Free Response to Motion - District Court of Arizona - Arizona

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Dan W. Goldfine (#018788) Richard G. Erickson (#019066) Emma Harty (#022490) Adam Lang (#022545) SNELL & WILMER L.L.P. One Arizona Center 400 East Van Buren Street Phoenix, AZ 85004-2202 Telephone: (602) 382-6000 Facsimile: (602) 382-6070 Attorneys for Plaintiff and Counterdefendant Meritage Corporation and Third Party Defendants Steve Hilton, John Landon and Larry Seay IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Meritage Homes Corporation, a Maryland Corporation, formerly d/b/a Meritage Case No. CV-04-0384-PHX-ROS Corporation, Hancock-MTH Builders, Inc., an Arizona corporation, Hancock-MTH PLAINTIFFS' (1) REPLY RE Communities, Inc., an Arizona corporation, RENEWED MOTION FOR ORDER TO and currently d/b/a Meritage Homes SHOW CAUSE AND (2) RESPONSE TO Construction, Inc., an Arizona corporation, REQUEST TO DELAY DISMISSAL and Meritage Homes of Arizona, Inc., an UNTIL RULING ON RENEWED Arizona corporation, MOTION FOR SUMMARY JUDGMENT Plaintiffs, v. Ricky Lee Hancock and Brenda Hancock, husband and wife; Gregory S. Hancock and Linda Hancock, husband and wife, Rick Hancock Homes L.L.C., an Arizona limited liability company; RLH Development, L.L.C., an Arizona limited liability company; and J2H2, L.L.C., an Arizona limited liability company, Defendants. (Assigned to the Honorable Roslyn O. Silver)

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Document 208

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Greg Hancock, an individual, Defendant, CounterClaimant, and Third Party Plaintiff, v. Steven J. Hilton, an individual; John R. Landon, an individual; Larry W. Seay, an individual; and Snell & Wilmer, L.L.P., an Arizona professional corporation, Third Party Defendants.

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Plaintiff/Counterdefendant and Third-Party Defendants1 ("Meritage") reply with respect to its Renewed Motion for an Order to Show Cause and respond to Defendant/Counterclaimants/Third Party Plaintiff Greg Hancock's ("Hancock") Request to Delay Dismissal until Ruling on Renewed Motion for Summary Judgment. Again, Hancock's Response is baseless and caustic, and, while Hancock has now provided a legal citation to support his position, the case he cites has been subsequently superseded by statute. Further, Hancock's request to delay ruling on Meritage's Renewed Motion to Show Cause pending a ruling on his Renewed Motion for Summary Judgment is a red herring. Hancock is simply attempting to take yet another bite from an apple that has already been chewed to the core. This Court's May 31, 2005 Order was and remains valid, and there is no stay in place.2 Accordingly, Hancock has been and remains in contempt of this Court's Order and does so brazingly, intentionally and without any respect due to this Court. Hancock is in Contempt and Has Failed to Cure that Contempt Hancock once again denies that he should have requested a stay and filed a supersedeas bond when petitioning to the Ninth Circuit, and he admonishes Meritage for not providing authority to support this requirement. (Response at 2:11-14). Hancock is Excluding third-party defendant Snell and Wilmer. Hancock alleges that the April 26, 2005 Order was amended because Hancock's filing of an appeal "caused a reassessment by the court." (Response at 2:2). However, as noted by the Court in its May 31, 2005 Order, the Court "inadvertently ordered...Hancock [to] dismiss his state law cause of action with prejudice." (May 31, 2005 Order at 1:20-21).
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mistaken. A quick review of the arguments already filed regarding this issue (See Meritage's May 19, 2005 Motion to Show Cause and related Reply) reveal that Meritage did in fact outline the procedure for filing extraordinary writs. Meritage has already clearly pointed out how and where both the Federal Rules of Appellate Procedure and the Federal Rules of Civil Procedure provide that a party challenging injunctive relief must obtain an order, and that there is no automatic stay provision.3 (Meritage's Reply to its first Motion for Order to Show Cause at 3:17-4:9). Nor does Hancock offer any evidence or argument that even pretends to meet his burden to obtain a stay. Instead, he refers the Court to his earlier response to Meritage's Motion for Order to Show Cause (Response at 2:12-13). However, as Meritage previously noted, Hancock has fallen far short of fulfilling the Ninth Circuit's requirement that parties seeking a discretionary stay satisfy two "interrelated legal tests," namely, (1) a combination of probable success on the merits and the possibility of irreparable injury, and (2) the existence of serious questions going to the merits and the balance of hardships. See, e.g., Artukuvic v. Rison, 784 F.2d 1354, 1355 (9th Cir. 1986). Hancock's filing of his Writ did not justify a stay, for Hancock's Writ did not present any serious legal questions; he merely disagreed with the Court. See, e.g., Artukuvic, 784 F.2d at 1355. That is not enough. See, e.g., id. Hancock's failure to take advantage of the three months since this Court's Order and since when Meritage put Hancock on notice that he was in contempt speaks volumes for the need for contempt sanctions. Rather than complying with the Order, which is simple enough, Hancock continues to snub his nose at this Court and even goes so far to seek, without authority or a factual basis, extensions of times in the State Court to avoid dismissal. Such conduct should not be countenanced.

