Michaelian v. Lawsuit Financial, Inc. et al
Filing
62
ORDER Appointing Special Master/Examiner. (Special Master/Examiner's Report of the Findings due by 12/17/2018.) Signed by District Judge Terrence G. Berg. (Attachments: # 1 Exhibit Stipulation and Proposed Order) (AChu)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JUDITH MICHAELIAN,
Plaintiff,
Case No. 17-13321
Hon. Terrence G. Berg
v.
LAWSUIT FINANCIAL, INC.
and MARK M. BELLO,
Defendants.
ORDER APPOINTING SPECIAL MASTER/ EXAMINER
On October 15, 2018, the Court heard oral argument on
several motions in this case, including Plaintiff’s Motion to Appoint
a Receiver. At the hearing, the Court indicated that the pleadings
and exhibits pertaining to the request to appoint a receiver raised
sufficient questions to justify the appointment of a special master
or examiner to investigate the financial condition of Defendant
Lawsuit Financial Inc. The Court directed parties to submit a
proposed stipulated order that specified the scope of duties of the
special master or examiner.
The parties submitted their proposed stipulated order on
October 19, 2018. This proposed stipulation is attached as Exhibit
1 to this Order. The stipulated order set out the parties’ agreement
1
that the special master or examiner should investigate the
following areas of inquiry:
The current financial health and stability of LFC,
including an assessment of its assets and short and longterm debt obligations, and its long-term sustainability and
viability, both assuming LFC receives no additional capital
and assuming that LFC receives capital injections at
various levels during the next 12-24 months;
The ability of LFC to fund the payment of a settlement or
judgment in the amount of approximately $800,000 (less
the $266,000 LFC has escrowed or repaid to date), with
monthly payments over a 24-36 month time frame, while
continuing to operate under its current business model of
funding cases; and,
A determination of the largest regular monthly payment
that LFC could consistently make while still continuing
operations.
The Court has the authority to appoint a special master to
“perform duties consented to by the parties,” or “address pretrial
and posttrial matters that cannot be effectively and timely
addressed by an available district judge or magistrate judge of the
district.” Fed. R. Civ. P. 53(a)(1)(A), (C).
Supreme Court jurisprudence predating the adoption of the
Federal Rules of Civil Procedure—and lower court decisions issued
well after their adoption—gives federal courts broad authority in
2
this arena. In re Peterson, 253 U.S. 300, 312 (1920) (“Courts have
(at least in the absence of legislation to the contrary) inherent
power to provide themselves with appropriate instruments
required for the performance of their duties. . . This power includes
authority to appoint persons unconnected with the court to aid
judges in the performance of specific judicial duties, as they may
arise in the progress of a cause.”); cf. Curtis v. Brunsting, No. 4:12CV-592, 2013 WL 12100751 (S.D. Tex. Apr. 19, 2013) (appointing
an accountant to investigate financial records of a trust); cf. Festival
Fun Parks, LLC v. Mountain Creek Resort, Inc., No. 12-410 (FSH),
2015 WL 758467 (D.N.J. Feb. 23, 2015) (entertaining the
defendant’s Motion for Instructions to Accountant after the court
appointed an accountant agreed upon by the parties).
In addition to the Court’s inherent power, Fed. R. Civ. P.
53(a)(1)(A) provides that the Court may appoint a master to
“perform duties consented to by the parties.” Here, the parties have
stipulated to the three specific areas of inquiry to be investigated.
In addition, Rule 53(a)(1)(C) authorizes the Court to appoint a
master to address any pretrial matters that cannot be effectively
3
addressed by the
district judge. Here, the Court requires the
expertise of an accountant to address the question of the financial
health of a company such as Lawsuit Financial.
Although the Court asked the parties to propose a qualified
accountant to serve as examiner, the parties were unable to do so
and requested the Court to select one. Accordingly, the Court will
appoint BL Consultants, LLC, of 260 E. Brown Street, Suite
280, Birmingham, Michigan (Barry P. Lefkowitz, Managing
Director) as special master/examiner, charged with investigating
the financial health of Lawsuit Financial, Inc., in accordance with
the stipulated responsibilities listed above.
To effectuate this Order, Defendants shall promptly comply
with any and all requests for documents and records by BL
Consultants, LLC, as well as allow inspections of any books and
records with proper notice and reasonable accommodation. BL
Consultants, LLC is authorized to contact the attorneys and the
parties in this case in order to conduct the investigation.
Defendants shall be responsible for the fees and costs incurred
by BL Consultants, LLC pursuant to this Order, and shall
4
execute a retainer agreement for BL Consultants, LLC in the
amount of $25,000, due immediately, with the fees and costs for the
investigation to be charged against that sum.
WHEREFORE, IT IS HEREBY ORDERED, that BL
Consultants, LLC is appointed Special Master-Examiner to
investigate the financial condition of Lawsuit Financial, Inc;
IT IS FURTHER ORDERED that BL Consultants, LLC
shall produce a report of its findings to the Court, addressing the
three areas of inquiry listed above, no later than December 17,
2018.
SO ORDERED.
Dated: October 30, 2018 s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Certificate of Service
I hereby certify that this Order was electronically filed,
and the parties and/or counsel of record were served on October
30, 2018.
s/A. Chubb
Case Manager
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?