Chubb et al v. LG Warranty Co LLC et al
Filing
49
ORDERED Defendants objection to the Bankruptcy Court's Proposed Findings of Fact and Conclusions of Law and Recommendations (ECF No. 30 ) is overruled. The Court adopts the Bankruptcy Court's Recommendations (ECF No. 29 ). Defendants 9; Counterclaims against Western are dismissed. The Clerk is instructed to enter judgment in accordance with this Order and transmit a copy of this order to the bankruptcy court. (Copy of Order mailed to USBK on 9/25/2017.) The Clerk is further directed to close this case. Signed by Judge Miranda M. Du on 9/25/2017. (Copies have been distributed pursuant to the NEF - DRM)
1
2
3
4
5
6
UNITED STATES DISTRICT COURT
7
DISTRICT OF NEVADA
8
***
9
JANET L. CHUBB, et al.,
Case No. 3:16-cv-00173-MMD
Plaintiff,
10
v.
ORDER
11
LG WARRANTY CO., LLC, et al.,
12
Defendants.
13
14
I.
INTRODUCTION
15
This action was initiated for the Court to review the Bankruptcy Court’s Proposed
16
Findings of Fact and Conclusions of Law and Recommendations (“Recommendations”).
17
(ECF No. 1.) Based on its findings, the Bankruptcy Court recommends dismissal of
18
Defendants/Counterclaimants’ Counterclaims.1 (ECF No. 28.) For the reasons discussed
19
herein, the Court adopts the Recommendations.
20
II.
RELEVANT BACKGROUND
21
Plaintiffs Janet L. Chubb, the Chapter 7 Trustee for Debtor Access Insurance
22
Services, Inc., and Lennard W. Stillman, Special Deputy Liquidator of Western Insurance
23
Company (“Western”), filed an adversary proceedings in United States Bankruptcy
24
Court, District of Nevada, against Defendants.2 Defendants asserted Counterclaims and
25
26
27
28
1Defendants/Counterclaimants
are LG Warranty Co., LLC (“LG”), Dale Holding
Co. of Columbus, LLC (“Dale Holding”), Christopher Lucas and Sean M. Gouhin
(collectively, “Defendants”).
2The issue of whether the reference should be withdrawn was litigated in another
case before this Court. See In Re Access Insurance Services Inc., Case No. 3:13-cv00699-MMD.
1
Western moved for dismissal of the same. (ECF No. 28 at 2.) Defendants consented to
2
the Bankruptcy Court’s determination of Western’s motion to dismiss, but Western
3
declined to offer consent. (Id.) This resulted in the Bankruptcy Court issuing the
4
Recommendations, recommending that the Counterclaims asserted against Western be
5
dismissed. (ECF No. 28.) Defendants object to the Recommendations. (ECF No. 30.)
6
Western has responded and supplemented its response with leave of court.3 (ECF Nos.
7
31, 46, 47.)
8
In the meantime, on March 30, 2017, Defendants’ counsel, Sallie B. Armstrong
9
and Downey Brand LLP, moved to withdraw. (ECF No. 35.) On April 3, 2017, the Court
10
granted Ms. Armstrong’s motion to withdraw as counsel for Defendants. (ECF No. 40.)
11
The Court gave thirty (30) days for LG and Dale Holding to retain new counsel and for
12
Lucas and Gouhin to file a notice that they intend to represent themselves in proper
13
person. (Id.) Because Defendants failed to comply, on May 10, 2017, the Court issued
14
an Order to show cause by June 2, 2017, as to why the Court should not overruled their
15
objection and adopt the Recommendations. (ECF No. 2.) Lucas and Gouhin responded
16
pro se, seeking an extension for Defendants to obtain counsel. (ECF No. 43.) On June
17
8, 2017, the Court extended an additional forty-five (45) days for them to retain counsel.
18
(ECF No. 44.) That deadline has passed and Defendants have not made an appearance
19
or otherwise responded to the Court’s May 10, 2017, Order.
20
III.
21
DISCUSSION
In its supplemental response, Western argues that the Court has two additional
aside
from
that
presented
in
Western’s
response,
to
adopt
the
22
reasons,
23
Recommendations. (ECF No. 47.) First, Western contends the Court should dismiss the
24
Counterclaims for Defendants’ failure to comply with the Court’s orders. Second,
25
Western argues that Defendants’ Counterclaims are barred by res judicata because the
26
Counterclaims have been adjudicated in the Third District Court, State of Utah. The
27
28
Court gave Defendants ten (10) days to respond to Western’s supplement,
but Defendants have failed to respond. (ECF No 46.)
