Fundamental Administrative Services, LLC v. Anderson

Filing 188

MEMORANDUM AND ORDER Denying 160 Plaintiff's Motion for Preliminary Injunction and Sanctions; Holding in abeyance 175 Anderson's motion to stay enforment of the Court's contempt order; Staying 171 the Court's contempt order pending the resolution of Anderson's motion; Directing Plaintiff to file its response to Anderson's motion within 14 days of the completion of limited discovery. Signed by Judge James K. Bredar on 5/13/2015. (nd2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
*
FUNDAMENTAL ADMIN. SERVS., LLC,

*

Plaintiff

*

v.

*

KRISTI ANDERSON,

*

Defendant
*

*

CIVIL NO. JKB-13-1708

*
*

*

*

*

*

*

*

*

*

*

MEMORANDUM AND ORDER
Pending before the Court are Plaintiff’s Motion for Preliminary Injunction and Sanctions
against Kristi Anderson, Steven Leitess, and Leitess Friedberg PC for Repeated Violations of
Court Orders (ECF No. 160) and Anderson’s Motion to Stay Enforcement of Contempt Order
(ECF No. 175). The motion for preliminary injunction is ripe (ECF Nos. 173, 174, 179, and
182) and involves no disputes of fact. It will be denied. Anderson’s motion to stay will be held
in abeyance pending limited discovery.
I. Motion for Preliminary Injunction
Preliminarily, the Court declines to hold a hearing on Plaintiff’s motion for preliminary
injunction. Such a hearing is not required when no disputes of fact exist and the denial of the
motion is based upon the parties’ written papers. See Aoude v. Mobil Oil Corp., 862 F.2d 890,
893-94 (1st Cir. 1988) (“an evidentiary hearing is not an indispensable requirement when a court
allows or refuses a preliminary injunction”) (citing cases). In a well-respected treatise, it is
stated:

Even if a party desires to present testimony [as to a motion for preliminary
injunction], several federal courts have held that when there is no factual
controversy the trial court has discretion to issue an order on written evidence
alone, without a hearing. Similarly, preliminary injunctions are denied without a
hearing, despite a request for one by the movant, when the written evidence
shows the lack of a right to relief so clearly that receiving further evidence would
be manifestly pointless. This practice is supported by Rule 78(b), which provides
that “the court may provide for submitting and determining motions on briefs,
without oral hearings,” and by the fact that Rule 65 does not explicitly require an
oral hearing on a preliminary-injunction motion.
11A Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure
§ 2949, at 246-48 (2013) (footnotes and citations omitted). In the instant case, the parties’
written submissions do not raise a question of fact that must be resolved before the Court may
rule on Plaintiff’s motion. Thus, no hearing is required. Local Rule 105.6 (D. Md. 2014).
In Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), the Supreme
Court set forth the following standard for preliminary injunctive relief:
A plaintiff seeking a preliminary injunction must establish that he is likely
to succeed on the merits, that he is likely to suffer irreparable harm in the absence
of preliminary relief, that the balance of equities tips in his favor, and that an
injunction is in the public interest.
Id. at 20. Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear
showing that the plaintiff is entitled to such relief.” Id. at 22. Courts are called upon to balance
a plaintiff’s claims of injury against the burdens to be imposed upon the defendant, and they
must “pay particular regard for the public consequences in employing the extraordinary remedy
of injunction.” Id. at 24. This standard is not met in Plaintiff’s pending motion for preliminary
injunction.
The record before the Court does not support a finding of irreparable injury in the
absence of preliminary relief or a finding that an injunction is in the public interest. Plaintiff
complains about certain arguments made by Mr. Leitess on behalf of Anderson in the Florida

2

bankruptcy proceedings in relation to two motions he filed there. He filed a motion for a court
order to permit Anderson to participate in the mediation involving the remaining parties to the
bankruptcy case, and he also filed a motion for Anderson to intervene so that she could object to
a proposed settlement between the bankruptcy trustee and the other parties, including Plaintiff as
successor to the debtor.
In the course of Mr. Leitess’s representation of Anderson, he advocated in writing and in
oral argument for adjudication of the instant case by the Florida bankruptcy court on the theory
that the claims between Plaintiff and Defendant constituted a “core proceeding.” Before he
made those arguments in Florida, this Court had granted his motion to withdraw from
representation of Anderson in this case for the reason that his former representation of Plaintiff
created a conflict of interest. Thus, he was to have nothing further to do with this case. (ECF
No. 113). Mr. Leitess’s argument crossed over the line of permissible argument, given his
conflict of interest; the fact that his argument did not occur in this Court is not determinative in
this regard. Rather, the determinative factor is that he was injecting his representation of
Anderson’s interests in this case in a judicial proceeding, albeit in a different court. As will be
later explained, however, Mr. Leitess’s troubling conduct is insufficient basis for a new order of
preliminary injunctive relief.
The second line of argument with which Plaintiff takes issue is Mr. Leitess’s contention
in the Florida court that the bankruptcy trustee’s prior release of all the debtor’s claims against
Anderson included Plaintiff’s claims against Anderson that are the subject of this case. This
argument is inconsistent with this Court’s analysis of the release. (See ECF No. 156.) Even so,
the Court’s interpretation of the release was only made in connection with Anderson’s motion to
stay proceedings last Fall; the release, in this Court’s view, did not justify staying proceedings

