Diamond Consortium, Inc. v. Manookian

Filing 268

MEMORANDUM OPINION AND ORDER - Pending before the Court is Defendants Mark Hammervold and Hammervold PLC's Consolidated Motion for Stay (Dkt. 231 ) and Defendants Brian Manookian, Brian Cummings, and Cummings Manookian, PLC's Motion to Sever (Dkt. #252). Having considered the pleadings, the Court finds that the Motion to Sever (Dkt. #252) should be GRANTED. Upon severing the claims against Mark Hammervold and Hammervold PLC, Mark Hammervold and Hammervold PLC's Consolidated Motion for Stay (Dkt. #231) shall be GRANTED and the separate cause of action against Mark Hammervold and Hammervold, PLC shall be STAYED pending the resolution of their interlocutory appeal. Signed by Judge Amos L. Mazzant, III on 6/27/2017. (baf, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

DIAMOND CONSORTIUM, INC.; DAVID
BLANK
v.
BRIAN MANOOKIAN; CUMMINGS
MANOOKIAN, PLC; BRIAN CUMMINGS;
MARK HAMMERVOLD;
HAMMERVOLD, PLC

§
§
§
§
§
§
§
§
§
§

Civil Action No. 4:16-CV-00094
Judge Mazzant

MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendants Mark Hammervold and Hammervold PLC’s
Consolidated Motion for Stay (Dkt. #231) and Defendants Brian Manookian, Brian Cummings,
and Cummings Manookian, PLC’s Motion to Sever (Dkt. #252). Having considered the pleadings,
the Court finds that the Motion to Sever (Dkt. #252) should be GRANTED. Upon severing the
claims against Mark Hammervold and Hammervold PLC, Mark Hammervold and Hammervold
PLC’s Consolidated Motion for Stay (Dkt. #231) shall be GRANTED and the separate cause of
action against Mark Hammervold and Hammervold, PLC shall be STAYED pending the
resolution of their interlocutory appeal.
BACKGROUND
On November 9, 2016, Defendants Mark Hammervold and Hammervold PLC (the
“Hammervold Defendants”) filed an Amended Motion to Dismiss (Dkt. #137). On December 9,
2016, Plaintiffs filed a response (Dkt. #147). On April 26, 2017, the Court issued a Memorandum
Opinion and Order denying the Amended Motion to Dismiss (Dkt. #180). On May 25, 2017, the

Hammervold Defendants filed a Notice of Appeal from the Court’s Memorandum Opinion and
Order (Dkt. #219).
On May 12, 2017, the Hammervold Defendants filed an opposed Motion for Withdrawal,
Substitution of Counsel, and Designation of Lead Counsel (Dkt. #196). On May 31, 2017, the
Court denied the motion (Dkt. #224). On June 6, 2017, the Hammervold Defendants filed a Notice
of Appeal from the Court’s Memorandum Opinion and Order (Dkt. #230). Trial in this matter is
specially set to begin on August 15, 2017.
On June 6, 2017, the Hammervold Defendants filed a Consolidated Motion for Stay
(Dkt. #231). The Hammervold Defendants noted that under the Texas Civil Practices and
Remedies Code, the filing of an appeal on the denial of a motion to dismiss pursuant to the Texas
Citizen’s Participation Act (“TCPA”) immediately stays the underlying lawsuit. Tex. Civ. Prac. &
Rem. Code §§ 51.014(a), (b). On June 16, 2017, Plaintiffs filed a response (Dkt. #250). Plaintiffs
did not oppose the stay based on the denial of the TCPA motion to dismiss, stating that under the
language of the TCPA “it appears that the right to an automatic stay is substantive and therefore
mandatory” (Dkt. #250 at p. 3).

On June 20, 2017, Defendants Brian Manookian, Brian

Cummings, and Cummings Manookian, PLC’s (the “Manookian Defendants”) filed a response to
the Hammervold Defendants’ consolidated motion for stay or, in the alternative, a motion to sever
(Dkt. #252). The Manookian Defendants argued a stay pursuant to the TCPA was a state
procedural rule and did not mandate a stay in this federal case (Dkt. #252 at p. 2). The Manookian
defendants further argued that the Hammervold Defendants waived any right to request a stay
(Dkt. #252 at p. 2). The Manookian Defendants requested that if the Court decided to grant the
stay, the Court sever the claims against the Hammervold Defendants so the Manookian Defendants
may try their claims in August 2017 (Dkt. #252 at p. 2).

2

LEGAL STANDARD
The Fifth Circuit has not ruled on whether “under the Erie doctrine, the array of state
procedural rules surrounding anti-SLAPP motions to dismiss (viz. discovery stays, accelerated
timetables for decision, and the like) follow the core anti-SLAPP motion to dismiss into federal
court.” Cuba v. Pylant, 814 F.3d 701, 707 n. 6 (5th Cir. 2016). However, the Fifth Circuit has
noted that the TCPA protects “not simply the right to avoid ultimate liability in a SLAPP case, but
rather is the right to avoid trial in the first instance.” NCDR, L.L.C. v. Mauze & Bagby, P.L.L.C.,
745 F.3d 742, 751 (5th Cir. 2014).
Rule 21 of the Federal Rules of Civil Procedure establishes that “[o]n motion or on its own,
the court may at any time, on just terms, add or drop a party,” and “[t]he court may sever any claim
against a party.” Fed. R. Civ. P. 21. Under Rule 21, a “district court has the discretion to sever an
action if it is misjoined or might otherwise cause delay or prejudice.” Applewhite v. Reichold
Chems., 67 F.3d 571, 574 (5th Cir. 1995). Trial courts have broad discretion to sever issues to be
tried before it. Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir. 1994). But courts
will refuse to sever claims if “the court believes that it only will result in delay, inconvenience, or
added expense.” In re Rolls Royce Corp., 775 F.3d 671, 680 n.40 (5th Cir. 2014).
Severance under Rule 21 creates “two separate actions or suits where previously there was
but one.” U.S. v. O’Neil, 709 F.2d 361, 368 (5th Cir. 1983). When a single claim is severed, it
proceeds as a “discrete, independent action, and a court may render a final, appealable judgment
in either one of the resulting actions.” Id.
ANALYSIS
The Fifth Circuit has not ruled on whether a stay pursuant to the TCPA is applicable in
federal court. The Court therefore will not rule on this issue. The Court notes that the under the

3

TCPA, the Hammervold Defendants have a “right to avoid trial in the first instance.” NCDR,
L.L.C., 745 F.3d at 751. The Court further notes that Plaintiffs are not opposed to a stay and the
Manookian Defendants do not oppose a stay if the Court severs the claims against the Hammervold
Defendants. The Court will therefore sever the claims against the Hammervold Defendants and
stay the separate cause of action against the Hammervold Defendants. The claims against the
Manookian Defendants will proceed to trial.
CONCLUSION
The Court hereby SEVERS the claims against Mark Hammervold and Hammervold, PLC
.

into a separate cause of action. The separate cause of action against Mark Hammervold and
Hammervold, PLC shall be STAYED pending the resolution of their interlocutory appeal. The
claims pertaining to Brian Manookian, Brian Cummings, and Cummings Manookian, PLC shall
proceed to trial on August 15, 2017.
SIGNED this 27th day of June, 2017.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

4