Fresno Rock Taco, LLC v. National Surety Corporation

Filing 337

ORDER to SHOW CAUSE Why Jury Costs and Attorneys' Fees Should Not Be Imposed on Plaintiff Fresno Rock Taco, LLC. Fresno Rock Taco shall show cause in writing by no later than August 5, 2014, why jury costs and National's attorneys' fe es should not be imposed on it; and the Clerk of Court is DIRECTED to file: a) FRT's brief submitted by email to the Court on May 29, 2014; and b) The jury cost assessment bill. Order signed by Magistrate Judge Sheila K. Oberto on 7/28/2014. (Timken, A)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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FRESNO ROCK TACO, LLC, a California
limited liability company; ZONE SPORTS
CENTER, LLC, a California limited liability
company,

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Plaintiffs,
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Case No. 1:11-cv-00845-SKO
ORDER TO SHOW CAUSE WHY JURY
COSTS AND ATTORNEYS' FEES
SHOULD NOT BE IMPOSED ON
PLAINTIFF FRESNO ROCK TACO, LLC

v.
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NATIONAL SURETY CORPORATION, a
Fireman's Fund Company,
Defendant.
_____________________________________/
Re-trial in this matter was set for May 28, 2014. On the first day of trial, National Surety

22 Corporation ("National") informed the Court that Plaintiff Fresno Rock Taco, LLC ("Plaintiff" or
23 "FRT") had been suspended in April 2014 by the California Secretary of State and was legally
24 prohibited from prosecuting its suit against National. FRT's managing member, Milton Barbis,
25 attempted to ascertain the basis for the suspension and to effect revival, if possible, that same day.
26 While FRT assessed its status, the Court proceeded with voir dire and selected a jury. FRT was to
27 report to the Court by the close of business on May 28, 2014, whether revival had occurred.
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FRT did not apprise the Court of its status by the close of the day. However, the next

2 morning, FRT informed the Court that it was unable to effect revival immediately and, although it
3 believed the law entitled it to continue prosecuting its suit, it was alternatively entitled to a
4 continuance of the trial while it attempted revival. FRT also set forth these arguments in a brief
5 that was submitted to the Court via email on May 29, 2014.1

Because the basis of FRT's

6 suspension was not clear and FRT could not provide a clear estimate how long revival would
7 require, the jury was dismissed, and the trial was continued to allow FRT to attempt to revive its
8 status.
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On June 27, 2014, FRT filed a status report stating it had been suspended for failure to pay

10 taxes and failure to properly file tax returns. FRT obtained a Certificate of Revivor on June 25,
11 2014, indicating that it was relieved of its suspension and was now in good standing with the
12 Franchise Tax Board. (Doc. 333.)
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On July 11, 2014, National filed a response contending that it had not caused FRT's

14 suspension, and it was harmed by FRT's failure to correct this deficiency prior to trial. National
15 argues that FRT knew of the suspension well before trial but failed to disclose it or to correct the
16 problem. National contends that Federal Rule of Civil Procedure 16(f)(1)(C) gives the Court
17 authority to issue sanctions, which include attorney's fees, for violating the pretrial order. In
18 addition to the jury costs assessed, National requests that FRT be ordered to pay National
19 $11,549.27 for fees and expenses incurred as a result of the continuance.
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On July 18, 2014, FRT filed a reply brief asserting the circumstances of this case are

21 similar to that described by a California appellate court in Color-Vue v. Abrams, 44 Cal. App. 4th
22 1599 (1996) which counsel noted in open court on May 29, 2014, but failed to raise in FRT's May
23 29, 2014, brief. FRT contends National failed to address the Color-Vue case or the issue of
24 waiver. FRT again asserts that it is not required to prove its standing as part of its case, and
25 National has waived the issue by not raising lack of capacity as an affirmative defense in its
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FRT asserts that Color-Vue requires National to bear the burden of the costs of

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FRT failed to actually file its brief. The brief FRT submitted to the Court via email will be filed pursuant to this
order.

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1 impaneling a jury. Having reviewed the parties' briefs and supporting documentation, the Court
2 disagrees.
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Accordingly, FRT is ORDERED to show cause by August 5, 2014, why jury costs in the

4 amount of $5,513.16 and National's attorneys' fees in the amount of $11,549.27 should not be
5 imposed on FRT as a result of the trial continuance necessary for FRT to revive its corporate
6 status. FRT may file a brief of no more than ten (10) pages stating why jury costs and attorneys'
7 fees should not be imposed, setting forth any additional reasons not already addressed in its
8 papers.
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Based on the foregoing, IT IS HEREBY ORDERED that:
1.

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FRT show cause in writing by no later than August 5, 2014, why jury costs and
National's attorneys' fees should not be imposed on it; and

2.

The Clerk of Court is DIRECTED to file:

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a.

FRT's brief submitted by email to the Court on May 29, 2014; and

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b.

The jury cost assessment bill.

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IT IS SO ORDERED.
Dated:

July 28, 2014

/s/ Sheila K. Oberto
UNITED STATES MAGISTRATE JUDGE

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