Lohr v. Gilman et al
Filing
86
MEMORANDUM OPINION AND ORDER: The Court ORDERS Defendants Frederick Minton and Marlane Minton to pay Plaintiff Claudette Lohr the expenses, including attorneys' fees, that Lohr incurred in having her attorneys draft and file her Motion to Com pel and Request for Sanctions Against Frederick Minton and Marlane Minton 48 and DENIES Defendants Frederick Minton and Marlane Minton's motion to set aside default 76 and ORDERS Plaintiff Claudette Lohr to, by 4/9/2018, file a motion for default judgment against Defendants Frederick Minton and Marlane Minton. (Ordered by Magistrate Judge David L. Horan on 3/19/2018) (epm)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CLAUDETTE LOHR,
Plaintiff,
V.
PAUL GILMAN; FREDERICK D.
MINTON, PhD; MARLANE
MINTON; OIL MIGRATION GROUP,
LLC; and WAVETECH29, LLC,
Defendants.
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No. 3:15-cv-1931-BN
MEMORANDUM OPINION AND ORDER1
This Memorandum Opinion and Order addresses two outstanding issues: (1)
whether the Court should enter an order requiring Defendants Frederick Minton and
Marlane Minton to pay Plaintiff Claudette Lohr, as required by Rule 37(a)(5)(A), the
expenses, including attorneys’ fees, that Lohr incurred in having her attorneys draft
and file her Motion to Compel and Request for Sanctions Against Frederick Minton and
Marlane Minton [Dkt. No. 48], see Dkt. No. 67 (November 9, 2017 Electronic Order),
and (2) whether the court should grant Defendants Frederick Minton and Marlane
Minton’s motion to set aside default [Dkt. No. 76] under Federal Rule of Civil
Procedure 55(c), see Dkt. No. 78.
Under § 205(a)(5) of the E-Government Act of 2002 and the definition of “written
opinion” adopted by the Judicial Conference of the United States, this is a “written
opinion[] issued by the court” because it “sets forth a reasoned explanation for [the]
court’s decision.” It has been written, however, primarily for the parties, to decide
issues presented in this case, and not for publication in an official reporter, and should
be understood accordingly.
1
Background
I.
Lohr’s Motion to Compel and Request for Sanctions Against the Mintons
On November 9, 2017, the Court entered an Electronic Order that granted
Plaintiff Claudette Lohr’s Motion to Compel and Request for Sanctions Against
Frederick Minton and Marlane Minton [Dkt. No. 48] and explained that
Federal Rule of Civil Procedure 26(g)(1) requires that “every discovery...
response... must be signed... by the party personally, if unrepresented and
must state the signer’s address, e-mail address, and telephone number.
By signing,... [a] party certifies that to the best of the person’s knowledge,
information, and belief formed after a reasonable inquiry:... (B) with
respect to a discovery... response..., it is: i) consistent with these rules and
warranted by existing law or by a nonfrivolous argument for extending,
modifying, or reversing existing law, or for establishing new law; (ii) not
interposed for any improper purpose, such as to harass, cause
unnecessary delay, or needlessly increase the cost of litigation; and (iii)
neither unreasonable nor unduly burdensome or expensive, considering
the needs of the case, prior discovery in the case, the amount in
controversy, and the importance of the issues at stake in the action.”
Federal Rule of Civil Procedure 26(g)(2) provides that “[o]ther parties
have no duty to act on an unsigned disclosure, request, response, or
objection until it is signed, and the court must strike it unless a signature
is promptly supplied after the omission is called to the attorney’s or
party’s attention.” Defendants Frederick Minton and Marlane Minton did
not sign their responses to Plaintiff’s First Set of Interrogatories,
Plaintiff’s First Set of Requests for Admissions, or Plaintiff’s First
Requests for Production as Rule 26(g)(1) requires, even after Plaintiff’s
counsel pointed out the omission. See Dkt. No. 48-1. They instead filed at
least some of their unsigned responses with the Court. See Dkt. No. 56.
