Edalatdju et al v. American Invsco Corporation et al

Filing 104

ORDER that Plaintiffs Motion to Strike (Docket No. 113) in Case No. 2:12-cv-1104-APG-NJK, is DENIED. Defendants are sanctioned in the amount of $675.15, payable to Plaintiffs or their counsel, and due forthwith. Signed by Magistrate Judge Nancy J. Koppe on 01/21/2014. (Copies have been distributed pursuant to the NEF - AC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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BRUCE COUTURIER, et al.,

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Plaintiff(s),

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vs.

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AMERICAN INVSCO CORP., et al.,

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Defendant(s).

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Case Nos.

2:12-cv-01104-APG-NJK
2:12-cv-01106-APG-NJK
2:12-cv-01107-APG-NJK
2:12-cv-01108-APG-NJK
2:12-cv-01110-APG-NJK
2:12-cv-01111-APG-NJK

ORDER

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This matter is before the court on Defendants American Invsco Corporation, Condominium

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Rental Services Inc., and Nicholas Gouletas’ response to the Court’s Amended Order to Show Cause

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for failure to comply with this court’s Order. Docket No. 124; see also Docket No. 122 (Amended

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Order to Show Cause). Also before the Court is Plaintiffs’ motion to strike, Docket No. 113, in Case

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No. 2:12-cv-1104-APG-NJK.

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I.

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Background
On October 21, 2013, Defendants American Invsco Corporation, Condominium Rental

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Services, Inc., and Nicholas Gouletas filed a motion to withdraw indicating that their then-attorney,

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Kirk Lenhard, wished to withdraw from the case. Docket No. 104. Subsequently, the Court issued an

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Order setting a hearing on that motion for October 29, 2013. Docket No. 105. That Order specifically

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informed Defendants American Invsco Corporation and Condominium Rental Services, Inc., that

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corporations may appear in federal court only through licensed counsel. Id.

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On October 29, 2013, the Court held the hearing on the motion to withdraw as scheduled.
Docket No. 111. Present in person for the hearing were Plaintiffs Frank and Amelia Taddeo

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(2:12-cv-1110-APG-NJK), American Invsco Corporations’ then-counsel, Kirk Lenhard, Meridian

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Private Residences’ counsel, Lawrence Semenza, and, via telephone, Defendants Nicholas Gouletas and

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Mark Goldstein, Corporate Representatives for Invsco Corporation and Condominium Rental Services,

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Inc. Id. The Court inquired into whether there were any objections to the motion to withdraw and then

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expressed concerns relating to dispositive motion deadlines that were due in one month. Id. Mr.

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Semenza, Mr. Gouletas, and Mr. Goldstein all indicated that they had no objection to the motion to

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withdraw. Id. Thereafter, having reviewed and considered the matter, the Court granted the motion to

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withdraw. Id.

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The Court gave Defendant Nicholas Gouletas until November 12, 2013, in which to retain

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counsel or file a notice with the court that he would be appearing in this matter pro se. Id. Because a

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corporation cannot appear except through counsel, the Court gave Defendants American Invsco

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Corporation and Condominium Rental Services, Inc., until November 12, 2013, in which to retain

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counsel of record authorized to appear in this action. Id. The Court further directed the Clerk of the

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Court to add Defendants’ last known addresses, which were contained in the motion to withdraw, to the

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docket. Id.

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By December 11, 2013, Defendants American Invsco Corporation and Condominium Rental

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Services, Inc., had failed to retain counsel of record, and Defendant Nicholas Gouletas had failed to

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either retain counsel of record or to file a notice with the court that he will be appearing in this matter

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pro se. Accordingly, the Court issued an Order to Show Cause requiring Defendants to show cause in

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writing, no later than January 10, 2013, why they should not be sanctioned and/or why the Court should

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not recommend that default judgment be entered against them for their failure to defend and failure to

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comply with the Court’s order that they retain counsel of record. Docket No. 115.

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On January 9, 2013, Defendants filed a response to the Order to Show Cause, expressing regret

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that they did not meet the November 12, 2013, deadline but explaining that as of January 2014, they had

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retained counsel. Docket No. 120. Defendants requested that the Court not impose sanctions or default

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judgment in light of the fact that they had obtained counsel who is ready and willing to defend them in

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the lawsuit. Id.

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On January 13, 2014, the Court issued an Amended Order to Show Cause requiring Defendants

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to show cause in writing, no later than January 17, 2014, why they should not be sanctioned up to the

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full costs and attorneys’ fees incurred by Plaintiff’s related to their motion to strike in Case No. 2:12-

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cv-1104-APG-NJK, as well as a court fine up to $5,000, pursuant to LR AI 4-1 and Fed.R.Civ.P. 16(f).

