United States District Court, E.D. Pennsylvania
March 19, 2014
WANDA HAMILTON, Plaintiff,
LMM MANAGEMENT, INC., et al., Defendants.
LAWRENCE F. STENGEL, District Judge.
This is a consumer class action brought under the Fair Debt Collection Practices Act. The defendants move to stay the proceedings pending the outcome of a Chapter 7 bankruptcy of a debtor who is no longer a party to the case. For the reasons set forth below, I will deny this motion.
A detailed explanation of the procedural background of this case is necessary to understand this motion's disposition. Plaintiff Wanda Hamilton filed her complaint on May 28, 2013 against defendants McGuigan Law Office, LLM Management, Lawrence Weil, and CACH. On August 23, 2013, the plaintiff filed an amended complaint, adding Square Two as a defendant.
On Septemb e r 1, 2013, Defendant McGuigan Law Office filed a Chapter 7 bankruptcy petition in the Eastern District of Pennsylvania (Bankr. E.D. Pa. 13-17633). Upon filing, the bankruptcy was listed as a no asset case. On September 26, 2013, McGuigan Law filed a suggestion of bankruptcy in this court; as a result, this court entered an Order on September 30, 2013 placing this case in suspense pending the bankruptcy of McGuigan Law Office.
On October 1, 2013, the plaintiff requested that the automatic stay be lifted, indicating that the non-debtor defendants were not entitled to the automatic stay. A telephone conference of counsel for the parties with this court was held on October 25, 2013 to discuss this request. At that conference, counsel for McGuigan Law argued that all of the defendants were so intertwined such that the bankruptcy proceeding will have an effect on the other defendants. After further discussion, the plaintiff agreed not to proceed with her claims against McGuigan Law in this case and to submit a second amended complaint with this change. The court agreed to this resolution with no objection from the defendants.
On October 29, 2013, this court entered an Order returning this case to the active docket and granting the plaintiff's request to amend her complaint. On November 1, 2013, the plaintiff filed a second amended complaint, which no longer named McGuigan Law as a defendant. On November 18, 2013, the defendants answered this complaint. A Rule 16 conference was then scheduled for January 3, 2013.
On December 30, 2013, the defendants filed this motion under Rule 60(b), asking the court to again stay the case. They argue that the change in McGuigan Law's bankruptcy case from a non-asset case to an asset case on November 21, 2013 is "newly discovered evidence" that warrants a reconsideration of the court's previous decision to return the case to the active docket. See Order dated October 29, 2013, Doc. No. 16. The plaintiff argues that the motion is procedurally deficient and should be dismissed accordingly.
II. STANDARD OF REVIEW
The defendants bring their motion pursuant to Federal Rule of Civil Procedure 60(b)(2) and (6). These provisions state that a court "may relieve a party or a party's legal representative from a final judgment, order, or proceeding for... newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)... or any other reason justifying relief from the operation of the judgment." FED. R. CIV. P. 60(b)(2) and (6). "The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence." Dasilva v. Esmor Correctional Services, Inc., 167 Fed.Appx. 303, 308 (3d Cir. 2006)(quoting Harsco Corp. v. Zlotnicki , 779 F.2d 906, 909 (3d Cir.1985))(quotation marks omitted). Any party requesting such relief "bears a heavy burden." Compass Technology, Inc. v. Tseng Laboratories, Inc. , 71 F.3d 1125, 1130 (3d Cir.1995)(quoting Plisco v. Union R. Co. , 379 F.2d 15, 17 (3d Cir.1967)). Courts should grant motions for reconsideration sparingly, in the interest of finality. Karibjanian v. Chromalloy Pharmaceutical, Inc., Civ. A. No. 90-4641, 1991 WL 125176, at *4 (E.D.Pa. June 28, 1991).
Rule 60(b) only allows reconsideration of final orders or judgments. An order is final when it fully resolves all the claims presented to the district court such that there is nothing further for the district court to do. See, e.g., Catlin v. United States , 324 U.S. 229, 233 (1945); Penn West Associates, Inc. v. Cohen , 371 F.3d 118, 125 (3rd Cir. 2004); Aluminum Co. of Amer. v. Beazer East, Inc. , 124 F.3d 551, 557 (3d Cir.1997); Isidor Paiewonsky Assocs., Inc. v. Sharp Props., Inc. , 998 F.2d 145, 150 (3d Cir.1993).
The plaintiff argues the defendants' motion should be denied because the Order dated October 29, 2013 would not be a final order under Rule 60(b). I agree. The Order did not resolve all the claims asserted in this matter. See Vintage Grapevine, Inc. v. Mara, No. Civ.A. 00-2828, 2001 WL 940422, at *1 (E.D.Pa. Aug. 6, 2001)(denying a Rule 60(b) motion for reconsideration of a motion for summary judgment because the decision was not a final judgment or order); Karibjanian v. Chromalloy Pharmaceutical, Inc., Civ. A. No. 90-4641, 1991 WL 125176, at *4 (E.D.Pa. June 28, 1991)(finding that an order was not final under Rule 60(b) "because it did not resolve all claims against all parties in th[e] action"). For this reason, Rule 60(b) cannot provide a basis for relief.
Even if the motion pertained to an order that was final, the defendants offer no valid reason to undo the previous decision. They claim that the change in McGuigan Law's bankruptcy from a non-asset case to an asset case is "newly discovered evidence" under Rule 60(b). However, the defendants fail to explain why this evidence was not available at the time the previous decision was made or why they were unable to discover this evidence, in line with the "due diligence" requirement of Rule 60(b)(2).
The defendants essentially make a plea for equity, asking the court to prevent "potential double recoveries to the severe detriment of Defendants." Defendants' Motion to Stay, Doc. No. 27 at ¶ 23. This notion builds on the same argument they presented prior to the entry of the previous Order-that McGuigan Law is so indispensable that this proceeding cannot go forward while McGuigan Law's bankruptcy is pending. "Ultimately, the moving party bears the burden of showing that the absent party should be joined under Rule 19." Dale v. Abeshaus, Civ. A. No. 06-CV-04747, 2013 WL 5379384, at *4 (E.D.Pa. Sept. 26, 2013)(citing Disabled in Action v. Southeastern Pennsylvania Transportation Authority , 635 F.3d 87, 97 (3d Cir.2011)). Both then and now, the defendants fail to explain what makes McGuigan Law so indispensable.
The defendants also fail to explain how the relationship of the parties would cause there to be a "double recovery." None of the defendants are named as co-debtors in McGuigan Law's bankruptcy proceeding. By all accounts offered, McGuigan Law is a separate entity from the other defendants and is no longer a party to this action. Therefore, the defendants have offered no basis for staying this case pending the resolution of McGuigan Law's bankruptcy.
Given its deficiencies, I have no choice but to deny the defendants' motion.
For the reasons stated above, I will deny the defendants' Rule 60(b) motion.
An appropriate Order follows.