The Court therefore strikes Defendants Frederick Minton and Marlane
Minton’s responses to Plaintiff’s First Set of Requests for Admissions,
Defendants Frederick Minton’s and Marlane Minton’s responses to
Plaintiff’s First Set of Interrogatories, and Defendants Frederick Minton’s
and Marlane Minton’s responses to Plaintiff’s First Requests for
Production. See Dkt. No. 48-1, Ex. B. Defendants Frederick Minton and
Marlane Minton must, by December 29, 2017, serve complete answers
and responses – complying with the Federal Rules of Civil Procedure – to
Plaintiff’s First Set of Interrogatories, Plaintiff’s First Set of Requests for
Admissions, or Plaintiff’s First Requests for Production. Federal Rule of
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Civil Procedure 37(a)(5)(A) provides that, if a motion to compel is granted,
or if the requested discovery is provided after the motion was filed, the
court must, after giving an opportunity to be heard, require the party...
whose conduct necessitated the motion, the party or attorney advising
that conduct, or both to pay the movant’s reasonable expenses incurred
in making the motion, including attorneys fees, except that the court
must not order this payment if: (i) the movant filed the motion before
attempting in good faith to obtain the disclosure or discovery without
court action; (ii) the opposing party’s nondisclosure, response, or objection
was substantially justified; or (iii) other circumstances make an award of
expenses unjust. By December 29, 2017, Defendants Frederick Minton
and Marlane Minton must also file a response explaining why the Court
should not enter an order requiring them to pay Plaintiff Claudette Lohr,
as required by Rule 37(a)(5)(A), the expenses, including attorneys’ fees,
that she incurred in having her attorneys draft and file her [48] Motion
to Compel and Request for Sanctions Against Frederick Minton and
Marlane Minton. If the Mintons file this response, Plaintiff may file a
reply in support of an award of expenses under Rule 37(a)(5)(A) by
January 12, 2018.
Dkt. No. 67.
On December 12, 2017, the Mintons made a filing [Dkt. No. 76] that the Court
has liberally construed as a motion to set aside default under Federal Rule of Civil
Procedure 55(c). See Dkt. No. 78. The Mintons’ one-page handwritten note states that
We are investors also and have not received any monies of any kind
from Paul Gilman. Neither, have we received any monies from Claudetter
Lohr.
We are living on our Social Security as both of us are Eighty three
years old.
We are not requesting for a delay.
We are requesting for a dismissal of this case.
Thank you
Dkt. No. 76 at 1 of 55. The Mintons then attached signed and apparently amended
responses and answers to Lohr’s discovery requests as well as certain documents being
produced in response to the requests. See id. at 2-54 of 55.
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On January 5, 2018, Lohr filed a Certificate of Defendants’ Non-Compliance
with Court’s Discovery Order Entered on November 9, 2017, Dkt. 67, explaining that
1. On November 9, 2017, this Court granted Plaintiff’s Motion to Compel
and Request for Sanctions and issued an Order requiring that Defendants
Frederick D. Minton, PhD and Marlane Minton (the “Mintons”) “serve
complete answers and responses” – complying with the Federal Rules of
Civil Procedure – to Plaintiff’s First Set of Interrogatories, Plaintiff’s
First Set of Request for Admissions, and Plaintiff’s First Requests for
Production of Documents by December 29, 2017 (the “Discovery Order”).
Dkt. 67.
2. The Court’s Discovery Order also required the Mintons to file a written
response to show cause why they should not be sanctioned for their prior
non-compliance by December 29, 2017. Id.
3. On November 9, 2017, Plaintiff served a true and correct copy of the
Court’s Discovery Order upon the Mintons. See Plaintiff’s Certificate of
Service, Dkt. 69.
4. Plaintiff hereby certifies to the Court that the deadline for the Mintons
to file a written response to show cause as to why they should not be
sanctioned has lapsed without any such filing.
