Securities and Exchange Commission v. Founding Partners Capital Management, Co. et al

Filing 321

OPINION AND ORDER granting 310 Motion for indicative ruling to the extent that the Court indicates that it would not grant the Rule 60(b) motion if the matter was remanded; granting 313 Motion to stay pending appeal; granting 314 Motion to stay pending appeal; denying 319 Motion to withdraw as attorney. All other motions currently pending are deferred pending appeal. Signed by Judge John E. Steele on 12/1/2011. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
vs.

Case No. 2:09-cv-229-FtM-29DNF

FOUNDING PARTNERS CAPITAL MANAGEMENT
CO.; FOUNDING PARTNERS STABLE-VALUE
FUND, LP; FOUNDING PARTNERS STABLEVALUE FUND II, LP; FOUNDING PARTNERS
GLOBAL FUND, LTD.; FOUNDING PARTNERS
HYBRID-VALUE FUND, LP; WILLIAM L.
GUNLICKS; and PAMELA L. GUNLICKS,
Defendants,
___________________________________
OPINION AND ORDER
This matter comes before the Court on defendant William
Gunlicks’ Rule 60(b) Motion, Motion to Vacate the Court’s Opinion
and

Order

Underlying

and

Vacate

Motion

to

the
Set

Supplemental
Disgorgement

Judgment
and

and

Strike

Pre-[sic]Judgment

Interest and Impose a Civil Penalty Against Defendant (Doc. #309)
filed on August 25, 2011; defendants William L. Gunlicks and Pamela
Gunlicks’ Motion for Indicative Rule Pursuant to Rule 62.1 (Doc.
#310) filed on August 25, 2011; defendant William L. Gunlicks’
Motion

to

Stay

(Doc.

#313)

filed

on

September

2,

2011;

and

defendant Pamela Gunlicks’ Motion to Stay (Doc. #314) filed on
September 2, 2011.

The Securities and Exchange Commission (SEC)

filed Responses to the motions.

(Docs. ## 315, 316, 318.)

Also

before the Court is Attorney Gabrielle Lyn D’Alemberte and Robert

L. Parks’ Motion for Leave to Withdraw as William L. Gunlicks’ and
Pamela Gunlicks’ Counsel of Record (Doc. #319).
I.
On March 3, 2010, the Court entered

an Order (Doc. #200)

granting the SEC’s Request for Entry of Judgment of Permanent
Injunction and Other Relief, with the Consent of Defendant William
L. Gunlicks, and directing the Clerk to enter judgment wherein Mr.
Gunlicks “waived findings of fact and conclusions of law; and
waived any right to appeal from this Judgment.”
3.)

(Doc. #200, pp. 2-

On March 4, 2010, the Clerk entered a Judgment in a Civil Case

(Doc. #201) which included language that “The Court shall determine
the amounts of the disgorgement and civil penalty upon motion of
the Commission. . . .

In connection with the Commission’s motion

for disgorgement and/or a civil penalty, the parties may take
discovery,

including

(Doc. #201, pp. 5-6.)

discovery

from

appropriate

non-parties.”

On May 17, 2010, the Court granted a

modification of the Asset Freeze to allow the payment of $53,392.46
to counsel for Mr. Gunlicks.

(Doc. #219.)

On April 8, 2010, the Court granted a stay of all pending
deadlines to allow the Receiver to negotiate the terms of the
disgorgement and civil penalties.

(Doc. #207.)

On August 10,

2010, the stay was continued for an additional 120 days without
prejudice

to the

Receiver’s ability

to

carry out

duties;

on

December 22, 2010, the Court extended the stay through February 22,

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20111; on February 22, 2011, the Court extended the stay for an
additional 60 days; and on April 25, 2011, in light of ongoing
settlement

negotiations,

the

Court

stayed

notification that the stay should be lifted.

the

case

pending

(Docs. ## 240, 264,

276, 284.)
On January 5, 2011, the Magistrate Judge entered an Order
(Doc.

