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Friedlander v. Onsa

July 14, 2008

ERIC FRIEDLANDER AND STEPHEN F. WAHL, PLAINTIFFS,
v.
WARD ONSA AND WARD ONSA & COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Denis R. Hurley, United States District Judge

MEMORANDUM AND ORDER

HURLEY, Senior District Judge

Presently before the Court is the motion by Plaintiffs Eric Friedlander and Stephen F. Wahl ("Plaintiffs") for an Order: (1) dismissing the defenses of defendants Ward Onsa and Ward Onsa & Company ("Defendants") as to Plaintiffs' breach of contract claim under the doctrine of res judicata; (2) rejecting Defendants' answer as being untimely and entering judgment in favor of Plaintiffs; and (3) striking Defendants' answer for failure to comply with Federal Rules of Civil Procedure ("Rules") 8 and 10. (See July 25, 2007 Notice of Mot.) For the reasons stated below, the motion is denied in its entirety.

BACKGROUND

Plaintiffs initiated this breach of contract and securities fraud action on December 27, 2005, to "recover more than $1.7 million lost or stolen by Ward Onsa, a purported investment advisor and principal of Ward Onsa & Company." (Compl. ¶ 1.) They allege that Ward Onsa placed their investment "funds into a general account with the funds of other investors [and] used those funds for his own benefit or to pay off the claims of other investors, and invested the balance in speculative transactions that resulted in massive losses to [Plaintiffs'] funds." (Id. ¶ 3.) After receiving an extension of time from the Court, Plaintiffs served the Complaint on Defendants on May 3, 2006.

Pursuant to Rule 12(a), Defendants' answer was due to be served on May 23, 2006; however, Defendants' Answer was not served until July 20, 2006. The first paragraph of the Answer reads as follows:

Defendants apologize for this late answer occasioned by their lack of financial resources to retain new counsel and the necessity of every member of the family to work to meet family expenses. Defendants have no alternative but to proceed as their own attorneys and beg the court's indulgence for both their late response and the informalities of this answer which have been drafted to the best of their ability. (Answer at 1.)

Thereafter, Plaintiffs filed the instant motion. While the motion was pending, Magistrate Judge Arlene R. Lindsay referred the case to mediation. (See docket no. 22.) She further directed the parties to file their proposed joint pre-trial order by February 1, 2008 should the mediation prove unsuccessful. (See id. no. 23.)

The docket sheet indicates that the mediation was scheduled to take place on February 25, 2008. According to Defendants, Ward Onsa, who resides in Florida, made travel arrangements to fly to New York for the February 25th mediation. (Letter from Ward Onsa to Court, dated Apr. 21, 2008, docket no. 34.)

Thereafter, Plaintiffs' counsel sent Ward Onsa an e-mail requesting that the date be changed to February 27, 2008. (Letter from Plaintiffs' counsel to Court, dated Apr. 1, 2008, docket no. 31.) Ward Onsa responded that he would try to rearrange his schedule. (Id.) According to Plaintiffs' counsel, neither the mediator nor Plaintiffs' counsel heard back from Onsa, even though counsel followed up by sending a further e-mail. (Id.) The mediation was therefore postponed.

In endeavoring to explain his failure to respond, Ward Onsa states that "[t]ravel arrangements . . . could not be cancelled and rearranged within that time frame." (Letter from Ward Onsa to Court, dated Apr. 21, 2008, docket no. 34.) He also contends that he "explained to Mr. Lepp [the ADR Administrator] that [he is] representing [him]self in this case due to financial inability to hire an attorney and traveling from Florida to Long Island was a financial hurdle." (Id.)

On April 2, 2008, the case was returned from mediation. The docket entry indicates as follows: "The Mediator reports he is unable to re-schedule session because defendant not responsive to scheduling requests after many attempts." (Docket sheet, un-numbered entry dated Apr. 2, 2008.)

The Joint Pre-Trial Order was filed and approved by Magistrate Judge Lindsay on March 26, 2008. The Joint Pre-Trial Order reflects that "the parties have not ...


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