Federal Trade Commission v. 1st Guaranty Mortgage Corp. et al

Filing 255

ORDER denying 226 Motion to Stay; denying 233 Motion ; denying 239 Motion for Leave to File ; denying 243 Motion for Reconsideration ; denying 247 Motion for Sanctions; denying 248 Motion for Reconsideration ; denying 249 Motion for Release of Funds; granting 251 Motion ; denying 252 Motion for Reconsideration. The Clerk of Court shall serve copies of DE# 43, 252 and 254 upon Defendant Lalonde. Signed by Magistrate Judge John J. O'Sullivan on 2/22/2012. (mms)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO: 09-61840-CIV-SEITZ/O’SULLIVAN
FEDERAL TRADE COMMISSION,
Plaintiff,
vs.
1st GUARANTY MORTGAGE CORP., et al.,
Defendants.
___________________________________/
OMNIBUS ORDER
THIS MATTER is before the Court on a number of Motions filed by the defendants,
Stephen Lalonde (“Lalonde”), and Michael Petroski (“Petroski”).
The Court will address each Motion in turn.
1.

Trustee Stephen Lalonde Individually and as Guardian for Minor Children of
Irrevocable Trust Motion to Stay Execution of Judgment and Release of Non Party
Assets (DE# 226, 8/3/11);

2.

Defendant Stephen Lalonde as Trustee of the Sabaac Family Trust and as Guardian
of Minor Beneficiaries of Said Trust Motion to Release All Assets of Non-Party OK
Close, Inc. (DE# 249, 11/22/11)

3.

Alternative Motion for Rule 54(b) Certification of Appealability and Applicable
Authorities in Support Thereof (DE# 233, 9/19/11);

4.

Defendant Stephen Lalonde’s Leave to File Sur Reply to Plaintiff’s Response
to Defendant Stephen Lalonde’s Additional Filing (DE 232) Concerning His
Motin [sic] to Stay Execution of Judgment (DE# 239, 9/30/11);

5.

Defendant Petroski’s Motion for Relief from Judgment (DE# 243, 10/31/11) and
Relief from Judgment or Order (DE# 248, 11/22/11);

6.

Defendant Petroski’s Motion Seeking Relief from Final Judgment and Order (DE#
Page 1 of 7

252, 1/18/12);
7.

Defendant Steven Lalonde’s Request for Production and Service of Defendant
Michael Petroski’s Second Motion to Dismiss and Request for Sanctions upon
Defendant Petroski (DE# 246, 11/16/11);

8.

Defendant Stephen Lalonde’s Motion for Docket Filing (DE# 251, 1/18/12) is
GRANTED.
DISCUSSION

1.

Trustee Stephen Lalonde Individually and as Guardian for Minor Children of
Irrevocable Trust Motion to Stay Execution of Judgment and Release of Non Party
Assets (DE# 226, 8/3/11)

2.

Defendant Stephen Lalonde as Trustee of the Sabaac Family Trust and as Guardian
of Minor Beneficiaries of Said Trust Motion to Release All Assets of Non-Party OK
Close, Inc. (DE# 249, 11/22/11)
The defendant seeks to stay the execution of the Judgment until resolution of his appeal

and to release certain frozen cash assets. To date, the government has not undertaken efforts to
execute on the subject frozen assets. “‘A motion for stay pending appeal is an extraordinary
remedy and requires a substantial showing on the part of the movant.’” In re Advanced
Telecommunication Network, Inc., No. 6:03-Bk-299-KSJ, 2011 WL 722766, *1-2 (M.D. Fla.
Jan. 23, 2011)(quoting Henkel v. Lickman (In re Lickman), 301 B.R. 739, 742 (Bankr. M.D. Fla.
2003) (citations omitted)). To obtain a stay pending an appeal, the movant must show:
(i) that the movant is likely to prevail on the merits of its appeal, (ii) that the
movant will suffer irreparable injury if a stay or other injunctive relief is not
granted, (iii) that other parties will suffer no substantial harm if a stay or other
injunctive relief is granted, and (iv) in circumstances where the public interest is
implicated, that the issuance of a stay or other injunctive relief will serve, rather
than disserve, such public interest.
Jet 1 Ctr., Inc. v. City of Naples Airport Auth. (In re Jet 1 Center, Inc.), No. 2:05 CV 568 FTM
29 DN, 2006 WL 449252, at *1 (M.D. Fla. Feb. 23, 2006) (quoting Tooke v. Sunshine Trust
Page 2 of 7

