Carpenter Crest 401(k) PSP v. Converti et al

Filing 22

ORDER: The Judgment at Doc. 19 entered against the named Defendants is vacated. ORDERED that the Clerk of Court is directed to enter full and final judgment in this matter as follows: (1) For the reasons provided by the Court in its Order at Doc. 18 , and pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure, the Clerk shall enter Judgment in favor of Plaintiff and against Defendants Rebekah Converti and The 2-Acorns, Inc. in the following amounts: (1) $350,000 in principa l; (2) $102,666.74, which represents 22 months of unpaid monthly interest payments; and (3) additional monthly interest payments of $4,666.67 until the principal amount of $350,000, plus all accrued interest, has been paid in full to Plaintiff. (2) Pursuant to Rule 58 of the Federal Rules of Civil Procedure, the Clerk of Court shall enter judgment dismissing Defendant John Doe Converti with prejudice. FURTHER ORDERED that Plaintiff's Motion to Amend (Doc. 21 ) is denied as moot. Signed by Judge G Murray Snow on 7/27/17.(EJA)

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WO

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Carpenter Crest 401,
Plaintiff,

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ORDER

v.

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No. CV-15-02004-PHX-JZB

Rebekah Converti, et al.,

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Defendants.

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Pending before the Court is Plaintiff’s Motion for Leave to File First Amended

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Complaint, which was filed in response to the Court’s Order to Show Cause why

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Plaintiff’s claims against John Doe Converti, the fictitious name of Defendant Rebekah

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Converti’s husband, should not be dismissed with prejudice. (Doc. 21.) Plaintiff seeks to

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amend his Complaint to identify John Doe Converti as Roberto Garcia, and to allow

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Plaintiff an additional 60 days to effect service on Mr. Garcia. (Id.) For the following

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reasons, the Court will dismiss John Doe Converti with prejudice for Plaintiff’s failure to

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prosecute, enter full and final judgment in this case, and deny Plaintiff’s Motion to

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Amend as moot.

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I.

Background

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On October 6, 2015, over 20 months ago, Plaintiff filed his Complaint in this

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action. (Doc. 1.) On November 23, 2015, Plaintiff filed a Motion for Alternative Service

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as to Rebekah Converti and John Doe Converti. (Doc. 7.) In his Motion, Plaintiff sought

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to have the Court “allow alternative service of the summons and complaint upon

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Defendant Rebekah Converti, and if married, upon her husband John Doe Converti

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(collectively ‘Converti’).” (Id.) On January 21, 2016, the Court granted Plaintiff’s

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Motion as to Rebekah Converti. (Doc. 8.) However, because Plaintiff indicated that he

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did not know if Rebekah Converti is married, and failed to identify any steps taken to

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determine “where, if Ms. Converti is married, her husband resides,” the Court denied the

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Motion as to John Doe Converti without prejudice. (Id.)

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On January 27, 2016, Defendants Rebekah Converti and The 2-Acorns, Inc. were

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served with the Summons and Complaint. (Doc. 11.) On March 7, 2016, after these two

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Defendants failed to respond to the Complaint, Plaintiff filed a Motion for Entry of

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Default Judgment against them, which the Court construed as a Motion for Entry of

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Default. (Docs. 12, 13, 14.) On March 8, 2016, the Clerk entered default against

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Rebekah Converti and The 2-Acorns, Inc. (Doc. 13.) On April 22, 2016, the Court

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ordered Plaintiff to submit additional briefing that addressed the factors provided in Eitel

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v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). (Doc. 14.) On May 6, 2016, Plaintiff

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filed a Motion for Entry of Default Judgment against Defendants Rebekah Converti and

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The 2-Acorns, Inc. pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. (Doc.

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15.) Due to several errors in Plaintiff’s damage calculations, however, the Court denied

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Plaintiff’s Motion without prejudice. (Doc. 16.)

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On November 28, 2016, Plaintiff filed an Amended Motion for Entry of Default

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Judgment against Rebekah Converti and The 2-Acorns, Inc. (Doc. 17.) On March 2,

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2017, the Court granted Plaintiff’s Motion for Entry of Default Judgment, and, on the

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same day, the Clerk of Court entered Judgment in favor of Plaintiff and against

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Defendants Rebekah Converti and The 2-Acorns, Inc. (Docs. 18, 19.)

