Ewing v. K2 Property Development, LLC et al

Filing 178

ORDER Denying Motion for Sanctions (Dkt. 171 ); Denying Motion to Hold Defendant in Contempt (Dkt. 173 ); Granting Motion to Strike (Dkt. 176 ). The hearing currently scheduled for 2/25/2019 is vacated. Signed by Judge Larry Alan Burns on 2/20/2019. (All non-registered users served via U.S. Mail Service) (jdt) (Additional attachment(s) added on 2/21/2019: # 1 Stricken Document) (jdt).

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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ANTON EWING

CASE NO. 16cv0678-LAB (AGS)
Plaintiff,

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vs.

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K2 PROPERTY DEVELOPMENT, LLC
and DANIEL KLEIN,

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ORDER DENYING MOTION FOR
SANCTIONS [Dkt. 171]; DENYING
MOTION TO HOLD DEFENDANT IN
CONTEMPT [Dkt. 173]; GRANTING
MOTION TO STRIKE [Dkt. 176]

Defendants.

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On October 4, 2018, this Court found that Defendant Daniel Klein had substantially

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complied with the terms of a settlement agreement with Plaintiff Anton Ewing that was

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entered on the record in front of Magistrate Judge Andrew G. Schopler. Accordingly, the

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Court granted Klein’s motion to enforce the settlement agreement and dismissed the

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case. Presently before the Court are two motions: Klein’s motion for sanctions against

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Ewing based on Ewing’s decision to continue litigating a related case in state court, and

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Ewing’s retaliatory motion to hold Klein in contempt for publicly filing private documents.

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Dkts. 171, 173. These motions are suitable for disposition without argument and both

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motions are DENIED. Civ. L.R. 7.1(d). Klein’s related motion to strike is GRANTED. Dkt.

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176.

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Klein’s Motions for Sanctions against Ewing

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The parties attempted to settle this case twice. The first settlement was entered

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out-of-court and was never finalized for reasons not relevant here. The second settlement

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was entered orally on the record in front of Judge Schopler. The terms of the settlement

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required Klein to provide to Ewing certain documents tying Klein’s company, K2, to other

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telemarketing firms. After Klein provided the documents late, Ewing reneged on the

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settlement agreement and continued litigating. Klein then brought a motion to enforce

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the settlement agreement and the Court granted that motion, finding that Klein had

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substantially complied with the terms of the agreement. The Court specifically found that

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the second “settlement agreement supersede[d] any previous settlement agreements”

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and that the case should be dismissed. Dkt. 160 at 7. Apparently unhappy with this

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result, Ewing continued litigating a parallel suit in San Diego Superior Court, which is

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related to the first, out-of court settlement agreement. Klein urges the Court to sanction

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Ewing for this behavior, which, in Klein’s view, violates the terms of the settlement

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agreements and this Court’s order of dismissal.

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It is true that “[d]istrict courts have broad equitable power to order appropriate

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relief in civil contempt proceedings.” F.T.C. v. EDebitPay LLC, 695 F.3d 938, 945 (9th

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Cir. 2012). But sanctions are not levied lightly. “Civil contempt . . . consists of a party's

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disobedience to a specific and definite court order by failure to take all reasonable steps

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within the party's power to comply.” In re Dual-Deck Video Cassette Recorder Antitrust

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Litig., 10 F.3d 693, 695 (9th Cir. 1993). “A person should not be held in contempt if his

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action appears to be based on a good faith and reasonable interpretation of the court's

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order.” Id. (internal citations and alterations omitted).

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Sanctions are not warranted here. While the Court was clear in its finding that the

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in-court settlement agreement superseded the first, it did not issue a “specific and definite”

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order that Ewing cease any related litigation in state court. Id. Ewing’s decision to do so

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may be frivolous, but it does not directly contravene this Court’s order. The state court is

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capable of determining the res judicata effects of this Court’s decisions and sanctioning

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Ewing to the extent his litigation is frivolous or malicious. But that’s for the state court to

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decide, not this one. Klein’s motion is DENIED. Dkt. 171.
Ewing’s Motion to Hold Klein in Contempt

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In what can only be construed as a retaliatory motion filed in response to Klein’s

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motion for sanctions, Ewing has filed a motion to hold Klein in contempt for publicly filing

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documents that Judge Schopler previously ordered to be filed under seal. The gist of his

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argument is that Judge Schopler ordered the parties to refrain from referencing settlement

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terms in future filings, and Klein violated this order when he filed his original motion for

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sanctions, which contained a reference to the dollar amount of the original, out-of-court

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settlement. Ewing has no leg to stand on here, because he too has publicly filed a

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document referencing the settlement amount. See San Diego County Superior Court

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Case No. 37-2018-00022631-CL-BC-CTL, Complaint.1 This is not to suggest that either

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party is entirely innocent, but simply to rebut Ewing’s argument that he has somehow

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suffered harm from the disclosure. See Dkt. 172 at 2 (“This disclosure harms Plaintiff in

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that other telemarketers now know that Plaintiff has accepted these small amounts to

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dispose of cases. The negative implications and serious harm that this puts upon Plaintiff

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is material and significant.”). Ewing’s motion to hold Klein in contempt is DENIED.

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However, Klein’s motion to strike Docket Entry 168—Klein’s original motion for

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sanctions—is GRANTED, and the clerk is directed to strike that entry from the docket.

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3.

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For the reasons above, the competing motions for sanctions are DENIED. Dkts.

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171, 173. Klein’s motion to strike, (Dkt. 176), is GRANTED and the clerk is directed to

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strike the entirety of Dkt. 168 from the docket. This case remains closed, and the hearing

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currently scheduled for February 25, 2019 is VACATED.

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Conclusion

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Court orders and filings are proper subjects of judicial notice. See United States v.
Black, 482 F.3d 1035, 1041 (9th Cir. 2007).

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As always, the parties are encouraged to work through their disagreements in a

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professional and courteous manner.

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IT IS SO ORDERED.

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Dated: February 20, 2019
HONORABLE LARRY ALAN BURNS
Chief United States District Judge

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