5. Plaintiff further certifies to the Court that the deadline for the Mintons
to serve complete discovery responses that comply with the Federal Rules
of Civil Procedure has also lapsed without such compliance. Instead, the
Mintons, in direct contravention of this Court’s Discovery Order, attached
modified (yet still non-compliant) discovery responses to their December
12, 2017 filing, which the Court construed as a Motion to Set Aside
Default Judgment. Assuming the Mintons intended the attached
documents to be their discovery responses, the responses substantially
and materially fail to comply with the Court’s Discovery Order.
6. The following shows only a sample of the myriad reasons the Mintons’
purported discovery responses fail to meet the standards under the
Federal Rules.
A. Interrogatories
7. The Mintons’ Responses to Interrogatories are not answered fully and
verified under oath as required by FRCP 33(b)(3). Most of their responses
still quite literally read “D.N.K.” or “I.D.K.”
8. Despite the Mintons’ alleging to this Court that they were investors
with Paul Gilman and his companies, the Mintons refuse to identify such
transactions as required by Plaintiff’s Interrogatory Nos. 17 and 19.
9. Further, Interrogatory No. 12 requests the Mintons to identify every
transfer of money to any other Defendants. Despite producing several
documents showing wire transfers to Paul Gilman, the Mintons
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inexplicably responded “I.D.K.—None”
B. Requests for Admissions
10. The Mintons fail to admit or deny each admission as required by the
Rules. The Mintons’ responses do not fairly respond to the substance of
the matter, nor do they assert that they have made a reasonable inquiry
to enable them to admit or deny the admissions.
C. Requests for Production
11. The Mintons failed to indicate whether they performed a diligent
search for documents within their possession and/or control, but their
paltry production proves they did not.
12. As previously stated in Plaintiff’s Motion to Compel, Plaintiff’s
counsel is in possession of some emails between the Mintons and Paul
Gilman that were produced by Paul Gilman in this action. Despite this,
the Mintons failed to produce any email communications.
13. The Mintons attached certain wire transfer statements to their
December 12, 2017 filing; however, Plaintiff has possession of additional
wire transfer statements from the Mintons that they failed to produce.
WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully
requests that the Court (i) sanction the Mintons in an amount of at least
$5,000.00 and order them to pay Plaintiff for fees and expenses incurred
associated with her Motion to Compel in an additional amount of
$5,000.00, (ii) authorize all writs to issue for collection of the sanctions
and fees awarded, if not paid promptly, (iii) consider the Mintons’
continuing failures in denying their Motion to Set Aside Default
Judgment, and (iv) grant Plaintiff all further relief as is appropriate at
law or equity so that justice may be done.
Dkt. No. 84 at 1-3 (footnote omitted). Lohr further explained that
[i]t is not lost upon Plaintiff that her possession of some emails and some
bank documents means their production from the Mintons may be
duplicative. However, the larger point is that Plaintiff knows of the
existence of more documents that she does not have because the Mintons
have not produced them. Further, production by the Mintons would also
resolve potential authenticity objections in the future.
Id. at 3 n.1
II.
The Mintons’ Motion to Set Aside Default
As the Court previously explained, on December 12, 2017, the same day that the
Court directed entry of and the Clerk of Court entered defaults as to Defendants
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Frederick Minton and Marlane Minton, both proceeding pro se, see Dkt. Nos. 75 & 77,
the Court received a filling mailed from the Mintons [Dkt. No. 76] that – considering
their pro se status and in the interest of fairly but expeditiously addressing the issues
in this litigation – the Court has liberally construed as a motion to set aside default
under Federal Rule of Civil Procedure 55(c). The Court abated the December 29, 2017
deadline for Plaintiff Claudette Lohr to file a motion for default judgment, see Dkt. No.
75, and instead ordered Lohr to file a written response to the construed Rule 55(c)
motion by January 2, 2018. See Dkt. No. 78. And the Court ordered that the Mintons
must file reply brief, but no additional documents, by February 3, 2018. See id.
Lohr timely filed the required brief. See Dkt. No. 83.