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Order at Doc. 18 granting the Motion for Default Judgment, the Court stated the

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following:

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In the Court’s

Plaintiff also names John Doe Converti, the fictitious name of
Rebekah Converti’s husband, as a Defendant in this action.
(Doc. 1.) Plaintiff claims in the Complaint that it is unknown
whether Rebekah Converti is married, and, to date, Plaintiff
has not further identified or served this fictitiously-named
Defendant. (Id. ¶ 6.) The Court’s reference to “Defendant
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Converti” throughout this Order refers only to Rebekah
Converti.

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(Doc. 18 at 2, n.2.)

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After the Court entered judgment against the named Defendants, Plaintiff took no

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action in this case with regard to the John Doe Defendant for weeks. Therefore, on

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March 20, 2017, the Court ordered that on or before April 3, 2017, Plaintiff shall either

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move to dismiss John Doe Converti with prejudice, or show cause why this Court should

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not dismiss this matter with prejudice pursuant to the Federal Rules of Civil Procedure.

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(Doc. 20.)

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On April 3, 2017, in response to the Court’s Order to Show Cause, Plaintiff filed a

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Motion for Leave to File First Amended Complaint, in which he seeks to file a First

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Amended Complaint identifying the John Doe Defendant as Roberto Garcia. (Doc. 21.)

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Plaintiff’s counsel claims he “now has reason to believe” Mr. Garcia was the spouse of

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Rebekah Converti during the relevant time and remains so today. (Id.) Plaintiff further

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“seeks a court order granting him sixty (60) days to effect service of process on

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Defendant Garcia,” asserting that “[s]erving Rebekah Converti was very difficult because

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she evaded service, and her whereabouts were unknown.

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encounter the same problems with Defendant Garcia.” Although the Motion claims that

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“[u]ndersigned counsel diligently searched, through skip traces and other means, to find

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out Rebekah’s marriage status during the relevant time period and her current marriage

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status,” the Motion fails to provide any explanation for why Roberto Garcia could not be

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identified until over 17 months after the Complaint was filed. (Id.) Plaintiff’s Motion

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also does not provide any explanation for failing to timely move to amend to identify Mr.

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Garcia until after judgment was entered against the named Defendants and the Court

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issued an Order to Show Cause notifying Plaintiff of his failure to pursue his claims

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against Rebekah Converti’s husband.

We expect that we will

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II.

Dismissal for Failure to Prosecute Pursuant to Rule 41(b)

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Plaintiff has the general duty to prosecute this case. See Fidelity Philadelphia

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Trust Co. v. Pioche Mines Consolidated, Inc., 587 F.2d 27, 29 (9th Cir. 1978). Rule

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41(b) of the Federal Rules of Civil Procedure provides that [i]f the plaintiff fails to

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prosecute or to comply with these rules or a court order, a defendant may move to

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dismiss the action or any claim against it.” In Link v. Wabash Railroad Co., 370 U.S.

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626, 629-31 (1962), the Supreme Court recognized that a federal district court has the

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inherent power to dismiss a case sua sponte for failure to prosecute. Moreover, in

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appropriate circumstances, the Court may dismiss a complaint for failure to prosecute

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even without notice or hearing. See id. at 633. Pursuant to Rule 41(b), plaintiffs must

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prosecute their actions with “reasonable diligence” to avoid dismissal. Anderson v. Air

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West, Inc., 542 F.2d 522, 524 (9th Cir. 1976) (affirming the district court’s dismissal for

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failure to prosecute where the plaintiff failed to serve several defendants for

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approximately one year).

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Where the identity of a defendant is unknown prior to the filing of a complaint, the

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plaintiff should be given an opportunity to conduct discovery and identify the unknown

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defendants, unless it is clear that discovery would not uncover the identities of the

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unknown defendants. See, e.g., Wakefield v. Thompson, 177 F.3d 1160, 1163 (9th Cir.

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1999). However, the plaintiff must take steps to conduct any necessary discovery and

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then “proceed with his claims.” Gillespie v. Civilett, 629 F.2d 637, 643 (9th Cir. 1980).

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See also Petty v. County of Franklin, Ohio, 478 F.3d 341, 345-46 (6th Cir. 2007)

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(affirming dismissal of doe defendants where Plaintiff failed to amend to name them after

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an opportunity to identify them through discovery); Garcia v. Clark County, 428 Fed.

