BidZirk LLC et al v. Smith

Filing 130

Brief regarding sanctions by BidZirk LLC, Daniel G Schmidt, III, Jill Patterson. (Attachments: # 1 Exhibit notice of lis pendens# 2 Exhibit letter brief# 3 Exhibit release of lis pendens# 4 Exhibit Greenville County property record)(Elwell, Kevin) Modified on 10/3/2007 to edit text per chambers (awil).

BidZirk LLC et al v. Smith

Doc. 130 Att. 2

6:06-cv-00109-HMH

Date Filed 09/27/2007

Entry Number 130-3

Page 1 of 33

2 May 2007 VIA ELECTRONIC MAIL Hon. Wm. M. Catoe U.S. Magistrate Judge PO Box 10262 Greenville, South Carolina 29603 RE: BidZirk LLC v. Smith United States District Court for the District of South Carolina, Greenville Division Civil Action No. 6:06-CV-00109-HMH (WMC)

Dear Judge Catoe: Please allow this correspondence to serve as Plaintiffs' submission of authority regarding the filing of a notice of lis pendens, per the Court's order of May 2, 2007. Authority for the filing of a lis pendens notice is found in S.C. Code § 15-11-20. A notice of lis pendens is intended to provide third parties notice that title to real property may be affected by pending litigation. The notice of lis pendens in this case was filed October 23, 2006, by which time Defendant had already been served with requests for admission, and had failed to respond. See discovery requests, attached. Accordingly, Defendant was, by the time of his first deposition (September 14, 2006) already subject to judgment for the same reasons outlined in Plaintiff's motion for summary judgment (Doc. 72), which was filed January 15, 2007. On October 26, 2006, Defendant filed a motion which, inter alia, requested that Defendant's notice of lis pendens be stricken (Doc. 66). This motion was denied as moot per the Court's docket entry of May 2, 2007. At the time the lis pendens notice was filed, Plaintiffs were already entitled to judgment as a matter of law. See Davis v. Williams, 588 F.2d 69, 70 (4th Cir. 1978). Defendant testified at deposition that he intended to sell his condominium. See deposition pages, attached. He has in fact attempted to sell the home twice during the pendency of this case, per his admission during today's hearing. The condominium is substantially Defendant's only salable asset. Plaintiffs contend that, under the circumstances presented at the time of filing (including their legal entitlement to judgment), the instant action was one "affecting the title to real property," and that a lis pendens was appropriate. See, e.g., Pond Place Partners, Inc. v. Poole, 351 S.C. 1, 17-8 (S.C. App. 2002) (describing propriety of lis pendens notice generally). Further, the notice itself is drafted in such a way that potential purchasers of Defendant's property would be aware that the property may be subject to execution to satisfy a civil judgment, rather than stating that the property's title itself was clouded due to a dispute about its ownership, fraudulent conveyance, etc. The notice provides that "[t]he purpose of the action is to recover damages for defamation and invasion of privacy, and to enjoin the defendant's infringement of trademarks belonging to BidZirk,

Dockets.Justia.com

6:06-cv-00109-HMH

Date Filed 09/27/2007

Entry Number 130-3

Page 2 of 33

LLC." See notice, attached. A third party reading this notice could not reasonably presume that Plaintiffs, or any of them, asserted an ownership interest in the property prior to the execution of a judgment. Mr. Schmidt and Ms. Patterson, the two plaintiffs in this action that are natural persons, are sensitive to the Court's weariness, considering Defendant's relative dearth of assets. But this case is not being pursued for nothing. Plaintiffs must first obtain a judgment in their case, and that objective does not lose value because Defendant likely could not pay a substantial judgment today. Defendant may be carrying a winning lottery ticket in his billfold right now; he might inherit a sum of money from a relative at some point in the future; he might accumulate enough assets to satisfy a judgment in futuro through his regular employment as a computer technician. What Plaintiffs seek presently is the right answer in response to their claims. If Defendant defamed them, invaded their privacy and infringed on BidZirk's trademarks, Plaintiffs should have judgment on those claims. Plaintiffs will today provide to Defendant a settlement demand, which we hope will move the parties t