Orlowski et al v. Bates et al

Filing 547

ORDER denying 513 Motion to Dismiss Prejudgment Attachment; denying 514 Motion to Stay; denying 514 Motion to Appoint Counsel; denying 521 Motion to Dismiss Prejudgment Attachment; denying 532 Motion to Strike. Signed by Judge Jon Phipps McCalla on 11/30/2015. (McCalla, Jon)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
DAMIAN ORLOWSKI, et al.,
Plaintiffs, on behalf of
themselves and all others
similarly situated,
v.
LARRY BATES, et al.,
Defendants.

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No. 2:11-cv-01396-JPM-cgc

ORDER DENYING PLAINTIFFS AND RECEIVER’S MOTION TO STRIKE (ECF NO.
532); DENYING DEFENDANTS LARRY BATES AND BARBARA BATES’ MOTION TO
DISMISS EX PARTE PRE-JUDGMENT ATTACHMENT ORDERS OF 8/6/2015 AND
8/7/2015 (ECF NO. 513); DENYING DEFENDANTS LARRY BATES AND
BARBARA BATES MOTION TO STAY PROCEEDINGS AND RETURN PROPERTY
ATTACHED TO DEFENDANTS AND FOR THE APPOINTMENT OF COUNSEL (ECF
NO. 514); AND DENYING DEFENDANTS LARRY BATES AND BARBARA BATES’
MOTION TO DISMISS EX PARTE PREJUDGMENT ATTACHMENT ORDERS OF
8/6/2015 AND 8/7/2015 (ECF NO. 521)

Before the Court are three motions filed by Defendants
Larry Bates and Barbara Bates (“Defendants”): a Motion to
Dismiss Ex Parte Pre-Judgment Attachment Orders of 8/6/2015 and
8/7/2015, filed October 27, 2015 (ECF No. 513); a Motion to Stay
Proceedings and Return Property Attached to Defendants and for
the Appointment of Counsel, filed October 27, 2015 (ECF No.
514); and a Motion to Dismiss Ex Parte Prejudgment Attachment
Orders of 8/6/2015 and 8/7/2015, filed October 30, 2015 (ECF No.
521).

Also before the Court is a motion to strike these three
motions (“Motion to Strike”) by Plaintiffs and Receiver, filed
November 13, 2015.

(ECF No. 532.)

For the reasons stated below, Plaintiffs and Receiver’s
Motion to Strike is DENIED and Defendants’ three motions are
DENIED.
I.

BACKGROUND
This case involves allegations of a complex, large-scale

scheme to defraud hundreds of people over the course of many
years.

(See 3d Am. Compl., ECF No. 375.)

On August 4, 2015, a

federal grand jury issued an indictment against Defendants Larry
Bates, Charles Bates, and Robert Bates.
Bates, No. 2:15-cr-20192-SHL, ECF No. 1.)

(See United States v.
Following the

indictment, Plaintiffs and the Receiver filed two emergency
motions for temporary prejudgment attachment.
442.)

(ECF Nos. 439,

The Court granted these motions (ECF Nos. 440, 443), and

held a prompt post-order hearing on August 12, 2015 (ECF No.
448.)
Defendant Larry Bates filed a motion for appointment of
counsel and motion to stay on August 12, 2015 (ECF No. 447), and
Defendant Barbara Bates filed a parallel motion on August 13,
2015 (ECF No. 454).
26, 2015.

The Court denied these motions on August

(ECF Nos. 463, 464.)

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On August 25, 2015, Plaintiffs filed a Motion to Continue the
Prejudgment Attachment and Preserve the Status Quo. (ECF No. 459.)1
On September 1, 2015, Defendants Robert Bates and Charles Bates
filed a Motion for Relief from Attachment, for the Return of
Defendants’ Personal Property and Information Seized by the
Plaintiffs and/or Receiver, and for Suppression of Evidence Seized
in Violation of Attorney-Client Privilege. (ECF No. 474.)

The

Court held a hearing on the temporary prejudgment attachment on
September 2, 2015, to address whether the attachment should be
maintained. (ECF No. 478.)

