Rosen v. Fasttrak Foods LLC

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Sherri Rosen, No. CV-19-05292-PHX-DWL 10 Plaintiff, ORDER 11 v. 12 Fasttrak Foods LLC, et al., 13 Defendants. [14] 15 Due to various unusual developments, the status of this action requires clarification. 16 This order clarifies where the case stands now and how the case may proceed from here. 17 BACKGROUND 18 On September 30, 2019, Plaintiff Sherri Rosen initiated this action. (Doc. 1.) The 19 Complaint named “Fasttrak Foods, LLC, a foreign corporation, Steve Hamilton, an 20 Individual, and the Estate of Renee Gumble” as Defendants. (Id.) 21 The Complaint alleged that Fasttrak Foods, LLC (“Fasttrak”), a company that sells 22 and distributes snack foods, employed Plaintiff as its Western Regional Sales Manager. 23 (Id. ¶¶ 6-7.) Renee Gumble was the “sole Manager” of Fasttrak, and Ms. Gumble’s 24 husband, Steve Hamilton, was an owner of Fasttrak and the “General Manager” who 25 “exercised managerial responsibility and substantial control over the terms and work 26 conditions of the Company’s employees.” (Id. ¶¶ 3-4, 8, 10.) Plaintiff continually 27 performed her contractual employment duties, but, beginning in 2019, Plaintiff was not 28 regularly paid her contractual wages or expenses. (Id. ¶¶ 18-25.) At some point in 2019, 1 Ms. Gumble passed away, leaving her interest in Fasttrak “to either Mr. Hamilton or her 2 estate.” (Id. ¶ 5.) Although Hamilton had admitted that Plaintiff’s wages “were earned 3 and owing” and “made affirmative promises to pay Plaintiff,” he expressed hostility and 4 disinclination to pay Plaintiff after Ms. Gumble died. (Id. ¶¶ 22-24, 28.) Plaintiff sued for 5 violation of the Fair Labor Standards Act, breach of contract, and unjust enrichment. (Id. 6 at 4.) 7 On November 8, 2019, all three purported Defendants,1 represented by counsel, 8 filed an Answer to the Complaint. (Doc. 13.) 9 On December 10, 2019, Plaintiff and the three purported Defendants jointly filed a 10 Rule 26(f) report. (Doc. 18.) On December 16, 2019, the Court entered a scheduling order. 11 (Doc. 20.) The Court set various deadlines, including an August 7, 2020 deadline for filing 12 dispositive motions. (Id. at 5.) 13 On January 31, 2020, Plaintiff filed a motion for judgment on the pleadings. (Doc. 14 22.) On February 21, 2020, the three purported Defendants responded. (Doc. 25.) 15 Defendants noted that they “admit that Fasttrak Foods owes Plaintiff wages and expenses, 16 but deny that Defendants Hamilton or the Estate of Renee Gumble ever had any obligation 17 to pay Plaintiff anything.” (Id. at 2.) Defendants further argued that that “the specific 18 amount” of past wages and expenses owed by Fasttrak was contested. (Id. at 5.) 19 On July 2, 2020, the Court denied the motion for judgment on the pleadings because 20 (1) Plaintiff failed to specify the claims on which she sought judgment on the pleadings 21 (and judgment in her favor on some claims would have been incompatible with judgment 22 in her favor on others), and (2) the amount of damages remained disputed. (Doc. 36 at 323 4.) [24] 1 The Estate of Renee Gumble is not an entity capable of being sued. “[A]n estate is 25 not a person or a legal entity and cannot sue or be sued; an estate can only act by and through a personal representative and therefore any action must be brought by or against 26 the executor or representative of the estate.” LN Mgmt., LLC v. JPMorgan Chase Bank, N.A., 957 F.3d 943, 956 (9th Cir. 2020); see also Ader v. Estate of Felger, 375 P.3d 97 , 27 104 (Ariz. Ct. App. 2016) (“An estate is a collection of the decedent’s assets and liabilities. As such, it has no capacity to bring or defend a lawsuit. Simply put, an estate cannot ‘act.’ 28 Rather, it can only sue and be sued through its personal representative, who ‘acts’ on behalf of the estate.”). 1 On July 30, 2020, counsel for the three purported Defendants moved to withdraw 2 as counsel of record without client consent because Defendants had not “cooperated with 3 [counsel] in discovery, . . . communicated with [counsel] as needed, [or] met their financial 4 obligations to [counsel] regarding this matter.” (Doc. 37 at 1.) Plaintiff opposed the 5 withdrawal request because Defendants had “continually avoided and rescheduled their 6 depositions” since April 2020 and she feared withdrawal of counsel would result in the 7 cancellation of Hamilton’s scheduled deposition on September 30, 2020. (Doc. 38.) 