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Zyda v. Four Seasons Hotels and Resorts

United States District Court, D. Hawaii

August 8, 2019

CHRISTOPHER ZYDA, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, Plaintiffs,
v.
FOUR SEASONS HOTELS AND RESORTS, FOUR SEASONS HOLDINGS, INC., FOUR SEASONS HUALALAI RESORT, HUALALAI RESIDENTIAL, LLC, DBA HUALALAI REALTY; HUALALAI INVESTORS, LLC, KAUPULEHU MAKAI VENTURE, HUALALAI DEVELOPMENT COMPANY, HUALALAI VILLAS & HOMES, HUALALAI INVESTORS, LLC, HUALALAI RENTAL MANAGEMENT, LLC, DOES 1-100, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS THIRD AMENDED COMPLAINT, FOR DAMAGES AND DECLARATORY RELIEF, FILED JUNE 14, 2019 [DKT. 203]

          LESLIE E.. KOBAYASHI UNITED STATES DISTRICT JUDGE

         On June 26, 2019, Defendants Hualalai Investors, LLC; Hualalai Residential, LLC; Hualalai Rental Management, LLC; Four Seasons Hotels Limited; and Four Seasons Holdings, Inc. (“Defendants”) filed their Motion to Dismiss Third Amended Complaint, for Damages and Declaratory Relief, Filed June 14, 2019 [Dkt. 203] (“Motion”). [Dkt. no. 209.] Pursuant to this Court's order, Defendants filed a supplemental memorandum on July 12, 2019. [Dkt. nos. 213 (entering order), 218.]

         Plaintiff Christopher Zyda (“Zyda”), on behalf of himself and all others similarly situated (collectively “Class”), filed his memorandum in opposition on July 26, 2019. [Dkt. no. 223.] The Court finds this matter suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice for the United States District Court for the District of Hawaii (“Local Rules”). Defendants' Motion is granted as to the request for punitive damages, and the Motion is denied in all other respects.

         BACKGROUND

         The relevant factual background of this case is set forth in the Order Granting in Part and Denying in Part Defendants' Motion for Partial Summary Judgment, filed on June 24, 2019 (“6/24/19 Order”). [Dkt. no. 207.[1] The operative pleading when Defendants filed their Motion for Partial Summary Judgment (“Summary Judgment Motion”) on April 3, 2019 was the Second Amended Class Action Complaint for Damages, Declaratory, and Injunctive Relief (“Second Amended Complaint”), filed on April 30, 2018. [Dkt. nos. 89 (Second Amended Complaint), 155 (6/24/19 Order).] However, while the Summary Judgment Motion was pending, the parties stipulated to allow the filing of the Third Amended Class Action Complaint for Damages and Declaratory Relief (“Third Amended Complaint”). [Third Amended Complaint, filed 6/14/19 (dkt. no. 203); stipulation & order, filed 6/14/19 (dkt. no. 204) (“6/14/19 Stipulation & Order”).] The parties stipulated that the Summary Judgment Motion applied to the Third Amended Complaint “since it is not materially different from the Second Amended Complaint for purpose of the motion.” [6/14/19 Stipulation & Order at ¶ 3.]

         Summary judgment was granted as to Count IV (promissory estoppel/detrimental reliance), Count V (violation of the duty of good faith and fair dealing), Count VI (negligent misrepresentation), Count VII (estoppel), and Count VIII (unjust enrichment). The Summary Judgment Motion was denied as to the portion of Count III alleging an unfair or deceptive acts or practices (“UDAP”) claim. 6/24/19 Order, 2019 WL 2583479, at *1, *8.[2] Defendants did not move for summary judgment as to the portion of Count III alleging an unfair methods of competition (“UMOC”) claim. Id. at *2. Thus, the only claims remaining in the Third Amended Complaint are the UDAP claim and the UMOC claim, both of which are brought pursuant to Haw. Rev. Stat. Chapter 480.

         In the instant Motion, Defendants seek the dismissal of: 1) the Class's prayer for disgorgement, punitive damages, and rescission; and 2) Zyda's UDAP claim.

         DISCUSSION

         By the time Defendants filed the instant Motion, the dispositive motions deadline had passed. See Rule 16 Scheduling Order, filed 4/11/18 (dkt. no. 84), at ¶ 7 (stating the deadline was 4/3/19). Thus, before the merits of the Motion can be considered, Defendants must establish good cause to amend the scheduling order. See Fed.R.Civ.P. 16(b)(4). This district court has stated:

The Rule 16(b) good cause inquiry focuses on the diligence of the party seeking to modify the scheduling order. Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002). The pretrial schedule may be modified if the deadline could not have been reasonably met despite the diligence of the party seeking the extension. Id. (citing Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992)) (internal quotation marks and citations omitted).
. . . Rule 16 is designed to prevent parties from benefitting from carelessness, unreasonability, or gamesmanship. In re Cathode Ray Tube Antitrust Litigation, 2014 WL 4954634, *2 (N.D. Cal. Oct. 1, 2014) (citing Orozco v. Midland Credit Mgmt. Inc., 2013 WL 3941318, at *3 (E.D. Cal. July 30, 2013)). . . .
Diligence of the party seeking amendment is the critical issue in the good cause determination. The diligence required for a showing of good cause has two parts:
(1) diligence in discovering the basis for amendment; and,
(2) diligence in seeking amendment once the basis for amendment has ...

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