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Corniche Capital LLC v. W & N Enterprises, Inc.

United States District Court, D. New Mexico

January 22, 2018

CORNICHE CAPITAL, LLC; NM GAS HOLDINGS 1, LLC; NM GAS HOLDINGS 2, LLC; and DE LiqNM LLC, Plaintiffs,
v.
W & N ENTERPRISES, INC., Defendant.

          MEMORANDUM OPINION AND ORDER FOR FAILURE TO COMPLY WITH COURT ORDER and COURT'S LOCAL RULES

         This is a case seeking specific performance of a purchase agreement relating to commercial real estate. It was filed in federal court on the basis of diversity jurisdiction, and has recently been assigned to the undersigned. At this point, Plaintiffs are proceeding pro se. The Court finds, sua sponte, and based on the proceedings in this case thus far, that Plaintiffs' claims should be dismissed in favor of Defendant, and that Defendant should prevail on its counterclaims.

         BACKGROUND

         Plaintiffs are limited liability companies organized under the laws of either Wyoming or New Mexico, and their respective sole members are individuals who are citizens and residents of New York.[1] Defendant is a corporation organized under the law of New Mexico with its principal place of business in New Mexico. Plaintiffs allege that Defendant has refused and continues to refuse to consummate the purchase and conveyance of the property and leasehold interests that are the subject of this lawsuit. Defendant has filed a counterclaim in the amount of $710, 000.00 alleging that Plaintiffs have failed to perform their duties under the real estate agreements and have thus thwarted Defendant's ability to perform under those agreements.

         Plaintiffs filed the complaint in January 2017 and have since then been unable to retain legal representation for any period of time, which is required in order for corporations, partnerships or business to appear in this Court. See D.N.M. LR-Civ. 83.7. Based on a review of Plaintiffs' conduct according to the docket entries in this case, the Court finds that dismissal of Plaintiffs' claims is warranted, as well as judgment for Defendants on their counterclaim. The Court sets out the relevant chronology in the litigation in this case to the present time:

1) March 2017: Plaintiffs file a motion seeking withdrawal and substitution of counsel Richard Olsen and Rebecca Nichols Johnson, which the Court granted during a telephonic conference. Docs. 8 and 16. The Clerk's Minutes also indicate that Plaintiffs were aware that without an entry of appearance by counsel on their behalf, their complaint would be subject to dismissal and that they would face entry of default judgment against them on Defendant's counterclaim.
2) In April 2017 2017, a notice of appearance was filed by attorney Patrick Griebel on behalf of Plaintiffs. Doc. 17. However, in August, Mr. Griebel filed an unopposed motion to withdraw from representation of Plaintiffs, seeking thirty (30) days in which to obtain new counsel. Doc. 31.
3) In October 2017, the Court granted the motion. Doc. 34. In the same Order granting Plaintiffs' counsel's request to withdraw, United States Magistrate Judge Stephan M. Vidmar ordered Plaintiffs to show cause no later than November 1, 2017, why their complaint should not be dismissed and default judgment entered against them on Defendant's counterclaim. Of particular note is Judge Vidmar's observation that although the motion to withdraw was unopposed, more than 30 days had passed and yet new counsel had not entered an appearance on Plaintiffs' behalf. The Court also cited to the local rule which states that Plaintiffs may appear only with an attorney, and which also renders Plaintiffs subject to default judgment or other sanctions absent the entry of appearance by a new attorney.[2] Doc. 34 at 1-2.
4) On November 1, 2017, Mr. Griebel filed a Motion for Leave to Make Limited Entry of Appearance and Preliminary Response to the Court's Order to Show Cause on a limited appearance (“Plaintiffs' response”), and stated the following:
a) Plaintiffs were “administered” by David Ebrahimzadeh, whose offices are located in New York and as such it has been difficult for Mr. Ebrahimzadeh to coordinate with counsel in New Mexico “due to lack of familiarity with the legal professional landscape in New Mexico; b) Due to various real estate transactions “unrelated to this matter, ” Plaintiffs were experiencing a problem with “liquidity” creating a “temporary hardship for Plaintiffs and the undersigned counsel.” Doc. 36 at 2.
c) Plaintiffs requested that the Court allow them until November 15, 2017, by which time Plaintiffs would either direct counsel to enter a general entry of appearance for purposes of resuming this litigation or if the liquidity issue was not resolved as expected, Plaintiffs would agree to voluntarily dismiss Plaintiffs' claims and confess judgment to the counterclaims. Doc. 36 at 2 (emphasis added).
5) On November 30, 2017, less than a month after filing the response to the Order to Show Cause, Mr. Griebel filed a Notice of Withdrawal of the Motion for Leave to Make Limited Entry of Appearance and Preliminary Response to Court Order to Show Cause, see Doc. 37. The Notice stated simply that “it is now moot.” There is no explanation as to what part of the filed pleading became moot. Had either of the two options become moot? Had both options become moot? Had the matter been resolved, or had the possible resolutions broken down?
6) On January 19, 2018, this case was reassigned to the undersigned.

         DISCUSSION

         Federal district courts have the inherent power to manage their business “so as to achieve the orderly and expeditious disposition of cases.” LaFleur v. Teen Help, 342 F.3d 1145, 1149 (10th Cir.2003) (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991)). In particular, federal district courts have the inherent power “to fashion an appropriate sanction for conduct which abuses the judicial ...


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