Marks & Sokolov LLC v. Shahrokh Mireskandari, et al

Filing

NOT PRECEDENTIAL OPINION Coram: GREENAWAY JR., SHWARTZ and RENDELL, Circuit Judges. Total Pages: 13. Judge: RENDELL Authoring. Marks' motion to amend the caption to reflect that "Marks Law Offices LLC d/b/a Marks & Sokolov, LLC" is the real party in interest is granted. [15-3014, 16-2780]

Case: 15-3014

Document: 003112705023

Page: 1

Date Filed: 08/18/2017

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 15-3014 and 16-2780
_____________
MARKS LAW OFFICES, LLC d/b/a MARKS & SOKOLOV, LLC
v.
SHAHROKH MIRESKANDARI; PAUL BAXENDALE-WALKER,
Appellants

On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(District Court No.: 2-13-cv-03152)
District Judge: Honorable Jeffrey L. Schmehl

Submitted Under Third Circuit L.A.R. 34.1(a)
July 13, 2017

Before: GREENAWAY, JR., SHWARTZ, and RENDELL, Circuit Judges

(Opinion filed: August 18, 2017)

Case: 15-3014

Document: 003112705023

Page: 2

Date Filed: 08/18/2017

___________
O P I N I O N*
___________
RENDELL, Circuit Judge:
This appeal arises from a suit to collect unpaid attorney’s fees, but focuses on the
District Court’s Orders taking the Defendants to task for obfuscation that resembles what
we would colloquially call, “cat and mouse tactics.” We will affirm.
I.
Shahrokh Mireskandari and Paul Baxendale-Walker (the “Defendants”) engaged
Bruce Marks, a Pennsylvania attorney, to represent them in a civil RICO action in
California (the “Mayne Matter”). When the Defendants failed to pay Marks’ fees, Marks
brought this diversity suit under the registered trade name of his law firm, Marks &
Sokolov, LLC, alleging breach of contract and quantum merit. We briefly trace relevant
portions of the years-long procedural history that followed.
To begin, the Defendants failed to timely answer Marks’ Complaint, although they
did attach a copy of the Complaint to a pro se petition for arbitration that they filed with
the Los Angeles County Bar Association (the “California Arbitration”) before their
response was due in this matter. The initiation of the California Arbitration had the effect
of staying this action. But shortly before an appearance was due in the California
Arbitration, the Defendants abruptly withdrew their Petition, and instead filed a civil
action in the Los Angeles County Superior Court against Marks claiming legal
*

This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
2

Case: 15-3014

Document: 003112705023

Page: 3

Date Filed: 08/18/2017

malpractice (the “Malpractice Action”). The Defendants’ counsel in these matters (the
“California Counsel”) wrote to Marks acknowledging this suit but asserted that neither of
the “[Defendants] have yet been effectively served.” A277. They also demanded Marks
dismiss his case. He declined, and after numerous subsequent attempts to serve the
Defendants failed to secure their appearance, the District Court deemed service complete
and entered default judgment in the amount of $229,693.25.
Shortly thereafter, the Defendants moved to set aside the default judgment under
Federal Rule of Civil Procedure 60(b)(1) and 60(b)(4). The District Court rejected both
grounds and denied the motion (the “Rule 60(b) Order”). The Defendants immediately
appealed.
While that appeal was pending, the District Court found Baxendale-Walker in
contempt of court for his refusal to comply with the District Court’s orders granting
discovery in aid of execution (“Contempt Order I”). Instead of complying, BaxendaleWalker filed a motion for reconsideration, which the District Court also denied
(“Contempt Order II”).
Finally, during the pendency of this post-judgment discovery, we summarily
remanded the Defendants’ earlier appeal of the Rule 60(b) Order for the District Court to
determine whether it had subject matter jurisdiction. The District Court examined the
named plaintiff, allowed the substitution of the named plaintiff with the real party in
interest pursuant to Federal Rule of Civil Procedure 17(a)(3), and concluded that it had
jurisdiction under 28 U.S.C. § 1332(a)(2) (the “Jurisdiction Order”). The Defendants
appeal this order too.
3

