Mota v. Beacon Bay Asset Managment LLC et al

Filing 50

MEMORANDUM OPINION AND ORDER1 denying 41 MMOTION to Extend Discovery Deadline, 40 MOTION to Extend Deadline Date for Discovery. (Ordered by Magistrate Judge David L. Horan on 5/31/2018) (epm)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ANNMARIE MOTA,

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Plaintiff,
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V.
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BEACON BAY ASSET MANAGEMENT, §
LLC, et al.,
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Defendants.
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No. 3:17-cv-1862-N-BN

MEMORANDUM OPINION AND ORDER1
This case has been referred to the undersigned United States magistrate judge
for pretrial management under 28 U.S.C. § 636(b) and a standing order of reference
from United States District Judge David C. Godbey. See Dkt. No. 38.
After granting the Unopposed Motion to Withdraw as Counsel for Defendants
Beacon Bay Asset Management, LLC (“Beacon Bay”) and James Virgil Willis [Dkt. No.
36] on April 27, 2018, see Dkt. No. 37, the Court entered an order on April 30, 2018
[Dkt. No. 39] observing that Beacon Bay “is a limited liability company, and, insofar
as it is neither an individual nor a sole proprietorship, this defendant is not permitted
to proceed pro se or through a non-attorney but rather must be represented by an
attorney in litigation in federal court” – and, accordingly, requiring Beacon Bay to
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issues presented in this case, and not for publication in an official reporter, and should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.
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“cause new counsel to enter an appearance on its behalf in this case by no later than
May 21, 2018.” Id. at 2 (citations omitted); see also id. (warning Beacon Bay “that a
failure to hire counsel to represent it by this deadline may result in appropriate
measures, including possibly striking its defenses and entering a default judgment
against it”). In response to that order, Willis (proceeding pro se on his own behalf)
asked the Court to appoint counsel for Beacon Bay, see Dkt. No. 44, which the Court
denied without prejudice, see Dkt. No. 49.
Willis and Beacon Bay also filed a Motion to Extend Deadline Date for
Discovery, see Dkt. No. 40, and Defendant Glenn Klupsak filed a Motion to Extend
Discovery Deadline & Deadline to File All Motions, see Dkt. No. 41. Plaintiff Annmarie
Mota filed a combined response to both motions, see Dkt. No. 43, and the defendants
each filed replies, see Dkt. Nos. 47 & 48.
Because Beacon Bay cannot proceed pro se or through Willis, the Court must
DENY the Motion to Extend Deadline Date for Discovery [Dkt. No. 40] as to Beacon
Bay.
As for the Motion to Extend Deadline Date for Discovery for Willis, see Dkt. No.
40, and Klupsak’s Motion to Extend Discovery Deadline & Deadline to File All Motions
[Dkt. No. 41], the Court DENIES both motions for the reasons explained below.
Legal Standards and Analysis
The Court’s Scheduling Order provides that “discovery closes” on May 15, 2018
and that “discovery requests must be served in time to permit response by this date”
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and that “all motions, including any objections to expert testimony, must be filed” by
June 15, 2018. Dkt. No. 20 at 2. “This case is set for trial on September 10, 2018,” and
“[t]he parties shall file all pretrial materials 30 days before trial.” Id. at 1, 3.
Willis asks the Court to extend the discovery deadline to July 15, 2018 and to
extend the motions deadline to August 1, 2018 and contends that “[t]here are no
Scheduling Order deadline dates that conflict with these requested changes.” Dkt. No.
40 at 2-3. He explains that, prior to his counsel’s withdrawal, “Willis expected Counsel
to proceed with notifications of Depositions of the Plaintiff by Counsel and possible
further Discovery prior to the Discovery deadline of May 15, 2018,” but “[a]ll legal
duties, requirements and preparation will now fall onto Willis.” Id. at 2.
Klupsak requests the same extended deadlines and contends that the requested
extensions have “no effect on the trial date or other remaining schedules at this time.”
