Free Order on Motion for Reconsideration - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 On January 26, 2006, this Court entered its order dismissing this case for lack of 17 prosecution and for failure to comply with the Court's orders. A judgment of dismissal was 18 entered by the Clerk on the same day. On February 9, 2006, Plaintiff filed a Motion for 19 Reconsideration of Dismissal as Sanction. The Court ordered Defendants to respond; which 20 they did on February 28, 2006. Thereafter, Plaintiff filed a reply. 21 Plaintiff's Motion for Reconsideration is limited exclusively to the issue of the 22 sanction imposed for Plaintiff's failure to prosecute and failure to comply with Court orders. 23 "The Motion is brought to ask the Court to examine whether dismissal, the harshest possible 24 sanction, is appropriate, and whether some lesser sanction can be imposed." (Motion at p.2). 25 Plaintiff suggests that before imposing dismissal as a sanction that the Court must consider 26 five factors: 1) the public's interest in expeditious resolution of litigation; 2) the Court's need 27 to manage its docket; 3) the risk of prejudice to the opposing party; 4) the public policy 28
Case 2:03-cv-01929-SRB Document 34 Filed 05/10/2006 Page 1 of 5

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Robert Patrick Abele, Trustee for the) Bankruptcy Estate of Wavo Corporation, ) ) ) Plaintiff, ) ) vs. ) ) ) David E. Deeds, et al., ) ) Defendants. ) )

No. CV03-1929-PHX-SRB ORDER

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favoring disposition of cases on their merits; and 5) the availability of lesser sanctions, citing Porter v. Martinez, 941 F.2d 732, 733 (9th Cir. 1991). Plaintiff argues that with the exception of interfering with the Court's docket, the remaining factors weigh against dismissal. Plaintiff suggests that there is no prejudice to the Defendants because they took no discovery, filed no motions, had no procedures delayed and that the witnesses and documentary evidence remains available. Plaintiff also argues that there is a policy favoring adjudication on the merits and that lesser sanctions are available, although none are suggested. Defendants' response argues that prejudice to the Defendants is presumed as a matter of law by virtue of the unreasonable and unexcused delay and Plaintiff has failed to rebut this presumption, that actual prejudice to Defendants has occurred, that the sanction imposed in not unduly harsh under the circumstances and that while adjudication on the merits is generally preferred, Plaintiff has failed to suggest why it would be important for this case to be decided on the merits. Defendants also point out Plaintiff's failure to suggest an alternative sanction and argue that there is neither a plausible nor effective alternative sanction available. Concerning the issue of delay, Defendants note that the allegations in Plaintiff's complaint relate to transactions concerning the bankrupt corporation Wavo, which had an order of relief entered against it in November 2001. Plaintiff was appointed as Wavo's trustee immediately thereafter. Defendants further note that Plaintiff waited nearly two years after his appointment and just weeks before the expiration of the statute of limitations to file his complaint despite the fact that special counsel to prosecute this litigation had been appointed in March 2003, seven months earlier. Wavo's largest creditor, National Data Cast, had investigated the facts of the claim before the bankruptcy petition was filed and had made the results of its investigation available to Plaintiff. Defendants suggest that the pattern of delay in this case should be evaluated by also considering the delay in the filing of the complaint as well as the complete lack of activity to prosecute this action after the complaint was filed. Defendants agree that the five factor test outlined by Plaintiff is the test for the Court to consider in connection with a dismissal for lack of prosecution but Defendants argue that all of the factors favor dismissal. In addition to the presumption of prejudice argued by the -2Case 2:03-cv-01929-SRB Document 34 Filed 05/10/2006 Page 2 of 5

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Defendants, Defendants assert that they have been actually prejudiced by the delay. Defendants point out that Plaintiff's statement that no witnesses have died or become unavailable is unsupported. Counsel for Defendants notes that he has not even spoken with some of the Defendants for several months and does not know all of their current physical whereabouts. Defendants' counsel argues that it is possible that some of the Defendants, and perhaps third-party witnesses, may no longer be readily available to testify. Additionally, because the events out of which this claim arose are now more than five years old and there has been no attempt to preserve witnesses' recollections, fading memories of witnesses also are a form of actual prejudice to the Defendants. Defendants also find fault with Plaintiff's analysis of the supposed public interest in the decision of this case on the merits noting that Plaintiff has not specified why it is important that this case be resolved on its merits and that Plaintiff's failure to move the case at a reasonable pace before dismissal precludes him from now attempting to invoke public policy to have his claims heard on their alleged merits. Finally, in discussing an alternative remedy Defendants note that the Plaintiff failed to identify or suggest any available or effective lesser sanction. Defendants suggest that there is none. No monetary sanction will improve fading memories or recover lost or missing evidence. Plaintiff had adequate warning that dismissal would be the sanction as set out in the Rule 16 Scheduling Order. Defendants also note that Plaintiff, despite being given an opportunity by the Court to explain why his case should not be dismissed, had been unable to so. Plaintiff's reply suggests that his failure to suggest an effective and adequate lesser sanction to dismissal was based on the Plaintiff having "given deference to this Court's experience and discretion." Plaintiff then suggests that possible appropriate sanctions would include a simple admonishment, a reprimand, an abbreviated scheduling order, or monetary sanctions. On November 22, 2005, this Court issued an order detailing the lack of activity in the case, including the fact that no discovery had been initiated and that there had been no compliance with the Court's Rule 16 Scheduling Order. The Court specifically noted that for a period just short of one year the Court had heard nothing from the parties and that instead -3Case 2:03-cv-01929-SRB Document 34 Filed 05/10/2006 Page 3 of 5

