T'Bear v. Forman (359 F. Supp. 3d 882, 2019)

United States District Court for the Northern District of California 2019-02-06

Citations

Full opinion text

JACQUELINE SCOTT CORLEY, United States Magistrate Judge

Plaintiff Caleb Avery t'Bear sued Defendant Barry Forman in California state court for breach of fiduciary duty, declaratory relief, and an accounting arising out of a failed business venture. (Dkt. No. 1-1.) Defendant removed the action to this Court pursuant to 28 U.S.C. § 1441(b), based on diversity jurisdiction under 28 U.S.C. § 1332. (Dkt. No. 1 at ¶ 4.) Defendant subsequently brought counterclaims for breach of loan agreements, rescission, and in the alternative, equitable relief. (Dkt. No. 84.) Now pending before the Court are Defendant's motion for summary judgment on Plaintiff's complaint, (Dkt. No. 103), the parties' cross motions for summary judgment on Defendant's counterclaims, (Dkt. Nos. 99 & 101), Defendant's motion for sanctions, (Dkt. No. 111), and Plaintiff's "motion to allow motion for leave to amend filing of amended affirmative defenses," (Dkt. No. 134). After careful consideration of the parties' briefing, and having had the benefit of oral argument on January 31, 2019, the Court GRANTS Defendant's motion for summary judgment on Plaintiff's complaint, DENIES in part and DEFERS in part pending supplemental briefing Defendant's motion for summary judgment on Defendant's counterclaims, DENIES Plaintiff's cross motion for summary judgment on Defendant's counterclaims, DENIES Defendant's motion for sanctions, and DENIES Plaintiff's motion for leave to amend.

BACKGROUND

I. Factual Background

A. FairWay

Beginning in 2006, the parties discussed plans for creating "a series of affiliated domestic and foreign companies" referred to by Plaintiff as "The FairWay Group" ("FairWay"), to monetize intellectual property (the "FairWay IP") developed by Plaintiff "for pricing offerings of securities and other assets." (Dkt. Nos. 1-1 at ¶ 6; 29 at ¶ 6; 99-1 at ¶ 3.) The entities involved include, "Urso Ltd (a Belize company) ("Urso"), FairWay IP Holdings, Ltd (a Cayman Island company) ("FairWay IP Holdings"), FairWay Financial U.S., Inc. (a Delaware company), FairWay Pricing Technologies, LLC (a Delaware company) [ ("FairWay Pricing") ], and FairWay International Kft (a Hungarian company)." (Dkt. No. 99-1 at ¶ 3.)

In May 2008, Plaintiff "assigned to Urso as corporate assets all personal patents, trademarks, and business plans related to FairWay inventions or businesses." (Dkt. No. 99-4, Ex. 44 at 7.) In December 2011, Plaintiff transferred ownership of the FairWay IP from Urso to FairWay IP Holdings. (Dkt. No. 99-4, Ex. 55 at 165.) Prior to August 2016, Plaintiff held a 100% ownership interest in Urso; Plaintiff currently owns 25% of the company and remains its president. (Dkt. No. 99-8, Ex. C at 59:11-22, 60:19-21.) Urso owns 100% of FairWay IP Holdings, which owns 100% of the FairWay IP. (Dkt. No. 99-8, Ex. C at 64:2-23.)

B. The Loans

Between April 2006 and October 2011, Defendant made 33 loans to Plaintiff-in the form of promissory notes-to fund FairWay. (Dkt. No. 99-1 at ¶ 5.) The notes list Defendant as the "Purchaser" or "Lender." (Dkt. Nos. 99-1 at ¶ 5; 99-2, Ex. 1-33.) Thirty-one of the notes list Plaintiff as the "Borrower," and the other two list FairWay Pricing Technologies, LLC and FairWay International Kft, respectively. (Dkt. No. 99-2, Ex. 1-33.) All but one of the notes contain Plaintiff's signature. (Id. ) The notes were secured by the general assets of Plaintiff and the FairWay IP held by Urso, with the principal and interest payable by Plaintiff upon demand. (Dkt. Nos. 1-1 at ¶ 10; 29 at ¶ 10; 99-4, Ex. 44 at 7, Ex. 51 at 56, Ex. 53 at 114.) Two of the notes are governed by Delaware state law, (see Dkt. No. 99-2, Exs. 1-2); the parties do not dispute that all other notes are governed by California state law.

The total outstanding principal of the notes is approximately $ 551,433. The annual interest rate on the FairWay Pricing Technologies, LLC note is 8%; the FairWay International Kft note does not provide for interest. (See Dkt. No. 99-2, Ex. 1 at 9; Ex. 25 at 98.) All other notes provide for an annual interest rate of 10%.

1. "Loan Managers"

Between June 2007 and February 2016, Plaintiff sent Defendant 19 emails attaching spreadsheets from a file entitled "Barry Forman Loan Manager"; the spreadsheets include a summary page entitled "Personal Loans - Forman to Avery," listing "Accumulated Loans with interest." (See Dkt. No. 99-3, Ex. 34-43, 45-53.) The Loan Managers list the dates of the notes, beginning with the August 2006 note, the principal loan amount, and the principal plus accrued interest. Beginning with the March 2008 Loan Manager, Plaintiff includes the following:

All principle and interest is due and payable on demand by Nathaniel Caleb Avery

To the extent any collateral is held by Urso Limited [also owned by Avery], that collateral is pledged as well [to the extent necessary to fully repay both principle and interest]

Signed by Nathaniel Caleb Avery both individually

and as Chairman and CEO of Urso Limited.

on behalf of Urso, Ltd.

Marina Towers, Suite 302,

Newtown Barracks,

Belize City, Belize

N. Caleb Avery

[signed under the Electronic Signatures Act of 2000 [Public Law No: 106-229) ] and legally binding upon all his assignees and heirs

(Dkt. No. 99-3, Ex. 40 at 67 (bracketed language in original).) On February 29, 2016, Plaintiff sent Defendant the last Loan Manager; it references all 33 of the notes at issue. (Dkt. No. 99-4, Ex. 53 at 113-159.) The February 2016 Loan Manager removes the language above regarding collateral held by Urso, and states, in pertinent part:

All principle and interest is due and payable on demand by Nathaniel Caleb Avery

Signed by Nathaniel Caleb Avery both individually

and as Chairman and CEO of Urso Limited.

on behalf of Urso, Ltd.

35 New Road

Belize City, Belize

**Also includes $ 100K Convertible Debt Note with FairWay Pricing Technologies which Nathaniel Caleb Avery and Urso Ltd will take personal and corporate responsibility to the extent that Note is not repaid by FairWay Pricing Technologies according to its terms.

(Id. at 114.)

