Marcos Melchor et al v. Arch Bay Holdings, LLC et al

Filing 36

ORDER DISMISSING CASE by Judge Michael W. Fitzgerald: Before the Court is Plaintiffs Marcos Melchor and Teresa Melchor's Response to the Court's Order to Show Cause 35 . For the reasons stated herein, IT IS HEREBY ORDERED that this actio n be DISMISSED with prejudice for failure to prosecute and failure to comply with court orders. The Court ORDERS the Clerk to treat this Order, and its entry on the docket, as an entry of judgment. IT IS SO ORDERED. (Case Terminated. Made JS-6.) (cw)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES -- GENERAL
Case No. EDCV 14-1458-MWF (DTB)
Date: December 8, 2015
Title:
Marcos Melchor, et al. -v- Arch Bay Holdings, et al.
PRESENT: HONORABLE MICHAEL W. FITZGERALD, U.S. DISTRICT
JUDGE
Cheryl Wynn
Relief Courtroom Deputy
ATTORNEYS PRESENT FOR PLAINTIFF:
None Present

None Present
Court Reporter
ATTORNEYS PRESENT FOR DEFENDANTS:
None Present

PROCEEDINGS (IN CHAMBERS): ORDER RE: PLAINTIFF’S RESPONSE
TO ORDER TO SHOW CAUSE [35]
Before the Court is Plaintiffs Marcos Melchor and Teresa Melchor’s
Response to the Court’s most recent Order to Show Cause issued on November 17,
2015. (Response, Docket No. 35).
Plaintiffs’ Complaint was filed on July 16, 2014, over one year ago. (See
generally Complaint, Docket No. 1). After the initial filing, Plaintiffs failed to
request a summons and effect service on Defendants for nearly a year. On April 8,
2015, the Court issued an Order to Show Cause Re: Dismissal for Lack of
Prosecution. (Docket No. 8). Plaintiffs requested the Clerk to issue the summons
on April 20, 2015 (Docket No. 9), but then continued to stand by idly for another
month, until the Court issued another Order to Show Cause Re: Dismissal for Lack
of Prosecution on May 8, 2015. (Docket No. 11). Again, at the Court’s prodding,
Plaintiffs filed proofs of service on May 21, 2015. (Docket Nos. 13–14).
The case again went silent, until the Court issued a third Order to Show
Cause Re: Lack of Prosecution on July 1, 2015, indicating that the Order would be
discharged if Plaintiffs voluntarily dismissed the action or filed an Application for
Default with the Clerk. (Docket No. 16). Plaintiffs filed deficient Applications for
Default on July 13, 2015 (Docket Nos. 17–18), which again prompted the Court to
issue yet another Order to Show Cause Re: Lack of Prosecution on July 29, 2015,
after Plaintiffs failed to remedy the deficient applications (Docket No. 22). After
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JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES -- GENERAL
Case No. EDCV 14-1458-MWF (DTB)
Date: December 8, 2015
Title:
Marcos Melchor, et al. -v- Arch Bay Holdings, et al.
perfecting the applications, the Clerk entered default against Defendants on August
31, 2015. (Docket No. 27). The Court issued an Order to Show Cause Re: Default
Judgment on September 1, 2015, indicating that the Order would be discharged if
Plaintiffs file a Motion for Default Judgment by October 5, 2015. (Docket No.
28). Plaintiffs filed a deficient Motion for Default Judgment on October 5, 2015
(Docket No. 29), and a perfected but untimely Motion for Default Judgment on
October 7, 2015, with a noticed hearing date scheduled for November 16, 2015 at
10:00 a.m. (Docket No. 32).
On November 16, 2015, this case was called, but counsel for neither party
appeared. On November 17, 2015, the Court issued a fifth Order to Show Cause
(“OSC”) requiring Plaintiffs to show cause by no later than November 30, 2015,
explaining why this action should not be dismissed for (1) lack of prosecution; (2)
lack of personal jurisdiction over each Defendant; and (3) lack of joinder of all
indispensable parties. (OSC, Docket No. 34). On November 30, 2015, Plaintiffs
filed a timely Response. (Docket No. 35).
Having reviewed Plaintiffs’ Response, the Court concludes that the
Response does not adequately address the concerns outlined in the Court’s OSC,
and Plaintiffs have thus failed to discharge their responsibilities under the OSC.
Plaintiffs’ counsel submitted a declaration explaining that Plaintiffs’ counsel
failed to appear at the hearing on Plaintiffs’ Motion for Default Judgment because
of a calendaring error by members of his staff. (Response at 1). But with regard to
the Court’s concerns about lack of personal jurisdiction over each Defendant and
lack of joinder of all indispensable parties, Plaintiffs failed to adequately comply
with the Court’s OSC. For example, the Court ordered Plaintiffs to show cause as
why “the Court has personal jurisdiction over each Defendant.” (OSC at 5). In
addition, the Court required Plaintiffs’ analysis to “address whether the Court has
personal jurisdiction over defunct corporations such as Regional Trustee.” (Id.).
Plaintiffs’ Response is silent as to the Court’s personal jurisdiction over Defendant
Mortgage Electronic Registration, and Plaintiffs do not attempt any analysis
regarding the Court’s personal jurisdiction over Regional Trustee as a defunct
corporation. (See generally Response).
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JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES -- GENERAL
Case No. EDCV 14-1458-MWF (DTB)
Date: December 8, 2015
Title:
Marcos Melchor, et al. -v- Arch Bay Holdings, et al.
Furthermore, the Court ordered Plaintiffs to show cause as to why “Land
America and Fidelity National are not indispensable and necessary parties to this
lawsuit under Rule 19(a).” (OSC at 5). Plaintiffs’ Response states that Land
America and Fidelity National have, “based upon a total lack of information and
belief, NOT acted or failed to act such that any liability attached to such action or
inaction.” (Response at 5–6). However, although Land America and Fidelity
