General Electric Capital Corporation et al v. Ten Forward Dining, Inc. et al

Filing 83

ORDER signed by Judge Frank C. Damrell, Jr. on 06/22/2011 GRANTING 72 Motion to Strike. (Michel, G)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo---12

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GENERAL ELECTRIC CAPITAL
CORPORATION; CEF FUNDING II,
L.L.C. and CEF FUNDING V, LLC,

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Plaintiffs,

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NO. CIV. S-09-3296 FCD/DAD
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v.
TEN FORWARD DINING, INC.;
DELIGHTFUL DINING, INC.; TGIA
RESTAURANTS, INC.; KOBRA
RESTAURANT PROPERTIES, L.L.C.;
ABOLGHASSEM ALIZADEH; THE
MECHANICS BANK; EQUITY
LENDERS, LLC; APEX PROPERTY
ADVISORS INC.; KEY REAL ESTATE
EQUITY CAPITAL, INC.; COUNTRY
OF SACRAMENTO DEPARTMENT OF
PUBLIC WORKS ADMINISTRATION;
STATE OF CALIFORNIA EMPLOYMENT
DEVELOPMENT DEPARTMENT; UNITED
STATES OF AMERICA; CITY OF
CITRUS HEIGHTS; CITY OF ELK
GROVE; CITY OF REDDING; CITY
OF GRASS VALLEY; COUNTY OF
PLACER; COUNTY OF SACRAMENTO;
COUNTY OF SHASTA; COUNTY OF
NEVADA, AND DOES 1 - 100,
INCLUSIVE,
Defendants.
_______________________________/

MEMORANDUM AND ORDER

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----oo0oo---This matter comes before the court on the motion of

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plaintiffs General Electric Capital Corporation, CEF Funding II,

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L.L.C., and CEF Funding V, LLC (collectively, “plaintiffs” or

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“GE”) to strike the answer of defendants Ten Forward Dining, Inc.

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(“Ten Forward”), Delightful Dining, Inc. (“Delightful Dining”),

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and TGIA Restaurants, Inc. (“TGIA”) (collectively, the “corporate

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defendants”).

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answer to the complaint be stricken as a sanction for the failure

Plaintiffs request that the corporate defendants’

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to obtain counsel to defend themselves in this action.

No

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opposition to plaintiffs’ motion has been filed.

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set forth below,1 plaintiffs’ motion to strike is GRANTED.

For the reasons

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BACKGROUND

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In November 2009, plaintiffs filed this action against a

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number of defendants as a means of redress for alleged breach of

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loan documents.

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corporate defendants, along with defendants Kobra Restaurant

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Properties, LLC (“Kobra Restaurant”) and Abolghassem Alizadeh

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(“Alizadeh”), filed an answer in January 2010 through counsel,

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Patricia Lee.

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October 2010, Patricia Lee filed a Motion to Withdraw as

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Attorney.

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On October 29, 2010, the court granted the motion to withdraw and

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informed defendants that corporations cannot appear in the action

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without legal counsel.

(Compl. [Docket #1], filed Nov. 25, 2009).

(Answer [Docket #11], filed Jan. 11, 2010).

The

In

(Mot. to Withdraw [Docket #60], filed Oct. 15, 2010).

(Order [Docket #64], filed Oct. 29,

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Because oral argument will not be of material
assistance, the court orders this matter submitted on the briefs.
E.D. Cal. Local Rule 230(g).
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2010).

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alternate counsel within 30 days of the court order.

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The court directed defendant corporations to retain
(Id.)

In May 2011, the court permitted defendants Kobra Restaurant

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and Alizadeh to substitute Paul Anthony Warner as their attorney

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of record.

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However, the corporate defendants have yet to retain alternate

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counsel, despite the court’s order directing them to do so.

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(Pl.’s Mot. to Strike [Docket #72], filed May 24, 2011, at 4).

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(Order, [Docket ##70–71], filed May 13, 2011).

ANALYSIS
Plaintiffs move to strike the corporate defendants answer as

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a sanction for their failure to retain alternate counsel in

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accordance with the court order.

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“It is a longstanding rule that [c]orporations and other

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unincorporated associations must appear in court through an

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attorney.”

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F.3d 972, 973–74 (9th Cir. 2004) (citation and quotation marks

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omitted, second modification in original); E Dist. Local Rule

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183(a).

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striking their answer when they fail to retain counsel to defend

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themselves.

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Inc., No. 2:08-cv01777, 2010 WL 3386473, at *3 (E.D. Cal. Aug.

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26, 2010) (sanctioning corporate defendants by striking their

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answer when they failed to retain alternate counsel after the

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withdrawal of their original counsel); Rojas v. Hawgs Seafood

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Bar, Inc., No. C08-03819, 2009 WL 1255538, at *1 (N.D. Cal. May

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5, 2009) (“When a corporation fails to retain counsel to

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represent it in an action, its answer may be stricken”).

D-Beam Ltd. P’ship v. Roller Derby Skates, Inc., 366

Further, a court may sanction corporate defendants by

See Galtieri-Carlson v. Victoria M. Morton Enters.,

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Pursuant to the local rule and applicable case law, the

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corporate defendants may not appear in this case without counsel.

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The corporate defendants’ original counsel withdrew in October

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2010, and the corporate defendants have failed to retain

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alternate counsel since that date.

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violation of the court’s order.

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defendants’ answer is stricken.

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This inaction is in direct

As such, the corporate

CONCLUSION
Accordingly, for the foregoing reasons, plaintiffs’ motion

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to sanction the corporate defendants by striking their answer is

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GRANTED.

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IT IS SO ORDERED.
DATED: June 22, 2011.

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FRANK C. DAMRELL, Jr.
UNITED STATES DISTRICT JUDGE

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