#267)

permitting

former

counsel

for

the

Gunlickses

to

withdraw, allowing until February 22, 2011, to obtain new counsel,
and

directing

that

all

future

communications,

motions,

correspondence, or filings be forwarded to the Gunlickses in
Illinois.
#273.)

Counsel filed an appearance by the deadline.

(Doc.

On February 24, 2011, the court entered an Order (Doc.

#278) terminating new counsel of record as neither were eligible to
practice in the Middle District of Florida.

On May 4, 2011, the

SEC filed a Motion to Set Disgorgement and Prejudgment Interest,
and Impose a Civil Penalty Against Defendant William L. Gunlicks
(Doc. #288).
was

served

The Certificate of Service reflects that the motion
on

May

4,

2011,

by

electronic

filing

to

all

participants, and Mr. Delaney, one of two attorneys terminated on
February 24, 2011.2

(Doc. #288, p. 17.)

On May 20, 2011, counsel

1

The Court notes that a typographical error was made in the
Order extending the stay through and including February 22, 2010.
(Doc. #264.)
2

New Counsel asserts that the motion was served on
Gunlicks under letter dated May 16, 2011. (Doc. #297-2.)
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Mr.

Gabrielle Lyn D’Alemberte filed an appearance on behalf of the
Gunlickses.

(Docs. #290, #291.)

On June 13, 2011, finding no

response to the SEC’s motion, the Court issued an Opinion and Order
(Doc. #292) granting the SEC’s motion and directing the payment of
disgorgement, pre-judgment interest, and civil monetary penalties
by William L. Gunlicks.

A Supplemental Judgment (Doc. #293) was

issued on June 15, 2011, and William L. Gunlicks was terminated as
a party.
On July 7, 2011, current counsel for Mr. Gunlicks filed a
Motion to Strike Plaintiff’s Motion to Set Disgorgement and PreJudgment Interest and Impose a Civil Penalty Against Defendant
William Gunlicks [D.E. 288], to Vacate the Court’s Opinion and
Order [D.E. 292] and Vacate the Supplemental Judgment [D.E. 293]
arguing lack of adequate notice, the failure of the Court to set a
deadline to file a response, the SEC’s failure to indicate that a
response might be required, and confusion over the impact of the
stay.

(Doc. #297.)

The SEC filed a Response (Doc. #299) stating

that Mr. Gunlicks was also served “in an excess of caution” on May
16, 2011, and that counsel had an independent obligation to review
the docket upon filing an appearance.

On July 15, 2011, the

Gunlickses filed a Notice of Appeal (Doc. #300), and on July 21,
2011, the Court denied the motion to strike and vacate because the
Court no longer had jurisdiction over the request based on the
transmitted appeal, doc. #302.

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II.
Counsel for the Gunlickses seeks reconsideration of the Motion
to Strike, to Vacate the Court’s Opinion and Order and Vacate the
Supplemental Judgment (Doc. #297).

Reconsideration of a Court’s

previous order is an extraordinary remedy and, thus, is a power
which should be used sparingly.

Griffin v. Swim-Tech Corp., 722

F.2d 677, 680 (11th Cir. 1984).

The appeal remains pending,

however the Eleventh Circuit has stayed the appeal pending a ruling
on the motion for reconsideration pursuant to Rule 62.13.

(Doc.

#316.)
Counsel for the Gunlickses is admitted in the Middle District
of Florida, and therefore is assumed to be aware of the Local
Rules, including Local Rule 3.01(b), which provides that a party
opposing a motion or application “shall file” a response within 14
days after service.

M.D. Fla. R. 3.01(b).

The Court did not issue

an Order on the SEC’s motion until 21 days after counsel appeared
on behalf of the Gunlickses. The argument that counsel should have
been notified by the Court or the SEC that a response was due or
could be filed is rejected.
The case was stayed with regard to all trial deadlines to
allow the SEC and Mr. Gunlicks to continue settlement discussions,

3

Rule 62.1 permits the Court to defer a motion, deny a motion,
or “state either that it would grant the motion if the court of
appeals remands for that purpose or that the motion raises a
substantial issue.” Fed. R. Civ. P. 62.1(a).
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and without prejudice to the Receiver continuing its duties in the
case.