Case: 15-3014

Document: 003112705023

Page: 4

Date Filed: 08/18/2017

In sum, the Defendants challenge four Orders: the Jurisdiction Order, the Rule
60(b) Order, and both Contempt Orders. Perceiving no error, we will affirm.
II.1
A. Jurisdiction Order2
Although the Defendants challenge jurisdiction, the focus of their arguments is on
the District Court’s Rule 17 holding. Before reaching the jurisdictional question, the
District Court concluded that Marks & Sokolov, LLC, the captioned plaintiff, was
actually a trade name registered to Marks Law Offices, LLC, a Pennsylvania limited
liability company of which Marks was the sole member.3 Concluding that the real party
in interest was therefore Marks Law Offices, LLC d/b/a Marks & Sokolov, LLC, the
District Court permitted Marks to substitute that entity in place of Marks & Sokolov,
LLC per Rule 17(a)(3). On appeal, the Defendants argue that the substitution of Marks
Law Offices, LLC was error because the real party in interest is actually “Marks &
Sokolov – Attorneys at Law,” an international partnership wherein Sokolov, a Russian
1

We have jurisdiction under 28 U.S.C. § 1292(a).
In our jurisdictional analysis, we exercise de novo review over questions of law,
but review factual findings underlying a determination of jurisdiction for “clear error.”
Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016). We review a District Court’s
holding with respect to Rule 17 for abuse of discretion. See ICON Grp., Inc. v. Mahogany
Run Dev. Corp., 829 F.2d 473, 476 n.3 (3d Cir. 1987).
3
The District Court noted that “it is unclear from the registration form . . . just
what entity has an interest in the fictional name Marks & Sokolov, LLC,” Marks &
Sokolov, LLC v. Mireskandari, No. 2:13-CV-03152, 2016 WL 2771785, at *5 (E.D. Pa.
May 11, 2016), because the form, in addition to listing “Marks Law Office, LLC” also
listed “Bruce S. Marks, LLC” as a party interested in the fictitious name, A2229–30. The
entity Bruce S. Marks, LLC does not exist. Marks averred that his office manager had
incorrectly filled out the form and that this box should have been left blank. He also
averred in March 2016 (during the pendency of this suit) that he filed an amendment
correcting the mistake.
2

4

Case: 15-3014

Document: 003112705023

Page: 5

Date Filed: 08/18/2017

resident, is a general partner. Defs’ Br. 31–32. Sokolov’s presence, they contend,
destroys diversity jurisdiction, so the suit should be dismissed. We disagree.
Rule 17(a) indeed requires that the “action . . . be prosecuted in the name of the
real party in interest.” Fed. R. Civ. P. 17(a)(1). But the District Court found, after
permitting discovery and holding a hearing on the jurisdictional issue, that Marks Law
Offices, LLC d/b/a Marks & Sokolov LLC was the real party in interest based on what it
characterized as the “unrefuted” averments and documentary evidence presented by
Marks. Marks & Sokolov, LLC v. Mireskandari, No. 2:13-CV-03152, 2016 WL 2771785,
at *5 (E.D. Pa. May 11, 2016). These findings included that Marks formed Marks Law
Offices, LLC in 2001; Marks registered Marks & Sokolov, LLC under the Pennsylvania
Fictitious Names Act, 54 Pa. C.S. §§ 301 et seq., as belonging to Marks Law Offices,
LLC in 2001; since that time, Marks Law Offices, LLC has practiced under the fictitious
name Marks & Sokolov, LLC; Marks is, and always has been, the sole member of Marks
Law Offices, LLC; Sokolov, although he works with Marks, “is neither a member,
partner nor joint venturer with Marks Law Offices, LLC,” Marks & Sokolov, LLC, 2016
WL 2771785, at *5; and finally, that the Defendants signed an engagement letter with
Marks who signed on behalf of Marks & Sokolov, LLC. The Defendants do not
meaningfully contest these findings or offer contrary evidence to support their claim. We
have trouble understanding their myopic focus on Sokolov, moreover, because they do
not claim to have ever engaged Sokolov or even to have met him. He was never in the
picture.

