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SHAMITOFF v. RICHARDS, 2:14-cv-00024-MCE-CKD. (2014)

Court: District Court, E.D. California Number: infdco20141120a79 Visitors: 5
Filed: Nov. 18, 2014
Latest Update: Nov. 18, 2014
Summary: MEMORANDUM AND ORDER MORRISON C. ENGLAND, Jr., Chief District Judge. On January 3, 2014, Plaintiffs Joel B. Shamitoff, Shamitoff Industries, Inc., Shamitoy Interactive, and Universal Interactive LLC 1 ("Shamitoff") filed the instant action against Geoffrey Richards, the Chapter 7 trustee for the bankruptcy estate of Jacquelynn ("Jackie") Bird; Robert Brown, an American Arbitration Association ("AAA") arbitrator; and the AAA. 2 Through the complaint, Plaintiffs sought to enjoin an arbitration
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MEMORANDUM AND ORDER

MORRISON C. ENGLAND, Jr., Chief District Judge.

On January 3, 2014, Plaintiffs Joel B. Shamitoff, Shamitoff Industries, Inc., Shamitoy Interactive, and Universal Interactive LLC1 ("Shamitoff") filed the instant action against Geoffrey Richards, the Chapter 7 trustee for the bankruptcy estate of Jacquelynn ("Jackie") Bird; Robert Brown, an American Arbitration Association ("AAA") arbitrator; and the AAA.2 Through the complaint, Plaintiffs sought to enjoin an arbitration ordered by the Sacramento County Superior Court.

Presently before the Court are two motions. First, Shamitoff moves to voluntarily dismiss without prejudice claims against Defendant. ECF No. 33. Second, Shamitoff's counsel, C. Anthony Hughes ("Hughes"), moves to withdraw as counsel. ECF No. 37. For the following reasons, (1) Shamitoff's Motion to Dismiss is GRANTED subject to payment of Defendant's attorney's fees and costs in an amount to be determined by the Court, and (2) Hughes' Motion to Withdraw is DENIED.3

BACKGROUND

In 2008, Jackie Bird and her husband James Bird filed a lawsuit in the Sacramento County Superior Court against Shamitoff seeking, among other things, damages for fraud and breach of contract in connection with an investment that resulted in a payment to Shamitoff of over $380,000. At Shamitoff's request, and pursuant to the terms of the contract with the Birds, the Sacramento County Superior Court ordered the parties to arbitrate. ECF No. 2-2. Just prior to the commencement of the arbitration proceedings, Jackie Bird filed for Chapter 7 bankruptcy protection. Consequently, on behalf of the bankruptcy estate, Defendant, the Chapter 7 trustee, attempted to collect the money Shamitoff allegedly owed the Birds.

Shamitoff then embarked on a campaign to thwart the arbitration proceedings by seeking continuances and filing numerous actions in the Sacramento and Orange County Superior Courts seeking to, among other things, preliminarily enjoin the arbitration proceedings and disqualify the arbitrator. The state courts uniformly ruled against Shamitoff.

Undeterred, Shamitoff filed the instant action and sought a temporary restraining order in yet another attempt to halt the arbitration proceedings prior to the formal hearing's conclusion. On January 17, 2014, the Court denied Shamitoff's application for a temporary restraining order, ECF No. 6, finding that Shamitoff was engaged in forum shopping and was not likely to succeed on the merits. Id. at 8-9. Subsequently, the arbitration hearing was completed and on February 10, 2014, the arbitrator ruled against Shamitoff. The arbitration award against Shamitoff was confirmed by the Sacramento County Superior Court on May 12, 2014; an appeal from that judgment is pending.

After receiving notice of the arbitration award, the Court issued a Pretrial Scheduling Order. ECF No. 26. Subsequently, Defendant noticed Shamitoff's deposition. A day prior to his scheduled deposition, however, Defendant was informed that Shamitoff would not appear. That same day, Shamitoff filed a procedurally deficient motion to dismiss without prejudice claims against Defendant. See ECF Nos. 27, 30. Shamitoff subsequently filed the Motion to Dismiss Defendant without Prejudice that is presently before the Court, ECF No. 33, and Shamitoff's counsel filed the instant Motion to Withdraw, ECF No. 37.

STANDARD

A. Motion for Voluntary Dismissal

Federal Rule of Civil Procedure Rule 41(a)(2) provides.

Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper. If a defendant has pleaded a counterclaim before being served with the plaintiff's motion to dismiss, the action may be dismissed over the defendant's objection only if the counterclaim can remain pending for independent adjudication. Unless the order states otherwise, a dismissal under this paragraph (2) is without prejudice.

A district court should grant a motion for voluntary dismissal under Federal Rule of Civil Procedure 41(a)(2) unless a defendant can show it will suffer some plain legal prejudice as a result. Waller v. Fin. Corp. of Am., 828 F.2d 579, 583 (9th Cir. 1987); see also Hamilton v. Firestone Tire & Rubber Co., 679 F.2d 143, 145-46 (9th Cir. 1982). The Ninth Circuit has clarified that "legal prejudice" means "prejudice to some legal interest, some legal claim, some legal argument." Smith v. Lenches, 263 F.3d 972, 976 (9th Cir. 2001) (quoting Westlands Water Dist. v. United States, 100 F.3d 94, 97 (9th Cir. 1996)). Further, mere "uncertainty because a dispute remains unresolved" does not result in plain legal prejudice; nor does uncertainty due to the threat of future litigation. Id. Finally, plain legal prejudice does not result merely because a defendant will be inconvenienced by having to defend in another forum or where a plaintiff would gain a tactical advantage through dismissal. Hamilton, 679 F.2d at 145.

