mr. Geringer argues that all three claims are subject to a
four-year statute of limitations.24 He then argues
that the first claim accrued, at the latest, upon his
resignation from CAREIC on July 9, 2009, and that the eighth
and ninth claims accrued, at the latest, when the final
investment occurred on May 5, 2009. 25
Using Mr. Geringer's dates, the court concludes the
claims are timely.
24 Mr. Geringer reserves the right to assert that
some of the claims are actually subject to a three-year
statute of limitations at trial but does not contest this
issue for purposes of this motion. (See ECF No. 244 at 19.)
25 Again, Mr. Geringer reserves the right to argue
at trial that these claims may have accrued earlier but does
not press the issue here. (See ECF No. 244 at 20 n.6.)
Id. at *25 n.24, 25.
two footnotes explicitly acknowledged that Mr. Geringer had
the right to advance different date calculations at trial.
Mr. Geringer presented a narrow statute of limitations
defense in his motion, in an effort to prevail at summary
judgment, and the court rejected it. Clearly, when the order
indicates that “the claims are timely, ” it is
referring only to the one argument that Mr. Geringer placed
before the court; it is not ...