5

Case: 15-3014

Document: 003112705023

Page: 6

Date Filed: 08/18/2017

Instead, the Defendants attempt to avoid the consequences of these factual
findings by arguing that substitution was not proper at this stage in the litigation. We are
not persuaded. Rule 17(a)(3) provides that “[t]he court may not dismiss an action for
failure to prosecute in the name of the real party in interest until, after an objection, a
reasonable time has been allowed for the real party in interest to ratify, join, or be
substituted into the action.” Fed. R. Civ. P. 17(a)(3). The purpose of this rule is “to avoid
forfeiture and injustice when an understandable mistake has been made in selecting the
party in whose name the action should be brought.” Gardner v. State Farm Fire & Cas.
Co., 544 F.3d 553, 562 (3d Cir. 2008) (quoting 6A Charles Alan Wright, Arthur Miller &
Mary Kay Kane, Federal Practice & Procedure, § 1555 (2d ed. 2008)).
Here, the District Court explicitly found that Marks’ failure to name Marks Law
Offices, LLC as the plaintiff was “not the result of any bad faith,” but rather “looseness
and sloppiness for which [Marks] should not have to forfeit [his] lawsuit.” Marks &
Sokolov, LLC, 2016 WL 2771785, at *8. Accordingly, the District Court determined that
“in the interests of justice” the matter should not be dismissed under Rule 17(a)(3). Id.
We see no reason to disturb this equitable ruling. Marks’ corporate filings may have been
careless (and, as the Defendants point out, may have even run contrary to his ethical
obligations to avoid the use of misleading firm names), but the Defendants offer nothing
to suggest Marks’ failure to file in the name of Marks Law Offices, LLC was the result of
his deliberately acting in bad faith. Further, the Defendants are in no position to protest
the timeliness of the substitution given that they failed to raise a Rule 17 objection during
the first three years of this litigation. For similar reasons, their argument, raised for the
6

Case: 15-3014

Document: 003112705023

Page: 7

Date Filed: 08/18/2017

first time in this appeal, that they “never knew of . . . and never engaged” the entity of
Marks Law Offices, LLC d/b/a Marks & Sokolov, LLC is not credible.4 Defs’ Br. 30. We
have reviewed the Defendants’ other legal arguments, but find them unavailing. The
District Court did not abuse its discretion in permitting the substitution.5
Accordingly, because Marks, the sole member of Marks Law Offices LLC, is a
Pennsylvania resident, Mireskandari is a California resident, Baxendale-Walker is an
English resident (and thus an alien), and the amount in controversy exceeds $75,000, the
District Court correctly determined that jurisdiction lies under 28 U.S.C. § 1332(a)(2).
B. Rule 60(b) Order6
The Defendants next challenge the denial of their motion to vacate the default
judgment under Rule 60(b). They advance the same arguments rejected by the District
Court.
First, they argue that the default judgment is “void” under Federal Rule of Civil
Procedure 60(b)(4) because service of process was deficient under Rule 4.

4

There was also uncontested record evidence that the Defendants electronically
wired their retainer to Marks Law Offices, LLC.
5
We will therefore grant Marks’ pending motion on appeal to amend the caption
to reflect that “Marks Law Offices LLC d/b/a/ Marks & Sokolov, LLC” is the real party
in interest.
6
Where a party claims that an entry of default judgment is void pursuant to Rule
60(b)(4) because the complaint was never properly served, our review is plenary. See
Budget Blinds, Inc. v. White, 536 F.3d 244, 251 n.5 (3d Cir. 2008); see generally Burda
Media, Inc. v. Viertel, 417 F.3d 292, 299 (2d Cir. 2005) (“[O]n a motion to vacate a
default judgment based on improper service of process where the defaulting defendant
had actual notice of the original proceeding but delayed in bringing the motion, the
defendant[s] bear[] the burden of proof to establish that the purported service did not
occur.”). We assume, arguendo, that the Defendants’ arguments are not waived, even
though Marks asserts they are.
7

Case: 15-3014

Document: 003112705023

Page: 8

Date Filed: 08/18/2017

In rejecting this argument, we begin by noting the lengths to which Marks went to
secure the Defendants’ appearance in this matter. Marks originally attempted to serve
Baxendale-Walker by having the clerk serve the summons and complaint via registered
mail to his last known London address under Rule 4(f)(2)(C)(ii). He also attempted to
serve Mireskandari by registered mail at his last known Beverly Hills address per Rule
4(e)(1) and Pennsylvania Rule of Civil Procedure 403 and 404. Both Defendants averred
under oath in the Mayne Matter that they had received, and continued to receive, mail at
this very same Beverly Hills address around this time. Further, well before the time to
respond in this matter expired, Marks sought waivers of service through the Defendants’
California Counsel, who acknowledged the suit and demanded all future communications
flow through them. When the Defendants listed a second Beverly Hills address in an
unrelated matter, Marks sought an Alias Summons for that address and attempted
personal service there, but the receptionist stated she did not know the Defendants and
did not receive mail for them. The District Court then ordered “alternative” service by
again requiring regular mail service to the Defendants’ California addresses and
Baxendale-Walker’s London address, as well as to the Defendants’ emails and by
certified mail upon their California Counsel (the “Alternative Service Order”). The
Defendants, for the most part, do not challenge their last known addresses, ownership or
control over their emails, or that they were represented by the California Counsel.
Instead, the Defendants challenge the propriety of the Alternative Service Order.
Mireskandari makes two arguments. First, he maintains, despite his declarations under
oath in the Mayne Matter, that the person who accepted service at the Beverly Hills
8