Dkt. No. 41 at 1. He explains that he seeks the extended discovery deadline to allow
time for “for what I may want to ask for” and that he “seeks relief from the Court due
to the fact that I cannot afford legal representation and I am currently representing
myself pro se,” where “[t]he time expended to research and navigate the Federal and
Local Court Rules is quite burdensome while working to earn a living” and, “[r]ecently,
much of my time has been spent responding to multiple requests from Plaintiff’s
attorney” and also “contacting legal services in Dallas County to find affordable
representation to no avail.” Id.
Mota opposes Willis’s and Klupsak’s requests because
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[t]his case is set for trial the week of September 10, 2018, which feels as
if it is right around the corner. If Defendants are filing motions to
challenge Plaintiff’s expert in August, such a schedule would necessarily
cause a postponement of the trial. Plaintiff has accommodated many
requests for postponement of the Defendants but the extensions that
Defendants are seeking now would materially impact Plaintiff’s trial
preparation. And Plaintiff cannot afford for the trial to be continued, as
she has been suffering financially for so long as a result of the
Defendants’ conduct.
Dkt. 43 at 1-2.
In reply, Klupsak denies that he has previously requested a change in the
deadlines established by the Court, takes issue with Mota’s assertion that she is
suffering any financial hardship as a result of losses in the IRA account that is the
basis for this lawsuit, and reports that Mota’s attorney waited until exactly 32 days
prior to close of current Discovery deadline to send [him] a lengthy and overreaching
Discovery and Production request which could have been sent months ago” and that
“[t]his was completely unexpected and did not allow enough time for me to respond
with my own discovery requests as it would have been well within the 30 days required
before the discovery deadline.” Dkt. No. 47 at 1-2. Klupsak also explains that the
requested extensions “will also allow for continued efforts on my part to seek
appointment of counsel or affordable legal representation.” Id. at 2.
In his reply, Willis explains that “[t]he scheduled date of September 10th, 2018
is over 100 days away” and that he does “not believe there exists any reason to
postpone a trial date”; that “[o]nly in one instance did Defendants Beacon Bay and
Willis request a one-week delay for an expert witness report which was granted” and
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that “[n]o other requests were made”; that Mota “has had significant time to prepare
for trial (via her counsel)”; and that he believes that Mota “is not suffering financially
due to this suit.” Dkt. No. 48 at 1-2. Willis explains that the requested extensions of the
discovery and motions deadlines will allow him “to properly execute requisite
documents to the Court on this issue.” Id. at 2.
Federal Rule of Civil Procedure “16(b)(4) governs a party’s request to extend the
discovery period after the deadline established by a scheduling order has elapsed.”
Warner v. Lear Corp., No. 3:15-cv-1878-D, 2017 WL 930829, at *3 (N.D. Tex. Mar. 9,
2017). Defendants’ request therefore is governed by Rule 16(b)(4), under which “[a]
schedule may be modified only for good cause and with the judge’s consent.” FED. R.
CIV. P. 16(b)(4).
“To show good cause, the party seeking to modify the scheduling order has the
burden of showing that the deadlines cannot reasonably be met despite the diligence
of the party needing the extension.” Squyres v. Heico Cos., L.L.C., 782 F.3d 224, 237
(5th Cir. 2015) (internal quotation marks omitted); accord 839 East 19th Street, LP v.
CitiBank, N.A., No. 3:11-cv-1238-M, 2012 WL 13024000, at *1 (N.D. Tex. June 11,
2012) (“In order to establish good cause, a party must demonstrate that the deadline
could not ‘reasonably be met despite the diligence of the party needing the extension.’”
(quoting Fahim v. Marriott Hotel Servs., Inc., 551 F.3d 344, 348 (5th Cir. 2008))).
The Court considers four factors in determining whether to modify a scheduling
order for good cause under Rule 16(b)(4) to allow discovery after the court ordered cut-5-

