Free Response in Opposition to Motion - District Court of Arizona - Arizona

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40 North Central Avenue Phoenix, Arizona 85004-4429 Facsimile (602) 262-5747 Telephone (602) 262-5311 Richard A. Halloran (State Bar No. 013858) [email protected] Shane E. Olafson (State Bar No. 024605) [email protected] Attorneys for Defendants CitiCapital Technology Finance, Inc. and CitiCapital Commercial Leasing Corporation

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA CitiCapital Technology Finance, Inc.; ) General Electric Capital Corporation; and ) CitiCapital Commercial Leasing ) Corporation, ) ) Plaintiffs, ) ) vs. ) ) Grant H. Goodman and Teri B. Goodman, ) ) Defendants. ) ) No. CV-03-01587-PHX-JAT CITICAPITAL'S RESPONSE TO PLAINTIFFS' "FIRST VERIFIED CONSOLIDATED INDEPENDENT ACTION"

CitiCapital Technology Finance, Inc. ("CitiCapital Technology") and CitiCapital Commercial Leasing Corporation ("CitiCapital Leasing") hereby respond to Mr. and Mrs. Goodman's so-called "First Verified Consolidated Independent Action" (hereafter "the Motion"). This Court's Judgment against the Goodmans is on appeal to the Ninth Circuit, so this Court lacks jurisdiction over the Motion. The Motion is also meritless because the relief sought by the Goodmans under Rule 60(b) is both untimely and unfounded, and the Goodmans have not sought or obtained leave to amend to assert their purported new claims for relief. Accordingly, the Motion should be denied in its entirety. MEMORANDUM OF POINTS AND AUTHORITIES I. PROCEDURAL BACKGROUND CitiCapital Technology and CitiCapital Leasing commenced this lawsuit in August 2003 seeking to recover amounts owed by the Goodmans under their personal

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guarantee of eight lease agreements.1 During the pendency of the lawsuit, CitiCapital Leasing transferred its rights under some of the leases to General Electric Capital Corporation ("GE"), and GE was then substituted as a plaintiff for CitiCapital Leasing. The case proceeded to a bench trial, the Court found in favor of CitiCapital Technology and GE, and Judgment was entered in their behalf and against the Goodmans on July 21, 2006. (See Dckt. 88 & 89). The Goodmans appealed to the Ninth Circuit. On May 23, 2008, the Ninth Circuit affirmed. (Ex. 1). On or about June 11, 2008, the Goodmans moved for En Banc review by the Ninth Circuit, raising many of the same arguments the Goodmans assert in their present Motion. (See Dckt. 131). II. THE COURT LACKS JURISDICTION OVER THE MOTION As discussed above, the Goodmans' appeal of this Court's Judgment is pending before the Ninth Circuit. That appeal divests this Court of jurisdiction to hear the Goodmans' Motion: "The filing of a notice of appeal divests the district court of jurisdiction. Unless the appellate court remands to the district court, the latter is without jurisdiction to consider motions to vacate judgment." Gould v. Mutual Life Ins. Co., 790 F.2d 769, 772 (9th Cir. 1986); Davis v. Yageo Corp., 481 F.3d 661, 685 (9th Cir. 2007) ("Once an appeal is filed, the district court no longer has jurisdiction to consider motions to vacate judgment."). Thus, this Court does not have jurisdiction over the Goodmans' Motion to vacate the prior Judgment. The Motion should therefore be denied. III. THE MOTION IS UNTIMELY Even if the Court had jurisdiction over the Motion, the Motion is untimely. The Goodmans seek to have this Court relieve them from a final judgment pursuant to Rule 60 based upon alleged "fraud upon the Court." (Motion at ¶ 23). Rule 60 requires,
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The Goodmans' Motion misstates the parties' respective status in this lawsuit. Grant Goodman and Teri Goodman are the defendants in this lawsuit. CitiCapital Technology and General Electric Capital Corporation, as successor-in-interest to CitiCapital Leasing, are the plaintiffs in this lawsuit.
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however, that any such motion "shall be made within a reasonable time, and for reasons (1), (2), and (3) [including fraud], not more than one year after the judgment, order, or proceeding was entered or taken." Fed.R.Civ.P. 60(b) (emphasis added). Here, the Judgment Plaintiffs seek to have vacated was entered on July 21, 2006 ­ almost two years ago. (Dckt. 88 & 89). The Motion was filed more than one year after the entry of the Judgment, and therefore is untimely and should be denied. Fed.R.Civ.P. 60(b); Ackermann v. United States, 340 U.S. 193, 197, 95 L. Ed. 207, 71 S. Ct. 209 (1950) (explaining that a motion under Rule 60(b)(1), (2), or (3) must be denied as untimely if made more than one year after judgment). IV. THE GOODMANS HAVE NOT SOUGHT OR OBTAINED LEAVE TO AMEND THEIR PLEADINGS Finally, CitiCapital notes that the Goodmans' Motion, in many respects, takes the form of a pleading. For instance, it contains a section regarding "Parties, Jurisdiction & Venue," sections entitled "Count I" and "Count II," and sets forth a request for relief. (See Motion at pp. 2, 10, 12-14). To the extent the Motion is intended as a pleading asserting claims for relief, the Motion is improper. To assert new claims for relief, the Goodmans are required to obtain leave to amend under Rule 15(a), Fed.R.Civ.P. The Goodmans have failed to obtain leave to amend, so their purported new claims for relief should be dismissed in accordance with Rule 15(a). 2 V. CONCLUSION This Court lacks jurisdiction to hear the Goodmans' Motion because of the currently pending appeal. The Motion is also improper because it is both untimely and devoid of merit. Accordingly, CitiCapital asks that the Court deny the Motion, and allow the parties to pursue their dispute on appeal.

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The Goodmans have also named Lewis and Roca LLP as a "defendant" in their Motion. Lewis and Roca is not a party in this action, and has not been served with process in accordance with Rule 4, Fed.R.Civ.P. Accordingly, Lewis and Roca is not required to respond to the Motion.
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DATED: June 30, 2008. LEWIS AND ROCA LLP By s/ Richard A. Halloran Richard A. Halloran Shane E. Olafson Attorneys for CitiCapital Technology Finance, Inc. and CitiCapital Commercial Leasing Corporation

CERTIFICATE OF SERVICE I hereby certify that on June 30, 2008, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Grant H. Goodman [email protected] David Ingrassia [email protected]

s/Diana Clauser

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