8 On August 19, 2020, the Court granted the motion to withdraw as counsel. (Doc. 9 40.) The Court also noted some “logistical issues,” including that the Estate of Renee 10 Gumble appeared to be “an inappropriate party” and that Plaintiff “should have identified 11 the estate’s personal representative and then sued that individual in his or her capacity as 12 the estate’s representative.” (Id. at 2-3.) The Court ordered Plaintiff to show cause why 13 “the Estate of Renee Gumble” should not be dismissed as an inappropriate party. (Id. at 14 3.) 15 On August 25, 2020, Defendants’ already-withdrawn counsel informed the Court 16 that Fasttrak had filed for bankruptcy. (Doc. 42.) 17 On September 2, 2020, Plaintiff filed a response to the Court’s order to show cause, 18 conceding that “that the Estate of Renee Gumble is not an appropriate party to the action 19 and should be dismissed.” (Doc. 43 at 2.) Plaintiff explained that she had “recently 20 learned, through former opposing counsel’s avow[al]s, that Mr. Hamilton is in fact the 21 personal representative” and planned to seek leave to amend “to name Mr. Hamilton in his 22 official capacity as personal representative of the Estate of Renee Gumble.” (Id.) 23 On September 4, 2020, the Court dismissed the Estate of Renee Gumble with 24 prejudice and ordered the parties to “confer as to whether amendment of the complaint to 25 add an additional capacity in which Hamilton is sued can be accomplished via stipulation.” 26 (Doc. 44 at 1-2.) 27 On September 23, 2020, Plaintiff filed a motion for leave to amend the complaint 28 for the sole purpose of “includ[ing] Defendant Hamilton (already a Defendant in his 1 individual capacity) in his capacity as personal representative for the Estate of Renee 2 Gumble.” (Doc. 45 at 2.) Plaintiff stated that she had “attempted to consult with Defendant 3 Mr. Hamilton on four occasions, but ha[d] not received a response,” adding in a footnote: 4 “Notably, Defendant Mr. Hamilton failed to appear at his deposition and has failed to 5 provide responses to discovery requests. Though not the subject of this Motion, this failure 6 to confer and cooperate is thematic for Mr. Hamilton.” (Id. at 1, 1 n.1.) Plaintiff also stated 7 that the reason she had been unable to ascertain the name of the estate’s personal 8 representative earlier was Defendants’ bad faith refusal to disclose it in their MIDP2 9 responses or as a response to written discovery. (Id. at 4-5.) Indeed, Plaintiff averred that 10 “Defendants have expressed their refusal to participate in this litigation.” (Id. at 5.) 11 On October 15, 2020, after Hamilton failed to respond to Plaintiff’s motion to 12 amend, the Court granted the motion. (Doc. 46.) That same day, Plaintiff filed the First 13 Amended Complaint (“FAC”). (Doc. 47.) 14 On November 3, 2020, Plaintiff served Hamilton with the FAC. (Doc. 48.) 15 Hamilton did not answer or otherwise respond to the FAC. 16 On January 6, 2021, Plaintiff filed an application for entry of default “against 17 Defendant Steven Hamilton, in his capacity as Personal Representative of the Estate of 18 Renee Gumble” (Doc. 49), which the Clerk of Court entered the following day (Doc. 51). 19 Plaintiff also filed a notice of readiness for Final Pre-Trial Conference, which stated that 20 Plaintiff is ready to proceed with trial, “[a] Complaint and an Answer have been filed,” the 21 parties have completed discovery, no outstanding motions are pending, and the parties have 22 not been able to settle their dispute. (Doc. 50.) 23 On January 8, 2021, the Court noted that setting a Final Pre-Trial Conference 24 seemed improvident because (1) this action is stayed as to Fasttrak and (2) Hamilton has 25 taken no action since the withdrawal of his counsel in August 2020. (Doc. 52.) The Court 26 ordered that Plaintiff and Hamilton each file, by January 22, 2021, a notice advising the [27] 2 The Mandatory Initial Discovery Pilot (“MIDP”) requires the parties to, inter alia, 28 state the facts relevant to all defenses in early, court-ordered discovery responses. (Doc. 3 at 7.) 