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Hart v. Connected Wireless, Inc.

United States District Court, D. Utah

October 29, 2019

RYAN HART, Plaintiff,
v.
CONNECTED WIRELESS, INC. et al., Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

          TED STEWART, United States District Judge.

         I. BACKGROUND

         • January 17, 2017 Complaint filed, alleging Defendant Connected Wireless, Inc. (“Connected Wireless”) discriminated against Plaintiff in violation of the Americans with Disabilities Act and the Utah Antidiscrimination Act.[1]

         • March 14, 2017 Notice of Removal filed, removing case to this Court based on federal question jurisdiction.[2]

         • April 4, 2017 Answer filed by Connected Wireless.[3]

         • January 18, 2018 Plaintiff and Connected Wireless attended settlement conference and were unable to reach settlement.[4]

         • March 14, 2018 Motion to withdraw filed by attorney Liesel B. Stevens, counsel for Connected Wireless.[5]

         • March 15, 2018 Order granting Connected Wireless counsel's motion to withdraw, [6] ordering Connected Wireless to “file a notice of appearance within twenty-one (21) days after entry of the order, unless otherwise ordered by the Court” and warning that failure to do so could result in “sanctions pursuant to Federal Rules of Civil Procedure 16(f)(1), including but not limited to dismissal or default judgment.”[7]

         • May 8, 2018 Motion for default judgment as to Connected Wireless filed by Plaintiff, [8] arguing for default judgment on the grounds that after Connected Wireless' counsel withdrew on March 15, 2018, “[i]n the subsequent 54 days, Defendant apparently has failed to retain new counsel, failed to direct new counsel to make an appearance, and/or failed to take any action to defend against this lawsuit.”[9]

         • May 23, 2018 Notice of appearance filed by counsel W. Earl Webster and James E. Howard on behalf of Connected Wireless.[10] Connected Wireless did not respond to Plaintiff's motion for default judgment.

         • June 6, 2018 Order denying motion for default judgment, [11] finding that “entering default judgment is not appropriate at this time” under Rule 55(a) as Connected Wireless had participated in early stages of litigation proceedings and relevant factors weighed against granting default.[12]However, the Court also noted that “default judgment may be entered as a sanction against Defendant for its failure to comply with Court orders.”[13]

         • August 2, 2018 Amended Complaint filed, adding Sprintcom, Inc, Sprint Corporation, and Does 1-10 as defendants.[14]

         • August 7, 2018 Status Conference held, setting deadlines: discovery due by November 7, 2018, dispositive motions due by December 7, 2018, final pretrial conference set for February 25, 2019, and 4-day jury trial set to begin March 11, 2019.[15]

         • August 24, 2018 Answer to Amended Complaint filed by Connected Wireless.[16]

         • January 14, 2019 Trial Order with instructions to counsel reiterating schedule for final pretrial conference and jury trial.[17]

         • February 12, 2019 Notice of bankruptcy filing by Connected Wireless.[18]

         • February 13, 2019 Case stayed as to Defendant Connected Wireless per Notice of Bankruptcy.[19]

         • May 28, 2019 Motions to withdraw as attorney filed by Connected Wireless counsel James E. Howard and W. Earl Webster.[20] Both motions indicate they are made with Connected Wireless' consent and note that “[i]n the event this motion is granted, Client or new counsel for Client must file a notice of appearance within twenty-one (21) days after entry of the order, unless otherwise ordered by the court.”[21] Motions also note that “Defendant has ceased operations and its corporate entity has been dissolved by the Utah Division of Corporations and Commercial Code. As such, Defendant is unable to continue participating in this matter, ” signed by Connected Wireless President Anthony Morrison.[22]

         • June 10, 2019 Order granting Defendant Connected Wireless' motion for attorneys James E. Howard and W. Earl Webster to withdraw as counsel.[23] Order reiterates that “[n]ew counsel shall file a Notice of Appearance on behalf of any corporation, association, partnership or other artificial entity whose attorney has withdrawn” and that “[a] party who fails to file a Notice of Substitution of Counsel or Notice of Appearance as set forth above, may be subject to sanction pursuant to Federal Rule of Civil Procedure 16(f)(1), including but not limited to dismissal or default judgment.”[24]

         • August 19, 2019 Plaintiff filed motion to appoint counsel, requesting that Connected Wireless be ordered to appoint new counsel.[25] Motion notes that the Bankruptcy Court ordered the automatic stay lifted for this case on July 1, 2019, and that 47 days after the stay was lifted and 68 days after this Court granted the motion for withdrawal of counsel, Connected Wireless had not yet complied with the requirement to appoint new counsel.[26] Motion also includes attached email correspondence with Connected Wireless President Anthony Morrison, in which Mr. Morrison declines to participate in mediation, stating that “Since Connected Wireless is a defunct company mediation would be a waste of everyone's time.”[27]

         • September 24, 2019 Memorandum decision and order, ordering Connected Wireless to “appoint counsel to represent it in this matter within fifteen (15) days of issuance of this Order” and noting that “[i]f Connected Wireless fails to meet this deadline, the Court may impose sanctions including but not limited to dismissal or default judgment.”[28]

         • October 24, 2019 Plaintiff filed Motion for Default Judgment, requesting default judgment entered against Connected Wireless and a court order enabling Plaintiff to pursue assets of Does 1-10, who allegedly purchased assets from Connected Wireless.[29]

         This matter is before the Court on Plaintiff's Motion for Default Judgment (“Motion”). Plaintiff's Motion seeks default judgment against Connected Wireless and a court order empowering him to pursue assets of Does 1-10, who allegedly purchased assets from Connected Wireless rendering it insolvent. The Court has not heard from Connected Wireless since the company's counsel submitted its May 28, 2019 motions for withdrawal. For the reasons discussed below, the Court will grant the Motion in part, as to Connected Wireless only.

         II. DISCUSSION

         A. DEFAULT AS TO CONNECTED WIRELESS

         Plaintiff moves for default judgment as a result of Connected Wireless' failure to comply with the Court's Order. Federal Rule of Civil Procedure 16(f)(1)(c) provides that a court “may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney . . . fails to obey a . . . pretrial order.”[30] Rule 37(b)(2)(A) referenced in Rule 16(f)(1)(c) provides for sanctions including:

(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole ...

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