Fabio, Jesse v. Diversified Consultants, Inc.
ORDER granting 23 Motion to Withdraw as Attorney; denying 24 Motion to Amend Complaint; granting 21 Motion to Compel. Clerk of court to enter default against defendant for failure to defend. Default hearing set for 7/2/14 at 9:00 AM. Plaintiff submissions due 5/15/14; defendant submissions due 6/15/14. Signed by District Judge William M. Conley on 2/27/14. (krj)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
OPINION AND ORDER
DIVERSIFIED CONSULTANTS, INC.,
d/b/a Diversified Credit, Inc.,
A telephonic motion hearing was held on February 26, 2014, in the abovecaptioned matter to address three motions: (1) defendant’s local counsel’s motion to
withdraw (dkt. #23); (2) plaintiff’s motion to compel discovery (dkt. #21); and (3)
plaintiff’s motion to amend his complaint to add Sprint (the ultimate creditor in this
action) as a defendant (dkt. #24). Plaintiff appeared by attorneys Joseph Mauro and
Peter Barry; defendant appeared by attorneys James Bedell, Michael Poncin and Steven
Dunn. The purpose of this opinion and order is to memorialize the court’s rulings on
I. Motion to Withdraw
Attorneys James R. Bedell and Michael S. Poncin and their law firm Moss &
Barnett seek to withdraw as counsel for defendant because they have been “precluded
from participating in the defense of this matter and defendant has failed to provide
Movants with facts and information necessary to defend the case.” (Def.’s Counsel’s
Mot. to Withdraw (dkt. #23).) Plaintiff’s and defendant’s counsel both indicated that
they did not oppose this motion. (Dkts. ##27, 33.) Accordingly, the court will (1)
grant the motion and (2) require defendant to retain not later than March 5, 2014, new
local counsel admitted to practice before this court.
II. Motion to Compel
On December 16, 2013, plaintiff served written discovery requests on defendant.
On January 27 and February 2, 2014, plaintiff’s counsel contacted defendant’s counsel
via email about defendant’s obligations to answer the discovery.
On each occasion,
defendant’s counsel responded with assurances that the responses would be forthcoming
“shortly” and by “the end of the day,” respectively. Nevertheless, as of February 18,
2014 -- the date plaintiff filed his motion to compel -- defendant had still failed to
respond to discovery requests. In addition to moving to compel responses, plaintiff also
seeks an order deeming admitted all of plaintiff’s requests for admission. See Fed. R. Civ.
P. 36(a)(3) (“A matter is admitted unless, within 30 days after being served, the party to
whom the request is directed serves on the requesting party a written answer or objection
addressed to the matter and signed by the party or its attorney.”). Plaintiff also seeks an
award of reasonable attorneys’ fees for having been forced to bring this motion.
Defendant’s counsel responded to the default motion on February 25, 2014,
contending that there is a good faith basis for defendant’s repeated failures to respond as
required by rule and as promised, as well as arguing that the court should allow the
deemed admissions to be withdrawn.
Specifically, Attorney Dunn
represents that defendant’s failure to respond was “inadvertent” and the result of
documented family health issues. (Id. at 8.; see also Declaration of Steven R. Dunn (dkt.
Dunn also contends that the relocation of his office on January 1, 2014,
contributed to his failure to timely respond. Finally, defendant argues that plaintiff was
not prejudiced by the delay, and represents that all discovery responses were sent to
plaintiff by end of the day on February 25th, the day before the hearing.
In addition to asking the court to ignore its glaring failures to defend timely,
defendant now argues that it has at least two meritorious defenses to plaintiff’s claims:
(1) defendant did not “make” the calls, but rather utilized a third party to do so; and (2)
defendant does not use an “automatic telephone dialing system.” (Def.’s Opp’n (dkt.
#29) 3-6.) Whether defendant has a meritorious defense but failed to defend is largely
irrelevant. Moreover, the court’s preliminary research demonstrates that courts have: (1)
held that a defendant may be liable if it uses an agent to “make” calls, see, e.g., Kristensen
v. Credit Payment Servs., Inc., No. 2:12-cv-00528-KJD-PAL, 2013 WL 686492, at *2 n.1
(D. Nev. Feb. 22, 2013); and (2) adopted the FCC’s more expansive definition of an
“automatic telephone dialing system,” which may well encompass defendant’s phone
system, see, e.g., Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009).
