Coastal Transportation, Inc. v. East West Seafoods L.L.C.

Filing 29

AMENDED ORDER granting Defendant's 24 MOTION to Vacate the 16 Order of Default; denying Plaintiff's 21 renewed motion for default judgment. The court ORDERS Mr. Tsabouris to pay $1,000.00 as sanctions to the court no later than 30 days after the date of this order. Signed by Judge James L. Robart. (PM) cc: finance

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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COASTAL TRANSPORTATION,
INC.,

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Plaintiff,
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v.

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EAST WEST SEAFOODS LLC,

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CASE NO. C17-1555JLR
AMENDED ORDER GRANTING
MOTION TO VACATE ORDER
OF DEFAULT AND DENYING
RENEWED MOTION FOR
DEFAULT JUDGMENT

Defendant.

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I.

INTRODUCTION

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Before the court are: (1) Defendant East West Seafoods LLC’s (“EWS”) motion
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to vacate the order of default entered against it (EWS Mot. (Dkt. # 24)); and (2) Plaintiff
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Coastal Transportation, Inc.’s (“Coastal”) renewed motion for default judgment against
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EWS (Coastal Mot. (Dkt. # 21)). The court has considered the motions, the materials
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filed in support of and in opposition thereto, and the balance of the record. Being fully
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ORDER - 1

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advised,1 the court GRANTS EWS’s motion, ORDERS EWS’s principal Chris Tsabouris

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to pay $1,000.00 in sanctions to the court, and DENIES as moot Coastal’s renewed

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motion for default judgment.

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II.

BACKGROUND AND ANALYSIS

Coastal brings this action against EWS for an alleged failure to pay for freight

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services. (Compl. (Dkt. # 1) ¶¶ 4.1-4.5.) In its answer, EWS asserts various affirmative

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defenses and brings a counterclaim, alleging that Coastal wrongfully charged EWS’s

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credit card without EWS’s authorization. (See Ans. (Dkt. # 6) ¶¶ 6.1-6.4, 7.1-7.5.)

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On January 17, 2018, EWS’s former counsel, Harold Thoreen, filed a motion to

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withdraw. (Mot. to Withdraw (Dkt. # 8); see 1st Thoreen Decl. (Dkt. # 9) ¶¶ 3-4.) The

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court granted the motion on January 26, 2018. (1/26/18 Order (Dkt. # 11).) In its order,

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the court cautioned EWS that, pursuant to Local Civil Rule 83.2(b)(4), if EWS failed to

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obtain a replacement attorney within 30 days, the court would enter default against EWS.

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(Id. at 2); see also Local Rules W.D. Wash. LCR 83.2(b)(4). Mr. Thoreen provided EWS

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with a copy of the court’s order via email, certified mail, and fax. (2d Thoreen Decl.

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(Dkt. # 12) ¶¶ 1-3, Exs. 1-2 (attaching email and fax confirmation); 3rd Thoreen Decl.

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(Dkt. # 14) ¶ 1, Ex. 1 (attaching signed return receipt of certified mail).) No replacement

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attorney appeared on EWS’s behalf in the 30 days. (See Dkt.) Thus, the court entered

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default against EWS and dismissed EWS’s counterclaim against Coastal. (3/13/18 Order

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(Dkt. # 15) at 2-3.)

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Neither party requests oral argument, and the court finds that oral argument would not
be helpful in its disposition of the motions. See Local Rules W.D. Wash. LCR 7(b)(4).

ORDER - 2

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After the court entered default against EWS, Coastal moved for default judgment.

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(See 1st Mot. for DJ (Dkt. # 17).) However, because Coastal did not provide sufficient

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supporting evidence with its motion, the court denied its motion without prejudice.

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(4/2/18 Order (Dkt. # 19) at 1-2.) After the court’s denial, a replacement attorney

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appeared on EWS’s behalf. (See Not. of Appear. (Dkt. # 20).)

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The parties subsequently filed the two motions at issue. EWS, through its

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replacement attorney, filed a motion to vacate the order of default. (See EWS Mot.)