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of filing the Joint Proposed Pretrial Order that was due, Plaintiff filed a Stipulation to Substitute Counsel and requested that the trial date be vacated reciting only the untimely death of Plaintiff's lead attorney Tony Lucia. Plaintiff requested that the Court re-establish all Rule 16 deadlines providing no explanation for the complete failure to prosecute or for the failure to timely advise the Court of the need for extensions of time in the six months between Mr. Lucia's death and the November 17, 2005 Stipulation for Substitution and Motion to Vacate. In that order counsel for Plaintiff was ordered to show cause why the case should not be dismissed for lack of prosecution. When Plaintiff responded to the Court's order on December 17, 2005, requesting that the Court not dismiss, Plaintiff suggested that the failures to seek extensions of the scheduling deadlines prior to their expiration and to notify the Court about the status of the case was the result of a misunderstanding and error in judgment. Plaintiff also suggested that the failures to prosecute and seek timely extensions prior to Mr. Lucia's illness were partly the fault of Defendants' counsel's failure to review Plaintiff's documents. Although there was no explanation provided as to why Plaintiff could not proceed with Defendants' deposition because Defendants' counsel had not reviewed Plaintiff's documents, Plaintiff's counsel admitted that they were aware shortly after Tony Lucia's death that the discovery deadline had passed and that there had been no request to the Court for any extension. Plaintiff admitted that he decided not to advise the Court about any of these matters until new counsel entered the case. No suggestion of any sanction short of dismissal was made. When Defendants responded, their response included extensive history concerning the interaction between counsel for the parties and the complete lack of responsiveness and activity by Plaintiff's counsel. Defendants requested that the case be dismissed. As noted in the Court's order, Plaintiff filed no reply, even though the Court's December 8, 2005 order to Defendants to respond specifically advised Plaintiff that he could reply. Reconsideration is only appropriate if: (1) the court is presented with newly discovered, previously unavailable, evidence; (2) the court committed a clear error of law and the initial decision was manifestly unjust; or (3) there has been an intervening change in -4Case 2:03-cv-01929-SRB Document 34 Filed 05/10/2006 Page 4 of 5

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controlling law. Sch. Dist. No. 1J, Multnomah County, Or. v. AC and S, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993);United States ex rel Conveyor Rental & Sales Co. v. Aetna Casualty and Surety Co., 1991 WL 495733, *1 (D. Ariz. 1991). Such a motion, however, may not be used to re-litigate old matters or to raise arguments or present evidence that could have been raised prior to entry of judgment. See, e.g., Fed. Deposit Ins. Agency v. World Univ., 978 F.2d 10, 16 (1st Cir. 1992); accord Backlund, 778 F.2d at 1388; 1 Wright, Miller, & Kane, Federal Practice and Procedure: Civil 2d § 2810.1 at 127-28. Plaintiff's Motion for Reconsideration fails to address why reconsideration is appropriate. It is essentially the memorandum that could have been filed when the Court ordered Plaintiff to show cause why his case should not be dismissed. The test for imposing the sanction of dismissal cited by Plaintiff in his motion is not new law, Plaintiff has presented no new previously unavailable evidence and Plaintiff has not shown either clear error of law or that dismissal is manifestly unjust. Even if Plaintiff had met the standard for reconsideration, the Court does not believe any lesser sanction should be imposed. Both the public's interest in expeditious resolution and the Court's need to manage its docket weigh in favor of dismissal as does the risk of prejudice to Defendants. Only the public policy favoring disposition on the merits possibly weighs in favor of Plaintiff. Concerning whether there is a lesser appropriate sanction, until the filing of the reply to the Motion for Reconsideration, Plaintiff had suggested no sanction short of dismissal for its complete and utter failure to comply with Court orders and to prosecute his case. Even in the reply Plaintiff only listed potential sanctions and does not suggest how any of them could or should be utilized effectively in this case. The Court finds that Plaintiff's Motion for Reconsideration fails demonstrate that the Court erred in its January 26, 2006 order or that reconsideration of that order is appropriate. IT IS ORDERED denying Plaintiff's Motion for Reconsideration. (doc. 29). DATED this 10th day of May, 2006.

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