1 Court as to how they would like to proceed. (Id.) 2 On January 21, 2021, Plaintiff filed a notice proposing that “the matter be set for 3 trial as to Defendant Steve Hamilton in his individual capacity.” (Doc. 53.) Plaintiff 4 further asserted that “[t]he damages assessed at trial can be assessed jointly and severally 5 against Defendant Hamilton in both his individual capacity and as personal representative 6 for the Estate of Renee Gumble, for which there is a default judgment.” (Id.)3 7 Hamilton failed to file the required notice. 8 DISCUSSION 9 Hamilton is an individual—one person—who has been sued in two capacities: 10 individually and as personal representative for the Estate of Renee Gumble. Proceeding 11 against such an individual by concurrently proceeding to trial and filing a motion for 12 default judgment strikes the Court as highly unusual, not to mention inefficient, and it is 13 not clear whether proceeding in this manner would ever be appropriate. At any rate, the 14 Court concludes that it is not appropriate here. 15 Rule 55(a) of the Federal Rules of Civil Procedure provides that “[w]hen a party 16 against whom a judgment for affirmative relief is sought has failed to plead or otherwise 17 defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s 18 default.” 19 As an initial matter, the Court rejects the premise that seems to underlie Plaintiff’s 20 decision to apply for entry of default against Hamilton in only one of his dual capacities— 21 the premise that Hamilton has answered in his individual capacity but has failed to answer 22 in his capacity as personal representative for the Estate of Renee Gumble. 23 Generally speaking, an “amended complaint supersedes the original, the latter being 24 treated thereafter as non-existent.” Forsyth v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir. 25 1997). Thus, the original complaint (Doc. 1) and the answer to the original complaint (Doc. 26 13) became legal nullities after Plaintiff filed the FAC (Doc. 47). Hamilton did not file an 27 3 The Court notes that there is no default judgment as of yet, merely an entry of default. Plaintiff presumably intends to file a motion for default judgment as to Hamilton 28 in his capacity as personal representative for the Estate of Renee Gumble. Fed. R. Civ. P. 55(b)(2). 1 answer or otherwise respond to the FAC—not in his individual capacity and not in his 2 capacity as personal representative for the Estate of Renee Gumble. Thus, as to the FAC, 3 Hamilton has entirely “failed to plead.” 4 Admittedly, there is another way of looking at this. The only change made in the 5 FAC was naming Hamilton as the personal representative of the Estate of Renee Gumble. 6 For all intents and purposes, there was no meaningful change in the identity of the parties 7 between the original complaint and the FAC. When the Estate of Renee Gumble was 8 improperly named in the original complaint, it was intended to be a placeholder until 9 Plaintiff could ascertain the identity of the Estate’s personal representative. (Doc. 43 at 110 2.) Plaintiff should have named “John Doe, as personal representative of the Estate of 11 Renee Gumble,” in which case, when the personal representative’s identity became known, 12 the designation of that defendant by a true name rather than “Doe” could have been 13 accomplished without an amended complaint. Cf. Trident Inv. Partners Inc. v. Evans, 2021 14 WL 75826 , *11-12 (D. Ariz. 2021) (changing name of pseudonym to real name, once 15 known, without requiring amended complaint); Twitch Interactive, Inc. v. Johnston, 2019 16 WL 3387977 , *3 (N.D. Cal. 2019) (same); 5A Charles Alan Wright and Arthur R. Miller, 17 Federal Practice and Procedure § 1321 (4th ed. 2020) (reasons that might justify amending 18 a case caption include “an erroneous designation of the capacity in which a party is suing 19 or being sued, or the identification of something that is not a legal entity”). 