2. Memorandum of Understanding

In December 7, 2011, Plaintiff emailed Defendant a "Memorandum of Understanding" ("MOU") reflecting a discussion between the parties to reconfigure the "payout plan" for the notes at issue so that Plaintiff could obtain $ 6 million in funding for FairWay through the sale of notes secured by the FairWay IP. (Dkt. No. 99-4, Ex. 51 at 39-56.) In the cover email, Plaintiff states, in pertinent part: "As you, [Defendant], and I, discussed, as part of the paperwork Urso Ltd. is assigning the FairWay IP portfolio to an IP Holding company, FairWay IP Holdings Ltd. to securitize the $ 6M in Notes being offered." (Id. at 39.) The attached MOU states, in pertinent part:

Some of the individual Notes in the series have pledged my general and entire asset base [including patents assigned to Urso Ltd.] as collateral. As we discussed, as part of our current fundraising, the FairWay Intellectual Property (patents, trademarks, etc.) is being assigned from Urso Ltd. to FairWay IP Holdings Ltd. [Cayman Islands]. To complete that assignment, I would ask you to accept and confirm your understanding that Urso Ltd. would not have direct control over these Intellectual Property assets but continue to have indirect rights to them through its 100% sole ownership of FairWay IP Holdings. Specifically, while Urso would no longer have direct title to these assets, it would have rights to the cash flow from the licensing of those assets [net of FairWay IP Holdings obligations to maintain them (legal costs, filing fees, annuities, etc.) ], such cash to be received as expense reimbursements or dividends from FairWay IP Holding to Urso. In summary, your lien interest [per the Notes] would continue on my general assets including: 1) my 100% ownership of Urso Ltd.; 2) by proxy, Urso Ltd.'s majority ownership of FairWay International; 3) my shares in FairWay Financial U.S., Inc.; and 4) general assets. But it would specifically no longer include direct lien on FairWay Intellectual Property, but rather depend on Urso's sole ownership of FairWay IP Holdings for repayment of the Notes. The Notes (2006-2011), as a series, are amended to that understanding.

(Id. at 56 (bracketed language in original) (emphasis added).) Defendant attests that:

[Plaintiff] told me that in order to consummate the transaction [for the $ 6 million in new funding], he needed a "carve out" of my direct security interest in the FairWay IP. In return, my loans would be repaid by the end of 2012, and I would retain my security interest in all of his other general assets, including, but not limited to, his 100% ownership in Urso.

(Dkt. No. 99-1 at ¶ 64.) Indeed, Plaintiff's cover email states, in pertinent part: "For clarity sake, I am attaching the current Loan Manager summarizing all personal Notes outstanding from me to you and a Memorandum of Understanding outlining the carve out of the IP in the general liens on my property to now accommodate the indirect control of the IP." (Dkt. No. 99-4, Ex. 51 at 39.) Plaintiff's cover email also states that pursuant to "[t]he payout plan," Plaintiff would pay Defendant his balance within six months, "with a small balance by year-end 2012." (Id. ) Defendant signed and returned the MOU to Plaintiff on December 12, 2011. (Dkt. No. 99-4, Ex. 55 at 164-65.)

3. Demand Notice

On May 17, 2017, Defendant sent Plaintiff a demand letter, calling for the immediate payment of principal and interest on all outstanding loans; "specifically, those loans listed in [Plaintiff's] document entitled "Loan Manager - Barry Forman - 31 Dec 2016"...as well as any and all other loans or advances from [Defendant] to [Plaintiff] or to any of [Plaintiff's] affiliate companies." (Dkt. No. 99-2, Ex. B at 5.) The letter demanded payment by May 31, 2017. (Id. ) Plaintiff did not respond to Defendant's demand, and on June 12, 2017, Defendant sent Plaintiff written notice via email and certified mail that "Plaintiff failed to make any payment of principal and interest as demanded by [Defendant's]" May 2017 letter. (Dkt. No. 99-2, Ex. C at 7.)

C. The "Partnership"

1. Preliminary Collaboration Agreement

On January 25, 2010, Defendant proposed terms for a potential partnership to Plaintiff by sending Plaintiff a "[f]irst draft of a partnership term sheet." (Dkt. No. 103-2, Ex. K. at 176.) The term sheet includes several questions related to tax issues. (Dkt. No. 103-2, Ex. K at 177-78.) On March 9, 2010, Plaintiff responded to Defendant's proposal by emailing Defendant a "[f]irst draft" of a document entitled "Preliminary Collaboration Agreement." (Dkt. No. 103-2, Ex. E at 146.) Plaintiff's cover email noted that the draft "needs a bit of work." (Id. ) The attached document states, in part:

This Preliminary Collaboration Agreement is intended to set forth the basic terms of agreement by which Barry Forman ("Forman") is partnering with Caleb Avery t'Bear ("t'Bear") in implementing the FairWay business model, as described in the Executive Summary for FairWay Financial U.S. and including the establishment of FairWay International and its operating companies.

(Id. at 147.) The draft "acknowledge[s] the preliminary nature of the agreement," and states that "as soon as practicable," the parties would "engage legal counsel experienced in the preparation and counseling regarding business partnership agreements to prepare a complete agreement covering, among other things, the terms and conditions set forth [t]herein." (Id. ) The Preliminary Collaboration Agreement includes the heading "Rough Draft for Caleb's Review," a bracketed question regarding "repurchase rights upon [Defendant's] death," brackets indicating forthcoming "[t]ext" regarding compensation, and a blank space regarding the percentage of equity participation in FairWay operating companies that Defendant would receive "[a]s consideration for [the] performance of his duties." (Id. at 147-49.) The draft is not signed by either party and does not include a date.

In addition to the Preliminary Collaboration Agreement, on March 9, 2010 Plaintiff forwarded to Defendant an email to Plaintiff from his then-attorney, Tim Covington. (Id. at 146.) Upon reviewing Defendant's partnership term sheet, Mr. Covington wrote, in pertinent part:

"Partnership" conveys possibly unknown rights and liabilities, as there is an entire body of partner law. Also you do not want to give Barry all of the rights you currently hold as Fairway's founder. My recommendation is to call this a collaboration agreement and then to make clear that Barry is, to an extent, an at will employee and doesn't have rights to control the formation of the various FairWay affiliates (he talks about ownership structure of UMS, etc. as if he would have some say in control of UMS, which I don't think is your intent).

(Id. ) Indeed, the Preliminary Collaboration Agreement designates Defendant's "Executive Role" as "CEO of FairWay Financial US and other FairWay operating companies," and states that Defendant "will be employed at will and may be terminated at any time upon notice with or without cause." (Id. at 148.)