On October 2, 2015, Defendants Larry

Bates and Barbara Bates filed a Response in Opposition and Motion
to Nullify Prejudgment Attachment Orders for Non-Compliance with
Tenn. Code Ann. § 29-6-113 and Non-Compliance with Tenn. Code Ann.
§ 29-6-115 Requiring Sufficient Bond of Plaintiffs Payable to the
Defendants and Motion for Sanctions (“Motion to Nullify Prejudgment
Attachment and Motion for Sanctions”). (ECF No. 497.)

On October

15, 2015, the Receiver and Plaintiffs filed an affidavit of John
Pikramenos in support of continuing the pre-judgment attachment.
(ECF No. 501.)
The Court entered an order on October 20, 2015, inter alia,
continuing the prejudgment attachment.

(ECF No. 503.)

Following

the Court’s order, Defendants Larry Bates and Barbara Bates have

1

Plaintiffs classified this document as a motion in the electronic filing
system, but entitled it “Plaintiffs’ Brief in Support of Continuing the
Prejudgment Attachment and Preserving the Status Quo.” For clarification,
the Court restyled Plaintiffs’ Brief “Motion to Continue the Prejudgment
Attachment and Preserve the Status Quo.” (See ECF No. 503 at 1 n.1.)

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filed: a “Motion to Dismiss Ex Parte Pre-Judgment Attachment

Orders of 8/6/2015 and 8/7/2015,” filed October 27, 2015 (ECF
No. 513); a “Motion to Stay Proceedings and Return Property
Attached to Defendants and for the Appointment of Counsel,”
filed October 27, 2015 (ECF No. 514); and a second “Motion to
Dismiss Ex Parte Prejudgment Attachment Orders of 8/6/2015 and
8/7/2015,” filed October 30, 2015 (ECF No. 521).

The Receiver

responded in opposition to Defendants’ October 30, 2015 motion
(ECF No. 521) on November 5, 2015.

(ECF No. 528.)

Plaintiffs

and the Receiver have also filed a Motion to Strike all three of
Defendants Larry Bates and Barbara Bates’ motions.

(ECF No.

532.)
II.

ANALYSIS
A. Motion to Strike
Plaintiffs and Receiver move to strike the aforementioned

motions by Larry Bates and Barbara Bates “in part, due to the
Court’s rulings on these issues, and also due to the false,
redundant, scandalous, impertinent and immaterial allegations
contained within the motions.”

(ECF No. 532 at 2 (citation

omitted).)
A district court “has wide discretion to strike ‘redundant,
immaterial, impertinent, or scandalous’ material from a
pleading.”

State Farm Mut. Auto. Ins. Co. v. Pointe Physical

Therapy, LLC, --- F. Supp. 3d ---, 2015 WL 3403359, at *22 (E.D.
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Mich. May 27, 2015) (quoting L and L Gold Assoc., Inc. v. Am.
Cash for Gold, LLC, No. 09-10801, 2009 WL 1658108, at *1 (E.D.
Mich. June 10, 2009)); Fed. R. Civ. P. 12(f).

“[B]ecause of the

practical difficulty of deciding cases without a factual
record[,] it is well-established that the action of striking a
pleading should be sparingly used by the courts.

It is a

drastic remedy to be resorted to only for the purposes of
justice.”

Brown v. Williamson Tobacco Corp. v. United States,

201 F.2d 819, 822 (6th Cir. 1953) (citations omitted); see also
Operating Eng’rs Local 324 Health Care Plan v. G & W Constr.
Co., 783 F.3d 1045, 1050 (6th Cir. 2015).
The Court agrees that Defendants’ motions are largely
redundant.

In the interests of justice, however, the Court

considers Defendants’ motions and DENIES Plaintiffs and
Receiver’s Motion to Strike.
B. First Motion To Dismiss Prejudgment Attachment Orders
In their motion filed October 27, 2015 (ECF No. 513),
Defendants Larry Bates and Barbara Bates argue that the
Declaration of Mr. Pikramenos filed on October 15, 2015, “is a
continuation of the silly assertions and false innuendo being
advanced by Plaintiffs’ Counsel Amber Shaw and Receiver Counsel
Laura Martin that simply defy logic and should be repugnant to
any serious or thinking person.”