The Mintons did not file a reply but did, on January 23, 2018, file a long-overdue
answer to Plaintiff’s Second Amended Complaint. See Dkt. No. 85.
Legal Standards and Analysis
I.
Lohr’s Motion to Compel and Request for Sanctions Against the Mintons
The Court does not find that the Mintons have shown that their failure to
properly sign and serve answers and responses – complying with the Federal Rules of
Civil Procedure – to Plaintiff’s First Set of Interrogatories, Plaintiff’s First Set of
Requests for Admissions, or Plaintiff’s First Requests for Production was substantially
justified or that other circumstances make an award of expenses unjust. While the
courts “construe pro se litigants’ pleadings liberally, [the courts] do not excuse pro se
litigants’ failure to comply with the pertinent rules of procedure and substantive law.”
Houston v. Venneta Queen, 606 F. App’x 725, 730 (5th Cir. 2015) (citations omitted).
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Further, the Court finds that Lohr filed her Motion to Compel and Request for
Sanctions Against Frederick Minton and Marlane Minton [Dkt. No. 48] only after
attempting in good faith to obtain the discovery without court action. See Dkt. No. 48
at 2-3.
Accordingly, the Court will order Defendants Frederick Minton and Marlane
Minton to pay Plaintiff Claudette Lohr, as required by Rule 37(a)(5)(A), the expenses,
including attorneys’ fees, that Lohr incurred in having her attorneys draft and file her
Motion to Compel and Request for Sanctions Against Frederick Minton and Marlane
Minton [Dkt. No. 48]. Lohr must, by April 9, 2018, file an application for attorneys’
fees and costs that is accompanied by supporting evidence establishing the amount of
the reasonable attorneys’ fees and costs (as described above) to be awarded under
Rules 37(a)(5)(A). The fee application must be supported by documentation evidencing
the “lodestar” calculation, including affidavits and detailed billing records, and
citations to relevant authorities and must set forth the itemized number of hours
expended in connection with the recoverable attorneys’ fees described above as well as
the reasonable rate(s) requested. See Tollett v. City of Kemah, 285 F.3d 357, 367 (5th
Cir. 2002). If an application is filed, Defendants Frederick Minton and Marlane Minton
must file any response challenging the amount of reasonable attorneys’ fees and costs
to awarded by May 9, 2018, and Lohr must file a reply by May 23, 2018.
II.
The Mintons’ Motion to Set Aside Default
As the Court previously explained, under Federal Rule of Civil Procedure 55, “a
district court ‘may set aside an entry of default for good cause.’” Moreno v. LG Eleccs,
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USA Inc., 800 F.3d 692, 698 (5th Cir. 2015) (quoting FED. R. CIV. P. 55(c)). “The
language of this rule is discretionary.” Id. As that language also makes clear, “[t]he
ultimate inquiry is whether a defendant can show ‘good cause’ that default should be
set aside.” Copeland v. State Farm Inc. Co., 657 F. App’x 237, 239 (5th Cir. 2016) (per
curiam) (citing Effjohn Int’l Cruise Holdings, Inc. v. A&L Sales, Inc., 346 F.3d 552, 559
(5th Cir. 2003)). And “‘the decision to set aside a default is committed to the sound
discretion of the trial court.’” Moreno, 800 F.3d at 698 (quoting In re Dierschke, 975
F.2d 181, 183 (5th Cir. 1992)).
In exercising its sound discretion to determine whether good cause to set aside
a default has been shown, a district court generally examines “[t]hree factors”: “(1)
whether the failure to act was willful; (2) whether setting the default aside would
prejudice the adversary; and (3) whether a meritorious claim has been presented.”
Elfjohn, 346 F.3d at 563 (citing Lacy v. Sitel Corp., 227 F.3d 290, 292 (5th Cir. 2000)).
