UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
June 22, 2011
GENERAL ELECTRIC CAPITAL CORPORATION; CEF FUNDING II, L.L.C. AND CEF FUNDING V, LLC,
TEN FORWARD DINING, INC.; DELIGHTFUL DINING, INC.; TGIA RESTAURANTS, INC.; KOBRA RESTAURANT PROPERTIES, L.L.C.; ABOLGHASSEM ALIZADEH; THE MECHANICS BANK; EQUITY LENDERS, LLC; APEX PROPERTY ADVISORS INC.; KEY REAL ESTATE EQUITY CAPITAL, INC.; COUNTRY OF SACRAMENTO DEPARTMENT OF PUBLIC WORKS ADMINISTRATION; STATE OF CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT; UNITED STATES OF AMERICA; CITY OF CITRUS HEIGHTS; CITY OF ELK GROVE; CITY OF REDDING; CITY OF GRASS VALLEY; COUNTY OF PLACER; COUNTY OF SACRAMENTO; COUNTY OF SHASTA; COUNTY OF NEVADA, AND DOES 1 - 100, INCLUSIVE, DEFENDANTS.
The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge
MEMORANDUM AND ORDER
This matter comes before the court on the motion of
plaintiffs General Electric Capital Corporation, CEF Funding
II, L.L.C., and CEF Funding V, LLC (collectively, "plaintiffs" or "GE")
to strike the answer of defendants Ten Forward Dining, Inc. ("Ten
Forward"), Delightful Dining, Inc. ("Delightful Dining"), and TGIA
Restaurants, Inc. ("TGIA") (collectively, the "corporate defendants").
Plaintiffs request that the corporate defendants' answer to the
complaint be stricken as a sanction for the failure to obtain counsel
to defend themselves in this action. No opposition to plaintiffs'
motion has been filed. For the reasons set forth below,*fn1
plaintiffs' motion to strike is GRANTED.
In November 2009, plaintiffs filed this action against a number of defendants as a means of redress for alleged breach of loan documents. (Compl. [Docket #1], filed Nov. 25, 2009). The corporate defendants, along with defendants Kobra Restaurant Properties, LLC ("Kobra Restaurant") and Abolghassem Alizadeh ("Alizadeh"), filed an answer in January 2010 through counsel, Patricia Lee. (Answer [Docket #11], filed Jan. 11, 2010). In October 2010, Patricia Lee filed a Motion to Withdraw as Attorney. (Mot. to Withdraw [Docket #60], filed Oct. 15, 2010). On October 29, 2010, the court granted the motion to withdraw and informed defendants that corporations cannot appear in the action without legal counsel. (Order [Docket #64], filed Oct. 29, 2010). The court directed defendant corporations to retain alternate counsel within 30 days of the court order. (Id.)
In May 2011, the court permitted defendants Kobra Restaurant and Alizadeh to substitute Paul Anthony Warner as their attorney of record. (Order, [Docket ##70--71], filed May 13, 2011). However, the corporate defendants have yet to retain alternate counsel, despite the court's order directing them to do so. (Pl.'s Mot. to Strike [Docket #72], filed May 24, 2011, at 4).
Plaintiffs move to strike the corporate defendants answer as a sanction for their failure to retain alternate counsel in accordance with the court order.
"It is a longstanding rule that [c]orporations and other unincorporated associations must appear in court through an attorney." D-Beam Ltd. P'ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973--74 (9th Cir. 2004) (citation and quotation marks omitted, second modification in original); E Dist. Local Rule 183(a). Further, a court may sanction corporate defendants by striking their answer when they fail to retain counsel to defend themselves. See Galtieri-Carlson v. Victoria M. Morton Enters., Inc., No. 2:08-cv01777, 2010 WL 3386473, at *3 (E.D. Cal. Aug. 26, 2010) (sanctioning corporate defendants by striking their answer when they failed to retain alternate counsel after the withdrawal of their original counsel); Rojas v. Hawgs Seafood Bar, Inc., No. C08-03819, 2009 WL 1255538, at *1 (N.D. Cal. May 5, 2009) ("When a corporation fails to retain counsel to represent it in an action, its answer may be stricken").
Pursuant to the local rule and applicable case law, the corporate defendants may not appear in this case without counsel. The corporate defendants' original counsel withdrew in October 2010, and the corporate defendants have failed to retain alternate counsel since that date. This inaction is in direct violation of the court's order. As such, the corporate defendants' answer is stricken.
Accordingly, for the foregoing reasons, plaintiffs' motion to sanction the corporate defendants by striking their answer is GRANTED.
IT IS SO ORDERED.