(ECF No. 513 at 1-2.)

Defendants specifically attack each assertion in Mr. Pikramenos’
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declaration and re-assert their beliefs that the parties to this
action “continue to trample on” their Fourth Amendment rights,
that they have been rendered homeless by the prejudgment
attachment orders, that they have been denied access to records
and healthcare products, and that the prejudgment attachment
bond was insufficient. (Id. at 2-7.) Defendants also attach a
newspaper article from March 16, 2008, which discusses a ten-day
suspension that Mr. Pikramenos received in 2004 for having a
romantic relationship with a co-worker.

(ECF No. 513-1.)

Plaintiffs and Receiver argue that this motion should be
stricken, or alternatively denied, because the Court has already
addressed these claims for relief and the motion contains
“false, redundant, scandalous, impertinent and immaterial
allegations.”

(ECF No. 532 at 2.)

In an order entered on October 20, 2015, the Court
maintained the prejudgment attachment after finding that the
Tennessee prejudgment attachment requirements were satisfied.
(See ECF No. 503.)

The Court has also addressed, and found

without merit, Defendants’ contentions that the parties to this
action have violated their Fourth Amendment rights and
Defendants’ contentions that they have been denied access to
records.

(See ECF No. 543 at 42-45.)

Defendants do not present

new evidence showing why the Court should vacate its Order

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maintaining the prejudgment attachment or how the attachment
could be construed to violated their Fourth Amendment rights.
Additionally, Defendants allegations regarding Mr.
Pikramenos do not compel the Court to vacate its prejudgment
attachment orders.

As an initial matter, Defendants request

that the Court “dismiss ex parte prejudgment attachment orders
of 8/6/2015 and 8/7/2015.”

(ECF No. 513 at 1.)

Mr. Pikramenos’

declaration was not filed until October 15, 2015.
1.)

(ECF No. 501-

Moreover, despite Defendants contentions that Mr.

Pikramenos’ declaration is “fatuous and inane,” Defendants do
not actually dispute the content of Mr. Pikramenos’ declaration.
(ECF No. 513 at 1-5.)

Rather, Defendants dispute the

implications of Mr. Pikramenos’ declaration.

(Id.)

The

explanations set forth in Defendants’ “Response to Joint Notice
of Filing of Declaration in Support of Continuing Pre-Judgment
Attachment and Motion to Dismiss Ex Parte Pre-Judgment
Attachment Orders of 8/6/2015 and 8/7/2015” (ECF No. 513) were
not, however, made under oath and may not be considered as
evidence by the Court.

Regardless, the Court did not consider

Mr. Pikramenos’ declaration in a vacuum.

The Court considered

Mr. Pikramenos’ declaration in conjunction with all of the
evidence in the record, specifically focusing on the evidence
presented at the August 12 and September 2 hearings.

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As Plaintiffs and the Receiver correctly point out, this
motion “simply reiterate[s] requests for relief that the Court
has already ruled upon.”

(ECF No. 532 at 2.)

Defendants’

contentions do not demonstrate that they are entitled to relief
from the prejudgment attachment and their Motion to Dismiss Ex
Parte Pre-Judgment Attachment Orders of 8/6/2015 and 8/7/2015
(ECF No. 513) is therefore DENIED.
C.
Motion To Stay Proceedings And Return Property
Attached To Defendants And For The Appointment Of Counsel
On October 27, 2015, Defendants filed the instant Motion to
Stay Proceedings and Return Property Attached to Defendants and
for the Appointment of Counsel.

(ECF No. 514.)

Defendants

assert that the pending criminal matter prevents Defendant Larry
Bates from testifying in any further proceeding, that they have
been denied access to their papers and records, and that they
need counsel to properly defend this matter.

(Id.)

In accordance with the Court’s order entered on October 26,
2015, the trial date in this matter has been continued to avoid
interfering with any possible Fifth Amendment rights of Larry
Bates, Charles Bates, and Robert Bates.

(See ECF No. 508.)

The

Court determined, however, that resolution of pending motions in
this case does not implicate the same Fifth Amendment concerns,
and accordingly, declined to stay all proceedings in this
matter.

