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Sukumar v. Direct Focus

April 23, 2008


The opinion of the court was delivered by: Honorable Larry Alan Burns United States District Judge


This court appointed Justice Howard B. Wiener (Ret.) as a Special Master to assist in the final resolution of the parties' eight-year-old dispute in this lawsuit. He provided a Report and Recommendation ("R&R") after investigation of the issues, arguments, and evidence. The matter is before the court for resolution of plaintiff Ponani Sukumar's ("Sukumar") continuing post-trial attempts to secure specific performance and compensation in this contract dispute against Defendant Direct Focus, Inc. ("Defendant" or "Nautilus") and his Objections to the R&R. The court held a hearing on April 21, 2008 for that purpose. Jose L. Patino, Esq. appeared for Sukumar. Robert W. Harrison, Esq. appeared for Nautilus. This court has reviewed de novo the findings of the Special Master in consideration of Sukumar's Objections and in consideration of the parties' arguments at the hearing. With the minor exceptions noted below, the court ADOPTS the Report and Recommendations prepared by the Special Master.

A bench trial in this case was tried by the undersigned District Judge in July 2004, and resulted in entry of judgment in Sukumar's favor. The court entered findings of fact and conclusions of law on July 29, 2004. Dkt No. 153. Sukumar moved for entry of judgment and costs as prevailing party. The court entered Judgment on December 7, 2004. Dkt No. 175. In particular, the court ordered: specific performance by Defendant; delivery of all machines and related equipment identified in the Contracts Summary; consequential damages to Sukumar of $70,000; a date certain by which Defendant was to complete all repairs and deliveries; and agreed costs, among other things.

Six weeks later, on January 18, 2005, Sukumar filed a 27-page Notice listing in minute detail alleged "conditions constituting material breach," and about 20 additional pages of exhibits. Dkt No. 176. This court rejected the Notice as untimely and dismissed the case for all purposes. Dkt No. 177. Sukumar unsuccessfully moved to vacate the Order and for a hearing of a motion to enforce the judgment. Dkt No. 178. On February 18, 2005, Sukumar filed a notice of Appeal. Dkt No. 187. On June 4, 2007, the Ninth Circuit vacated the Judgment and remanded the case for further proceedings. Dkt No. 206.

At the appeal mandate hearing, the court informed the parties it intended to refer the parties to a Special Master to inspect the equipment and address the remaining alleged defects in a Report and Recommendation, as the Ninth Circuit had suggested in its remand ruling. Dkt No. 208. The Ninth Circuit stated: "In view of the demonstrated propensity of the purchaser microscopically to inspect the sold goods for defects, the district court may deem it an appropriate saving of judicial resources to let the parties pay for a special master to work out a recommended final order." Sukumar v. Direct Focus, Inc., 224 Fed.Appx. 556, 560 (9th Cir. 2007).

Before resorting to a Special Master proceeding, the court instructed Sukumar to give Nautilus a list of specific defects he contended remained uncorrected and ordered Nautilus to inspect the allegedly defective machines and make what corrections it could, all within a scheduled time frame. The court forewarned the parties it would conduct a hearing thereafter, if needed, with the understanding Sukumar's edited list would include only those remaining remediation disputes over material alleged defects for referral to a Special Master. Dkt No. 208. The court alerted the parties that if a Special Master appointment became necessary, it would order costs apportioned equally between plaintiff and defendant, unless an adjustment was warranted based on plaintiff's assertion of immaterial or frivolous defects causing the costs to be more than they otherwise would have been, or based on Defendant's failure to fix some or all of the items it should have remediated in conformance with the Judgment. Dkt No. 208. Sukumar objected to the appointment of a Special Master, insisting the court is better suited to the review task. The court overruled his objection.