3

here. Although it is unlikely that this second argument will gain any traction elsewhere, the
Court’s interpretation was not intended to have the far-reaching effect sought by Plaintiff, which,
in plain terms, is to foreclose Anderson’s argument regarding the proper analysis of the release
by another court. The Court sees no justification for such a prior restraint on speech.
Although Anderson argues that Mr. Leitess only represented her in relation to the Florida
bankruptcy proceedings and that she represented herself there as to this case, she has not
supported that statement with an entry of appearance pro se or copies of any pro se filings. The
Court gives no credence to Anderson’s statement in this regard. Moreover, her statement is
contradicted by the arguments made by Mr. Leitess on her behalf.
One other matter has arisen that the Court will address before ruling on the merits. In a
telephonic conference with counsel about scheduling, the Court raised the question of whether it
has jurisdiction over Mr. Leitess so that he could be required to appear for a hearing on
Plaintiff’s motion. The Court finds Mr. Leitess is subject to its jurisdiction on this matter
because of the Court’s earlier order addressing the propriety of his representation of Anderson
(ECF No. 113). Any issue as to his compliance with that order is sufficient basis for requiring
him to appear in this Court to defend against Plaintiff’s motion for preliminary injunction.
As to the merits, the Court is unable to discern any threat of irreparable injury to Plaintiff.
Even granting the impropriety of Mr. Leitess’s argument in Florida, the Court is unpersuaded of
the likelihood of irreparable injury from his making such arguments, in the present or in the
future. The Court notes the problematic argument was most likely immaterial in the Florida
proceedings because it is extremely doubtful the Florida bankruptcy court could adjudicate the
relevant issues pending before this Court. (Further, there is no indication that the Florida court

4

attempted to do so.) The futility of Mr. Leitess’s efforts to bring issues from the instant case into
the Florida proceeding undercuts the notion of potentially irreparable injury to the Plaintiff.
Having said that, the Court reiterates that Mr. Leitess has no role to play in this case, and
any further backdoor attempt by him or his firm to act as Anderson’s attorney in relation to this
case in this Court or any other court may subject Mr. Leitess and his firm to sanctions. Mr.
Leitess should consider himself duly cautioned.
This Court’s existing orders are sufficient in directing the conduct of all concerned. No
additional order is needed now.
II. Motion to Stay Enforcement of Contempt Order
Anderson has sought a stay of the Court’s contempt order (ECF No. 171) on two
grounds, one of which is financial hardship.1 (ECF No. 175.) Plaintiff has responded in a
neutral fashion because it believes it has insufficient information to decide whether to oppose the
motion. (ECF No. 181.) Thus, Plaintiff has proposed that it be allowed to conduct limited
discovery on this matter. Plaintiff’s request is reasonable and is granted. Plaintiff may propound
up to fifteen interrogatories and fifteen document requests, and Plaintiff may also depose
Anderson up to four hours. This limited discovery should be completed by June 15, 2015. Until
Anderson’s motion is resolved, enforcement will be stayed.
III. Conclusion
The Court concludes that Plaintiff’s motion for preliminary injunction and sanctions
(ECF No. 160) does not meet the governing standard for preliminary injunctive relief.

1

Another argument in support of Anderson’s motion is her lack of opportunity to have appellate review of
the contempt finding and penalty imposed until after a final judgment is rendered. The Court will address both
arguments when the motion is ripe, which will follow Plaintiff’s additional discovery as to Anderson’s financial
hardship.

5

Accordingly, it IS DENIED. Anderson’s motion to stay enforcement of the Court’s contempt
order (ECF No. 175) IS HELD IN ABEYANCE pending limited discovery in accordance with
this opinion and order.

Further, the Court’s contempt order (ECF No. 171), insofar as it

mandates Anderson’s payment of a fine, IS STAYED pending the resolution of Anderson’s
motion. Plaintiff SHALL FILE its response to Anderson’s motion within fourteen days of the
completion of the limited discovery.
DATED this 13th day of May, 2015.

BY THE COURT:

______________/s/____________________
James K. Bredar
United States District Judge

6