The next day, Plaintiff sent Defendant an email with the subject line "Merged draft agreements," with "[d]raft 3" of the Preliminary Collaboration Agreement attached. (Dkt. No. 103-2, Ex. M at 186.) The email states, in pertinent part:

I merged both drafts. We still need to compare against [Defendant's] draft term sheet and also need a section as to the formula(s) applied to calculate the initial founder's calculation of each [operating company]. I will also go back and look at [Defendant's] draft to see if we have missed anything else.

But this is a good initial start.

(Id. ) The third draft includes the heading "Rough Draft for Caleb's Review," and contains the same bracketed question regarding repurchase rights, bracket denoting forthcoming text regarding compensation, and blank space regarding equity participation as the initial version. The draft also inserts a new non-compete clause stating:

[Defendant] agrees not to compete with t'Bear, Urso or FairWay in any manner central to their business plans for a period of 5 years after leaving the employment of FairWay Financial US, FairWay International and/or other Fairway operating companies, as the case may be[.]

(Id. at 188.) The draft includes another new clause stating, pertinent part:

Complete Agreement. Forman and t'Bear agree to cooperate to ensure that this Agreement is superseded by a complete form of agreement ("Complete Agreement") covering its subject matter within six (6) months of the effective date set forth below.

(Id. at 189.) The draft also includes a clause regarding liability under the agreement, stating, in pertinent part:

IN NO EVENT SHALL EITHER PARTY BE LIABLE, UNDER ANY LEGAL OR EQUITABLE THEORY, TO THE OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND AS A RESULT OF OR ARISING FROM THIS AGREEMENT AND WHETHER [sic] OR NOT ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

(Id. at 190.) As with the initial version, the third draft is not signed by either party and does not include a date.

On March 27, 2010, Plaintiff sent Defendant an email with the subject line "updated partner draft." (Dkt. No. 103-2, Ex. O at 203.) The "Compensation" section of the attached draft includes for the first time a formula for determining the parties' "share equity set forth in each major operating company set aside for founders at the time the company is established." (Id. at 205.) The section includes bracketed questions regarding the formula, including one stating:

How would the [partnership pool] be split up as a practical matter? Not equally, as per [Defendant's] draft term sheet, I think; since, different "Partners" would be bringing different things to the table and awarded shares in differing amounts accordingly. We need to discuss.

(Id. at 206.) The version again includes the heading "Rough Draft for Caleb's Review" and contains the same bracketed question regarding repurchase rights found in the previous drafts. (Id. at 204, 207.) Also like the previous versions, the March 27 draft is not signed by either party and does not include a date.

On June 5, 2011, Plaintiff emailed Defendant stating that Plaintiff was "looking for the most current draft of the partnership proposal." (Dkt. No. 103-2, Ex. P at 217.) Minutes later, Plaintiff sent Defendant an email with the subject line "Partner Agmt" that included the "last draft [Plaintiff] had from Tim [Covington]." (Dkt. No. 103-2, Ex. Q at 221.) Plaintiff's email notes that the draft "seems incomplete to sign and the partnership formula is not really spelled out as we have in excel spreadsheets." (Id. ) Further, the email states:

Can you work with Tim and I to get this in better form and then we can give the legal/tax advisors something better to work with[?] Just to document our most recent discussion/agreement about the formula (and the attached draft), we are making the following structural change (with your approval) [to the repurchase period and the "FairWay Group compensation pool set-aside].

(Id. ) The attached Preliminary Collaboration Agreement does not contain the "partnership formula" contained in the March 27 draft's "Compensation" section but does include the heading "Rough Draft for Caleb's Review" and the previous versions' bracketed question regarding repurchase rights. (Id. at 222, 224.) Once again, the draft is not signed by either party and it does not include a date.

2. Defendant's Exit from FairWay

On September 21, 2015, Defendant sent an email to Plaintiff with the subject line "Transition." (Id. at 9.) The email states, in pertinent part:

Last March, you asked that I level with you regarding our partnership in FairWay .

...Consequently, Caleb, I am no longer able to proceed as your partner . Serving in a lesser capacity may be possible, perhaps, as, say, strategic advisor on the group level or some such that would entail a minor time commitment.

...Obviously there are issues that need addressing, such as timing, debt repayment, informing the team, documentation and the like. We can begin dealing with those. I intend to transition honorably and professionally.

(Id. (emphasis added).) In January 2016, Plaintiff and Mr. Covington collaborated on a draft letter to "memorialize [Defendant's] withdrawal from the FairWay Group." (Dkt. No. 103-2, Ex. C at 115.) The letter states, in part:

It is with both sadness and understanding that I read the letter by which you stepped down as Chairman of the FairWay Group. They say that no one is irreplaceable. But I know this does not apply to you in this case. I cannot think of anyone who can provide the resources and loyalty you have provided and which have been critical in keeping FairWay and our dream for it alive.

(Dkt. No. 103-2, Ex. R at 233.) The draft letter includes sections entitled: "Terminating Prior Equity Arrangements"; "Loan Obligations Unaffected"; "Retroactive Compensation"; "Expense Reimbursement"; "Ongoing Consultation"; and "Miscellaneous." (Id. at 233-236.) The parties continued to negotiate regarding Defendant's exit and the repayment of his loans, and at some point in February or March 2016, Defendant informed Plaintiff "that if [Defendant] were not repaid by the end of 2016, [Defendant would need to have [his] original security interest in the FairWay IP restored." (Dkt. No. 99-1 at ¶ 72.) Negotiations broke down, as reflected in an email from Plaintiff to Defendant on March 7, 2016, wherein Plaintiff states that Defendant "bargained hard" for a "full partnership," and "with those rewards come obligations, particularly to lead the charge for funding so all the pieces could be put in place and creditors (including the Forman loans) could be paid." (Dkt. No. 103-2, Ex. S at 238.)

On April 10, 2016, Mr. Covington emailed Plaintiff a proposal detailing an "alternative" loan repayment structure that included granting Defendant a "security interest...under an omnibus collateral agreement." (Dkt. No. 103-2, Ex. T at 247.) Plaintiff refused, stating: "I am still open to this [creative]; but not with security interest - non-starter [he can fuck us at the finish line]." (Id. (bracketed language in original).) Mr. Covington responded by email the next day, stating, in pertinent part:

As for the security interest, it seems you and [Defendant] will never see eye to eye. I have to confess, though, that if there is subordination to future investors, why a security interest is a "non-starter" as you put it. If you don't move on this, then the odds of reaching an agreement are slim to none. Tell me this: When [Defendant] gave you 45 loans, why were you willing to let each and all of them be subject to security interest but not now?