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Docket No. 13. The Court invited Plaintiffs’ attorney to submit a declaration of their costs and fees

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incurred in relation to the motion to strike no later than January 15, 2014. Id. Pursuant to the Court’s

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Order, on January 15, 2014, Plaintiffs’ counsel submitted a declaration of costs and fees. Docket No.

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123. On January 17, 2014, Defendants filed a response to the Amended Order to Show Cause. Docket

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No. 124.

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II. Analysis
Parties are required to follow Court orders. Rule 16(f)1 requires parties to comply with pretrial

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orders and provides that the Court may order any “just” sanctions, including those outlined in Rule

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37(b)(2)(A)(ii)-(vii), for non-compliance.2 Whether the party and/or its counsel disobeyed the court

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order intentionally is impertinent; sanctions may be imposed when the parties and their counsel disobey

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a court order. See Lucas Auto. Eng’g, Inc. v. Bridgestone/Firestone, Inc., 275 F.3d 762, 769 (9th Cir.

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2001). Rule 16(f) “was designed not only to insure expeditious and sound management of the

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preparation of cases for trial but to deter conduct that unnecessarily consumes ‘the Court’s time and

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resources that could have been more productively utilized by litigants willing to follow the Court’s

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procedures.’” Martin Family Trust v. Heco/Nostalgia Enters. Co., 186 F.R.D. 601, 603 (E.D. Cal.

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1999) (quoting Mulkey v. Meridian Oil, Inc., 143 F.R.D. 257, 262 (W.D. Okla. 1992)). Indeed, the rule

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also makes clear that “concerns about burdens on the court are to receive no less attention than concerns

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about burdens on opposing parties.” Matter of Baker, 744 F.2d 1438, 1441 (10th Cir. 1984) (en banc).

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In this case, Defendants failed to comply with a Court-ordered deadline to retain counsel;

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however, the Court takes counsel at their word that any shortcomings were not intentional and that they

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Unless otherwise specified, references to “Rules” refer to the Federal Rules of Civil Procedure.

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Moreover, this Court’s Local Rules also provide the Court with authority to impose “any and
all appropriate sanctions on an attorney or party . . . who, without just cause . . . [f]ails to comply with
any order of this Court.” Local Rule IA 4-1.
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have fixed the issues regarding their retention of counsel. In light of the circumstances in this case, the

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Court will not impose a Court fine. Additionally, the Court finds that striking Defendants’ answer is not

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an appropriate sanction at this time and Plaintiffs’ Motion to Strike (Docket No. 113) in Case No. 2:12-

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cv-1104-APG-NJK is DENIED.

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Nonetheless, Defendants caused Plaintiffs to incur unnecessary attorneys’ fees and costs by

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failing to comply with the Court’s Order as Plaintiffs’ counsel then had to prepare their motion to strike

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in Case No. 2:12-cv-1104-APG-NJK. Accordingly, the Court finds that Defendants must pay the costs

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and fees associated with that motion and further, that Defendants have agreed to pay those costs and

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fees.3 See Docket No. 124, at 8. The Court has reviewed Plaintiffs’ declaration and finds that the

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requested $662.50 in attorneys’ fees and $12.65 in costs is reasonable. Additionally, Defendants have

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not objected to the calculation of fees. This sanction is imposed solely on Defendants and not their

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counsel. The balance must be paid directly to Plaintiffs or their counsel.

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Lastly, the Court reminds the parties and counsel that it expects strict compliance with Court

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orders and the rules of the Court. Future violations may result in significant sanctions, up to and

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including case-dispositive sanctions.

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Accordingly,

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IT IS ORDERED:

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Plaintiffs’ Motion to Strike (Docket No. 113) in Case No. 2:12-cv-1104-APG-NJK, is
DENIED.

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Defendants are sanctioned in the amount of $675.15, payable to Plaintiffs or their
counsel, and due forthwith.

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Dated: January 21, 2014.

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___________________________________
NANCY J. KOPPE
UNITED STATES MAGISTRATE JUDGE

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Defendants have not agreed to pay, and the Court will not impose, sanctions for the costs and
fees associated with filing motions to strike in the following related cases: 2:12-cv-01106-APG-NJK;
2:12-cv-01107-APG-NJK; 2:12-cv-01108-APG-NJK; 2:12-cv-01110-APG-NJK; and 2:12-cv-01111APG-NJK. Plaintiffs did not file a motion to strike in any of these related cases and, therefore, they did
not incur relevant costs and fees in those cases.
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