Mortg. Trust No. 86-225, 149 B.R. 687,689 (M.D. Fla. 1992)). “‘[F]ailure to satisfy one prong
[of the four criteria] is fatal to the motion.’” In re Lickman, 301 B.R. at 742 (quoting In re
Brown, 290 B.R. 415-424 (Bankr. M.D. Fla. 2001)). In the present case, Lalonde’s motion does
not satisfy the third and fourth criteria. The motion for stay is DENIED.
The defendant argues that certain frozen cash assets are exempt from execution because
they belong to non-parties, Crossland Property Management (“Crossland”) and Capsouth, LLC
(“Capsouth”), which are controlled by the Sabaac Trust. Several months later, Lalonde filed a
motion to release the assets of Non-Party OK Close, Inc., which was not included in his initial
motion. In the second motion, Lalonde seeks release of all hardware and software of OK Close,
Inc. in the possession of the Receiver.
On August 1, 2011, the Defendant Stephen Lalonde’s Notice of Appeal of All Orders up
to and Including Appeal of Final Judgment was filed (DE# 224). The notice of appeal divested
this Court of its jurisdiction to rule on the subject motions seeking release of frozen assets. See
Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982) (explaining that “a federal
district court and a federal court of appeals should not attempt to assert jurisdiction over a case
simultaneously. The filing of a notice of appeal is an event of jurisdictional significance - it
confers jurisdiction on the court of appeals and divests the district court of its control over those
aspects of the case involved in the appeal”). The Court lacks jurisdiction to resolve the motions
regarding release of assets while the appeal is pending. The defendant’s requests for release of
non-party assets are DENIED.
3.

Alternative Motion for Rule 54(b) Certification of Appealability and Applicable
Authorities in Support Thereof (DE# 233, 9/19/11)
Federal Rule of Appellate Procedure 8(a) (2)(A) (ii) allows parties to file a motion for
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stay in the Court of Appeals when the district court has denied a stay motion, but does not
provide for “certification” of such denials by the district court to the appellate court. The
alternative motion is DENIED.
4.

Defendant Stephen Lalonde’s Leave to File Sur Reply to Plaintiff’s Response
to Defendant Stephen Lalonde’s Additional Filing (DE 232) Concerning His
Motin [sic] to Stay Execution of Judgment (DE# 239, 9/30/11)
The motion is DENIED for failing to cite any memorandum of law to support the

requested relief. The Local Rules of this Court do not afford for sur-replies to be filed without
leave and justification. See First Specialty Ins. Co. v. 633 Partners, Ltd., 300 F3d. App’x 777,
788 (11th Cir. 2008) (sur-replies “should generally only be allowed when ‘a valid reason for such
additional briefing exists, such as where the movant raises new arguments in its reply brief.’”)
(quoting Fedrick v. Mercedes-Benz USA, LLC., 366 F. Supp. 2d 1190, 1197 (N.D. Ga. 2005)).
The defendant’s claim of prejudice without more does not warrant the requested relief and the
motion is DENIED.
5.

Defendant Petroski’s Motion for Relief from Judgment (DE# 243, 10/31/11) and
Relief from Judgment or Order (DE# 248, 11/22/11)

6.

Defendant Petroski’s Motion Seeking Relief from Final Judgment and Order (DE#
252, 1/18/12);
The defendant Petroski seeks relief from the judgment based on newly discovered