(Id. at 246.) Negotiations between the parties continued, with Defendant seeking restoration of his security interest in the FairWay IP. On August 7, 2016, Mr. Covington emailed Plaintiff, suggesting that the "4 Urso shareholder scenario at 25%...could be a key to thwarting [Defendant's] attachment of the assets." (Dkt. No. 103-2, Ex. Y at 270.) On or about that date, Plaintiff sold or transferred 75% of his ownership interest in Urso to unnamed parties. (Dkt. No. 99-8, Ex. C at 59:11-22.) Plaintiff did not notify Defendant of this transfer. The parties continued discussions regarding a forbearance agreement throughout 2016 and up until January 2017, when Defendant was served with Plaintiff's state court complaint. (Dkt. No. 99-1 at ¶ 72.)

II. Procedural History

Plaintiff filed this action in Superior Court of the State of California, County of Alameda, on January 17, 2017. (Dkt. No. 1-1 at 2.) Defendant removed the action to this Court on February 17, 2017, based on diversity jurisdiction. (Dkt. No. 1.) Thereafter, Defendant moved to dismiss the complaint, (Dkt. No. 5), and Plaintiff moved to remand the action to state court, (Dkt. No. 12). The Court denied both motions on April 28, 2017. (Dkt. No. 22.) With the Court's permission, Defendant filed an amended answer and second amended counterclaim on July 19, 2018. (Dkt. No. 84.)

On October 4, 2018, Defendant filed motions for summary judgment on his counterclaims, (Dkt. No. 99), and Plaintiff's complaint, (Dkt. No. 103). Plaintiff filed his motion for summary judgment on Defendant's counterclaims that same day, (Dkt. No. 101). The motions for summary judgment are fully briefed.

Defendant filed the instant motion for sanctions on October 12, 2018. (Dkt. No. 111.) Plaintiff did not file an opposition. On January 7, 2019, Plaintiff moved, purportedly under Federal Rule of Civil Procedure 36, to "allow motion for leave to amend filing of amended affirmative defenses by Plaintiff." (Dkt. No. 134.) Defendant opposes Plaintiff's motion. (Dkt. No. 135.) The Court heard oral argument on all motions on January 31, 2019.

PRELIMINARY ISSUES

I. Evidentiary Objections

Both parties submit evidentiary objections outside of their opposition or reply briefing regarding evidence proffered by the opposing party in support of, or opposition to their respective motions for summary judgment. (See Dkt. Nos. 121 & 124.) Defendant's objections span 32 pages. (See Dkt. No. 124.) These separate filings violate Civil Local Rules 7-3(a),(c), which require that "[a]ny evidentiary and procedural objections to the [motion or opposition] must be contained within the [opposition or reply] brief or memorandum." The Court will thus "only address the evidentiary arguments to the extent they are raised" in the parties' opposition or reply briefs. See Beauperthuy v. 24 Hour Fitness USA, Inc. , 772 F.Supp.2d 1111, 1119 (N.D. Cal. 2011) (denying defendant's separately-filed motion to strike based on a similar violation of Local Rule 7-3(c) ). Accordingly, the Court overrules the parties' objections to the extent they are raised outside their opposition or reply briefs.

Defendant also submitted evidentiary objections, (Dkt. No. 126), to evidence Plaintiff submitted with his reply in support of Plaintiff's cross-motion for summary judgment on Defendant's counterclaims, (Dkt. No. 120). Under the Local Rules:

If new evidence has been submitted in the reply, the opposing party may file within 7 days after the reply is filed, and serve an Objection to Reply Evidence, which may not exceed 5 pages of text , stating its objections to the new evidence, which may not include further argument on the motion .

Civil L.R. 7-3(d) (emphasis added). Again, Defendant's submission fails to comply with the Local Rules. First, it contains over two pages of argument regarding how certain of Plaintiff's positions are unsupported by evidence or contradicted by other testimony. Such argument is not an objection to evidence. Second, it exceeds the 5-page limit by 5 pages. Based on Defendant's failure to comply with the Local Rules, the Court will not consider this filing.

II. Requests for Judicial Notice

A. Defendant's Request

Defendant asks the Court to take judicial notice of an adjudicative fact pursuant to Federal Rule of Evidence 201(b)(2). (Dkt. No. 100.) Under Rule 201(b)(2), a judicially noticed adjudicative fact must be one "that is not subject to reasonable dispute because it...can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201. Here, Defendant seeks "judicial notice of the fact that the Federal Reserve Discount Rate on April 28, 2006, was 5.75%." (Dkt. No. 100 at 2.) In support of this fact, Defendant submits two printouts from the "website of the Board of Governors of the Federal Reserve System" demonstrating that the discount rate was set at 5.75% on April 10, 2006. (Dkt. No. 100 at 2.) Plaintiff has not opposed judicial notice of these documents or otherwise disputed their authenticity. Accordingly, the Court grants judicial notice of the fact that the Federal Reserve discount rate was 5.75% on April 28, 2006 because it is an undisputed "matter of public record." See Lee v. City of Los Angeles , 250 F.3d 668, 689 (9th Cir. 2001).

B. Plaintiff's Request

Plaintiff requests judicial notice of the following facts in support of his cross-motion for summary judgment on Defendant's counterclaims: (1) "Federal Reserve discount rates during the period of March 2006 through October 2011"; and (2) "that over sixty (60) days have elapsed since May 22, 2018 and [Defendant] continues to seek principal and interest on the promissory notes referenced in the Second Amended Complaint." (Dkt. No. 101-14 at 1.) Plaintiff provides no documents in support of his request, however, to the extent relevant, the Court grants judicial notice of the requested facts.

DISCUSSION

I. Defendant's Motion for Summary Judgment on Plaintiff's Complaint

On summary judgment, the movant must demonstrate "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Where the movant does not bear the burden of proof at trial for the underlying claims, it satisfies its burden if it can show that there is an absence of evidence to support "an element essential to [the nonmovant's] case, and on which [the nonmovant] will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Defendant has done so.

A. Breach of Fiduciary Duty

"The elements of a claim for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach." City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 68 Cal. App. 4th 445, 483, 80 Cal.Rptr.2d 329 (Cal. Ct. App. 1998). Defendant insists that summary judgment on Plaintiff's cause of action for breach of fiduciary duty is warranted because a partnership agreement was never "reached, finalized, formalized, dated or executed," and therefore, Defendant owed no fiduciary duty to Plaintiff. (Dkt. No. 103 at 19-24.) Further, Defendant insists that even if a partnership existed, there is no evidence that Defendant breached a fiduciary duty or that such a breach caused damages to Plaintiff. (Id. at 24-30.)