National may not have acted in any way to create liability to Plaintiffs, Plaintiffs
fail to address the Court’s concern that, absent Land America and Fidelity
National’s presence in this lawsuit, the Court “cannot accord complete relief
among the existing parties.” Fed. R. Civ. P. 19(a)(1)(A). As the Court discussed
in the OSC, “[i]t is unclear what interest Fidelity National holds in the Deed of
Trust as the purchaser of the original trustee.” (OSC at 8). “Until Plaintiffs pay
off the loan, the trustee, or any successor trustee, presumably holds the title in
trust.” (Id.). Therefore, it is unclear that the Court can adjudicate Plaintiffs’
request for quiet title in the absence of the original trustee (Land America) or
successor trustee (Fidelity National). As Plaintiffs acknowledge, these parties
“may or may not still possess an interest (in whole or in part) in the Note.” (Id.).
This case has continued to languish on the Court’s docket for nearly oneand-one-half years, as Plaintiffs continue to do the bare minimum, each time at the
Court’s prodding, to prevent dismissal. It is well-established that a district court
has authority to dismiss a plaintiff’s action because of his or her failure to
prosecute and/or to comply with court orders. See Fed. R. Civ. P. 41(b); Link v.
Wabash Railroad Co., 370 U.S. 626, 629–30 (1962) (court’s authority to dismiss
for lack of prosecution is necessary to prevent undue delays in the disposition of
pending cases and avoid congestion in district court calendars); Ferdik v. Bonzelet,
963 F.2d 1258, 1260 (9th Cir. 1992) (district court may dismiss action for failure to
comply with any order of the court).
In determining whether to dismiss a case for failure to prosecute or failure to
comply with court orders, the Court considers five factors: (1) the public’s interest
in expeditious resolution of litigation; (2) the Court’s need to manage its docket;
(3) the risk of prejudice to Defendants; (4) the public policy favoring the
disposition of cases on their merits; and (5) the availability of less drastic
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JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES -- GENERAL
Case No. EDCV 14-1458-MWF (DTB)
Date: December 8, 2015
Title:
Marcos Melchor, et al. -v- Arch Bay Holdings, et al.
sanctions. See In re Eisen, 31 F.3d 1447, 1451 (9th Cir. 1994) (failure to
prosecute); Ferdik, 963 F.2d at 1260–61 (failure to comply with court orders).
The first two factors—the public’s interest in expeditious resolution of
litigation and the Court’s need to manage its docket—weigh in favor of dismissal.
Plaintiffs have continuously dragged their feet in moving this case forward, and
Plaintiffs have also blatantly disregarded the Court’s explicit instructions to
address certain concerns in the OSC. Given that this case cannot move forward to
resolution in the absence of Plaintiffs overcoming the issues concerning personal
jurisdiction and joinder, Plaintiffs’ conduct hinders the Court’s ability to move this
case toward disposition, and indicates that Plaintiffs do not intend to litigate this
action diligently.
The third factor—prejudice to defendants—also weighs in favor of
dismissal. A rebuttable presumption of prejudice to defendants arises when there
is a failure to prosecute diligently. Eisen, 31 F.3d at 1452–53. That presumption
may be rebutted where a plaintiff proffers an excuse for delay. Plaintiffs have
failed to come forward with any excuse or reason for delay.
The fourth factor—public policy in favor of deciding cases on their merits—
weighs against dismissal. It is, however, a plaintiff’s responsibility to move a case
towards a disposition at a reasonable pace and to avoid dilatory tactics. See Morris
v. Morgan Stanley Co., 942 F.2d 648, 652 (9th Cir. 1991). Plaintiffs have not
discharged this responsibility. In these circumstances, the public policy favoring
resolution of disputes on the merits does not outweigh Plaintiffs’ failure to
prosecute and failure to comply with orders of the Court.
The fifth factor—availability of less drastic sanctions—weighs in favor of
dismissal. The Court has attempted to avoid outright dismissal of this action on
five separate occasions by issuing Orders to Show Cause and providing Plaintiffs
an opportunity to explain why this matter should not be dismissed. Plaintiffs failed
to adequately comply with the Court’s most recent OSC, despite the Court’s
explicit warning that Plaintiffs’ “[f]ailure to adequately address these issues will

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JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES -- GENERAL
Case No. EDCV 14-1458-MWF (DTB)
Date: December 8, 2015
Title:
Marcos Melchor, et al. -v- Arch Bay Holdings, et al.
result in dismissal of this action with prejudice.” (OSC at 9). See also Henderson
v. Duncan, 779 F.2d 1421, 1424 (9th Cir. 1986) (“The district court need not
exhaust every sanction short of dismissal before finally dismissing a case, but must
explore possible and meaningful alternatives.”).
Taking all of the above factors into account, dismissal for failure to
prosecute and failure to comply with court orders is appropriate. Such a dismissal,
however, should not be entered unless Plaintiffs have been notified that dismissal
is imminent. In this case, Plaintiffs have been cautioned multiple times about the
possibility of dismissal in the OSC as well as previous Orders to Show Cause dated
July 1, 2015, and July 29, 2015. (Docket Nos. 16, 22).
IT IS HEREBY ORDERED that this action be DISMISSED with
prejudice for failure to prosecute and failure to comply with court orders. The
Court ORDERS the Clerk to treat this Order, and its entry on the docket, as an
entry of judgment. Local Rule 58-6.
IT IS SO ORDERED.

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