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Soloff v. Aufman

United States District Court, W.D. Pennsylvania

July 19, 2018



          Arthur J. Schwab United States District Judge

         I. Summary of the Case

         Plaintiffs' Amended Complaint identifies Plaintiffs as college students currently attending the University of Southern California. Through the statements set forth in the pleadings submitted by the Parties, as well as the documents related to certain Trusts and Accounts, some which have been attached to the pleadings and the various motions and responses filed in this case, it appears that Plaintiffs are dissatisfied with their grandfather's provision of financial gifts to them (either directly or indirectly through their mother), but have elected to sue Defendants - who were and are the grandfather's financial and investment advisors - instead of their grandfather. Plaintiffs' pleadings, as well as their Motions and Responses to Defendants' Motions, illustrate their belief that Defendants exploited, extorted, and/or misappropriated funds in said Trusts and Accounts, resulting in Plaintiffs' inability to obtain the funds they want from these financial vehicles.

         Although it appears that Plaintiffs were not direct beneficiaries of some, if not all, of their grandfather's various Trusts and other investment vehicles, and although it appears that Defendants have no fiduciary relationship with Plaintiffs or other duty to Plaintiffs, the Court has permitted this case to proceed up to this point in time, because Plaintiffs are pro se and because the Court believed all Parties would benefit from the mandatory Alternative Dispute Resolution (“ADR”) process and the pre-ADR discovery which this Court ordered.

         To assist the Parties in obtaining a cost-effective, independent evaluation of this case, by a subject matter expert, the Court ordered the Parties to participate in an Early Neutral Evaluation (“ENE”) pursuant to the ADR program established by Local Rule 16.2, and consistent with Plaintiffs' own request. Doc. no. 16, page 13, item 15. Further, the Court recommended the Parties retain, as the ENE Neutral, one of Pittsburgh's leading estates and trusts attorneys, at a cost of $3, 000 per side. Doc. nos. 19, 24, 48, 70, 74.

         Instead of participating in good faith in the ENE process, Plaintiffs, through their motion practice, began attacking Defendants, their counsel, the ENE Neutral (doc. no. 70, pages 3-4), and now, finally, the Court (doc. no. 67), as set forth in more detail below. It has become readily apparent that these pro se Plaintiffs are quite skilled in these legal matters, as demonstrated by their Complaint (doc. no. 5), Amended Complaint (doc. no. 49), and their extensive motion practice.

         Presently before the Court is Plaintiffs' Motion for Recusal (doc. no. 67) and Defendants' Response in Opposition thereto. Doc. no. 71. After careful consideration, the Court denied Plaintiffs' Motion for Recusal on July 5, 2018 (see doc. no. 75), and now has prepared the following Memorandum Opinion to explain its decision.

         II. Case History

         A. First Federal Lawsuit in the Western District of Pennsylvania

         Plaintiffs filed their first federal lawsuit in the Western District of Pennsylvania on July 10, 2017, on behalf of themselves and their two minor siblings. Doc. no. 3 in case no. 17-cv-00908. At that time, Plaintiffs also filed a request to file the matter in forma pauperis, which this Court immediately granted. Doc. nos. 1 and 2. However, after reviewing the Plaintiffs' Complaint, Defendants' Motion to Dismiss, Plaintiffs' Response, and Defendants' Reply, on September 27, 2017, this Court held as follows:

This Court finds, based on the Adult Plaintiffs' Complaint and other filings, that the mother of both the Adult and Minor Plaintiffs is living and capable of bringing claims on behalf of her two minor children. In addition, there are no alleged facts in the lengthy Complaint, nor in any of the Adult Plaintiffs' Briefs, as to why the two Adult Plaintiffs have any authority to sue on behalf of their siblings. . . . Thus, this Court concludes that the Plaintiffs' mother would be the best representative of the minor children's claims.
Given this decision, the Court will grant the Defendants' Motion to Dismiss without prejudice, due to the lack [of] capacity for the Adult Plaintiffs to sue on behalf of the Minor Plaintiffs.

Doc. no. 18, p. 6-7, case no. 17-cv-00908.

         B. Second Federal Lawsuit in the Western District of Pennsylvania

         Shortly thereafter, on November 17, 2017, Plaintiffs filed the instant lawsuit, again by seeking this Court's leave to file a Complaint in forma pauperis, which this Court (again) immediately granted. Doc. nos. 1 and 2. This time, the Complaint only asserted claims on behalf of the Adult Plaintiffs - Cailin and Dylan Soloff - and Defendants filed an Answer to same. Doc. nos. 5 and 9.

