El Tejado Broadway, Inc. v. Owners Insurance Company

Filing 36

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE re 1 Complaint, filed by El Tejado Broadway, Inc. by Magistrate Judge Michael E. Hegarty on 10/25/2018. (tsher, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 17-cv-01549-WJM-MEH
EL TEJADO BROADWAY, INC.,
Plaintiff,
v.
OWNERS INSURANCE COMPANY,
Defendant.
_____________________________________________________________________________
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
_____________________________________________________________________________
Michael E. Hegarty, United States Magistrate Judge.
This matter comes before the Court sua sponte due to Plaintiff’s failure to respond to this
Court’s order to show cause. The Court recommends that this case be dismissed with prejudice.1
The Plaintiff initiated this action on June 23, 2017. ECF No. 1. On October 17, 2017, I
granted Plaintiff’s request to stay the case, pending an appraisal of its property after the property was
damaged in a hail storm. ECF No. 25. That stay remains in effect.

1

Be advised that all parties shall have fourteen (14) days after service hereof to serve and
file any written objections in order to obtain reconsideration by the District Judge to whom this
case is assigned. Fed. R. Civ. P. 72. The party filing objections must specifically identify those
findings or recommendations to which the objections are being made. The District Court need
not consider frivolous, conclusive or general objections. A party’s failure to file such written
objections to proposed findings and recommendations contained in this report may bar the party
from a de novo determination by the District Judge of the proposed findings and
recommendations. United States v. Raddatz, 447 U.S. 667, 676–83 (1980); 28 U.S.C. §
636(b)(1). Additionally, the failure to file written objections to the proposed findings and
recommendations within fourteen (14) days after being served with a copy may bar the
aggrieved party from appealing the factual and legal findings of the Magistrate Judge that are
accepted or adopted by the District Court. Duffield v. Jackson, 545 F.3d 1234, 1237 (10th Cir.
2008) (quoting Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991)).

On September 13, 2018, Plaintiff’s counsel filed a motion to withdraw as attorney. ECF No.
30. Because this motion would leave the Plaintiff corporation unrepresented, I set a hearing on the
motion and required a representative of Plaintiff to appear at the hearing in person. ECF No. 32.
Further, I required Plaintiff’s counsel to file a certificate of service demonstrating that Plaintiff had
been served a copy of my order setting the hearing. Id. Plaintiff’s counsel timely complied with this
order. See ECF No. 33.
At the October 9, 2018 hearing, Plaintiff’s counsel appeared but a representative of Plaintiff
did not. See ECF No. 34. After Plaintiff’s counsel described his unsuccessful attempts to contact
his client prior to the hearing, I granted the motion to withdraw. See id. Consequently, the Plaintiff
corporation was left unrepresented and unable to appear before the Court. Mahajan v. Boxcar
Holdings, LLC, No. 18-cv-00533-MEH, 2018 WL 3056072, at *1 (D. Colo. Apr. 27, 2018) (“[A]
corporation may appear in the federal courts only through licensed counsel.’). Therefore, I issued
an order to show cause directing Plaintiff to explain why I should not recommend its case be
dismissed for failure to prosecute by October 23, 2018. ECF No. 35. That date has come and
passed, and Plaintiff has not responded to the order.
The Federal Rules of Civil Procedure give a district court ample tools to deal with a
recalcitrant litigant. See Jones v. Thompson, 996 F.2d 261, 264 (10th Cir. 1993). Fed. R. Civ. P.
41(b) allows a defendant to move for dismissal of an action if the plaintiff fails to prosecute or to
comply with a court order. See id.; see also Nasious v. Two Unknown B.I.C.E. Agents, 492 F.3d
1158, 1161 (10th Cir. 2007). Although the language of Rule 41(b) requires that the defendant file
a motion to dismiss, the Rule has long been interpreted to permit courts to dismiss actions sua sponte
for a plaintiff’s failure to prosecute or comply with the rules of civil procedure or the court’s orders.

2

Link v. Wabash R.R. Co., 370 U.S. 626, 630–31 (1962).
“A district court undoubtedly has discretion to sanction a party for failing to prosecute or
defend a case, or for failing to comply with local or federal procedural rules.” Reed v. Bennett, 312
F.3d 1190, 1195 (10th Cir. 2002). However, a dismissal with prejudice is a more severe sanction
and, generally, requires the district court to consider certain criteria. AdvantEdge Bus. Grp. v.
Thomas E. Mestmaker & Assoc., Inc., 552 F.3d 1233, 1236 (10th Cir. 2009). The Tenth Circuit set
forth a non-exhaustive list of factors a district court should consider when evaluating grounds for
dismissal of an action with prejudice: “(1) the degree of actual prejudice to the defendant; (2) the
amount of interference with the judicial process; . . . (3) the culpability of the litigant; (4) whether
the court warned the party in advance that dismissal of the action would be a likely sanction for
noncompliance; and (5) the efficacy of lesser sanctions.” Ehrenhaus v. Reynolds, 965 F.2d 916, 921
(10th Cir. 1992) (internal quotations and citations omitted). “[D]ismissal is warranted when ‘the
aggravating factors outweigh the judicial system’s strong predisposition to resolve cases on their
merits.’” Ecclesiastes 9:10-11-12, Inc. v. LMC Holding Co., 497 F.3d 1135, 1144 (10th Cir. 2007)
(quoting Ehrenhaus, 965 F.2d at 921).
The Court finds the first factor is neutral since, although the Defendant has been named in
a lawsuit, the case is currently stayed. However, Plaintiff’s lack of response to this Court’s orders
and its failure to participate has interfered with the judicial process in that the Court has been unable
to advance this case. Additionally, the necessity of issuing an order to show cause increases the
workload of the Court and interferes with the administration of justice.
Furthermore, Plaintiff has provided no justification for its failure to respond to Court orders
and to participate in the litigation; its culpability is evident. Plaintiff was warned in the order to

3

show cause that the Court would recommend dismissal for his failure to prosecute; yet, he has made
no response. Finally, the Court finds that no sanction less than dismissal with prejudice would be
effective here. Plaintiff has essentially abandoned this litigation; thus, no monetary sanction would
be practical. The Court concludes that dismissal with prejudice is the appropriate result.
In sum, Plaintiff appears to have abandoned its claims in this matter. It has failed to
prosecute the case with due diligence by his failure to appear at the motion hearing and to respond
to this Court’s order to show cause. Therefore, dismissal of this action against Defendant is
warranted.
Based on the foregoing and the entire record herein, and pursuant to Fed. R. Civ. P. 41(b),
I respectfully recommend that the Honorable William J. Martinez dismiss this case with prejudice
for Plaintiff’s failure to prosecute this action.
Dated this 25th day of October, 2018, in Denver, Colorado.
BY THE COURT:

Michael E. Hegarty
United States Magistrate Judge

4