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Arayos LLC v. Ellis

United States District Court, D. Maine

June 26, 2015

ARAYOS LLC, Plaintiff,
v.
JIMMIE ELLIS, MISTY BURR, JOHN M. VELLIANITIS, JMV, INC., PAXOS MANAGEMENT SERVICES, INC. and SYDKAL, INC., Defendants.

AMENDED ORDER ON PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND DISMISSAL OF COUNTERCLAIM

NANCY TORRESEN, Chief District Judge.

This matter is before the Court on the Plaintiff's motion for default judgment against Defendant Jimmie Ellis and dismissal of Ellis's counterclaims. Mot. for Default Judgment and Dismissal of Counterclaim (ECF No. 66). The Plaintiff moves for: (1) entry of default judgment against Defendant Ellis pursuant to Federal Rule of Civil Procedure 37(d); (2) dismissal of Ellis's counterclaims against the Plaintiff pursuant to Rules 37(d) and 41(b); and (3) entry of default judgment against all the Defendants under Rule 55(b)(2). The Court will GRANT IN PART and RESERVE IN PART the Plaintiff's motion for default judgment and will GRANT the Plaintiff's motion for dismissal of Ellis's counterclaims.

PROCEDURAL BACKGROUND

On September 19, 2014, after granting the motion of Defendants' counsel to withdraw from representation, the Magistrate Judge ordered the Defendants to arrange for new counsel or enter a pro se appearance on or before October 3, 2014. Report of Telephone Conference and Order (ECF No. 55).[1] On September 18, 2014, the Plaintiff's attorney served requests for production of documents under Rule 34 (titled "Plaintiff's First Request for Production of Documents") upon all the Defendants, including Defendant Jimmie Ellis, by serving copies of same upon Defendants' then counsel of record, Attorney John Van Lonkhuyzen. Aff. of John H. Branson ¶ 2 (ECF No. 66-1). During a September 19, 2014 telephone conference with Magistrate Nivison, Attorney Van Lonkhuyzen acknowledged receipt of those document requests, and further represented in the conference that he would deliver those requests to the Defendants. Id. Pursuant to Rule 34, responses and objections to the document requests were due on or about October 18, 2014. Fed.R.Civ.P. 34. No extensions were requested or given at any time with regard to these document requests. None of the Defendants, including Ellis, ever produced any documents in response to the September 18, 2014 document requests, nor did they serve any responses or objections thereto upon the Plaintiff or his counsel. Branson Aff. ¶ 3.

Because the Defendants did not enter pro se appearances or arrange for new counsel to enter appearances on their behalf by October 3rd, the Magistrate Judge issued an Order to Show Cause requiring the Defendants, on or before October 20, 2014, to comply with the Court's prior order regarding representation, or risk the possibility that the Court would impose sanctions. Order to Show Cause (ECF No. 56).

On October 17, 2014, Defendant Ellis filed a Motion to Extend Time (ECF No. 57). In the motion, Ellis indicated that he would "represent the remaining named defendants in this case." Id. On November 25, 2014, the Magistrate Judge issued an Order accepting Mr. Ellis's pro se appearance and notifying him that because he is not an attorney licensed to practice law and admitted to practice he could not enter an appearance on behalf of any of the other Defendants. Order on Mot. to Extend Time and Show Cause Order (ECF No. 59). The Magistrate Judge gave the individual Defendants Burr and Vellianitis until December 10, 2014 to either enter pro se appearances, or arrange for counsel to enter an appearance on their behalf. The Magistrate Judge gave the corporate Defendants JMV, Inc., Paxos Management Services, Inc., and Skydall, Inc. until December 10, 2014, to arrange for counsel to enter appearances on their behalf. In that Order, all Defendants were notified that failure to comply with the terms of the Order would result in sanctions, including the entry of default.

The Defendants Burr, Vellianitis, JMV, Inc., Paxos Management Services, Inc., and Skydall, Inc. did not enter appearances or otherwise comply with the Court's order. The Plaintiff then moved for default against all the Defendants except Ellis and moved for dismissal of Sydkal, Inc.'s counterclaims. No response to the Plaintiff's Motion for Default was filed. On January 15, 2015, the Court entered default against individual Defendants Burr and Vellianitis and the corporate Defendants JMV, Inc., PAXOS Management Services, Inc. and Sydkal, Inc. and dismissed Sydkal's counterclaims. Order on Plaintiff's Mot. for Entry of Default (ECF No. 63).

On February 20, 2015, the Plaintiff's attorney sent a letter to Defendant Ellis, individually and in his capacity as President of Sydkal, Inc., requesting that he produce documents in response to Plaintiff's First Request for Production of Documents propounded upon Ellis and Sydkal on September 18, 2014, and enclosing copies of the documents requests. Branson Aff ¶ 4 and Exhibit A. In the February 20th letter, the Plaintiff's attorney advised Ellis that if responsive documents were not produced by March 10, 2015, that the Plaintiff would file a motion seeking sanctions, including but not limited to a request for a default judgment. Branson Aff. ¶ 4.

DISCUSSION

I. ENTRY OF DEFAULT AGAINST ELLIS PURSUANT TO RULE 37(d)

The Plaintiff now requests the entry of default judgment for Ellis's failure to provide the requested discovery. Rule 37(d) states:

The court where the action is pending may, on motion, order sanctions if:
...
(ii) a party, after being properly served with interrogatories under Rule 33 or a request for inspection under Rule 34, fails to serve its ...

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