         C. Rule 26(f) Conference and Report

         Next, Plaintiffs, who reside in the state of California, filed a Motion to Appear via Skype, Facetime, or conference call at the Rule 26(f) conference. Doc. no. 14. This Court granted Plaintiffs' request, and the Rule 26(f) conference was conducted by the Parties. Doc. nos. 15 and 16. In the Rule 26(f) Report of the Parties, filed by the Parties on March 26, 2018 (doc. no. 16), Defendants indicated that the ADR process would likely be fruitless because they did not intend to make “any monetary offer.” Id. In this same Report, Plaintiffs noted that “Defendants [were] adamantly opposed to any type of Alternative Dispute Resolution, believing it would not be fruitful to either party, as they have [sic] they do not intend on settling this matter. Plaintiffs opposed that viewpoint and were strongly in favor of ADR. Prior to the ‘confer' [P]laintiffs were open to either ENE or Mediation.” Id. (emphasis added.)

         D. Initial Case Management Conference and the ADR Process

         On April 4, 2018, the Court held its Initial Case Management Conference in this matter at which time Plaintiff Cailin Soloff was present, and indicated to the Court that she was authorized to speak on behalf of her brother, Plaintiff Dylan Soloff, who could not attend due to school commitments. During this conference, the Court discussed the Rule 26(f) Report, sided with Plaintiffs, and ordered an ENE to take place with a qualified Neutral. The Court further ordered as follows:

. . . (1) Plaintiffs (and Defendants) should serve and file, on the docket, formal request for production of documents on or before April 13, 2018; (2) The opposing Party should serve and file, on the docket, responses and objections to those requests on or before April 23, 2018; (3) Any documents which exist and are responsive to a request, shall be produced by a Party to the opposing Parties by April 30, 2018; and (4) The Parties are to attend an Early Neutral Evaluation, preferably before Sam Goncz of Cohen & Grigsby, if Mr. Goncz can preside as the neutral evaluator in this matter after performing a conflict check. If Mr. Goncz can handle this matter as an evaluator, he is to be paid $6, 000 in a fee, by the Parties (50% of his fee to be paid by the Plaintiffs, and 50% to be paid by the Defendants) in advance of the evaluation meeting.

See Text Order at doc. no. 19.

         E. Plaintiffs' Request for a “Free” ENE and “Free” ADR Counsel

         Following this conference, on April 10, 2018, Plaintiffs filed a Motion seeking the appointment of pro bono counsel to represent them at the ADR proceeding. Doc. no. 22. On April 11, 2018, the Parties filed a Stipulation selecting an ADR process wherein they indicated that they had selected ENE for their ADR process, and noted that Sam Goncz[1] would serve as the Neutral. Doc. no. 24. Also, on April 11, 2018, Plaintiffs requested that the Court also waive their pro rata share of the Neutral's fee. Doc. no. 25. The Court denied the Plaintiffs' request for a pro bono attorney (without prejudice) and for a waiver of the Neutral fee. In reaching this decision the Court noted:

In effect [Plaintiffs] want the [N]eutral to perform an important service to Plaintiffs for free. Given the complex nature of this case and the age of the Trusts at issue, this case will undoubtedly cost each Party much more than $3, 000 if they proceed through discovery and ultimately to trial, and it is unfair to expect the neutral to work for 50% of his already reduced rate. If each Party does not pay their fair share of $3, 000 to the [N]eutral by May 4, 2018, the Court will cancel the ENE Stipulation and exempt this case from the ADR procedure.

Doc. no. 26. With respect to Plaintiffs' Motion for a pro bono attorney, the Court held:

The Court also DENIES, without prejudice, Plaintiffs' Motion for a Pro Bono Attorney to Represent Plaintiffs at ADR Early Neutral Evaluation (doc. no. 22). The Court will reconsider this Motion for a Pro Bono Attorney if and when the record becomes clear as to whether the ENE will proceed. In sum, the Court is denying Plaintiffs' request for a free ENE process and for a free attorney at the ENE, but is willing to reconsider appointing a pro bono attorney for the ENE once the docket reflects that the payments have been made to the neutral evaluator and that the ENE will proceed.

Id. (emphasis added.)