1. Existence of a Partnership

Plaintiff alleges that Defendant owed him a fiduciary duty based on the formation of a partnership between the two to operate FairWay. Under California law, a partnership is defined as "the association of two or more persons to carry on as co-owners a business for profit...whether or not the persons intend to form a partnership." Cal. Corp. Code § 16202(a). A partnership need not be formed by written agreement. See Cal. Corp. Code § 16101(10) (defining "partnership agreement" as "the agreement, whether written, oral, or implied, among the partners concerning the partnership"). The "intent of the parties revealed in the terms of their agreement, conduct, and the surrounding circumstances" is the "crucial factor" in "determining whether a partnership exists." Holmes v. Lerner , 74 Cal. App. 4th 442, 454, 88 Cal.Rptr.2d 130 (Cal. Ct. App. 1999).

There is no dispute that Defendant proposed terms of a partnership to Plaintiff in January 2010, that Plaintiff responded with the Preliminary Collaboration Agreement on March 9, 2010, and that Plaintiff sent another draft the following day that purportedly "merged both drafts," (see Dkt. No. 103-2, Ex. M at 186). There is a dispute, however, as to the effect of the March 10th draft of the Preliminary Collaboration Agreement. Plaintiff testified that the parties "agreed on March 10th...that we were partners," based on the terms of the March 10th draft. (Dkt. No. 103-2, Ex. A at 27.) Plaintiff further testified that the parties then "proceeded through a course of conduct as partners." (Id. ) The draft partnership agreement, together with Plaintiff's testimony and the parties' course of conduct gives rise to a genuine dispute of fact regarding the formation of a partnership.

On January 12, 2012, Defendant forwarded to Plaintiff an email from a potential investor in FairWay, asking: "What's your take, partner?" (Dkt. No. 115-2 at 6.) On December 2, 2012, Plaintiff emailed Defendant regarding FairWay, stating in pertinent part:

You are doing the right things and let's hit this on all cylinder[s], real emphasis now. This is what I expected of you when you became my partner ....I am glad in this case that you are rising to the occasion and being a true partner . My faith in you is realized and renewed. You are someone I am proud to be partnered with .

(Dkt. No. 115-2 at 4 (emphasis added).) Defendant responded on December 3, 2012, stating, in pertinent part: "We're a team, partners you and I . I have every intention of living up to the confidence you place in me." (Id. (emphasis added).)

As previously discussed, Defendant sent an email to Plaintiff in September 2015 with the subject line "Transition." (Id. at 9.) The email states, in pertinent part:

Last March, you asked that I level with you regarding our partnership in FairWay .

...Consequently, Caleb, I am no longer able to proceed as your partner . Serving in a lesser capacity may be possible, perhaps, as, say, strategic advisor on the group level or some such that would entail a minor time commitment.

...Obviously there are issues that need addressing, such as timing, debt repayment, informing the team, documentation and the like. We can begin dealing with those. I intend to transition honorably and professionally.

(Id. (emphasis added).) Finally, in December 2015, Defendant sent Plaintiff an email discussing compensation and stating: "I, too, would have devoted less time had I known in advance that the economics of our partnership would never materialize." (Dkt. No. 115-2 at 8 (emphasis added).)

Based on the parties' repeated references to their "partnership" in the correspondence above, as well as Plaintiff's testimony that the parties agreed to the terms set forth in the draft March 10 partnership agreement, the record reflects a genuine dispute as to whether the parties indeed carried on as partners.

2. Breach

Under California law, "a partner owes to the partnership and the other partners...the duty of loyalty and the duty of care." Cal. Corp. Code § 16404(a). Plaintiff's complaint alleges that Defendant "breached his fiduciary duty [under the partnership] to act with good faith, due care and loyalty to Plaintiff." (Dkt. No. 1 at ¶ 17.) Defendant argues that summary judgment is warranted because even if a partnership existed, Plaintiff has produced no evidence showing that Defendant breached any fiduciary duty, or produced evidence giving rise to a genuine dispute of material fact on that score. Construing the record in the light most favorable to Plaintiff, the Court agrees.

a. Duty of Loyalty

The duty of loyalty requires a partner:

(1) To account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property or information, including the appropriation of a partnership opportunity.

(2) To refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership.

(3) To refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.

Cal. Corp. Code § 16404(b)(1)-(3). Plaintiff's complaint alleges that Defendant "attempt[ed] to take assets of the jointly owned business and [usurped/compromised] business opportunities held by the partnership." (Dkt. No. 1-1 at ¶ 17.) Plaintiff's opposition further clarifies that Defendant breached the duty of loyalty by asking Plaintiff to reinstate Defendant's "direct security interest in [Plaintiff's intellectual property]." (Dkt. No. 119 at 23 (emphasis added).) Defendant insists that summary judgment is warranted because Plaintiff presents no evidence of any actual breach of loyalty, and instead, Defendant's request in 2016 to reinstate his direct security in Plaintiff's intellectual property as part of negotiations for a loan forbearance agreement was proper under California law. The Court agrees that Plaintiff presents no evidence giving rise to a genuine dispute of material fact as to whether Defendant's mere request to reinstate his security interest in Plaintiff's intellectual property breached the duty of loyalty. Further, any such request is permitted under California law.

"A partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the partner's conduct furthers the partner's own interest." Cal. Corp. Code § 16404(e). Further:

A partner may lend money to and transact other business with the partnership, and as to each loan or transaction, the rights and obligations of the partner regarding performance or enforcement are the same as those of a person who is not a partner, subject to other applicable law.

Cal. Corp. Code § 16404(f). Thus, even if Plaintiff had agreed to Defendant's request, Defendant would not have breached the duty of loyalty by reinstating the security interest he previously held in Plaintiff's intellectual property as forbearance for repayment of the promissory notes. It follows that Defendant's mere request to do so as part of a loan forbearance negotiation does not constitute a breach of loyalty under California law. Because Plaintiff's conclusory allegations are insufficient to defeat summary judgment, and the evidence is insufficient to support a finding that Defendant breached the duty of loyalty, Plaintiff's duty of loyalty theory fails as a matter of law.

b. Duty of Care

A partner's duty of care "is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law." Cal. Corp. Code § 16404(c). Plaintiff insists that Defendant breached his duty of care by failing to "use diligent efforts to recruit executives and solicit investments in FairWay operating companies." (Dkt. No. 119-1 at ¶ 19.) Defendant argues that summary judgment is warranted because Plaintiff fails to put forth any evidence that Defendant engaged in proscribed conduct giving rise to a breach of the duty of care. The Court agrees. Defendant has met his initial burden of showing that Plaintiff "does not have enough evidence of an essential element [of his breach of fiduciary claim] to carry [his] ultimate burden of persuasion at trial," and Plaintiff has failed to produce "evidence to create a genuine issue of material fact" on that score. See Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc. , 210 F.3d 1099, 1103, 1106 (9th Cir. 2000).