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See, Fed.R.App.P. 8(a): "a party must ordinarily move first in the district court for . . . a stay of . . . [an] order of a district court pending appeal"; Fed.R.Civ.P 62(a): "Unless otherwise ordered by the court, an interlocutory judgment in an action for an injunction . . . shall not be stayed during the period after its entry and until an appeal is taken or during the pendency of an appeal" (emphasis added).
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Hancock's Argument that this Court Lacks Authority to Enforce its Orders is Without Basis Hancock additionally attempts to argue that this Court lacks the power to impose sanctions regarding Hancock's state court filings (or lack of dismissal thereof). Hancock relies on Hurd v. Ralphs Grocery Company, 824 F.2d 806 (9th Cir. 1987) for the proposition that "the court's order requiring Hancock to pay fees and costs in conjunction with the state case is entirely illegal." (Response at 2:22-24). This reliance is misplaced. The Hurd Court's holding was limited to a situation in which the district court attempted to impose sanctions based on a plaintiff's filing of a state court complaint that lacked merit. Hurd, 824 F.2d at 808. The Hurd court held that sanctions could not be

imposed under Rule 11 for filing a paper in state court because the district court did not have the power to impose sanctions under Rule 11. Id. at 808-809. However, this

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proposition has been subsequently superseded by the 1993 amendments to Rule 11. Buster v. Peterson, 104 F.3d 1186, 1190 n.4 (9th Cir. 1997). That is, "[a]lthough prior to the [1993] amendments conduct was measured only at signing, see Hurd v. Ralphs Grocery Co., 824 F.2d 806, 808 (9th Cir. 1987), Rule 11 now authorizes sanctions for `presenting to the court (whether by signing, filing, submitting, or later advocating) a document otherwise sanctionable.'" Id. (emphasis in original text). Not withstanding the fact that the sanctions requested herein are not Rule 11 sanctions, Buster can be likewise construed to permit this Court the authority to impose sanctions on Hancock for his state court actions. That is, because Hancock has been advocating his state complaint to this Court by expounding its viability and necessity, he has brought it within this Court's jurisdictional reaches for purposes of imposing