The parties thereafter submitted a Stipulation Regarding Special Master on August 27, 2008, when it became apparent they would be unable to resolve their remaining disputes. Dkt No. 216. Although Sukumar objected again to the appointment of a Special Master, both sides agreed Justice Howard B. Wiener (a retired Justice of the California Court of Appeal) was an acceptable choice. Dkt No. 216 p. 2. On September 10, 2007, the court overruled Sukumar's renewed objections to the appointment of a Special Master and instructed the parties to prepare a proposed Order appointing Justice Wiener, including a schedule for the Special Master proceedings. Dkt No. 227. The Order of appointment, among other things, set a schedule for completion of the assignment, and reiterated this court's reservation of the right to adjust responsibility for costs if either party failed to proceed reasonably and in good faith with positions advanced before the Special Master or made unwarranted or frivolous objections to the Special Master's R&R. Dkt No. 229.

Justice Howard B. Wiener is a distinguished former Riverside County Superior Court Judge and Justice of the California Fourth District Court of Appeal. Currently, he is a highly-sought-after mediator, greatly respected in the San Diego legal community. He accepted the Special Master assignment in this case, and provided his fifteen-page R&R on March 8, 2008. The R&R contains well-reasoned discussion in support of each of the ten discrete recommendations it makes. It reflects a conscientious investigation of the parties' remaining disputes involving extensive briefing, expert opinions, multiple hearings, and evidentiary submissions from both sides, and thoughtful, practical proposed results.

Defendant filed a short Motion To Adopt Special Master's Report And Recommendation in its entirety -- effectively a notice of non-opposition. Dkt No. 241. Sukumar filed an Opposition, criticizing Defendant's Motion as "skeletal and unavailing." Contrary to Sukumar's criticism, however, a party having no objection to an R&R is not expected, much less compelled, to reargue the contents of an R&R with which it agrees and entirely accepts, including those portions, as here, imposing on itself additional obligations. Sukumar floats the proposition, relying on inapposite legal authority, the District Court is required to review de novo in its entirety any and all R&Rs, not merely those portions of an R&R to which objection is made. Such a proposition would render all Special Master proceedings and all R&R processes wholly redundant and extravagant and ignores the express standard of Rule 53, imposing on the District Court the obligation to decide de novo only "all objections to findings of fact made or recommended by a master" and "all objections to conclusions of law made or recommended by a master."*fn1 Rule 53 (f)(3),(4). Moreover, contrary to the implication of Sukumar's argument, Rule 53 does not mandate that a de novo review be conducted in the exact same manner as the Special Master conducted the factual investigation underlying the R&R.

But economies and proportionality of responses have not been hallmarks of Sukumar's style in the prosecution of this action. In addition to filing Objections to Defendants' motion, Sukumar filed Objections to the R&R approaching 300 pages in length. He filed a 25-page document entitled Objections To, And Motion To Modify, Special Master's Report And Recommendation (Dkt No. 243), accompanied by a Declaration of his counsel authenticating ten (10) exhibits totaling in excess of 270 pages (Dkt No. 245) and a CD exhibit, and Sukumar's own Declaration. He essentially objects to every aspect of the Special Master's process and conclusions, and seeks to have the court discard not only the entire analysis and recommended results, but also the Special Master appointment itself. He argues the court should void the appointment as improper and should reject the R&R "as a nullity" on grounds the court is purportedly obligated to personally inspect the equipment and then revisit every asserted defect in consideration of Sukumar's plenary Objections and because there is no "transcript" of Special Master proceedings for the court's review.

The court REJECTS Sukumar's insistence this court should discard the Special Master process and results and begin anew. The court finds the appointment of Justice Wiener fully comports with the purposes of Rule 53, authorizing the appointment of a special master, among other things, to address post-trial matters that "cannot be addressed effectively and timely by an available district judge." Rule 53(a)(1)(c). Sukumar's additional representations that referral was improper because the nature of the task assigned is purportedly not properly delegable and "displaces" the court ignores the explicit recommendation of the Ninth Circuit as well as the review standard and posture of this case and are based on inapposite authority. See Pl. Obj. pp. 9-10. As recited on the record, this court considered not only the court's congested docket and the need to timely and effectively address these post-trial matters (a consideration amply supported by the parties' acknowledgment the Special Master spent at least a full week addressing all the materials presented by the parties, including hearings and a site visit), considerations expressly authorized under Rule 53, but also the complexity of Sukumar's ever-expanding complaints over the course of this litigation as reflected in the voluminous docket of this action. This court consciously included in that consideration the number and detail of Sukumar's objections to Nautilus' performance of its contract obligations, as acknowledged in the Ninth Circuit's ruling describing his obvious propensity to "microscopically inspect" the equipment, implicitly acknowledging he would then challenge any perceived imperfection as a breach of contract or, in the current posture of the case, as a failure to abide by the Judgment.