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Appx. 706, 708-09 (9th Cir. Apr. 18, 2011) (“Neither did the district court abuse its

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discretion when it denied Maria leave to amend the complaint to identify the Doe

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defendants. Maria had ample opportunity prior to the time defendants moved for

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summary judgment to conduct reasonable discovery, identify these defendants, and seek

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leave to amend the complaint to name them properly.”).

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Here, Plaintiff failed to make any effort to amend his Complaint to properly name

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John Doe Converti within any reasonable time. Plaintiff filed his Complaint in this

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matter on October 6, 2015. (Doc. 1.) On November 23, 2015, Plaintiff moved for an

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order from the Court allowing Plaintiff to serve both Rebekah Converti and John Doe

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Converti by alternative service. (Doc. 7.) In the Motion, Plaintiff asserted that he did not

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know whether Defendant Rebekah Converti was married, and he did not seek to amend

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the Complaint to identify Rebekah Converti’s husband by name. On January 21, 2016,

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over 17 months ago, the Court issued an Order granting Plaintiff’s request for alternative

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service as to Defendant Rebekah Converti, but denying without prejudice the request as

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to John Doe Converti because “[a]lthough Plaintiff . . . named John Doe Converti as a

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Defendant, Plaintiff indicates that [he] does not know if Ms. Converti is married, and

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provides no information regarding where, if Ms. Converti is married, her husband

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resides.” (Doc. 8.) Accordingly, as of January 21, 2016, the Court had notified Plaintiff

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of the need to identify Ms. Converti’s husband before proceeding on the claims against

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him.

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However, it wasn’t until April 3, 2017, over 14 months later, that Plaintiff moved

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to amend the Complaint to name John Doe Converti. Prior to that time, Plaintiff chose to

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proceed in seeking judgment against Ms. Converti and The 2-Acorns, Inc., on the same

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claims Plaintiff asserts against John Doe Converti, which took several months due in

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large part to the deficiencies in Plaintiff’s briefing. (Docs. 12, 13, 14, 15, 16, 17, 18.) At

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no point during this roughly 14-month period of time did Plaintiff move to amend the

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Complaint to identify John Doe Converti. Further, in the Court’s March 2, 2017 Order

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granting Plaintiff’s request for default judgment against Ms. Converti and The 2-Acorns,

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Inc., the Court again specifically noted that “Plaintiff also names John Doe Converti, the

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fictitious name of Rebekah Converti’s husband, as a Defendant in this action. (Doc. 1.)

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Plaintiff claims in the Complaint that it is unknown whether Rebekah Converti is

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married, and, to date, Plaintiff has not further identified or served this fictitiously-named

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Defendant. (Id. ¶ 6.).” (Doc. 18 at 2 n.2.)

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However, Plaintiff took no action with regard to John Doe Converti. It was not

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until 32 days later, after the Court issued an Order to Show Cause regarding John Doe

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Converti, and over 17 months after Plaintiff filed his Complaint in this matter, that

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Plaintiff moved to amend his Complaint to identify Defendant John Doe Converti. (Doc.

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21.)

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through skip traces and other means, to find out Rebekah’s marriage status during the

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relevant time period and her current marriage status. Undersigned counsel now has

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reason to believe that Rebekah Converti was married to Roberto Garcia during all

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relevant times and that she remains married to him today.” (Id.) However, Plaintiff

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provides no basis for his failure to identify John Doe Converti within any sort of

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reasonable time. Plaintiff does not explain when the skip traces or “other means” were

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employed to attempt to identify Ms. Converti’s husband, or what document or

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information was not available during the first 17 months this case was pending, but that

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became available only after the Court issued an Order to Show Cause regarding John Doe

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Converti’s status as a Defendant.

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regarding the skip traces or “other means” used to find John Doe Converti’s true identity

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during the first 17 months of this case. Further, Plaintiff was aware, as of March 8, 2016,

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when default was entered against Rebekah Converti and The 2-Acorns, Inc., that he

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would be unable to locate John Doe Converti through any discovery to those Defendants.

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(Doc. 13.) For all of these reasons, it appears clear to this Court that Plaintiff failed to

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prosecute his claims against John Doe Converti with any sort of diligence, which has

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caused unreasonable delay.