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

sanctions. (See, for example, Hr'g Tr. 49:25-54:8, Mar. 11, 2005, attached as Exhibit A;4 Hr'g Tr. 9:22-12:22, Mar. 25, 2005, attached as Exhibit B). Hancock does not dispute that this Court's Order clearly and unambiguously required him to dismiss his State Court action on or before June 14, 2005. (Order at 9:89 (May 31, 2005)) Hancock does not dispute that on or before June 14, 2005, he failed to abide by this Court's May 31, 2005 Order. As of the date of this Reply, Hancock is still in contempt and clearly expressed his intent not to comply voluntarily with this Court's Order. In this light, to effectuate the Court's Order, contempt sanctions such as civil fine are necessary. Most importantly, Hancock did not seek reconsideration or modification of this Court's Order by petitioning this Court. Instead, he broke the law, snubbed his nose at this Court's authority, and asked the Ninth Circuit to intervene -- which, for good reason, did not. It is clear that Hancock has no intention to comply with the Court Order, and sanctions are necessary. Hancock's Request to Delay Dismissal is Baseless Hancock alternatively asks this Court to delay dismissal until the Court rules on his Renewed Motion for Summary Judgment. Not only does Hancock render Rule 12 of the Rules of Civil Procedure meaningless, he offers no reason for this Court to take such draconian actions. Hancock moved to dismiss for lack of subject matter jurisdiction, and this Court denied his motion -- doing so correctly. (See February 18, 2005 Minute Entry Denying Hancock's Motion to Dismiss). Thus, Hancock's request to delay dismissal is simply an impermissible reargument of his failed motion to dismiss and an attempt to postpone punishment for his sanctionable conduct. No further time is needed for the Court to enforce its Orders. Hancock must face the music for his digressions. In the March 11, 2005 hearing, the Court specifically provided Hancock an opportunity to submit a position paper regarding any statute of limitations issues and the state court complaint. (Hr'g Tr. 53:22- 54:8, Mar. 11, 2005). Meritage subsequently provided a position paper on the matter asserting that Hancock's purported statute of limitations concerns were not supported by law and were pretextual (See Meritage's Mar. 21, 2005 Position Paper, attached s Exhibit C), and Hancock did not dispute any of Meritage's arguments provided in that position paper.
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Moreover, even if Hancock were correct, this counsel sees no sense in Hancock's approach. In gist, Hancock argues that he can break the law and disobey this Court's Order because of some contingent event in the future. (He has made similar arguments elsewhere. See, e.g., Hancock's Motion to Continue Action on Inactive Calendar (in the State cause of action) at 2:1-2, attached as Exhibit D). This Court correctly ruled that Hancock's "contingent" argument was baseless and lawless with respect to complying with the Federal Rules of Civil Proceeding governing discovery. (Hr'g Tr. 6:15-7:19 and 10:4-12:3 (March 25, 2005) (requiring Hancock to comply with discovery even though Hancock argued that ultimately this Court would be without jurisdiction if the Court addressed the summary judgment motions). It should similarly reject the instant

"contingent" argument with respect to this Court's Order by Hancock that he, unlike every other litigant, is entitled to disobey Court Orders. Conclusion Accordingly, the Court should enter an Order to Show Cause why Defendant Greg Hancock should not be held in Civil Contempt of Court for his failure, as required by the Court Order on May 31, 2005, to dismiss his state court action without prejudice. A proposed form of Order setting a hearing was provided with the Motion. Further this

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Court should deny Hancock's Request to Delay Dismissal until Ruling on Renewed Motion for Summary Judgment. DATED this 1st day of September, 2005. SNELL & WILMER L.L.P.

By s/Emma Harty Dan W. Goldfine Richard G. Erickson Emma Harty Adam Lang One Arizona Center 400 East Van Buren Street Phoenix, Arizona 85004-2202 Attorneys for Plaintiffs/Counterdefendant

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

ORIGINAL of the foregoing filed with and COPY provided to the Clerk of the Court this _______ day of September, 2005 for delivery to: The Honorable Roslyn O. Silver Unites States District Court Judge United States District Court, District of Arizona Sandra Day O'Connor U.S. Courthouse 401 West Washington Street Phoenix, Arizona 85003 COPY of the foregoing sent via regular mail this 1st day of September, 2005 to: Robert M. Frisbee, Esq. Frisbee & Bostock, PLC 5611 N. 16th Street, Suite 300 Phoenix, Arizona 85016 Attorneys for Defendant Greg Hancock Ivan K. Mathew, Esq. Mathew & Mathew, P.C. 1850 N. Central Avenue, Suite 1910 Phoenix, Arizona 85004 Attorneys for Defendant Rick Hancock

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