20 Hamilton presumably knew that he was the personal representative of his late wife’s 21 estate and he defended the lawsuit in that capacity. Hamilton hired counsel to represent 22 himself, Fasttrak, and the estate. When the “Estate of Renee Gumble” purported to file an 23 answer to the original complaint, it was Hamilton, the personal representative, authorizing 24 that answer on the estate’s behalf. If the original complaint and answer had not been 25 superseded by an amended complaint, it would arguably be sensible to construe the answer 26 as having been made by Hamilton in both of his capacities. 27 At any rate, regardless of whether Hamilton is viewed as having “failed to plead,” 28 it is abundantly clear at this point that he refuses to “otherwise defend” against this action 1 in either of his dual roles. CMA CGM S.A. v. Asia-Glob. Renewable Energy Corp., 2018 2 WL 6133631 , *4 (C.D. Cal. 2018) (“Defendant nonetheless refuses to participate in this 3 action in good faith moving forward [which] warrants terminating sanctions under Fed. R. 4 Civ. Proc. Rule 55(a) as Defendant Shenzen has failed to ‘otherwise defend’ this matter.”) 5 Hamilton has not participated in this action, in any way, since his counsel withdrew in 6 August 2020. Plaintiff has informed the Court that Hamilton has expressed refusal to 7 participate in this litigation (Doc. 45 at 5), and Hamilton has not denied this. Indeed, he 8 did not respond at all. Furthermore, Hamilton has disregarded the Court’s orders by failing 9 to confer as to whether adding an additional capacity in which Hamilton is sued could be 10 accomplished via stipulation (Doc. 44 at 1-2) and failing to file the court-ordered notice 11 advising how he intended to proceed in this action (Doc. 52).4 12 The Court has determined that the appropriate course of action is to direct the Clerk 13 of Court to enter default against Hamilton in his individual capacity, as well in as his 14 capacity as personal representative of the Estate of Renee Gumble. If Hamilton wishes to 15 file a motion to set aside the default, he must do so on or before February 12, 2021. 16 If Hamilton does not file a motion to set aside the default by February 12, 2021, 17 Plaintiff must file a motion for default judgment against Hamilton by March 12, 2021. 18 When deciding whether to grant the motion, the Court will consider the following factors: 19 (1) the possibility of prejudice to the plaintiff, (2) the merits of the claims, (3) the 20 sufficiency of the complaint, (4) the amount of money at stake, (5) the possibility of factual 21 disputes, (6) whether the default was due to excusable neglect, and (7) the policy favoring 22 decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 23 Accordingly, [24] 4 Hamilton’s abandonment of the litigation and failure to respond to the Court’s 25 orders will weigh in favor of granting default judgment, once a motion is filed. Dr. JKL Ltd. v. HPC IT Educ. Ctr., 749 F. Supp. 2d 1038, 1051 (N.D. Cal. 2010) (finding that where 26 the defendants filed an answer but failed to otherwise defend in the action and default was entered, there was no evidence that the defendants’ actions were “the result of excusable 27 neglect”); J & J Sports Prods. Inc. v. Cervantes, 2018 WL 3702298 , *4 (E.D. Cal. 2018) (same). However, Plaintiff will need to demonstrate in the motion for default judgment 28 that Hamilton, in his individual capacity and/or as personal representative of the Estate of Renee Gumble, can be held liable. (See, e.g., Doc. 27 at 2 n.1.) 1 IT IS ORDERED that the Clerk of Court shall enter default against Hamilton in 2|| his individual capacity, as well as in his capacity as personal representative of the Estate of 3 || Renee Gumble. 4 IT IS FURTHER ORDERED that if Hamilton wishes to file a motion to set aside || the default, he must do so on or before February 12, 2021. 6 IT IS FURTHER ORDERED that if Hamilton does not file a motion to set aside 7\| the default by February 12, 2021, Plaintiff must file a motion for default judgment against 8 || Hamilton by March 12, 2021. 9 Dated this 28th day of January, 2021. [10] 11 Lom ee” 12 f t _C—— Dominic W. Lanza 13 United States District Judge [28] -8-