Xcentric Ventures, LLC, et al., v. Richeson

Filing 38

RESPONSE in Opposition re 27 MOTION for Sanctions and CROSS MOTION for Sanctions, filed by Jaburg & Wilk PC. (Speth, Maria) Modified on 10/18/2010 to include the pending motion.(ESL).

Xcentric Ventures, LLC, et al., v. Richeson

Doc. 38

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Jaburg & Wilk, P.C. Attorneys At Law 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [phone]

Maria Crimi Speth (012574) JABURG & WILK, P.C. 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [e-mail] [phone] David S. Gingras (021097) Gingras Law Office, PLLC 4072 E Mountain Vista Dr. Phoenix, AZ 85048 Tel.: [phone] [e-mail] Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA XCENTRIC VENTURES, LLC, an Arizona limited liability corporation, and JABURG & WILK, P.C., a professional corporation, Plaintiffs, v. SHAWN RICHESON, Defendant. Case No.: 2:10-cv-1931-PHX-NVW RESPONSE TO DEFENDANT SHAWN RICHESON'S MOTION FOR RULE 11(C) SANCTIONS AGAINST MARIA CRIMI SPETH AND JABURG & WILK, P.C. AND CROSS-MOTION FOR SANCTIONS PURSUANT TO RULE 11, FED.R.CIV.P.

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Plaintiff Jaburg & Wilk, P.C. and Plaintiffs' counsel Maria Crimi Speth hereby respond to the pleading filed by Defendant Shawn Richeson and captioned as "Motion for Rule 11(c) Sanctions ­ Against Maria Crimi Speth & Jaburg and Wilk P.C." (Doc. No. 27). Defendant Richeson has failed to comply with Rule 11, Fed.R.Civ.P. in the filing of this Motion. Because the Motion for Sanctions is procedurally improper, it must be denied on its face. In the alternative, because Defendant Richeson fails to establish any basis for an award of sanctions pursuant to Rule 11(b), the Motion must be denied.
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Jaburg & Wilk, P.C. Attorneys At Law 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [phone]

Further, based on the false statements made by Defendant Richeson within his Motion for Sanctions, Plaintiffs request that the Court award them sanctions pursuant to Rule 11(c). I. DEFENDANT RICHESON'S MOTION FOR SANCTIONS MUST BE DENIED Pursuant to Rule 11(c)(2), any Motion for Sanctions pursuant to Rule 11(b): must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. Fed.R.Civ.P. Rule 11(c)(2). Defendant Richeson has filed his Motion for Sanctions without first serving it and waiting twenty-one days before filing it. Courts "enforce this safe harbor provision strictly." Holgate v. Baldwin, 425 F.3d 671, 678 (9th Cir. 2005); see Radcliffe v. Rainbow Const. Co., 254 F.3d 772, 788-89 (9th Cir.2001) (citing Barber v. Miller, 146 F.3d 707, 710-11 (9th Cir.1998)). Simply letting Plaintiffs know that he planned on filing such a motion "does not satisfy Rule 11's strict requirement that a motion be served on the opposing party." Matsumaru v. Sato, 521 F. Supp. 2d 1013, 1015 (D. Ariz. 2007); see Radcliffe v. Rainbow Constr. Co., 254 F.3d 772, 789 (9th Cir.2001) (holding that "although a defendant had given informal warnings to the plaintiffs threatening to seek Rule 11 sanctions, these warnings did not satisfy the strict requirement that a motion be served on the opposing party twenty-one days prior to filing"); Barber v. Miller, 146 F.3d 707, 710 (9th Cir.1998) (denying motion for sanctions because, despite multiple warnings as to deficiency of plaintiff's claim, Rule 11 requires service of a motion). On this basis alone, the Motion for Sanctions is procedurally improper and must be denied. In the alternative, the Motion must be denied because it fails to identify any sanctionable conduct on the part of Jaburg & Wilk or Ms. Speth. Defendant Richeson continues to use this Court case as a forum to defame and harass Plaintiffs and to cause Plaintiffs to incur unnecessary expenses by filing pleadings without any legitimate purpose. The present Motion is symptomatic of this problem. Instead of raising any cogent legal theories, or pointing the Court to specific facts within Plaintiffs' Complaint 2
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Jaburg & Wilk, P.C. Attorneys At Law 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [phone]