Counsel had the ability to seek clarification, or leave to

file a response by filing an appropriate motion, if counsel was
unclear as to his or her duties as counsel of record.
not do so.

Counsel did

Therefore, the argument concerning confusion about the

stay is also rejected.
Counsel also argues that Mr. Gunlicks was denied due process.
Counsel does not argue lack of adequate notice of the Judgment
(Doc.

#201),

which

clearly

stated

“[i]n

connection

with

the

Commission’s motion for disgorgement and/or a civil penalty, the
parties may take discovery, including discovery from appropriate
non-parties.”

(Doc. #201, pp. 5-6)(emphasis added).

Mr. Gunlicks

did not reach a settlement agreement with the SEC and had the
ability at any time to invoke the provisions of the Judgment and
demand discovery.

Mr. Gunlicks also had the ability to object,

respond, or contest the SEC’s request for disgorgement, prejudgment
interest, and a civil penalty but did not do so in a timely
fashion.

Counsel did not oppose the SEC’s motion and waited until

22 days after entry of the Court’s Opinion and Order to seek to
strike the SEC’s motion.

Therefore this argument is also rejected

as a basis for reconsideration.
The Court finds that counsel has failed to articulate a basis
to

reconsider

vacate

the

Court’s

Opinion

and

Order,

or

to

reconsider and vacate the Supplemental Judgment, or to strike the

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SEC’s Motion to Set Disgorgement and Prejudgment Interest, and
Impose a Civil Penalty.
III.
Counsel Gabrielle Lyn D’Alemberte and Robert L. Parks seek to
withdraw from representation of the Gunlickses.

Counsel indicate

that “with no ability to pay, irreconcilable differences have
arisen.”

The Gunlickses do not consent to the withdrawal as they

cannot afford representation based on the asset freeze.

Upon

review, the Court finds that counsel should not be permitted to
withdraw from representation.

There is no indication that the

Gunlickses’ financial situation has substantially changed since
counsel were retained, and counsel have an appeal pending, which if
successful, will require further activity in the district court.
Accordingly, it is now
ORDERED:
1.

Defendant William Gunlicks’ Rule 60(b) Motion, Motion to

Vacate the Court’s Opinion and Order and Vacate the Supplemental
Judgment and Strike Underlying Motion to Set Disgorgement and Pre[sic]Judgment Interest and Impose a Civil Penalty Against Defendant
(Doc. #309) is deferred pending a determination by the Eleventh
Circuit Court of Appeals.
2. Defendants William L. Gunlicks and Pamela Gunlicks’ Motion
for Indicative Rule Pursuant to Rule 62.1 (Doc. #310) is GRANTED to

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the extent that the Court indicates that it would not grant the
Rule 60(b) motion if the matter was remanded.
3.

The

Clerk

shall

notify

the

Circuit

Clerk

of

Court

forthwith of the contents of this Order pursuant to Federal Rule of
Appellate Procedure 12.1.
4.

Defendant William L. Gunlicks’ Motion to Stay (Doc. #313)

is GRANTED pending appeal.
5.

Defendant Pamela Gunlicks’ Motion to Stay (Doc. #314) is

GRANTED pending appeal.
6.

Attorney Gabrielle Lyn D’Alemberte and Robert L. Parks’

Motion for Leave to Withdraw as William L. Gunlicks’ and Pamela
Gunlicks’ Counsel of Record (Doc. #319) is DENIED.
7. In light of the stay pending appeal, the Receiver’s Fourth
Interim Application for Allowance and Payment of Fees and Expenses
(Doc. #295); Motion to Intervene (Doc. #298); the Receiver’s Motion
for an Order Approving Auction of the Receivership Entities’
Furniture and Equipment (Doc. #304); and the Receiver’s Motion to
End Monthly Disbursement of $3,000 to Defendant Gunlicks (Doc.
#305) are deferred.
DONE AND ORDERED at Fort Myers, Florida, this
December, 2011.

Copies:
USCA
Counsel of record
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1st

day of