off: (1) the explanation for the failure to complete discovery on time, (2) the importance
of the modification to the scheduling order to permit the discovery, (3) the potential
prejudice in allowing the modification, and (4) the availability of a continuance to cure
such prejudice. See Squyres, 782 F.3d at 237; Leza v. City of Laredo, 496 F. App’x 375,
376 (5th Cir. 2012). “The absence of prejudice to the nonmovant and inadvertence of
the party seeking the modification are insufficient to demonstrate ‘good cause.’” Barnes
v. Sanchez, No. 3:07-cv-1184-M, 2010 WL 5027040, at *1 (N.D. Tex. Dec. 2, 2010)
(footnote omitted).
Discovery has been open since September 2017. Willis and Klupsak acknowledge
– and have previously acknowledged – that their counsel withdrew because they could
not afford to pay them, and, according to Willis, a majority of his counsel’s invoices are
unpaid. See Dkt. No. 30 at 1; Dkt. No. 36 at 1; Dkt. No. 40 at 2; Dkt. No. 41 at 1. But
that does not explain how or why Defendants have not taken affirmative discovery
before now. And their explanation that, since their counsels’ withdrawal (on March 16,
2018 for Klupsak and on April 27, 2018 for Willis), they have been occupied by efforts
to find new counsel and answer Mota’s discovery requests does not explain why they,
through counsel, could not have served discovery on Mota to allow her to respond by
the May 15, 2018 deadline despite their diligence.
And, like Mota, the Court is not as sanguine as Willis and Klupsak about the
limited impact on this case’s remaining deadlines from extending the discovery and
motions deadlines. Permitting an expert motion to be filed as late as August 1 with an
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August 11 deadline for filing all pretrial materials would very likely disrupt the trial
schedule. And, whether or not Mota is financially struggling as much as her counsel
suggests, Mota could be prejudiced by the additional expense from – and trial of the
case likely would be delayed based on – the additional discovery and motion practice
that Willis and Klupsak seek the Court’s leave to launch in the less than four months
before the trial date and the less than three months before final pretrial materials are
due. See Geiserman v. MacDonald, 893 F.2d 787, 792 (5th Cir. 1990); cf. Reliance Ins.
Co. v. La. Land & Exploration Co., 110 F.3d 253, 258 (5th Cir. 1997) (“District judges
have the power to control their dockets by refusing to give ineffective litigants a second
chance to develop their case.”); Barnes, 2010 WL 5027040, at *2 (“Moreover, granting
a continuance would not deter future careless behavior nor serve to enforce this Court’s
Scheduling Order.”).
In this analysis, the Court can assume that Willis and Klupsak are correct that
any proposed (largely unidentified) discovery and motions would be important to their
defense of Mota’s case. But, under these circumstances, the claimed importance of
additional discovery and motions only underscores the need for Willis and Klupsak –
until very recently, and for most of the discovery period, through their counsel – to
have exercised some diligence in complying with the scheduling order’s discovery and
motions deadlines. See Geiserman, 893 F.2d at 792; see also Palomino v. Miller, No.
3:06-cv-932-M, 2007 WL 1650417, at *2 (N.D. Tex. June 7, 2007) (“The only factor
potentially weighing in Plaintiff’s favor here is the importance of the amendment, since
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Plaintiff has failed to state a claim for which relief may be granted against the City of
Irving in his Original Petition. However, Plaintiff’s lack of diligence in timely
amending his complaint undercuts the importance of the amendment.”); cf. Rosario v.
Livaditis, 963 F.2d 1013, 1019 (7th Cir.1992) (“A party who fails to pursue discovery
in the face of a court ordered cut-off cannot plead prejudice from his own inaction.”).
In short, considering Rule 16(b)(4)’s good cause requirement dictating that Willis
and Klupsak show that the discovery and motions deadlines could not have been
reasonably met despite Plaintiffs’ diligence and the other Rule 16(b)(4) factors, the
Court determines that Willis and Klupsak have not shown the required good cause to
reopen or extend the discovery and motions deadlines as they request. See Hamburger
v. State Farm Mut. Auto. Ins. Co., 361 F.3d 875, 884 (5th Cir. 2004) (in the related
context of deciding whether to exclude an untimely expert designation, explaining that,
if “the first and third factors [– (1) the explanation for the failure to identify the
witness and (3) potential prejudice in allowing the testimony –] militate against
permitting the testimony, the trial court was not obligated to continue the trial,”
where, “[o]therwise, the failure to satisfy the rules would never result in exclusion, but
only in a continuance,” and, “[b]ecause of a trial court’s need to control its docket, a
party’s violation of the court’s scheduling order should not routinely justify a
continuance).
Conclusion
For the reasons explained above, the Court DENIES the Motion to Extend
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Deadline Date for Discovery for Defendant Beacon Bay Asset Management, LLC, and
James Virgil Willis [Dkt. No. 40] and Defendant Glenn Klupsak’s Motion to Extend
Discovery Deadline & Deadline to File All Motions [Dkt. No. 41].
SO ORDERED.
DATED: May 31, 2018
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE

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