that he believes to be false, Defendant Richeson instead simply makes generic unsupported statements. Worse, Defendant Richeson misquotes the Court and counsel for Plaintiffs, falsely arguing that (1) Plaintiffs' legal theories were "pointed out by the honorable Judge Neil Wake as having no merit and no factual basis to support them;" and (2) counsel for Plaintiffs' "testified that neither Plaintiff would ever be able to meet its Burden [sic] of proof of this Court's minimal jurisdiction of $75,000.00." Each identified statement is unsupported by the record of this Court, a point which is made worse when noting that Defendant Richeson was present before the Court during the so-called "testimony" which he believes to give rise to these mistaken conclusions. It is these two points alone that Defendant Richeson has based his Motion for Sanctions. Because each of these statements is false and unsupported by the record of the Court, Defendant Richeson cannot support his Motion for Sanctions and it must be denied. It appears that Defendant Richeson, while a sophisticated pro per litigant, may be confused by certain legal processes. In particular, Defendant Richeson appears to be under the mistaken belief that by simply making a statement in a pleading, and then signing it, said statement is automatically considered truthful for the purpose of this litigation. That is an improper conclusion by Defendant Richeson, and a notion which he must be quickly disabused of by the Court. "[A] pro se litigant is not excused from knowing the most basic pleading requirements." American Ass'n of Naturopathic Physicians v. Hayhurst, 227 F.3d 1104, 1107-08 (9th Cir.2000) (citations omitted). Defendant Richeson cannot be allowed to file pleadings which rely solely on his personal and otherwise unsupported avowals of "fact" and conclusions of law. See Christian v. Mattel, Inc., 286 F.3d 1118, 1129 (9th Cir. 2002) ("Simply saying so does not make it so."). II. PLAINTIFFS ARE ENTITLED TO SANCTIONS PURSUANT TO RULE 11 Rule 11 motions themselves are subject to Rule 11, and by making false statements to the Court in his Motion, Defendant Richeson has opened himself up to a request for sanctions by Plaintiffs. "A party defending a Rule 11 motion need not comply with the 3
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separate document and safe harbor provisions when counter-requesting sanctions." Patelco Credit Union v. Sahni, 262 F.3d 897, 913 (9th Cir. 2001). Plaintiffs request that they be awarded sanctions pursuant to Rule 11(c) based on Defendant Richeson's violations of Rule 11(b)(3). Filing any document with the court constitutes a certification by the filing party that they have made a reasonable inquiry, upon which they certify (to the best of their knowledge, information and belief) that "factual contentions have evidentiary support...." See Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531, 1536 (9th Cir.1986). Defendant Richeson is aware that he has made certain factual contentions without any evidentiary support1, and therefore, his Motion violates Rule 11(b)(3). "The reasonable inquiry test is meant to assist courts in discovering whether [a filer], after conducting an objectively reasonable inquiry into the facts and law, would have found the [allegations] to be well-founded." Holgate v. Baldwin, 425 F.3d 671, 677 (9th Cir. 2005). There is no question that Defendant Richeson's allegations regarding the conclusions made by this Court and the statements made by counsel for Plaintiffs are not well founded. Even if the statements by the Court were to be interpreted liberally, no reasonable person could reach the conclusions advocated by Defendant Richeson. Similarly, there is no testimony from counsel for Plaintiffs regarding the absolute inability of Plaintiffs to prove their damages; indeed, as evidenced by the filing of Plaintiffs' supplemental memorandum of law regarding that damage amount, Plaintiffs believe and have advocated to the Court that their damages do meet the minimum threshold required to establish diversity jurisdiction. After even the most minimal inquiry, no reasonable person could find Defendant Richeson's allegations regarding what occurred at the Preliminary Injunction hearing to have evidentiary support. See, e.g., Truesdell v. S. California Permanente Med. Group, 293 F.3d 1146, 1154 (9th Cir. 2002) (approving an award of sanctions in cases where the filing party has personal knowledge of facts that disprove his claims). Thus, Defendant Richeson has acted in violation of Rule 11(b)(3).
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These contentions include the two statements regarding what occurred at the Preliminary Injunction hearing.

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Jaburg & Wilk, P.C. Attorneys At Law 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [phone]

III.

CONCLUSION Based on the foregoing, it is requested that Defendant Richeson's Motion for

Sanctions be denied in its entirety. Additionally, it is requested that Defendant Richeson be sanctioned pursuant to Rule 11(b)(3) for his filing of the Motion for Sanctions, which contained numerous false and unsupportable statements of "fact" regarding Plaintiffs and their counsel. DATED this 15th day of October, 2010. JABURG & WILK, P.C.

s/Maria Crimi Speth Maria Crimi Speth David S. Gingras Attorneys for Plaintiffs Certificate of Service I hereby certify that on the 15th day of October, 2010, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing. I have also caused to be delivered to Defendant, who is not registered with the CM/ECF System, a copy of the attached document by First Class Mail and E-Mail: Shawn Richeson 1906 Twilight Drive Killeen, Texas 76543 [e-mail] Defendant Pro Per

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s/Debra Gower

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