ORDER ON PLAINTIFFS' MOTION TO VACATE SANCTIONS AND MOTION FOR SANCTIONS (Doc. Nos. 75, 78)
Before the Court is Plaintiffs South Shore Ranches, LLC and JMZ Development Co., LLC's ("collectively Plaintiffs") motion for sanctions against Defendant Lakelands Co., LLC ("Lakelands") and motion for reconsideration of sanctions that were imposed against them. Pursuant to briefing ordered by the Court, the parties have briefed the application of Federal Rule of Civil Procedure 60(b)(2) to the pending motions. For the reasons that follow, the Court will grant reconsideration of the sanctions motion, but will deny Plaintiffs' motion for sanctions. With the resolution of these motions, the Court will accept no further filings from the parties.
On December 12, 2005, Plaintiffs as seller and Lakelands as buyer entered into a Contract for the sale of 1,947 acres of real property located in Tuolumne County, California. At some point in the transaction process, the sale broke down and steps to undergo arbitration began.
However, in order to further process the Parcel Map and to extend valuable benefits within Tuolumne County, JMZ deeded all of the real estate it owned relative to the Contract to South Shore Ranches. JMZ did this in late July 2008, at the request of Tuolumne County. The grant deed was recorded on August 13, 2008, in Tuolumne County.
On August 28, 2008, arbitration went forward before Judge Broadman, but Lakelands did not appear. After hearing evidence, Judge Broadman issued his decision in favor of Plaintiffs.
On September 22, 2008, Plaintiffs filed a petition to confirm the arbitration award in the Tuolumne County Superior Court. On October 23, 2008, the Tuolumne County Superior Court confirmed Judge Broadman's order.
On January 14, 2009, Plaintiffs filed this lawsuit seeking an order from this Court to confirm Judge Broadman's arbitration award. The confirmation order that Plaintiffs wished this Court to sign was identical to that which the Tuolumne County Superior Court signed. All parties in the complaint are Limited Liability Companies ("LLC's").
In February 2009, Lakelands filed a motion to dismiss and later filed a motion to remand. After Plaintiffs filed what the Court construed as an amended petition, the Court allowed Lakelands to file amended motions to dismiss and remand, and told the parties that it had concerns over its subject matter jurisdiction.
On May 13, 2009, the Court ruled that the case had not been removed because the case had been filed as an original action in this Court and because no notice of removal had been filed in this Court. The Court then ruled that it lacked subject matter jurisdiction and closed the case.
Plaintiffs filed a motion for reconsideration on May 26, 2009. On June 24, 2009, Plaintiffs filed a notice of removal. On July 8, 2009, the Court denied the motion for reconsideration and found that Plaintiffs had failed to meet their burden under Rules 60(b)(1) and 60(b)(6). The Court then remanded the case because the evidence submitted as part of the motion for reconsideration again failed to establish that the Court had diversity jurisdiction.
On July 10, 2009, Lakelands filed a motion for sanctions. One of the arguments in the sanctions motion was that the petition was frivolous due to a lack of subject matter jurisdiction.
On November 4, 2009, Lakelands filed an amended motion for sanctions due to the Tuolumne County Superior Court imposing its own sanctions against Plaintiffs for improper removal.
On January 15, 2010, the Court granted Lakelands's motion for sanctions. The Court determined that Plaintiffs acted in bad faith, specifically that they had been reckless and made frivolous arguments regarding the Court's subject matter jurisdiction.
On March 5, 2010, Plaintiffs filed two motions to vacate under Rule 60(b)(3), one motion to vacate the order imposing sanctions and one motion to vacate the order dismissing and remanding the case. Plaintiffs also filed a requests for ...