         F. Pre-ENE Discovery and Motions Practice

         Following the entry of the April 4, 2018 Order, the Parties engaged in pre-ENE discovery, which primarily consisted of an exchange of documents, with the goal of having a robust and meaningful ENE. Doc. nos. 27, 28, 29, 32, 33, and 42. During the course of this discovery, Plaintiffs and Defendants filed various Motions against one another claiming that each side had failed to comply with the other's document production requests. See Defendants' Motion to Quash Subpoenas (doc. no. 30), which this Court denied as moot (doc no. 31); see also Plaintiffs' Motion to Compel (doc. no. 34), Defendants' Opposition to Plaintiffs' Motion to Compel (doc. no. 37), Plaintiffs' Reply to Responses filed by Defendants (doc. no. 38), which this Court granted in part and denied in part (doc. no. 45). In addition, Plaintiffs filed a Motion seeking additional time to pay the Neutral their fifty percent share of his fee (doc. no. 46), Defendants filed a Response (doc. no. 47), and the Court granted Plaintiffs' request for this extension of time. Doc. no. 48.

         G. Amended Complaint and Additional Motions Practice

         On May 15, 2018, Plaintiffs filed an Amended Complaint.[2] Doc. no. 49. Ten days later, on May 25, 2018, Plaintiffs filed a Motion for Sanctions and a Motion to Compel Discovery. Doc. no. 50. On June 1, 2018, Defendants filed a Motion to Strike attachment 1 to the Amended Complaint. Doc. no. 52. On June 4, 2018, Defendants filed their own Motion to Compel (doc. no. 54), an Answer to the Amended Complaint (doc. no. 56), and a Response to Plaintiffs' Motion for Sanctions and Motion to Compel. Doc. no. 57. Plaintiffs filed a Response to Defendants' Motion to Strike Attachment 1 from the Amended Complaint (doc. no. 58, filed on June 9, 2018), a Response to Defendants' Motion to Compel Discovery (doc. no. 59, filed on June 11, 2018), and a Motion to Strike Defendants' Affirmative Defenses found in the Answer to the Amended Complaint (doc. no. 60, filed on June 18, 2018). On June 21, 2018, the Court entered an Order denying Plaintiffs' Motion for Sanctions and to Compel (doc. no. 50); granting Defendants' Motion to Strike attachment 1 to the Amended Complaint (doc. no. 52); and granting, in part, Defendants' Motion to Compel (doc. no. 54) and denying Plaintiffs' Motion to Strike (doc. no. 60). Doc. no. 63.

         H. Additional Motion Practice by Plaintiffs

         Following the Court's entry of its June 21, 2018 Order, the Court was hopeful that this matter would proceed as scheduled, and that the ENE would be held on or before June 29, 2018 (doc. no. 48), with the Parties present and actively participating as per the Court's instruction. However, on June 24, 2018, Plaintiffs filed a “Motion to Strike Defendants Affirmative Defenses, [and] Reconsideration of Memorandum Order for Fraud Upon the Court” (hereinafter “Reconsideration Motion”). Doc. no. 64.

         I. Plaintiffs' Complaint Against Neutral and the ENE Process

         In their Reconsideration Motion (doc. no. 64), Plaintiffs expressed their displeasure with the Court's June 21, 2018 Order - the first Order of Court in which this Court did not rule in Plaintiffs' favor - and also indicated that they had just discovered that the Neutral had a “conflict of interest, ” and thus, claimed he could not serve as a Neutral during the ENE.[3] Plaintiffs asked this Court to reconsider its Order (doc. no. 63). In addition, their Reconsideration Motion (doc. no. 64) suggested that the alleged “conflict of interest” was proof that the Court, the Neutral, the Florida Lawsuit Defendant(s), and the Defendants' counsel in the instant case were all conspiring against Plaintiffs' interests. Finally, in this Reconsideration Motion, Plaintiff Cailin Soloff implied that she was now too afraid to attend the ENE, by stating as follows:

The SOLE Plaintiff scheduled to appear at that “ENE' is a twenty[-]year old, female, college student that resides in California and attends the University of Southern California. She will not be attending any “ENE” in which three, male attorneys in Pennsylvania have “conspired” to “extinguish” the claims of Plaintiffs in a Pennsylvania Federal Court. The “three” male attorneys are beginning to frighten, the “only” female college student, who is only twenty-years old and “not” an attorney.

Doc. no. 64, p. 12 (emphasis added). Plaintiffs' Reconsideration Motion also stated that their neighbor is a public defender in Orange County, California and that they feel “more safe sharing the information with him.” Id. The last section of this Motion (doc. no. 64) states as follows:

WHEREFORE, Plaintiffs are respectfully declaring Fraud Upon the Court and Requesting an Attorney be appointed for Plaintiffs in Pennsylvania and Defendants['] Affirmative Defenses be Stricken and Memorandum Order Reconsidered for Fraud Upon the Court.

Id., p. 13.

         J. Defendants' Response and ...

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