Plaintiff argues that Defendant breached his fiduciary duty of care by failing to diligently recruit executives and solicit investments for FairWay. (Dkt. No. 119-1 at ¶ 19.) Even taking Plaintiff's allegation as true, Plaintiff cites no authority indicating that a lack of "diligence" rises to the level of "grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law" sufficient to show a breach of the duty of care under Section 16404. Further, the only evidence Plaintiff points to in support of this claim does not give rise to a genuine issue of material fact regarding any such conduct.

Plaintiff's opposition states that Defendant's "lack of diligent activity to solicit investors, one of the two primary duties of Defendant Forman in the partnership[,] is demonstrated on the face of Exhibit S." (Dkt. No. 119 at 24.) Exhibit S includes the names and titles of individuals, the firms they worked for, and the year Defendant made "Direct and Indirect" introductions of those individuals to Plaintiff for purposes of obtaining funding for FairWay. (Dkt. No. 115-6 at 26-29.) The list indicates that between 2010 and 2015-the time period during which the partnership allegedly began and ended-Defendant made 111 such introductions. (Id. ) The list also includes 28 "Additional Third Party Meetings and Interactions" Defendant participated in to solicit funding during that time. (Id. at 29-30.)

Plaintiff testified that the list indicates that Defendant made "a decent effort" during the "first nine months of the partnership," but after that, Defendant's "diligent efforts went down to less than one per month and then they fell down to four per year and then they fell down to two per year." (Dkt. No. 103-2, Ex. A at 30.) Plaintiff further testified, "I do not consider that diligent, and that is a breach." (Id. ) However, "to avoid summary judgment, a non-movant must show a genuine issue of material fact by presenting affirmative evidence from which a jury could find in his favor." FTC v. Stefanchik , 559 F.3d 924, 929 (9th Cir. 2009) (noting that "[a] non-movant's bald assertions or a mere scintilla of evidence in his favor are both insufficient to withstand summary judgment.") Here, there is nothing in Plaintiff's testimony nor the face of exhibit S from which a reasonable trier-of-fact could find that Defendant was grossly negligent or reckless, or engaged in intentional misconduct "or a knowing violation of the law." See Cal. Corp. Code § 16404.

Plaintiff's opposition cites no other evidence in support of Defendant's alleged breach, other than the aforementioned exhibit, and the Court is not required to scour the voluminous record in this case searching for such evidence. See Carmen v. San Francisco Unified School Dist. , 237 F.3d 1026, 1031 (9th Cir. 2001) (noting that on summary judgment, " Rule 56(e) requires that the adverse party's 'response,' not just the adverse party's various other papers, 'set forth specific facts' establishing a genuine issue."). Indeed, '[r]equiring the [Court] to search the entire record for a genuine issue of fact, even though [Plaintiff] does not set it out in the opposition papers" would be "profoundly unfair" to both the Court and Defendant. See id. (noting that "[t]he movant is...denied a fair opportunity to address the matter in the reply papers" where the court "searches the whole record" for a genuine issue of fact not raised by the nonmovant).

Drawing all reasonable inferences from the record in Plaintiff's favor, no reasonable trier of fact could find that Defendant engaged in "grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law"; thus, summary judgment is warranted.

* * *

As no reasonable trier of fact could find that Defendant breached the duties of loyalty or due care, the Court grants Defendant's motion for summary judgment on Plaintiff's claim for breach of fiduciary duty. The Court need not address Defendant's arguments regarding lack of evidence of damages, although the Court agrees that Plaintiff's claim is also deficient in that regard.

B. Declaratory Relief

Plaintiff's complaint seeks declaratory relief regarding "the parties' rights, duties and obligations to each other" stemming from the alleged partnership and the December 2011 MOU. (Dkt. No. 1-1 at ¶ 29.) Defendant insists that summary judgment is warranted on this claim as to the alleged partnership because Defendant owed no fiduciary duties to Plaintiff. As to the MOU, Defendant's counterclaim insists that he is entitled to "declaratory relief rescinding" the MOU "for failure of consideration." (See Dkt. Nos. 99 at 14; 103 at 30.)

"The Declaratory Judgment Act does not grant litigants an absolute right to a legal determination." United States v. State of Washington , 759 F.2d 1353, 1356 (9th Cir. 1985). A court's decision whether to grant declaratory relief is instead "a matter of discretion," and "the court may, after a full consideration on the merits, exercise its discretion to refuse to grant declaratory relief because the state of the record is inadequate to support the extent of the relief sought." Id. "Declaratory relief should be denied when it will neither serve a useful purpose in clarifying and settling the legal relations in issue nor terminate the proceedings and afford relief from the uncertainty and controversy faced by the parties." Id. at 1357.

Here, although there is a genuine dispute of fact regarding the existence of a partnership, that dispute is not material to Plaintiff's breach of fiduciary claim in the absence of evidence in support of such a breach. Thus, affording Plaintiff declaratory relief will serve no useful purpose in settling the claims at issue, nor will it "terminate the proceedings." See State of Washington , 759 F.2d at 1357 ("Precise resolution, not general admonition, is the function of declaratory relief."). Similarly, Plaintiff's request for declaratory relief regarding the MOU serves no useful purpose and will not terminate the proceedings regarding Plaintiff's claim for breach of fiduciary duty. Accordingly, the Court grants Defendant's motion for summary judgment on Plaintiff's cause of action for declaratory relief.

C. Accounting

Plaintiff's cause of action for an accounting alleges that "there was a contractual relationship between the [p]arties and a balance is due and owing between them in an amount which is disputed and which cannot be ascertained without an accounting." (Dkt. No. 1-1 at ¶ 31.) Defendant provides no substantive argument regarding this claim, but instead insists that summary judgment "results from [his motion] and the companion [motion for summary judgment on Defendant's counterclaims], because [Defendant's] motions resolve any issues of the amounts due and owing between the parties." (Dkt. No. 103 at 30) (citing St. James Church of Christ Holiness v. Superior Court , 135 Cal. App. 2d 352, 359, 287 P.2d 387 (Cal. Ct. App. 1955) (no accounting necessary where the amount is for a sum certain or "where it appears from the complaint that none is necessary or that there is an adequate remedy at law."). Plaintiff offers no opposition to summary judgment regarding this claim, and even if he did, such opposition would be futile because his claim for an accounting is derivative of his breach of fiduciary duty claim. See Janis v. California State Lottery Comm'n , 68 Cal. App. 4th 824, 833-34, 80 Cal.Rptr.2d 549 (Cal. Ct. App. 1998) (holding that cause of action for an accounting must fail where underlying claims fail because "[a] right to an accounting is derivative; it must be based on other claims.").

Accordingly, the Court grants Defendant's motion for summary judgment on Plaintiff's claim for an accounting because it is derivative of his breach of fiduciary claim.