Sukumar objects to the report "in its entirety," arguing the Special Master's Report "is not supported by the record" and moves for complete de novo review of his expansive list of allegedly material defects. Dkt No. 243 p. 1. He insists the undersigned District Judge must personally inspect the physical equipment. He also insists the court should issue an Order stating Defendant has failed to satisfy the Judgment and award additional damages in excess of six times the Judgment amount.*fn2 Through his blanket objections to the R&R, Sukumar essentially asks the court to acquiesce at last to all of his demands, despite their previous rejection by at least three judges (including the undersigned District Judge) and now a Special Master, who have all concluded Sukumar harbors many unreasonable and unsatisfiable expectations. For example, relatively early in this protracted litigation, after failed settlement efforts, in a 7-page R&R signed March 28, 2002 detailing the inspection results of each alleged machine defect, neutral inspector Magistrate Judge Harry R. McCue (Ret.) prophetically observed, after personally expending considerable time and effort to assist the parties in resolving their disputes: "The list of other complaints clearly indicate[s] the expectations of Mr. Sukumar can never be met." Dkt No. 110, Harrison Decl. In Support Of Defendant's Motion For Summary Judgment, Exh. A. After presiding over this matter since its reassignment to the undersigned District Judge in October 2003, through dispositive motions and ultimately trial, this court reluctantly registered the same conclusion in its February 2005 Order denying Sukumar's Ex Parte Application rejecting his January 2005 Application to have the court vacate its Order dismissing the case after entry of Judgment.*fn3

The court is now presented yet again with Sukumar's unrelenting resistence to accept the findings of another conscientious, neutral observer and evaluator recommending denial of multiple forms of detailed relief he continues to badger the court to order.*fn4 The court finds particularly offensive Sukumar's representation: "The Special Master Misled Plaintiff Into Compromising His Rights."*fn5 Pl. Obj. 10:24. The objective of appointing a Special Master was to narrow the issues and provide objective findings with respect to each of the remaining disputes, with the goal of entering a final judgment and terminating this litigation. The goal is obviously thwarted by Sukumar's persistent refusal to cull the material from the immaterial and to insist on standards beyond those reasonable under the parties' contracts.

Sukumar's Objections make clear he expects this court to revisit every issue presented to the Special Master and beyond. He purports to have narrowed his assessment of his entitlements under the original Judgment, whereas the sheer volume of the materials presented convinces this court he continues to expand his demands at every opportunity. See Patino Decl. Exh. 10 descriptions. Without abrogating its responsibility to make de novo determinations regarding matters in an R&R to which specific objection is made, the court nonetheless narrowly construes its review obligations and declines to proceed, after eight years of litigation, as if this case is before the court as a matter of first impression.

Defendant responds to Sukumar's Objections by correcting Sukumar's misstatement of the Rule 53 legal standards and demonstrating the Special Master performed his duties diligently and precisely within the scope of his appointing Order.*fn6 An overriding and legitimate consideration in the decision to appoint a Special Master was to achieve finality in the effectuation of the trial results and Judgment in this action. The R&R reflects Justice Wiener fully appreciated the need for finality and approached his role as Special Master accordingly. Defendant correctly positions the procedural posture of this case and the R&R assignment as encompassing "the narrow issue of whether NAUTILUS complied with the Judgment," distinguishing it from the authority Sukumar relies on in asserting a much more expansive view. Def's Resp. pp. 3-5; see, ...

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