ORDER DISMISSING ACTION AGAINST REMAINING DEFENDANTS

WILLIAM ALSUP, District Judge.

After more than two years of litigation against seventeen defendants, this civil action was nearing its very end when plaintiff suddenly requested a dismissal as to all five remaining defendants. All that remained was to rule on a motion for default judgment against the five defendants (and counter-motions to set aside default) after hearing.

This order will carry out plaintiff's request for dismissal, but in light of the vast resources already invested in the case and pending motions, this order will set forth some considerations of potential value in the event that plaintiff resumes this same litigation elsewhere against the five defendants.

The essence of this action was that plaintiff auto-dealership in California had on its payroll a con artist who allegedly conspired with other auto-dealerships (and brokers) elsewhere in the country to divert Toyota vehicles in short supply from its inventory to those dealers and brokers in exchange for a kickback. Plaintiff Pag-Daly City, LLC then collected more than $1.6 million in settlements from ten defendants, all of whom have been previously dismissed. See also Pag-Daly City, LLC v. Mercado, No. 13-03001 (N.D. Cal. Bankr.) (Judge Hannah Blumenstiel) (Dkt. No. 68).

The five remaining defendants were Christopher Glass, Malissia Glass, Classic Locators, Inc., Quality Auto Locators, Inc., and Chad Petro. None of them had timely filed an answer.

Pro se Mr. Glass, however, first appeared in this action as a non-party to challenge a subpoena. He and others (including Ms. Glass and Classic Locators) were added as defendants much later. Default was eventually recorded against the five remaining defendants. Although a service issue was recently raised with respect to Mr. Glass, after supplemental declarations were submitted by both sides, the Court was inclined to find that service had been proper for the defaulting defendants.

Pag-Daly then moved for a default judgment ($2.9 million from the Glasses and Classic Locators and $2.9 million from Mr. Petro and Quality Auto Locators). The Glasses — appearing pro se — timely filed oppositions and counter-motions to set aside the default (Dkt. Nos. 413, 415, 416). The Glasses were located in Florida and stated that they were without resources to hire an attorney. Ms. Glass, a non-attorney, purported to appear on behalf of Classic Locators. Mr. Petro and Quality Auto Locators never timely appeared. At the October 30 oral argument, pro se defendant Mr. Glass appeared telephonically.

Having considered the record, the Court was inclined to set aside the default against at least Mr. Glass and Ms. Glass and allow the case to be litigated on the merits as to them. In pertinent part, Ms. Glass filed a signed, sworn declaration "maintain[ing] innocence in this matter" and stating that "Classic Locators had absolutely no idea that any dealings with [Mr.] Mercado [a Pag-Daly employee] were unauthorized . . . . and in no way knew the property to be stolen" (M. Glass Decl. ¶¶ 3-8). Mr. Glass filed a signed, sworn declaration stating that the owner of Pag-Daly "advised me that I had to deal directly with Allan Mercado" (C. Glass Decl. ¶¶ 4, 6). At oral argument, pro se Mr. Glass stated that he had "no clue" Mr. Mercado was doing the deals the wrong way. If the Glasses' story is true, then Pag-Daly was at fault for instructing innocent brokers like the Glasses to deal only with a con artist on Pag-Daly's payroll. The Court was thus inclined to allow litigation on the merits as to the Glasses.

The Court was also prepared to enter default judgment against Quality Auto Locators and Mr. Petro, who never appeared. The problem, however, was that Pag-Daly had already collected more than $1.6 million and its declaration claimed damages of $1,593,400. Pag-Daly's showing was thus insufficient to support the $2.9 million sought and indeed, the record supported nothing more than nominal damages for the default judgment.

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Again, against this backdrop and having presided over this litigation for more than two years, the Court is concerned that Pag-Daly, having seen the writing on the wall at oral argument, seeks to dismiss this action in favor of re-litigating it elsewhere. Under Rule 41, the undersigned judge is not in a position to require this action be dismissed with prejudice. Nevertheless, the above considerations and history are now memorialized for the benefit of any subsequent court in which Pag-Daly may (or may not) sue the remaining defendants.

Accordingly, Pag-Daly's request to dismiss all remaining defendants is hereby GRANTED. This action is hereby DISMISSED. Docket numbers 403 and 416 are terminated. The Clerk shall CLOSE THE FILE.

IT IS SO ORDERED.