Unreported / Non-Citable
Background
Sonja Sher, acting through her power of attorney Teresa Fiss, sued EverBright, LLC in the Eastern District of California. EverBright moved to compel arbitration, arguing that Sher had agreed to a contract containing an arbitration clause that covered the dispute. Sher opposed the motion and submitted substantial evidence showing that no contract had been formed. The court denied EverBright's motion to compel arbitration, finding no genuine dispute of material fact about whether the parties had formed a contract and concluding that EverBright failed to show Sher had entered into the agreement.
EverBright then moved for reconsideration, relying on an alleged phone recording of Sher speaking with EverBright representatives. EverBright claimed the recording proved Sher knew she had entered into the contract. Critically, EverBright admitted it had the recording in its possession when it filed its original motion to compel arbitration but chose not to produce it. In its earlier reply brief, EverBright had stated it was not obligated to produce additional evidence supporting the agreement to arbitrate. In a declaration submitted with Sher's opposition to the motion to compel arbitration, Sher's attorney alleged that she requested a copy of the recording and that EverBright stated it would not produce the purported phone recording.
The Court’s Holding
The court denied the motion for reconsideration, holding that the recording was not newly discovered evidence. Under the governing standard, evidence is newly discovered only if it is truly new, could not have been discovered through due diligence, and is of such a material and controlling nature that it demands a probable change in the outcome. Evidence is not new if it was in the moving party's possession or could have been discovered before the court's ruling. Here, EverBright actually had the recording, knew it had it, and deliberately chose not to submit it. A lawyer for EverBright referenced the recording a week before the motion to compel was filed, and EverBright discussed the recording in its reply brief while noting it had declined to produce it.
The court also rejected EverBright's argument that reconsideration was necessary to avoid manifest injustice. EverBright did not show that the court erred in its original order based on the law and evidence before it at the time. As the party seeking to compel arbitration, EverBright bore the burden of proving the existence of an agreement to arbitrate by a preponderance of the evidence, and it failed to meet that burden. The court found no injustice when EverBright could have easily submitted the recording with its original motion or, at a minimum, with its reply brief. The court also noted that EverBright's custodial declaration authenticated the call as a business record but did not establish the identity of the individuals speaking on the recording.
Key Takeaways
- A party cannot use a motion for reconsideration to present evidence it knowingly possessed but deliberately withheld from its original motion.
- Evidence is not newly discovered if it was in the moving party's possession or could have been discovered through due diligence before the court's ruling.
- A tactical decision not to submit evidence does not later convert that evidence into new evidence justifying reconsideration.
- The party seeking to compel arbitration bears the burden of proving the existence of an agreement to arbitrate by a preponderance of the evidence.
- A custodial declaration authenticating a recording as a business record does not establish the identity of the speakers on the call without additional supporting declarations.
Why It Matters
This order reinforces the principle that motions for reconsideration are not vehicles for parties to rehash arguments or present evidence they strategically chose to withhold. Litigants cannot make tactical decisions about what evidence to submit and then claim that evidence is newly discovered when the original motion fails. The ruling also underscores the importance of proper authentication for recordings, as a business records declaration alone does not establish the identity of speakers without testimony from someone who participated in the call.