II. Cross Motions for Summary Judgment on Defendant's Counterclaims

The burdens faced by opposing parties on cross motions for summary judgment "vary with the burden of proof they will face at trial." First Pac. Networks, Inc. v. Atl. Mut. Ins. Co. , 891 F.Supp. 510, 513 (N.D. Cal. 1995). "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial." C.A.R. Transp. Brokerage Co., Inc. v. Darden Rests., Inc. , 213 F.3d 474, 480 (9th Cir. 2000) (internal quotation marks and citation omitted). In that case, the moving party "has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." Id. If the party produces sufficient evidence on that score, "the burden then moves to the opposing party, who must present significant probative evidence tending to support its claim or defense." Id. (internal quotation marks and citation omitted). If the opposing party "fails to produce enough evidence to create a genuine issue of material fact," the moving party wins the motion for summary judgment." Fritz Co., Inc. , 210 F.3d at 1103. "[W]hen simultaneous cross-motions for summary judgment on the same claim are before the court, the court must consider the appropriate evidentiary material identified and submitted in support of both motions, and in opposition to both motions, before ruling on each of them." Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two , 249 F.3d 1132, 1134 (9th Cir. 2001). In other words, the Court will consider all evidence in the record, regardless of whether a party identified it in support of or in opposition to a motion.

Defendant moves for summary judgment on his counterclaims for: (1) breach of promissory notes and loan agreements; and (2) declaratory relief (rescission). Defendant also seeks injunctive relief prohibiting Plaintiff from conveying his interest in any FairWay-related entity, the FairWay IP, and his general assets until Plaintiff "has satisfied in full the judgment entered against him" on these claims. (Dkt. No. 99 at 31-32.) Further, Defendant seeks "an award of reasonable attorney's fees and costs based on the attorney's fees provisions in the [notes]." (Id. at 32.)

Plaintiff likewise moves for summary judgment on Defendant's counterclaims, arguing that: (1) the notes at issue are usurious; and (2) Defendant failed to register as a licensed finance lender as required under the California Financial Code, § 22000 et seq. The Court addresses Defendant's counterclaims in turn.

A. Breach of Promissory Notes

To establish a breach of contract under California law, a claimant must show: "(1) the contract, (2) the [claimant's] performance or excuse for nonperformance, (3) [the opposing party's] breach, and (4) the resulting damages to [the claimant]." Rutherford Holdings, LLC v. Plaza Del Rey , 223 Cal. App. 4th 221, 228, 166 Cal.Rptr.3d 864 (Cal. Ct. App. 2014). Similarly, under Delaware law, the elements of a breach contract claim are: (1) "the existence of a contract"; (2) "the breach of an obligation imposed by that contract; and" (3) resulting damages to the claimant. Avaya Inc., RP v. Telecom Labs, Inc. , 838 F.3d 354, 389 (3d Cir. 2016) (internal quotation marks and citation omitted).

The record shows that the parties entered into 33 loan agreements between 2006 and 2011 reflected in promissory notes that were payable by Plaintiff upon Defendant's demand. Plaintiff does not dispute the existence or facial validity of the notes at issue; indeed, Plaintiff includes them (and several other promissory notes between the parties) as exhibits to his cross motion for summary judgment. (See Dkt. No. 101-4, Ex. A at 2-177.) Further, the Loan Managers clearly reflect Plaintiff's express recognition that he is individually liable for payment of the notes on demand. Plaintiff's February 29, 2016 email to Defendant includes a Loan Manager with a summary entitled "Personal Loans - Forman to Avery" that lists "Accumulated Loans with interest" dating from August 2006 to October 2011. (Dkt. No. 99-4, Ex. 53 at 114.) The list includes the 33 notes at issue. The summary states, in pertinent part:

All principle [sic] and interest is due and payable on demand by Nathaniel Caleb Avery

Signed by Nathaniel Caleb Avery both individually

and as Chairman and CEO of Urso Limited,

on behalf of Urso, Ltd.

35 New Road

Belize City, Belize

** Also includes $ 100K Convertible Debt Note with FairWay Pricing Technologies which Nathaniel Caleb Avery and Urso Ltd. will take personal and corporate responsibility to the extent that Note is not repaid by FairWay Pricing Technologies according to its terms.

(Id. ) It is undisputed that Plaintiff failed to comply with Defendant's demand for payment in May 2017. Finally, Plaintiff's breach resulted in damages to Defendant reflected in the unpaid amounts owed under the notes.

Based on the record before the Court, Defendant has satisfied his burden of demonstrating the absence of a genuine dispute of material fact on the essential elements of his breach of contract claim. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; see also Atl. Mut. Ins. Co. , 891 F.Supp. at 513 (" 'Where the moving party has the burden of [proof at trial,] his showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party.' ") (quoting Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact , 99 F.R.D. 465, 487-88 (1984) ). Thus, the burden shifts to Plaintiff to "present significant probative evidence tending to support its claim or defense." See Darden Rests., Inc. , 213 F.3d at 480. As discussed below, Plaintiff has not met that burden.

1. Statute of Limitations

Plaintiff argues that Defendant's breach of contract claim is barred by the applicable statute of limitations because "[t]he statute of limitations on Demand Notes begins to run when Demand Notes are signed, not upon their demand." (Dkt. No. 118 at 12.) Plaintiff cites no authority for this argument; however, he is correct that the statute of limitations begins to run upon execution of a demand note. There is a four-year statute of limitations under California law for breach of contract claims, see Cal. Civ. Proc. Code § 337, and "loans payable on demand are deemed payable at their inception, and the statute begins to run from such time," Buffington v. Ohmert , 253 Cal. App. 2d 254, 256, 61 Cal.Rptr. 360 (Cal. Ct. App. 1967). Under Delaware law, the statute of limitations is six years. 10 Del. C. § 8109 ("When a cause of action arises from a promissory note, bill of exchange, or an acknowledgement under the hand of the party of a subsisting demand, the action may be commenced at any time within 6 years from the accruing of such cause of action.").

Defendant first filed his counterclaim for breach of contract on May 17, 2017. (Dkt. No. 29.) Thus, based solely on the date of the notes at issue, which were executed between 2006 and 2011, and the date of Defendant's first counterclaim, the statutes of limitations under California and Delaware law appear to bar his claim. However, the Loan Managers effectively restarted the statute of limitations under both California and Delaware law. See e.g. , Cal. Civ. Proc. Code § 360 ("No acknowledgement or promise is sufficient evidence of a new or continuing contract, by which to take the case out of the operation of [the statute of limitations], unless the same is contained in some writing, signed by the party to be charged there by ,...") (emphasis added); Mykulak v. Collins , 301 A.2d 313, 316 (Del. Super. Ct. 1973) (interpreting Section 8109's precursor statute, 10 Del. C. § 8108, and holding that the statute provides "a six year limitation for bringing action on a written instrument which acknowledges an existing indebtedness .") (emphasis added).