B. Motion to Withdraw As Counsel

Local Rule 83-182(d) governs the withdrawal of attorneys in this Court. According to the rule, an attorney "may not withdraw leaving the client in propria persona without leave of court upon noticed motion and notice to the client and all other parties who have appeared. Id. In support of a motion to withdraw as counsel, an "attorney shall provide an affidavit stating the current or last known address or addresses of the client and the efforts made to notify the client of the motion."

ANALYSIS

A. Motion to Voluntarily Dismiss

Shamitoff seeks to voluntarily dismiss without prejudice the complaint's remaining claims pursuant to Rule 41(a)(2). Defendant does not oppose Shamitoff's motion or argue that he will suffer plain legal prejudice as a result of dismissal. However, Defendant requests as a condition to dismissal that the Court award attorney's fees and costs to Defendant in the amount of $13,148, which is based on 34.6 hours expended by Defendant's counsel thus far. See ECF No. 46-1 at 4. Because Defendant has not demonstrated legal prejudice, and expenses incurred in defending a lawsuit do not in and of themselves amount to legal prejudice, see Westlands, 100 F.3d at 97, the Court finds that voluntary dismissal is appropriate.

However, the Court may nonetheless exercise its discretion to protect a defendant's interests by conditioning a voluntary dismissal without prejudice upon the payment of appropriate attorney's fees and costs. Id.; see also Fed. R. Civ. P. 41(a)(2) (action may be dismissed by court order "on terms that the court considers proper"); McCants v. Ford Motor Co., 781 F.2d 855, 857 (11th Cir. 1986) (Rule 41(a)(2) intended to allow the court to "exercise its broad equitable discretion . . . to weigh the relevant equities and do justice between the parties"). Indeed, the imposition of attorney's fees and costs are often imposed upon a plaintiff who is granted a voluntary dismissal pursuant to Rule 41(a)(2). See Stevedoring Servs. of Am. v. Armilla Int'l B.V., 889 F.2d 919, 921 (9th Cir. 1989).

The Court finds that under the facts of this case, conditioning the voluntary dismissal upon the payment of attorney's fees and costs is appropriate. Unlike the plaintiff in Armilla, Shamitoff has not raised a substantial legal question in this case. Indeed, this Court previously found that the filing of this action amounted to no more than improper forum shopping. ECF No. 6 at 8. In fact, Shamitoff previously proffered the same arguments he advanced in this litigation in two different state courts without success. Id. It is abundantly clear on this record that Shamitoff never had a realistic chance of prevailing on his claims in this Court. Moreover, as Shamitoff concedes, work performed by Defendant's counsel will not be useful in any continuing litigation between the parties. See Koch v. Hankins, 8 F.3d 650, 652 (9th Cir. 1992); ECF No. 35 at 3.

Accordingly, Shamitoff's Motion to Voluntarily Dismiss without Prejudice is GRANTED on the condition that Shamitoff pay Defendant's attorney's fees and costs in an amount to be determined by the Court. Defendant shall submit as soon as practicable and no later than twenty (20) days after the date this Memorandum and Order is filed electronically documentation in support of the hours worked and the rates requested for all attorney's fees and costs sought.

B. Motion to Withdraw As Counsel

The Motion to Withdraw fails to comply with the Court's procedural requirements. First, although this is a federal case, counsel's electronically filed notice of motion and motion was submitted on a form for use in California state court proceedings. Moreover, although counsel submitted a declaration in support of his Motion to Withdraw, ECF No. 37-1, he failed to provide "the current or last known address or addresses of the client" or to explain "the efforts made to notify the client of the motion to withdraw" as required by Local Rule 83-182(d).

Accordingly, counsel's Motion to Withdraw is DENIED WITHOUT PREJUDICE. In the event counsel wishes to pursue again withdrawal as counsel of record, he must resubmit and notice a motion that complies fully with Rule 83-182(d).

CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED THAT:

1. Shamitoff's Motion to Dismiss Without Prejudice, ECF No. 33, is GRANTED, subject to the condition that Shamitoff pay Defendant's attorney's fees and costs in an amount to be determined by the Court; 2. Defendant shall submit as soon as practicable and no later than twenty (20) days after the date this Memorandum and Order is filed electronically documentation in support of the hours worked and the rates requested for all attorney's fees and costs sought; 3. Shamitoff may, but is not required to, file a response to Defendant's documentation in support of the request for attorney's fees and costs within ten (10) days after Defendant's electronic filing; 4. Within twenty (20) days after this Memorandum and Order is electronically filed, Shamitoff may withdraw the Motion for Voluntary Dismissal if he declines to accept, as a condition of that dismissal, the requirement that he pay Defendant's attorney's fees and costs4; and 5. Counsel Hughes' Motion to Withdraw, ECF No. 37, is DENIED WITHOUT PREJUDICE.

IT IS SO ORDERED.

FootNotes


1. According to the complaint, Joel Shamitoff is the principal for all three Plaintiff business entities.
2. On August 11, 2014, Shamitoff's claims against Defendants Brown and the AAA were dismissed without leave to amend. ECF No. 31. Consequently, Richards will be referred to as "Defendant."
3. Because oral argument was not deemed to be of material assistance, the Court ordered this matter submitted on the briefs. E.D. Cal. Local R. 20(g); ECF No. 47.
4. See Lau v. Glendora Unified Sch. Dist., 792 F.2d 929 (9th Cir. 1986) (plaintiff must be given a reasonable amount of time in which to refuse the voluntary dismissal if the conditions imposed are too onerous).
Source:  Leagle

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