The opinion
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
MICHAEL TERRY, et al., )
)
Plaintiffs, )
)
v. ) Case No. CIV-19-990-D
)
ROGER ELY, et al., )
)
Defendants. )
O R D E R
Before the Court is Defendants’ Motion for Summary Judgment [Doc. No. 36], filed
pursuant to Fed. R. Civ. P. 56.1 Defendants Roger Ely, Vahid Salalati, and Four
Horsemen Auto Group, Inc. assert that Plaintiffs cannot establish their remaining claims:
1) breach of a settlement agreement that obligated Defendants to negotiate for a resolution
of any dispute with a nonparty lender, Southampton, Ltd.; and 2) breach of a non-
disparagement clause in the settlement agreement by Defendant Ely based on statements
made in insurance claim forms.2
1 Defendants have also moved to impose sanctions for Plaintiffs’ failure to comply with
the Court’s deadlines to disclose witnesses and exhibits. Defendants allege Plaintiffs have failed
to conduct any discovery or to prosecute their case. See Defs.’ Mot. Exclude Pls.’ Evidence [Doc.
No. 35] at 2 n.1; Mot. Summ. J. at 3 n.1. Plaintiffs have remained silent. Dismissal of Plaintiffs’
case might be warranted under Fed. R. Civ. P. 41(b) and the Court’s inherent authority. See
United States ex rel. Jimenez v. Health Net, Inc., 400 F.3d 853, 855 (10th Cir. 2005). However,
the Court elects to decide the case on the merits.
2 Plaintiffs voluntarily dismissed Defendant Gregory Luster pursuant to Fed. R. Civ.
P. 41(a)(1)(A)(i). See Notice [Doc. No. 6]. Judge Patrick R. Wyrick previously dismissed all
other claims under Fed. R. Civ. P. 12(b)(6). See 9/8/20 Order [Doc. No. 22] at 26.
Plaintiffs Michael Terry and Julie Terry have failed to respond to the Motion within
the deadline set by LCvR7.1(g) or in the manner required by Rule 56(c) or LCvR56.1. In
the exercise of discretion under LCvR7.1(g), the Court deems the Motion confessed, and
deems admitted under LCvR56.1(e) all material facts presented in support of the Motion.
Under Rule 56, however, the Court has an independent duty in the absence of a response
by the nonmoving party to determine that summary judgment is appropriate. See Murray
v. City of Tahlequah, 312 F.3d 1196, 1200 (10th Cir. 2002); Reed v. Bennett, 312 F.3d
1190, 1194-95 (10th Cir. 2002). Summary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact and that the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). Applying this standard, the Court
finds that the Motion should be granted.
It is undisputed that Plaintiff Michael Terry and Defendants entered into a written
settlement agreement in September 2013. As part of the agreement, Four Horsemen Auto
Group, Inc. “agree[d] to attempt to negotiate a resolution of any contractual dispute with
Southampton, Ltd.” See Mot., Ex. 2 [Doc. No. 36-2] ¶ 2.10. The agreement contained
a non-disparagement clause by which the parties “agree[d] to refrain from making any
derogatory or detrimental comments about or concerning the other Parties.” Id. ¶ 2.11.
After the agreement was made, Defendants through counsel engaged in discussions with
Southampton, Ltd. to resolve their contractual disputes but were unsuccessful in reaching
a resolution. See Salalati Aff. [Doc. No. 36-3] ¶¶ 5-6. In November 2014, nonparties to
the settlement agreement – Chisholm Trail Auto Group, LLC and Chisholm Trail Auto
Group II, LLC – submitted two proofs of loss for employee dishonesty coverage under
their policy with Harco National Insurance Company. Defendant Ely signed the proofs
of loss in a representative capacity on behalf of the insured entities, as required by the
insurer’s form. See Defs.’ Mot., Ex. 4 [Doc. No. 36-4] at 2, 4 (ECF page numbering).
To prevail on the breach of contract claim in Count 1, Plaintiffs must prove that
“Defendants did not attempt to negotiate a resolution of any contractual disputes with
Southampton, Ltd.” as required by the settlement agreement. See Compl. [Doc. No. 1],
¶ 31. The facts show that Defendants attempted to negotiate a resolution of contractual
disputes with Southampton, Ltd. and so performed their obligation under the agreement.
Plaintiffs have not demonstrated any factual dispute on this issue. Therefore, Defendants
are entitled to summary judgment on Plaintiffs’ breach of contract claim in Count 1.
To prevail on the breach of contract claim in Count 2, Plaintiffs must prove that
Defendant Ely violated the disparagement clause by making statements about them in the
proofs of loss. See Compl. ¶ 37. The insured limited liability companies (LLCs)
submitted proofs of loss that made statements about Plaintiffs, but Defendant Ely was
acting on behalf of the LLCs when he signed the forms. Plaintiffs have come forward
with no evidence or legal authority for holding Defendant Ely personally responsible for
any disparaging statements the LLCs made about Plaintiffs.3 Therefore, Defendant Ely is
entitled to summary judgment on Plaintiffs’ breach of contract claim against him.
3 Plaintiffs’ claims are governed by Oklahoma law, which holds: “Courts may disregard
the corporate entity and hold stockholders personally liable for corporate obligations or corporate
conduct under the legal doctrines of fraud, alter ego and when necessary to protect the rights of
third persons and accomplish justice.” Fanning v. Brown, 85 P.3d 841, 846 (Okla. 2004).
Conclusion
For these reasons, the Court finds that Defendants are entitled to summary judgment
on all remaining claims asserted against them in the Complaint.
IT IS THEREFORE ORDERED that Defendants’ Motion for Summary
Judgment [Doc. No. 36] is GRANTED. A separate judgment shall be entered in their
favor.
IT IS SO ORDERED this 1* day of July, 2021.
Q.Oyht
TIMOTHY D. DeGIUSTI
Chief United States District Judge