Case: 15-3014

Document: 003112705023

Page: 9

Date Filed: 08/18/2017

address was not his agent. The District Court rejected this factual argument, and we see
no reason to disturb its judgment.7 Second, he argues that the Alternative Service Order
violated Pennsylvania Rule of Civil Procedure 430, which provides that a court may enter
“a special order directing the method of service” in the event service cannot be completed
under other applicable rules, but only if the plaintiff submits an affidavit stating his good
faith efforts to locate the defendants and effect service. Pa. R. Civ. P. 430(a); see also
Deer Park Lumber, Inc. v. Major, 559 A.2d 941, 944 (Pa. Super. Ct. 1989) (“The purpose
of this procedure is to provide proof that a good faith effort has been made to effect
service under normal methods.”). Marks’ submissions to the District Court, however,
demonstrate his good faith efforts to locate and serve the Defendants by traditional
means, as we detail above. The Alternative Service Order was consistent with
Pennsylvania law and therefore Rule 4(e)(1).
Baxendale-Walker, for his part, asserts that Marks’ service to him was prohibited
by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents
in Civil or Commercial Matters, art 10(a), 20 U.S.T. 361, as well as Rule 4(f)(3). His
argument fails. “Article 10(a) encompasses service by mail,” and permits such service to
a person residing in a foreign state provided that (1) “the receiving state has not objected
to service by mail” and (2) it is authorized by “otherwise-applicable law.” Water Splash,
7

Curiously, Mireskandari produced mailbox keys purportedly able to open the
mailbox at the Beverly Hills address, but when Mireskandari and his attorney appeared at
the location, they were unable to open the mailbox or even the front door. We cannot be
certain why the Defendants listed these addresses in the Mayne Matter, but it seems clear
they were “not being truthful,” if not to the Mayne court, then to the District Court here.
Marks & Sokolov, LLC v. Mireskandari, No. 13-3152, 2015 WL 1133788, at *5 n.1 (E.D.
Pa. Mar. 11, 2015), remanded by, No. 15-1689 (3d Cir. 2015).
9

Case: 15-3014

Document: 003112705023

Page: 10

Date Filed: 08/18/2017

Inc. v. Menon, 137 S. Ct. 1504, 1513 (2017). While Baxendale-Walker points out that
England, the receiving state, might object to email service, he offers no indication that
service by regular mail (or upon one’s attorney for that matter) would be similarly
objectionable. Moreover, Marks’ service to him was permissible under Rule 4(f)(3). See
Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1016 (9th Cir. 2002) (noting under
Rule 4(f)(3) that courts permit “a wide variety of alternative methods of service including
. . . mail to the defendant’s last known address [and] delivery to the defendant’s
attorney”).
Finally, we are satisfied that the myriad modes of service authorized by the
District Court and completed by Marks provided “notice reasonably calculated . . . to
apprise interested parties of the pendency of the action,” and thus satisfied the
requirements of the Due Process Clause. Mullane v. Cent. Hanover Bank & Tr. Co., 339
U.S. 306, 314 (1950). It is beyond cavil that the Defendants had actual notice of this suit
well before the deadline to respond expired as they used the Complaint in this matter
offensively in the California Arbitration. Further, the record shows that the Defendants
were in contact with their California Counsel about this matter. The District Court did not
abuse its discretion in denying Rule 60(b)(4) relief on the above grounds.
The Defendants next argue that they demonstrated excusable neglect under Rule
60(b)(1). See Nara v. Frank, 488 F.3d 187, 193–94 (3d Cir. 2007) (noting courts should
consider, inter alia, the reason for the delay including whether it was within the movant’s
control and whether the movant acted in good faith); see also In re Cendant Corp.