The Motion to Amend claims that “[u]ndersigned counsel diligently searched,

Likewise, Plaintiff fails to submit any evidence

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In determining whether Plaintiff’s failure to prosecute warrants dismissal of his

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claims, the Court must weigh the following five factors: “(1) the public’s interest in

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expeditious resolution of litigation; (2) the court’s need to manage its docket; (3) the risk

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of prejudice to the defendants; (4) the public policy favoring disposition of cases on their

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merits; and (5) the availability of less drastic sanctions.” Carey v. King, 856 F.2d 1439,

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1440 (9th Cir. 1988) (quoting Henderson v. Duncan, 779 F.2d 1421, 1423 (9th Cir.

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1986)).

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The Court finds the first three factors weigh heavily in favor of dismissing

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Plaintiff’s claims against John Doe Converti. As set forth in detail above, Plaintiff

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caused unreasonable delay by his failure to move to amend to properly name the John

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Doe Defendant until 17 months after filing the Complaint, and 14 months after the Court

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highlighted for Plaintiff to the need to identify and locate John Doe to serve him.

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Notably, Plaintiff does not appear to have even located Defendant John Doe Converti,

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stating in his Motion that “[s]erving Rebekah Converti was very difficult because she

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evaded service, and her whereabouts were unknown. We expect that we will encounter

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the same problems with Defendant Garcia.” (Doc. 21.) The Court finds the extreme and

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unreasonable delay undercuts the public’s interest in expeditious resolution of this

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litigation.

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Further, the Court’s need to manage its docket is severely hindered by Plaintiff’s

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failure to prosecute here, as this case has now been pending for over 20 months, and

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Plaintiff’s request to amend comes after the Court has spent extensive time and resources

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resolving Plaintiff’s request to enter default judgment against the named Defendants.

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Additionally, the risk of prejudice to the John Doe Defendant weighs in favor of

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dismissal because a presumption of injury arises from unreasonable delay in the

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prosecution of an action. See Anderson, 542 F.2d at 524 (The Ninth Circuit Court “has

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consistently held that the failure to prosecute diligently is sufficient by itself to justify a

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dismissal, even in the absence of a showing of actual prejudice to the defendant from the

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failure.”).

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Defendants, the same claims that form the basis for Plaintiff’s claims against John Doe

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Converti.

And, the Court has already adjudicated the claims against the named

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The fourth factor, the policy favoring adjudication on the merits, as in most cases,

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weighs against dismissal of this action. Finally, the Court has considered possible less

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drastic sanctions and cannot identify any such available sanction. The Court has already

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ordered Plaintiff to show cause why this case should not be dismissed with prejudice, and

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Plaintiff’s response fails to provide any specific explanation for his extreme and

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unreasonable delay. Further, at this late stage of the case, after Plaintiff has failed to

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prosecute its claims against John Doe Converti for over 17 months, no less drastic

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sanction is available.

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In sum, the Court finds that the above factors weigh heavily in favor of dismissal

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of Plaintiff’s claims against John Doe Converti with prejudice for Plaintiff’s failure to

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prosecute. Therefore, the Court will vacate its previous partial judgment, entered against

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Defendants Rebekah Converti and The 2-Acorns, Inc., and enter a full and final judgment

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in this action.

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Accordingly,

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IT IS ORDERED that the Judgment at Doc. 19 entered against the named

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Defendants is vacated.

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IT IS FURTHER ORDERED that the Clerk of Court is directed to enter full and
final judgment in this matter as follows:

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1.

For the reasons provided by the Court in its Order at Doc. 18, and pursuant

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to Rule 55(b)(2) of the Federal Rules of Civil Procedure, the Clerk shall enter Judgment

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in favor of Plaintiff and against Defendants Rebekah Converti and The 2-Acorns, Inc. in

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the following amounts: (1) $350,000 in principal; (2) $102,666.74, which represents 22

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months of unpaid monthly interest payments; and (3) additional monthly interest

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payments of $4,666.67 until the principal amount of $350,000, plus all accrued interest,

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has been paid in full to Plaintiff.

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2.

Pursuant to Rule 58 of the Federal Rules of Civil Procedure, the Clerk of

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Court shall enter judgment dismissing Defendant John Doe Converti with prejudice.

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IT IS FURTHER ORDERED that Plaintiff’s Motion to Amend (Doc. 21) is
denied as moot.
Dated this 27th day of July, 2017.

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Honorable G. Murray Snow
United States District Judge

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