As “[t]hese factors are not exclusive,” “[o]ther factors may be considered, such as
whether the party acted expeditiously to correct the default.” Id. (citing Dierschke, 975
F.2d at 184; see also Moreno, 800 F.3d at 698 (“[D]istrict courts generally should grant
motions to set aside a default unless the default was willful, the plaintiff will be
prejudiced, or the defendant has no meritorious defense.” (citing Dierschke, 975 F.2d
at 183-84; citation omitted)).
Lohr contends that the defaults against the Mintons should not be set aside,
where “[t]he Mintons were served personally at their Dallas residence on June 8, 2015
and June 15, 2015”; “[f]or nearly four years now, despite their numerous appearances,
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requests for relief, and Court orders, the Mintons have successfully evaded ever
answering Lohr’s complaints”; “[t]he Mintons’ willful evasion over the last
two-and-a-half years has allowed them to leave the country, lose or destroy documents
from their Dallas storage units, avoid proper discovery, and prolong Lohr’s litigation
costs and delays to a most-unreasonable extent”; and “(a) the Mintons’ continuing
failures are willful, (b) reversing default will severely prejudice Lohr, and (c) the
Mintons have presented no meritorious defenses.” Dkt. No. 83 at 1-2. According to
Lohr, “[n]one of the relevant factors weighs in favor of reversal of default, and the
Mintons’ latest filing [Dkt. No. 76] should be denied and/or overruled.” Id. at 2.
After carefully considering the record and the relevant considerations, the Court
agrees.
“The first factor (willfulness) weighs in favor of ... not setting aside the entr[ies]
of default.” Elfjohn, 346 F.3d at 563. Here, the Mintons knew of the action for years
and were repeatedly advised by Lohr’s counsel and the Court that they were required
to answer Lohr’s complaint after their motion to dismiss was denied and Lohr filed her
Second Amended Complaint. See Dkt. No. 75 (laying out procedural history). That they
finally filed an answer that appears to comply with Federal Rule of Civil Procedure 8(b)
in January 2018 only demonstrates that they could have done so sooner, and yet they
did not act expeditiously to correct their defaults. The Court finds that the Mintons
willfully – in this case, intentionally – failed to timely answer Lohr’s Second Amended
Complaint for months, despite the Court’s repeated and clear orders directing them to
do so. See In re OCA, Inc., 551 F.3d 359, 370 n. 32 (5th Cir. 2008) (“A willful default is
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an intentional failure to respond to litigation.” (emphasis and internal quotation marks
omitted)); Dierschke, 975 F.2d at 184-85 (“The willful failure to answer, the lack of any
meritorious defense, and the existence of resulting prejudice to the plaintiff, depending
on the circumstances, typically can provide adequate cause for the court to deny a
motion to set aside a default. Assuming no prejudice to the plaintiffs and that
Dierschke had meritorious defenses does not automatically overcome the willful failure
to answer. Willful failure alone may constitute sufficient cause for the court to deny
this motion.”); see generally Mason & Hanger-Silas Mason Co., Inc. v. Metal Trades
Council of Amarillo, Tex. & Vicinity, AFL-CIO, 726 F.2d 166, 168 (5th Cir. 1984)
(noting that, where a defendant filed a late answer, the district “court could have
entered a default judgment but chose not to do so”).
The Fifth Circuit has explained “ finding of willful default ends the inquiry, for
when the court finds an intentional failure of responsive pleadings there need be no
other finding.” Lacy, 227 F.3d at 292 (internal quotation marks omitted). But, here, the
the second and third factors also weigh in favor of finding no good cause to set aside
the entry of defaults against the Mintons.
As to the second factor, “mere delay does not alone constitute prejudice,” id. at
293, and pointing to “expected difficulties [the plaintiff] may face if forced to proceed
with further litigation” and “requiring a plaintiff to prove his case do[] not constitute
prejudice, Jenkens & Gilchrist v. Groia & Co., 542 F.3d 114, 122 (5th Cir. 2008).
“Rather, the plaintiff must show that the delay will result in the loss of evidence,
increased difficulties in discovery, or greater opportunities for fraud and collusion.”