(Id. at 4.)

The Court finds no reason to revisit its

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earlier determination and DENIES Defendants’ Motion to Stay
Proceedings.
Similarly, the Court finds no reason to overturn its orders
of prejudgment attachment.

Defendants’ Motion for the return of

their attached property is therefore DENIED.
Defendants also request the appointment of counsel in this
matter.

Pursuant to 28 U.S.C. § 1915(e)(1), “[t]he court may

request an attorney to represent any person unable to afford
counsel.”

In a civil proceeding, however, “[t]he appointment

of counsel . . . is not a constitutional right.” Lanier v.
Bryant, 332 F.3d 999, 1006 (6th Cir. 2003); see also Shepherd v.
Wellman, 313 F.3d 963, 970 (6th Cir. 2002) (“[T]he plaintiffs
were not entitled to have counsel appointed because this is a
civil lawsuit.”); Lavado v. Keohane, 992 F.2d 601, 605-06 (6th
Cir. 1993) (no constitutional right to counsel in a civil case);
Farmer v. Haas, 990 F.2d 319, 323 (7th Cir. 1993) (“There is no
constitutional or . . . statutory right to counsel in federal
civil cases . . . .”).
Appointment of counsel is “a privilege that is justified
only by exceptional circumstances.” Lavado, 992 F.2d at 606
(internal quotation marks omitted).
In determining whether “exceptional circumstances”
exist, courts have examined “the type of case and the
abilities of the [litigant] to represent himself.”
Archie v. Christian, 812 F.2d 250, 253 (5th Cir.
1987); see also Poindexter v. FBI, 737 F.2d 1173,
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1185 (D.C. Cir. 1984). This generally involves a
determination of the “complexity of the factual and
legal issues involved.” Cookish v. Cunningham, 787
F.2d 1, 3 (1st Cir. 1986).
Id. at 606. “Appointment of counsel . . . is not appropriate
when a pro se litigant’s claims are frivolous or when the
chances of success are extremely slim.” Id. (citation omitted)
(quoting Mars v. Hanberry, 752 F.2d 254, 256 (6th Cir. 1985));
see also Cleary v. Mukasey, 307 F. App’x 963, 965 (6th Cir.
2009) (same).

Moreover, “[c]ourts do not perform a useful

service if they appoint a volunteer lawyer to a case which a
private lawyer would not take if it were brought to his or her
attention.”

Johnson v. Memphis City Schools, No. 09-2049-STA-

tmp, 2009 WL 6057287, at *1 n.2 (W.D. Tenn. June 4, 2009)
(quoting Cooper v. A. Sargenti Co., 877 F.2d 170, 174 (2d Cir.
1989)).
Defendants Larry Bates and Barbara Bates have not satisfied
their burden of demonstrating that appointment of counsel would
be appropriate in this case.

Additionally, it would be

unhelpful for the Court to appoint a volunteer lawyer “to a case
which a private lawyer would not take.”
6057287, at *2.

See Johnson, 2009 WL

Based on the record developed thus far, success

appears improbable for Defendants Larry Bates and Barbara Bates.
It would, therefore, be inappropriate to appoint private counsel
for these defendants.

See Gregg v. SBC/Ameritech, 321 F. App’x

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442, 448 (6th Cir. 2009) (affirming district court’s denial of
motion for appointment of counsel because “[a]s clearly noted in
the district court’s decisions in the substantive aspects of
this litigation, Gregg’s prospects for success . . . were not
good”); Brown v. Kordis, 46 F. App’x 315, 317 (6th Cir. 2002)
(holding that the district court did not abuse its discretion in
denying request for counsel where the plaintiff’s claims had
“only a slim chance of success”).
The Court further notes that Defendants have failed to file
materials to support the proposition that they are unable to
afford counsel. 2

See Sutton v. U.S. Small Bus. Admin., 92 F.

App’x 112, 116-17 (6th Cir. 2003) (holding that the district
court did not abuse its discretion in denying the plaintiff’s
motion for appointment of counsel where the plaintiff failed “to
demonstrate his indigence”); Hauck v. State of Tenn., 872 F.2d
1025, 1089 WL 40261, at *1-2 (6th Cir. 1989) (upholding the
district court’s denial of the prisoner’s motion to proceed in
forma pauperis because his attached affidavit did not establish
his indigence).