10

Case: 15-3014

Document: 003112705023

Page: 11

Date Filed: 08/18/2017

PRIDES Litig., 234 F.3d 166, 171 (3d Cir. 2000) (citing Pioneer Inv. Servs. Co. v.
Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993)).
The District Court reviewed the relevant factors and reasoned that the Defendants,
who failed to attach a proposed answer to their motion to vacate, had no meritorious
defenses, “took no action to defend this case until nearly one year after the complaint had
been filed,” and that the delay was “solely the fault of the [D]efendants’ culpable conduct
and . . . bad faith.” Marks & Sokolov, LLC v. Mireskandari, No. 13-3152, 2015 WL
1133788, at *8 n.1 (E.D. Pa. Mar. 11, 2015), remanded by, No. 15-1689 (3d Cir. 2015).
We agree with this assessment. The Defendants had actual notice of the suit in plenty of
time to file an answer, and their reason for delay—a conclusory assertion that they had
trouble finding a lawyer—falls woefully short of showing that their failure to appear was
beyond their control. Nara, 488 F.3d at 193; see also Coltec Indus., Inc. v. Hobgood, 280
F.3d 262, 274 (3d Cir. 2002) (declining to provide Rule 60(b) relief where movant was
“trying to escape the consequences of [its] counseled and knowledgeable decisions”
(internal quotation marks omitted)).
The Defendants’ dilatory tactics in this case appear to be part of “a carefully
orchestrated plan . . . to delay this action” in favor of the parallel California Arbitration
proceeding and Malpractice Action in which the Defendants had hoped to secure a
favorable verdict to the exclusion of this matter.8 Marks & Sokolov, LLC, 2015 WL

8

The record was rife with other examples of the Defendants attempts’ at delaying
this action further. Even on appeal, the Defendants asked for numerous extensions to file
their briefs.
11

Case: 15-3014

Document: 003112705023

Page: 12

Date Filed: 08/18/2017

1133788, at *8. Unfortunately for them, this strategy did not pay off. The District Court
did not abuse its discretion in denying Rule 60(b)(1) relief on these facts.
C. Contempt Orders I and II9
Finally, Baxendale-Walker challenges the District Court’s orders holding him in
contempt. Baxendale-Walker refused to comply with the District Court’s discovery
orders, claiming he was physically incapable of responding due to various medical
conditions including dementia. In support, he proffered a “house call” doctor’s note,
A1482–83, a so-called “psychodiagnostic” evaluation, A1670, and a neurologist’s report
addressed to the house call doctor, which was based largely on the psychodiagnostic
evaluation, A1607–10. The District Court concluded following oral argument that these
submissions did not satisfy the reliability requirements of Federal Rule of Evidence 702
because none of the documents provided an onset date nor were sworn. Sensing
hypocrisy, moreover, the District Court noted that Baxendale-Walker seemingly had no
trouble assisting his attorneys in his numerous other matters wherein he was proceeding
as a plaintiff. It thus rejected his defense.
On appeal, Baxendale-Walker protests only that the District Court’s denial of a
full evidentiary hearing deprived him of due process. While civil contempt hearings must
afford due process, see Newton v. A.C. & S., Inc., 918 F.2d 1121, 1127 (3d Cir. 1990),
due process does not necessarily require a full evidentiary hearing. Due process is
satisfied under our case law when a potential contemnor is given “notice” and a hearing

9

We review an order of contempt for an abuse of discretion. Harris v. City of
Philadelphia, 47 F.3d 1311, 1321 (3d Cir. 1995).
12

Case: 15-3014

Document: 003112705023

Page: 13

Date Filed: 08/18/2017

that provides “an opportunity to explain the conduct deemed deficient before the fine is
imposed [so] that a record will be available to facilitate appellate review.” Id. There is no
dispute here that the District Court permitted motion practice, allowed the submission of
evidence, and held oral argument, during which time Baxendale-Walker’s counsel was
given ample “opportunity to explain [his client’s] conduct.” Id.
In any event, Baxendale-Walker does not contest the central holding of the District
Court: that his evidence was not competent under Rule 702. He has not proffered any
other evidence to support his defense of physical impossibility. This leaves only his
“mere assertion of inability,” which does not suffice to support a defense to contempt
under our case law. Harris v. City of Philadelphia, 47 F.3d 1311, 1324 (3d Cir. 1995)
(internal quotation marks omitted). So, the District Court did not abuse its discretion in
finding Baxendale-Walker in contempt or in denying reconsideration of its earlier
holding. For the foregoing reasons, we will affirm.

13