In his cover email for the December 2007 Loan Manager, Plaintiff notes that the Loan Managers were "valid & binding - signed under the Electronic Signature Act." (See Dkt. No. 99-3, Ex. 38 at 56; see also id. , Ex. 39 at 61 ("[T]hese electronic docs are completely binding [signed under the Electronic Signatures Act].").) As previously discussed, beginning with the March 2008 Loan Manager, Plaintiff includes the following:

All principle and interest is due and payable on demand by Nathaniel Caleb Avery

To the extent any collateral is held by Urso Limited (also owned by Avery),

that collateral is pledged as well [to the extent necessary to fully repay both principle and interest]

Signed by Nathaniel Caleb Avery both individually

and as Chairman and CEO of Urso Limited.

on behalf of Urso, Ltd.

Marina Towers, Suite 302,

Newtown Barracks,

Belize City, Belize

N. Caleb Avery

[signed under the Electronic Signatures Act of 2000 [Public Law No: 106-229) ] and legally binding upon all his assignees and heirs

(Dkt. No. 99-3, Ex. 40 at 67.) Plaintiff then sent Defendant updated Loan Managers in April 2008, May 2008, August 2008, September 2008, October 2009, April 2010, February 2011, and October 2011. Each of the Loan Managers included Plaintiff's electronic signature and his acknowledgement of his obligation to pay the notes on Defendant's demand. The Loan Managers also included all of the notes at issue that are governed by California law. Such written acknowledgement is sufficient to renew the statute of limitations. See Western Coal & Mining Co. v. Jones , 27 Cal. 2d 819, 823, 167 P.2d 719 (1946) (noting that "[t]he distinct and unqualified admission of an existing debt contained in a writing signed by the party to be charged, and without intimation of an intent to refuse payment thereof, suffices to establish the debt to which the contract relates as a continuing contract, and to interrupt the running of the statute of limitations against same") (internal quotation marks and citations omitted).

The December 2011 Loan Manager adds an additional line to the above, stating:

**Also includes $ 100K Convertible Debt Note with FairWay Pricing Technologies which Nathaniel Caleb Avery and Urso Ltd will take personal and corporate responsibility to the extent that Note is not repaid by FairWay Pricing Technologies according to its terms.

(Dkt. No. 99-4, Ex. 51 at 53.) The parties executed the FairWay Pricing Technologies note in April 2006, and it is governed by Delaware law, which provides for a six-year statute of limitations. Plaintiff's acknowledgement of the FairWay Pricing Technologies note in the December 2011 Loan Manager and his representation that he would take "personal" responsibility for the note, was sufficient to restart the six-year statute of limitations under Delaware law. See Mykulak , 301 A.2d at 316 (holding that "an instrument which by its terms clearly recognizes or admits the existence of a prior claim or debt is sufficient" to commence the statute of limitations).

Plaintiff next sent Defendant Loan Managers in March 2015 and February 2016 that likewise reference all 33 of the notes at issue. (See Dkt. No. 99-4, Ex. 52 at 111, Ex. 53 at 114.) Thus, the Loan Managers indicate that Plaintiff renewed the applicable statutes of limitations prior to their expiration, and Defendant's breach of contract claim-first filed in May 2017-falls within the limitations period.

Plaintiff insists that "the intent underlying the Loan Managers was not to serve as an acknowledgement of the debt but rather in compliance with his obligation as a partner to provide information about the partnership." (Dkt. No. 118 at 12-13.) Plaintiff characterizes the question regarding his "intent" in drafting the Loan Managers as a "factual dispute" sufficient to defeat summary judgment. (See id. ) Plaintiff is wrong.

To give rise to a genuine dispute of material fact, Plaintiff must provide evidence -not unsupported assertions. See Liberty Lobby, Inc. , 477 U.S. at 250, 106 S.Ct. 2505 ("[W]hen a properly supported motion for summary judgment is made, the adverse party 'must set forth specific facts showing that there is a genuine issue for trial.' ") (quoting Fed. R. Civ. P. 56(e) ); see also Galen v. Cty. of Los Angeles , 477 F.3d 652, 658 (9th Cir. 2007) ("Bald assertions that genuine issues of material fact exist are insufficient."). Here, not only does Plaintiff fail to provide any evidence in support of his "intent" argument, that argument is directly contradicted by the record. The Loan Managers show that Plaintiff contemporaneously characterized the notes at issue as "Personal Loans - Forman to Avery" and represented that he was individually responsible for payment of the notes upon Defendant's demand. The only reasonable inference to be drawn from the Loan Managers is that they acknowledged Plaintiff's debt to Defendant.

At oral argument Plaintiff insisted that the Loan Managers did not acknowledge Plaintiff's debt because the December 2011 MOU relinquished Plaintiff's obligation to pay the notes, or at least required Defendant to first seek payment from Urso before making demand upon Plaintiff. Putting aside that this argument is not really about the statute of limitations, it nonetheless fails because the MOU cannot reasonably be read to support Plaintiff's interpretation. And Plaintiff points to no other evidence in the record to support his argument: no testimony as to conversations with Defendant, no emails or other correspondence, and no other documentary evidence that even hints that Defendant had agreed to give up his right to repayment from Plaintiff. Instead, the record includes Loan Managers issued by Plaintiff subsequent to the MOU that expressly acknowledge his debt and make no mention of the debt being relinquished. Simply put, no reasonable trier of fact could find the facts as urged by Plaintiff in this respect.

2. Loans Intertwined with Partnership

Plaintiff further argues that summary judgment is inappropriate because there is "a factual dispute over the [existence] of the partnership that is intertwined with any status of the Demand Notes of 2006-2011." (Dkt. No. 118 at 18.) Again, however, Plaintiff points to no evidence in support of that assertion, and his argument is belied by the terms of the notes themselves-none of which mention a partnership-and the Loan Managers, which clearly show that Plaintiff understood that the notes at issue were personal loans from Defendant to Plaintiff. Plaintiff's argument is also undercut by the timeframe of the loans-31 of the 33 notes at issue were executed before Defendant proposed terms of a partnership to Plaintiff in January 2010 and before Plaintiff responded to those proposed terms with the draft Preliminary Collaboration Agreement in March 2010. The two loans that came after, in May 2011 and October 2011, contain identical terms and formatting (though different loan amounts) to the notes that preceded them in September 2006, November 2006, December 2006 (2), January 2007 (2), February 2007, March 2007 (3), April 2007, May 2007, June 2007, July 2007 (2), August 2007, September 2007, October 2007 (2), November 2007 (2), December 2007 (2), January 2008, February 2008, April 20