While the court fully credits defendant counsel’s representation as to the family
issues he was encountering around the time the discovery requests were served, these
issues in no way excuse his or his client’s failure to respond timely to discovery,
particularly given the pains plaintiff’s counsel went in apprising him of his obligation and
defendant’s failure to provide any response except empty promises until February 25th.
Moreover, the court required defendant to retain local counsel, which it did. For reasons
unknown to the court -- and entirely unexplained in defendant’s submission -- Attorney
Dunn failed to utilize local counsel to respond to these discovery responses even after local
counsel approached Attorney Dunn and the client to inquire as to the status of the
discovery responses and to offer assistance in completing them. (Declaration of James R.
Bedell (dkt. #23-1).)
Accordingly, the court will grant plaintiff’s motion to compel and award the
(1) to the extent written responses to interrogatories and document
requests have yet to be provided, they were due by end of day February 26, 2014; (2) all
underlying responsive source documents shall be delivered to plaintiff’s lead counsel by
the end of the day, February 28, 2014; (3) plaintiff’s requests for admission are deemed
admitted; and (4) plaintiff is awarded his reasonable attorney’s fees for filing the motion
Plaintiff’s counsel shall submit an affidavit and any supporting materials
detailing his fee request on or before March 6, 2014. The court also finds defendant in
default for failing to defend pursuant to Fed. R. Civ. P. 55(a).
Plaintiff’s brief and
supporting documents, if any, on default judgment is due by May 15, 2014; defendant’s
responsive brief and supporting documents, if any, is due by June 15, 2014.1 The court
Given the current state of this record, the court is prepared to enter default judgment in
the amount of $94,000, plus attorney’s fees for having to bring a motion to compel, for
the reasons stated orally, including that: (1) defendant is deemed to have admitted (by
failing to timely respond to plaintiff’s requests for admission) to making 188 calls in
violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(1)(A); and (2)
the TCPA provides for a minimum of $500 per call in statutory damages, § 227(b)(3)(B).
(Pl.’s Br. in Support of Mot. to Compel, Ex. 1 (dkt. #22-1) p.15 ¶ 14.) This option
remains open. If plaintiff informs the court and defendant any time before its brief in
support of default judgment is due that he seeks entry of a final default judgment in this
amount and provides proof of reasonable attorney’s fees, defendant will have 14 days to
respond, and the court will enter final judgment accordingly.
will hold a hearing on default judgment on July 2, 2014, at 9:00 a.m.
III. Motion to Amend Complaint
On Monday, February 24, 2014, plaintiff also filed an unopposed motion to
amend the complaint to add Sprint -- the underlying creditor in this lawsuit -- as a
defendant. (Dkt. #24.) The court will deny this motion because (1) this lawsuit has
progressed too far, the only question remaining being the amount of default judgment; (2)
the Preliminary Pretrial Conference Order (dkt. #20) set a deadline for amendments to
pleadings of January 3, 2014, and plaintiff has not offered good cause for his lengthy
delay in seeking to add Sprint as a defendant, and the court can discern no cause, see Fed.
R. Civ. P. 16(b); and (3) if the court were to allow amendment to the complaint to add
Sprint as a defendant at this late date, Sprint would no doubt seek to reopen any finding
of default against its “collection agent” at least as it implicates Sprint’s arguable liability,
since it has not participated in this lawsuit to date, which would essentially require that
this case start over.
Instead, the court will leave to address any liability by Sprint in a
IT IS ORDERED that:
1) defendant’s local counsel’s motion to withdraw (dkt. #23) is GRANTED.
Defendant may have until March 5, 2014, to designate new local counsel;
2) plaintiff’s motion to amend his complaint to add Sprint as a defendant (dkt.
#24) is DENIED;
3) plaintiff’s motion to compel discovery (dkt. #21) is GRANTED as set for the
4) defense counsel’s affidavit and accompanying attachments in opposition to
entry of default shall be deemed filed under seal;
5) the clerk of court shall enter default against defendant for failure to defend
pursuant to Fed. R. Civ. P. 55(a);
6) a default judgment hearing is set for July 2, 2014, at 9:00 a.m. Plaintiff shall
serve and file its brief and supporting documents, if any, by May 15, 2014.
Defendant shall serve and file its responsive brief and supporting document, if
any, by June 15, 2014; and
7) all other deadlines in this case are struck.
Entered this 27th day of February, 2014.
BY THE COURT:
WILLIAM M. CONLEY
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