United States District Court, W.D. New York
DECISION AND ORDER
DAVID G. LARIMER, District Judge.
This action was commenced in 2007. The complaint alleged that thirteen defendants participated in a plan to fraudulently induce plaintiffs Apace Communications, Inc. and its principal, Rakesh Aggarwal to invest millions of dollars in a company named NetSetGo, in 2001. Plaintiffs allege that they lost those funds as a result of defendants' fraud.
The case proceeded through discovery and motions for several years. During that time, plaintiffs were represented by two law firms, Foley & Lardner in Chicago, and local counsel in the Western District of New York, McConville Considine Cooman & Morin, P.C.
Over the course of the litigation, and culminating in April 2014, this Court dismissed claims against the bulk of the defendants. Specifically, claims against defendants David Grainger (Dkt. #82), Steven Hyde (Dkt. #84), Empire Beef (Dkt. #102) and David Klein (Dkt. #135) were all dismissed. The Court also granted summary judgment in favor of defendants Lori Levine, Steven Levine, Cephas Capital Partners, LP ("Cephas"), Clint Campbell, and Jeffrey Holmes, and dismissed all claims against them (Dkt. #256) on April 28, 2014. So a total of nine defendants have been dismissed from the action.
Thereafter, on July 10, 2014, two of the remaining four defendants, Timothy Beers (Dkt. #258) and Michael Benedict (Dkt. #259) moved for summary judgment. Soon after those two motions were filed, both of plaintiffs' attorneys, Foley & Lardner and the McConville Considine firm, moved (Dkt. #261, #262) to withdraw as counsel for plaintiffs because plaintiffs had not honored their financial obligations to those firms. In support of those motions to withdraw, those two law firms submitted proof that although they had continued to work for plaintiffs, plaintiffs had failed to pay legal fees for well over a year prior to the motions to withdraw. Movants have submitted uncontroverted evidence that the last payment to counsel occurred in May 2013 (Dkt. #265).
The Court granted the motions to withdraw by order of August 7, 2014 (Dkt. #264). Because Beers's and Benedict's motions for summary judgment were then pending, in the Court's order granting leave for counsel to withdraw, plaintiffs were directed to advise the Court within sixty days whether they had obtained new counsel, and to respond to the pending motions for summary judgment. Id. Aggarwal informed his prior counsel that he understood his obligations under the Court's order (Dkt. #266).
Plaintiffs have not complied with the Court's August 7, 2014 order. Plaintiffs did not contact the Court in any way or respond to the pending motions during the sixty-day period that had been granted them. Not until March 2, 2015, some seven months after the Court's August 7, 2014 order, did plaintiffs contact the Court regarding this matter. That contact consisted of a one-page letter (Dkt. #270) from Aggarwal, dated February 23, 2015, requesting that plaintiffs be given until June 30, 2015 to obtain new counsel and to file a response to Burke's motion to dismiss.
Plaintiffs' request was apparently prompted by a motion to dismiss filed by defendant Jeffrey Burke (Dkt. #267) under FED. R. CIV. P. 41, on January 29, 2015, for failure to prosecute. A similar motion (Dkt. #272) was filed on March 17, 2015 by another of the defendants, Cephire Technologies ("Cephire"). Cephire's motion also seeks an order directing the turnover of certain funds being held by Harris Beach PLLC, which represented Cephas, Holmes, and Campbell up until their dismissal from the case.
At this point, then, five motions are pending in this case: motions for summary judgment by defendants Beers and Benedict; motions to dismiss for lack of prosecution by defendants Burke and Cephire; and plaintiffs' motion for an extension of time to respond to Burke's motion. As stated, Cephire's motion also includes a request for an order directing the turnover of certain funds being held by Harris Beach.
Plaintiffs' motion for an extension of time is denied, and plaintiffs' remaining claims are dismissed. This Court has authority to enforce its orders and to sanction parties for their failure to comply with those orders, and I do so here.
Plaintiffs have demonstrated a pattern of noncompliance with this Court's orders and with their obligations as plaintiffs. First of all, plaintiffs have not controverted the evidence that they have failed to fund the lawsuit and to pay their attorneys for well over a year, which finally resulted in their attorneys' well-founded motions to withdraw.
Plaintiffs were then ordered to obtain new counsel if they intended to prosecute the action, and to respond to the summary judgment motions. Plaintiffs were given sixty days in which to do so, which was more time ...