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Henry D. Fajardo v. Jp Unlimited

August 27, 2012

HENRY D. FAJARDO, PLAINTIFF,
v.
JP UNLIMITED, LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge

ORDER GRANTING DEFENDANTS' MOTION FOR SANCTIONS (Document 41)

Defendants Metro Funding Corp., Metro Funding, LLC and MFC Real Estate, LLC ("Defendants") filed this motion for sanctions on July 20, 2012. The matter was heard on August 24, 2012, before the Honorable Dennis L. Beck, United States Magistrate Judge. Lofty Mrich appeared on behalf of Plaintiffs Henry D. Fajardo, JP Unlimited, LLC, Twins Builders Services Corp., Jesus Lim and Phillip Diep ("Plaintiffs"). Meghan Sherrill appeared on behalf of Defendants.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs filed this action on February 14, 2012, against New Jersey corporations Metro Funding Corp., MFC Funding, LLC and MFC Real Estate, LLC.*fn1 Plaintiffs allege fraud and negligence in connection with a $1.3 million loan agreement.

On March 22, 2012, MFC Twin Builders LLC filed an action against Plaintiffs to enforce the guaranties executed in connection with the loan in the United States District Court for the District of New Jersey.

On April 5, 2012, Plaintiffs filed a motion to consolidate this action with the New Jersey action. During the May 11, 2011, hearing, the Court explained that it could not consolidate this action with an action pending before another court. The Court denied the motion without prejudice on May 11, 2011, especially in light of the Clerk's entry of default in that action.*fn2

On May 17, 2012, Plaintiffs filed an ex parte application to consolidate this action with MFC Twin Builders LLC v. Fajardo, et al., 1:12cv219 AWI SKO. That action was an unlawful detainer action that Plaintiffs removed to this Court, though it was ultimately remanded on May 29, 2012. The request to consolidate also included a motion for a temporary restraining order to stay the unlawful detainer action and prevent eviction of Henry Fajardo. The Court vacated the hearing on the ex parte request to consolidate because it was not properly noticed.

On June 5, 2012, after 1:12cv219 was remanded, Plaintiff filed a second motion to consolidate and for issuance of a TRO. The Court denied the motion on June 14, 2012, because the unlawful detainer action was no longer before this Court.

Defendants filed their first motion for Rule 11 sanctions on June 1, 2012, based on Plaintiffs' attempt to consolidate this action with the New Jersey action. The Court granted the motion on July 16, 2012, and awarded sanctions in the amount of $5,000 on August 9, 2012.

Plaintiffs filed another motion for a TRO on July 2, 2012. The Court denied the motion on July 3, 2012, based on the Anti-Injunction Act.

On July 20, 2012, Defendants filed this motion for sanctions based on Plaintiffs' attempt to consolidate this action with the unlawful detainer action after it was remanded.

Plaintiffs did not oppose the motion.

LEGAL STANDARD

Rule 11 sanctions are appropriate when a pleading is frivolous or brought for an improper purpose. Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1362 (9th Cir. 1990). A pleading is frivolous if it is baseless ...


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