evidence. In the second motion, Petroski seeks dismissal of the case and a hearing. Neither are
warranted. The plaintiff opposes Petroski’s first motion on the ground that it is frivolous and
fails to provide the new evidence upon which the motion is purportedly based. The second
motion also lacks any substance regarding the purportedly newly discovered evidence. To obtain
relief under Federal Rule of Civil Procedure 60(b)(2), a party must show:
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(1) the evidence must be newly discovered since the trial; (2) the movant must
have exercised due diligence in discovering the new evidence; (3) the evidence
cannot be merely cumulative or impeaching; (4) the evidence must be material;
and (5) the new evidence must be such that it would produce a different outcome
in the underlying action.
Kissinger-Campbell v. C. Randall Harrell, 418 Fed. Appx. 797, 804-05 (11th Cir. 2011) (citing
Waddell v. Hendry Co. Sheriff’s Office, 329 F.3d 1300, 1309 (11th Cir. 2003)). “A motion for
new trial under Rule 60(b)(2) is an extraordinary motion and the requirements of the rule must be
strictly met.” Waddell, 329 F.3d at 1309 (quoting Toole v. Baxter Healthcare Corp., 235 F.3d
1307, 1316 (11th Cir. 2000)). “Finality is a virtue of the law.” Waddell, 329 F.3d at 1309
(footnote omitted). Petroski’s motions fail to satisfy the requirements of Federal Rule of Civil
Procedure 60(b)(2). The motions are DENIED.
7.

Defendant Steven Lalonde’s Request for Production and Service of Defendant
Michael Petroski’s Second Motion to Dismiss and Request for Sanctions upon
Defendant Petroski (DE# 246 - 247, 11/16/11)

8.

Defendant Stephen Lalonde’s Motion for Docket Filing (DE# 251, 1/18/12)
The defendant seeks to require the Clerk of Court to provide copies to Lalonde that

Petroski failed to serve on him and to obtain an award of sanctions against Petroski for his failure
to do so. Pursuant to prior Orders of this Court, Petroski is required to serve all papers on all
parties to this action, including Lalonde. See, e.g., (DE# 202, 3/30/11). Lalonde’s requests to
receive copies of Petroski’s filings from the Clerk of the Court (DE# 246, 247 and 251) are
GRANTED. The Clerk of Court is directed to provide copies of DE# 43, 252, and 254 to
Defendant Lalonde. Lalonde’s request for sanctions against Petroski (DE# 246, 247, 11/16/11) is
DENIED for failure to comply with the memorandum of law requirement of Southern District of
Florida Local Rule 7.1(a)(1).
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CONCLUSION
For the reasons set forth above, it is hereby
ORDERED THAT
1.

Trustee Stephen Lalonde Individually and as Guardian for Minor Children of
Irrevocable Trust Motion to Stay Execution of Judgment is DENIED and Release of
Non Party Assets (DE# 226, 8/3/11) is DENIED for lack of jurisdiction;

2.

Defendant Stephen Lalonde as Trustee of the Sabaac Family Trust and as Guardian
of Minor Beneficiaries of Said Trust Motion to Release All Assets of Non-Party OK
Close, Inc. (DE# 249, 11/22/11) is DENIED for lack of jurisdiction;

3.

Alternative Motion for Rule 54(b) Certification of Appealability and Applicable
Authorities in Support Thereof (DE# 233, 9/19/11) is DENIED;

4.

Defendant Stephen Lalonde’s Leave to File Sur Reply to Plaintiff’s Response
to Defendant Stephen Lalonde’s Additional Filing (DE 232) Concerning His
Motin [sic] to Stay Execution of Judgment (DE# 239, 9/30/11) is DENIED;

5.

Defendant Petroski’s Motion for Relief from Judgment (DE# 243, 10/31/11) and
Relief from Judgment or Order (DE# 248, 11/22/11) are DENIED;

6.

Defendant Petroski’s Motion Seeking Relief from Final Judgment and Order (DE#
252, 1/18/12) is DENIED;

7.

Defendant Steven Lalonde’s Request for Production and Service of Defendant
Michael Petroski’s Second Motion to Dismiss and Request for Sanctions upon
Defendant Petroski (DE# 246, 11/16/11) is GRANTED in part and DENIED in part;

8.

Defendant Stephen Lalonde’s Motion for Docket Filing (DE# 251, 1/18/12) is
GRANTED.

Page 6 of 7

DONE AND ORDERED in Miami, Florida, this 22nd day of February, 2012.

___________________________________
JOHN O’SULLIVAN
UNITED STATES MAGISTRATE JUDGE
Copies provided to:
All Counsel of Record
Copies provided by Chambers to those :
Amy Lalonde
2090 NE 65th Street
Fort Lauderdale, FL 33308

Stephen Lalonde
#501109985
Broward County Main Jail
P.O. Box 9356
Ft. Lauderdale, FL 33310

Page 7 of 7

Michael Petroski
5161 NE 18th Ave
Fort Lauderdale, FL 33334