3The
2
1
Court agrees with Western’s first argument and declines to address its remaining
2
arguments as raised in its response and supplemental response.
3
District courts have the inherent power to control their dockets and “[i]n the
4
exercise of that power, they may impose sanctions including, where appropriate . . .
5
dismissal” of a case. Thompson v. Hous. Auth. of City of Los Angeles, 782 F.2d 829, 831
6
(9th Cir. 1986). A court may dismiss an action, with prejudice, based on a party’s failure
7
to prosecute an action, failure to obey a court order, or failure to comply with local rules.
8
See Ghazali v. Moran, 46 F.3d 52, 53-54 (9th Cir. 1995) (dismissal for noncompliance
9
with local rule); Ferdik v. Bonzelet, 963 F.2d 1258, 1260-61 (9th Cir. 1992) (dismissal for
10
failure to comply with an order requiring amendment of complaint); Carey v. King, 856
11
F.2d 1439, 1440-41 (9th Cir. 1988) (dismissal for failure to comply with local rule
12
requiring pro se plaintiffs to keep court apprised of address); Malone v. U.S. Postal
13
Service, 833 F.2d 128, 130 (9th Cir. 1987) (dismissal for failure to comply with court
14
order); Henderson v. Duncan, 779 F.2d 1421, 1424 (9th Cir. 1986) (dismissal for lack of
15
prosecution and failure to comply with local rules).
16
In determining whether to dismiss an action for failure to obey a court order, the
17
court must consider several factors: (1) the public’s interest in expeditious resolution of
18
litigation; (2) the court’s need to manage its docket; (3) the risk of prejudice to the
19
defendants; (4) the public policy favoring disposition of cases on their merits; and (5) the
20
availability of less drastic alternatives. Thompson, 782 F.2d at 831; Henderson, 779 F.2d
21
at 1423-24; Malone, 833 F.2d at 130; Ferdik, 963 F.2d at 1260-61; Ghazali, 46 F.3d at
22
53.
23
Applying these factors here, the Court finds that the first two factors, the public’s
24
interest in expeditiously resolving this litigation and the Court’s interest in managing the
25
docket, weigh in favor of dismissal. The third factor, risk of prejudice to Western, also
26
weighs in favor of dismissal, since a presumption of injury arises from the occurrence of
27
unreasonable delay in complying with the court’s order or prosecuting an action. See
28
Anderson v. Air West, 542 F.2d 522, 524 (9th Cir. 1976). The fourth factor ─ public
3
1
policy favoring disposition of cases on their merits ─ is greatly outweighed by the factors
2
in favor of dismissal discussed herein. Finally, a court’s warning to a party that its failure
3
to obey the court’s order will result in dismissal satisfies the “consideration of
4
alternatives” requirement. Ferdik, 963 F.2d at 1262; Malone, 833 F.2d at 132-33;
5
Henderson, 779 F.2d at 1424. The Court’s May 10, 2017, Order required Defendants to
6
show cause by the established deadline “why the Court should not overrule their
7
objection and adopt the Bankruptcy Court’s [Recommendations] for their failure to
8
comply with the Court’s Order.” (ECF No. 42.) Accordingly, Defendants had adequate
9
warning that dismissal of their Counterclaims would result from noncompliance with the
10
Court’s orders.
11
IV.
CONCLUSION
12
It is therefore ordered that Defendants’ objection to the Bankruptcy Court’s
13
Proposed Findings of Fact and Conclusions of Law and Recommendations (ECF No. 30)
14
is overruled. The Court adopts the Bankruptcy Court’s Recommendations (ECF No. 29).
15
Defendants’ Counterclaims against Western are dismissed.
16
17
18
19
The Clerk is instructed to enter judgment in accordance with this Order and
transmit a copy of this order to the bankruptcy court.
The Clerk is further directed to close this case.
DATED THIS 25th day of September 2017.
20
21
MIRANDA M. DU
UNITED STATES DISTRICT JUDGE
22
23
24
25
26
27
28
4
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?