Additionally, Defendants Larry Bates and

Barbara Bates are educated individuals with sophisticated
backgrounds.

(See Larry Bates Dep. 14:22-16:3, 18:5-19:5, 22:1-

24:6, ECF No. 183; Barbara Bates Dep. 11:24-12:18, ECF No. 87-

2

Orders attaching the assets of Larry Bates have been entered. (ECF Nos.
440, 443, 503.) These orders do not resolve the issue of the unaccounted-for
assets.

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1.)

Both also have detailed knowledge and experience gained in

the precious metals and information systems fields.

See Sutton,

92 F. App’x at 117 (noting that, in denying the plaintiff’s
motion for appointment of counsel, “the district court
considered the court’s familiarity with the implicated issues
and principles, the case’s advanced procedural posture, and
plaintiff’s ‘well-drafted’ response to SBA’s dispositive
motion”).

Accordingly, the Court DENIES Defendants Larry Bates’

and Barbara Bates’ Motion for appointment of counsel.
D.

Second Motion to Dismiss Prejudgment Attachment Orders

On October 30, 2015, Defendant Larry Bates and Barbara
Bates filed a “Filing of Declaration in Support of and Motion to
Dismiss Ex Parte Prejudgment Attachment Orders of 8/6/2015 and
8/7/2015.”

(ECF No. 521.) 3

In this Motion, Defendants assert

that the Receiver has not paid the electric bill for the
attached property.

(Id.)

Defendants further contend that they

were “unjustly removed from their property” due to the late
filing of the Receiver’s affidavit and the lack of sufficient
bond.

(Id. at 2-3.)

They aver that these facts “justify the

nullification of the prejudgment attachment orders.”

(Id. at

3.)
As discussed above, the Court has already determined that
the Receiver and Plaintiffs have fully complied with the
3

Despite the title of the document, Defendants do not attach a sworn
declaration under oath as to the allegations set forth in this motion.

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requirements of the Tennessee prejudgment attachment statutes.
(See ECF No. 503.)

The Court will revisit this decision only

upon the production of new evidence refuting the grounds for
prejudgment attachment set forth in the Court’s October 20, 2015
order or upon a showing of harm to the property due to the
Receiver or Plaintiffs’ conduct.

Accordingly, the Court

considers Defendants contentions that the Receiver has failed to
pay electricity bills, and that as a result, the “alarm systems
and general security of the premises is compromised.”

(ECF No.

521.)
In response, the Receiver asserts that he has maintained
electricity on the properties and has communicated with Tippah
Electric regarding payment of the power bills.
¶¶ 17-21.)

(ECF No. 528

The Receiver explains that Tippah Electric did not

receive his first check, and corroborates this explanation by
submitting a copy of the original check, as well as a new check
sent to Tippah Electric to cover the outstanding balance.
No. 528 at PageID 8457-8458.)

(ECF

The Court is satisfied that the

Receiver is adequately maintaining the attached property at
issue.

Accordingly, Defendants’ Motion (ECF No. 521) is DENIED.

III. CONCLUSION
For the foregoing reasons, Plaintiffs and Receiver’s Motion
to Strike (ECF No. 532) is DENIED; Defendants Larry Bates and
Barbara Bates’ Motion to Dismiss Ex Parte Pre-Judgment
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Attachment Orders of 8/6/2015 and 8/7/2015 (ECF No. 513) is
DENIED; Defendants Larry Bates and Barbara Bates’ Motion to Stay
Proceedings and Return Property Attached to Defendants and for
the Appointment of Counsel (ECF No. 514) is DENIED; and
Defendants Larry Bates and Barbara Bates’ Motion to Dismiss Ex
Parte Prejudgment Attachment Orders of 8/6/2015 and 8/7/2015
(ECF No. 521) is DENIED.
IT IS SO ORDERED, this 30th day of November, 2015.

/s/ Jon P. McCalla
JON P. McCALLA
U.S. DISTRICT COURT JUDGE

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