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Coastal filed a renewed motion for default judgment. (See Coastal Mot.) Coastal also

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filed an opposition to EWS’s motion to vacate, arguing that EWS’s culpable conduct led

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to the default. (See Resp. (Dkt. # 27.) at 1-3.)
EWS explains that it “has now retained counsel” and “understands that however it

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feels about the subject of the litigation, it must go through the process to an ultimate

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result.” (EWS Mot. at 1.) EWS attaches the declaration of its principal, Mr. Tsabouris,

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in which Mr. Tsabouris explains that he “did not attend to this matter the way [he] should

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have” due to his travels to Alaska. (Tsabouris Decl. (Dkt. # 25) ¶ 3.) Mr. Tsabouris also

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stated that he “did not understand that it was necessary to go through this process”

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because he believed that EWS “had nothing to do with” the transaction at issue. (Id. ¶ 5.)

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Mr. Tsabouris further asserts that Mr. Thoreen “did not explain . . . that this process was

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necessary.” (Id.) However, Mr. Tsabouris states that he has “now been lectured . . .

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regarding the necessity of participating in the litigation process” and am “prepared to go

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forward to a resolution of this matter on the merits.” (Id.)

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ORDER - 3

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The order of default was predicated on EWS’s lack of representation (see 3/13/18

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Order at 2-3), and because EWS has now obtained new counsel and demonstrated an

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understanding of the litigation process, the court finds good cause to set aside the order of

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default, see Fed. R. Civ. P. 55(c). Moreover, Coastal concedes that it cannot make a

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showing of prejudice and that EWS appears to articulate a meritorious defense. (Resp. at

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2); see Johnson v. Wang, No. C16-1738JLR, 2017 WL 1233101, at *2 (W.D. Wash. Apr.

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4, 2017). Accordingly, the court vacates the order of default against EWS. Vacating the

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order of default necessarily renders Coastal’s pending motion for default judgment moot,

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and the court denies it on that basis.

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However, the court reprimands Mr. Tsabouris for failing to abide by the court’s

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orders. Mr. Tsabouris’s unilateral—and erroneous—decision that he “wanted to do

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nothing further with” this matter prompted Coastal and the court to take steps towards

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default judgment, which required time and resources that are wasted now that Mr.

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Tsabouris has newly discovered the importance of participating in litigation. (See

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Tsabouris Decl. ¶ 5.) Accordingly, Mr. Tsabouris must pay $1,000.00 in sanctions to the

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court for failing to adhere to the court’s orders and wasting judicial resources.

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In this regard, Mr. Tsabouris cannot shift the blame to Mr. Thoreen. Mr. Thoreen

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filed numerous declarations documenting his various attempts to inform Mr. Tsabouris of

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the court’s order and the consequences of not abiding. (See, e.g., 2d Thoreen Decl.; 3rd

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Thoreen Decl.) Indeed, Mr. Thoreen specifically drew Mr. Tsabouris’s attention to Local

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Civil Rule 83.2(b)(4), warning him that failure to obtain replacement counsel would

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result in default. (1st Thoreen Decl. ¶ 5; see also 2d Thoreen Decl. ¶ 1, Ex. 1 (“[I]f you

ORDER - 4

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fail to have a replacement attorney appear on your behalf with in [sic] 30 days of the date

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of the Order . . . a default will be entered against [EWS].”).) Thus, Mr. Tsabouris’s

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conduct is not excused by Mr. Thoreen’s conduct.

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III.

CONCLUSION

For the foregoing reasons, the court GRANTS EWS’s motion to vacate (Dkt. # 24)

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and DENIES Coastal’s renewed motion for default judgment (Dkt. # 21). The court

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ORDERS Mr. Tsabouris to pay $1,000.00 as sanctions to the court no later than 30 days

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after the date of this order.

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Dated this 24th day of April, 2018.

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A

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JAMES L. ROBART
United States District Judge

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ORDER - 5