Ally Bank et al v. Wells Fargo Bank, N.A.

Filing 672

ORDER by Judge Yvonne Gonzalez Rogers denying 622 Motion for Payment of Fees and Expenses; denying without prejudice 622 Motion to Withdraw as Attorney ; denying 642 Motion to Lift Preliminary Injunction for Limited Purpose. (fs, COURT STAFF) (Filed on 4/30/2014)

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1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4 5 FIDELITY NATIONAL TITLE INSURANCE COMPANY, et al, Plaintiffs, 6 7 8 9 vs. JAMES C. CASTLE AKA J. CHRISTOPHER CASTLE, et al, 10 Defendants. 11 Northern District of California United States District Court 12 CASE NO.: 11-CV-896 YGR ORDER: (1) DENYING PLAINTIFFS’ MOTION TO LIFT PRELIMINARY INJUNCTION FOR LIMITED PURPOSE OF ALLOWING JUDGMENT CREDITOR TO EXECUTE ON FROZEN FUNDS WITHOUT PREJUDICE (DKT. NO. 642); (2) DENYING CASTLE’S MOTION FOR PAYMENT OF FEES AND EXPENSES FROM FROZEN ASSETS (DKT. NO. 622); (3) DENYING ALTERNATIVE MOTION OF CASTLE’S COUNSEL TO WITHDRAW WITHOUT PREJUDICE Defendant James C. Castle (“Castle”) has filed a Motion For Payment Of Fees And Expenses 13 14 From Frozen Assets, or alternatively to allow his counsel to withdraw. (Dkt. No. 622.) Following 15 shortly thereafter, Plaintiff Fidelity National Title Insurance Company (“FNTIC”) filed its Motion to 16 Lift Preliminary Injunction For Limited Purpose of Allowing Judgment Creditor to Execute on Frozen 17 Funds. (Dkt. No. 642.) 18 I. 19 Motions Concerning Use of Frozen Funds Previously in this action, on December 5, 2011, the Court issued a Preliminary Injunction 20 Order freezing funds in five bank accounts, belonging to three different defendants and a third party. 21 (Dkt. No. 111.) Castle’s motion seeks to unfreeze those funds to pay his counsel, since he claims 22 inability to pay her otherwise. However, none of those accounts are in Castle’s name. Although 23 Castle argues that, as a principal of the entities (a limited liability company and an unincorporated 24 association), he is authorized to make disbursements of the funds therein, he has not established that 25 he is authorized to use those funds for his own personal purposes. The Preliminary Injunction Order 26 expressly provided that Castle could petition for the use of the frozen funds for legal expenses if he 27 could provide “evidence of his authorization to use business funds for personal purposes.” (See 28 Document No. 111, 3:15-17.) Having failed to do so, the motion is DENIED. FNTIC seeks to lift the preliminary injunction order to pay a judgment against Castle. As with 1 2 Castle’s motion, there is no evidence or authority offered to show that allowing FNTIC to attach the 3 funds in the frozen accounts would be permissible. Again, the funds are held in the name of other 4 entities, not the judgment debtor Castle. As FNTIC concedes, the decision about whether these funds 5 might be used to pay the judgment against Castle is a matter most appropriately decided by the court 6 that entered the judgment. Consequently, the Court DENIES the motion to lift the preliminary 7 injunction, but without prejudice to some further showing that the funds may be used to pay the state 8 court judgment. 9 II. Motion to Be Relieved As Counsel Castle’s motion seeks, in the alternative, to allow his counsel to withdraw. Based on the 10 Northern District of California present showing, the Court DENIES this motion WITHOUT PREJUDICE. The proof of service on the 12 United States District Court 11 motion and supporting papers do not indicate that Castle was served with a copy of the motion. There 13 is no evidence in the record to indicate that Castle was informed that his counsel, Ann McFarland 14 Draper (“Draper”), seeks to withdraw. Likewise, there is no evidence that Castle was notified of the 15 consequences of Draper’s potential withdrawal. Should Draper continue to seek leave to withdraw, she is directed to serve a notice of motion, 16 17 declaration, and proposed form of order on Castle, and all remaining parties in the litigation, which 18 contains all the information provided in California Judicial Council Forms MC-051, MC-052, and 19 MC-053. (See Inclusion of all the information therein will 20 ensure that Castle understands the consequences of the motion, and that Draper provides the Court 21 and opposing parties with Castle’s contact information. However, Draper must complete the briefing 22 on the outstanding discovery dispute. 23 III. 24 Discovery Dispute As stated on the record, Plaintiffs are directed to file a formal motion regarding the relief they 25 seek in connection with Castle’s alleged failure to provide adequate responses to their document 26 demands. Said motion shall be filed no later than May 9, 2014. Castle’s response shall be filed by 27 May 23, 2014. Any reply shall be filed by May 30, 2014. Hearing is scheduled for June 17, 2014, at 28 2:00 p.m. in Courtroom1. Draper is hereby advised that the Court will only consider an extension if 2 1 Draper is actively in trial and provides verification of the same by the assigned trial judge. Given the 2 history of this litigation, and this dispute particularly, no other request for extension will be 3 entertained. 4 IV. Conclusion 5 For the reasons stated above, DENIES the motions. 6 This Order terminates Dkt. Nos. 622 and 642. 7 IT IS SO ORDERED. 8 9 10 Date: April 30, 2014 ____________________________________ YVONNE GONZALEZ ROGERS UNITED STATES DISTRICT COURT JUDGE 11 Northern District of California United States District Court 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3

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