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Strasburg v. M/Y Just A Notion

August 30, 2010

GREGORY A. STRASBURG, INDIVIDUALLY AND AS TRUSTEE OF THE GREGORY A. STRASBURG REVOCABLE TRUST,, PLAINTIFF,
v.
M/Y JUST A NOTION; PETER BLAIR; JIM SINGLETON; THE YACHT CLUB, LLC; AND WACHOVIA BANK, N.A., DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER: (1) GRANTING PETER BLAIR'S MOTION FOR RECONSIDERATION and (2) DENYING LEAVE TO AMEND (Doc. No. 108)

On April 1, 2010, Defendant Peter Blair ("Defendant"), proceeding pro se, filed a motion for relief pursuant to Federal Rule of Civil Procedure 60(b) from this Court's Order dated August 25, 2009 denying Defendant Peter Blair and Yacht Club LLC's motion for leave to amend. (See Doc. No. 108; see also Doc. No. 65.) Plaintiff Gregory Strasburg filed a response in opposition to the Rule 60(b) motion for reconsideration on May 20, 2010. (Doc. No. 114.) Defendant filed a reply on May 27, 2010. (Doc. No. 115.) The reply incorrectly indicated that Plaintiff's opposition was untimely, but did not address the merits of the opposition.*fn1 (See id.) For the reasons stated below, the Court HEREBY DENIES Defendant's motion for reconsideration.

BACKGROUND

Gregory Strasburg commenced this action on January 3, 2008 against Peter Blair, James Singleton, and Yacht Club LLC. (Doc. No. 1.) Strasburg asserts nine claims based on fraudulent inducement to enter into an agreement to transfer title and his continued unlawful possession and ownership of the vessel. (Id. ¶ 12.) The claims asserted in the original complaint were: (1) petitory action to establish title pursuant to supplemental admiralty rules D and E(2); (2) fraud by intentional misrepresentations of fact; (3) fraud by negligent misrepresentation of fact; (4) fraud by suppression of material fact; (5) fraud by promise without intention to perform; (6) breach of fiduciary duty; (7) conversion; (8) agent's wrongful appropriation of property of principal (against Blair only); and (9) breach of contract (against Blair only).

On August 18, 2008, this Court granted Defendants' motion to dismiss the complaint without prejudice. (Doc. No. 2008). On September 16, 2008, Strasburg filed a First Amended Complaint ("FAC") apparently curing the deficiencies. (Doc. No. 38.) The FAC asserts all the same causes of action, but asserts all the fraud causes of action against Peter Blair only. (Id.) Peter Blair and The Yacht Club LLC filed an answer to the FAC on October 16, 2008. (Doc. No. 42.) That same day, James Singleton filed a separate answer as well as a counterclaim against Strasburg and a cross-claim against Yacht Club LLC. (Doc. Nos. 43 & 44.)

On June 22, 2009, Defendants Peter Blair and the Yacht Club, LLC filed a motion for leave to filed an amended answer/counterclaims. (Doc. No. 60.) Plaintiff filed a response in opposition to the motion on July 9, 2009 (Doc. No. 61) and Defendants Peter Blair and the Yacht Club, LLC filed a reply on July 16, 2009. (Doc. No. 62.) On August 25, 2009, the Court denied Defendants' motion for leave to amend. (Doc. No. 65.) It is this Order which is the subject of Defendant Peter Blair's motion for relief pursuant to Rule 60(b). (Doc. No. 108).

On March 31, 2010, Peter Blair filed an ex parte motion to substitute himself, proceeding pro se, in place of Attorney James C. Mitchell. (Doc. No. 103.) After hearing and warning Peter Blair of the difficulties of proceeding pro se, the Court granted Peter Blair's ex parte motion on April 8, 2010. (Doc. No. 106.) Mr. Mitchell remains counsel of record for Defendant Yacht Club, LLC.

On April 1, 2010, Peter Blair filed a motion for reconsideration pursuant to Rule 60(b) from this Court's Order denying leave to amend the answer and assert counterclaims dated August 25, 2009. (Doc. No. 108.) Plaintiff filed a response in opposition on May 20, 2010 and Peter Blair filed a reply on May 27, 2010. (Doc. Nos. 114, 115.) The hearing was thereafter taken under submission without oral argument.

LEGAL STANDARD

Federal Rule of Civil Procedure 60 provides, in pertinent part: "On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; . . . or (6) any other reason that justifies relief." Fed. R. Civ. P. 60(b).

District courts also have the inherent authority to entertain motions for reconsideration of interlocutory orders. Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir.1996) ("[I]nterlocutory orders . . . are subject to modification by the district judge at any time prior to final judgment." (quotation omitted)); see also Balla v. Idaho State Bd. of Corrections, 869 F.2d 461, 465 (9th Cir. 1989); Fed. R. Civ. P. 54(b). Although a district court may reconsider its decision for any reason it deems sufficient, generally a motion for reconsideration "is appropriate if the district court: (1) is presented with newly discovered evidence; (2) committed clear error or the initial decision was manifestly unjust; or (3) if there is an intervening change in controlling law." School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993); see also Hydranautics v. FilmTec Corp., 306 F.Supp. 2d 958, 968 (S.D.Cal. 2003).

Whether to grant or deny a motion for reconsideration is in the sound discretion of the district court. Navajo Nation v. Norris, 331 F.3d 1041, 1046 (9th Cir. 2003) (citing Kona Enter., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000)). "However, a court should generaly leave a previous decision undisturbed absent a showing that it either represented clear error or would work a manifest injustive." Hydranautics, 306 F. Supp. 2d at 968 (citing Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988)).

DISCUSSION

This Court's Order denying leave to amend found that Defendants had not shown "good cause" pursuant to Federal Rule of Civil Procedure 16, which sets the standard for granting leave to amend after a scheduling order has been issued. See Fed. R. Civ. P. 16(b)(4). Specifically, Defendants sought to amend the answer and assert two additional counterclaims. In the motion for leave to amend, Defendants' counsel, Mr. James C. Mitchell, admitted that he did not originally plead these counterclaims due to his own oversight, his lack of familiarity with the case, and because it "did not occur to [him] to file a counterclaim with the answer." (See Doc. No. 65 at 3.) The Court concluded that mere oversight on behalf of Defendants' counsel, despite 3 months lapse in time between the time he was retained and when he filed ...


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