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Lacy, 227 F.3d at 293 (internal quotation marks omitted). As Lohr explains, in addition
to the Mintons’ failures to comply with their discovery obligations – despite the Court’s
explaining to them that they must comply with those obligations during the hearing
in which the Court allowed the Mintons’ attorney to withdraw – “the Mintons alleged
they had ‘stored documents which are in Dallas, TX’” but, “as explained in Lohr’s
Motion to Compel, ... apparently no longer have those documents,” and “Lohr will be
prejudiced if the Mintons successfully use their delay tactics to avoid production of
documents.” Dkt. No. 83 at 8 (quoting Dkt. No. 57 at 2.).
And, as to the third factor, the Mintons have failed to present a meritorious
defense sufficient to support a finding on the merits for these defaulting parties. “In
determining whether a meritorious defense exists, [t]he underlying concern is ...
whether there is some possibility that the outcome of the suit after a full trial will be
contrary to the result achieved by the default.” In re OCA, 551 F.3d at 373 (internal
quotation marks omitted). A defaulting defendant must provide “definite factual
allegations, as opposed to mere legal conclusions, in support of her defense,” which “is
measured not by whether there is a likelihood that it will carry the day, but whether
the evidence submitted, if proven at trial, would constitute a complete defense.”
Jenkens & Gilchrist, 542 F.3d at 122 (internal quotation marks omitted).
As Lohr explains, the Mintons’ factual assertions and denials in their one-page
filing [Dkt. No. 76] does not raise meritorious defenses that, if proven, raise a real
possibility that the outcome of the suit after a full trial will be contrary to the result
achieved by the default. See Dkt. No. 83 at 9-11.
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The Mintons do raise more specific factual assertions and denials in their latefiled answer [Dkt. No. 85], but, at the same time, the Mintons appear to have no
interest in taking their defenses to trial – they ask the Court to summarily dismiss the
case based on their factual assertions. See Dkt. No. 76 at 1; Dkt. No. 85 at 4-5. Insofar
as their filings could be construed as seeking dismissal under Federal Rule of Civil
Procedure 12(b)(6) or summary judgment under Federal Rule of Civil Procedure 56,
they have failed to show to make the showing required for such relief.
Based on the Mintons’ willful failure to answer in the previous six months, their
failure to expeditiously correct their defaults, and the serious prejudice that Lohr has
shown would follow from setting aside their defaults as discussed above, the Court
finds that, even if the third factors does not strongly weigh in favor of denying the
motion to set aside, the Mintons have failed to show good cause to set aside their
defaults. See generally UnitedHealthcare Ins. Co. v. Holley, __ F. App’x ___, No. 1740354, 2018 WL 775291, at *2 (5th Cir. Feb. 7, 2018) (explaining the defaulting
defendant (Holley) “claims that the district court erred in failing to consider her
allegedly meritorious defense” but “does not cite any authority for her novel proposition
that, even if the court finds a defendant’s default was willful, it is required to consider
the defendant's potentially meritorious defense to the substantive claims,” and that
“[t]his is likely because the weight of this court’s authority indicates the converse: once
a district court finds that default was willful, the inquiry ceases, and it does not abuse
its discretion in denying defendant’s request to set aside the judgment”).
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Conclusion
For the reasons and to the extent explained above, the Court (1) ORDERS
Defendants Frederick Minton and Marlane Minton to pay Plaintiff Claudette Lohr, as
required by Rule 37(a)(5)(A), the expenses, including attorneys’ fees, that Lohr
incurred in having her attorneys draft and file her Motion to Compel and Request for
Sanctions Against Frederick Minton and Marlane Minton [Dkt. No. 48] and (2)
DENIES Defendants Frederick Minton and Marlane Minton’s motion to set aside
default [Dkt. No. 76] under Federal Rule of Civil Procedure 55(c) and ORDERS
Plaintiff Claudette Lohr to, by April 9, 2018, file a motion for default judgment against
Defendants Frederick Minton and Marlane Minton.
SO ORDERED.
DATED: March 19, 2018
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
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