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Johnson v. Chan

United States District Court, E.D. California

January 15, 2020

SIU KEUNG CHAN, et al., Defendants.


         Defendants move for reconsideration of this court's June 11, 2019 order granting in part and denying in part plaintiff's motion for summary judgment, ECF No. 27, under Rule 60(b)(6) of the Federal Rules of Civil Procedure. Mot., ECF No. 34. Plaintiff opposes the motion. Opp'n, ECF No. 36. At hearing, Bradley Smith appeared for plaintiff and Richard Morin and Bryce Fick appeared for defendants Siu Keung Chan and Rita Ngan Chan. For the reasons discussed below, the motion for reconsideration is GRANTED.

         I. BACKGROUND

         This is an action for violations of the Americans with Disabilities Act of 1990 (“ADA”) and California's Unruh Civil Rights Act. The plaintiff is a C-5 quadriplegic who uses a motorized wheelchair and has significant manual dexterity impairments. Compl., ECF No. 1. The defendants own or owned the physical premises of a Subway restaurant located at 6530 Florin Road, Sacramento, California. Id. ¶¶ 2-13; Answer, ECF No. 7. Plaintiff alleges the restaurant failed to provide ADA-mandated disability accommodations, causing him difficulty, discomfort and frustration. Compl. ¶¶ 21-37, 68-69.

         On April 20, 2018, plaintiff moved for summary judgment. Mot. Summ. J., ECF No. 22. On June 12, 2019, after the deadline for defendants to file an opposition to the motion passed, the court issued an order granting the majority of plaintiff's claim, excepting an issue relating to the paint on the disabled parking spot at the restaurant. Order Mot. Summ J., ECF No. 27. The order awarded both injunctive relief, directing defendants to make the required disability accommodations, and a civil penalty of $8, 000.00. Id.

         On July 1, 2019, plaintiff filed an ex parte application to vacate trial dates and order defendants to appear, contending that they could not reach defendants through their counsel of record, Mark T. Gallagher. Ex Parte Appl., ECF No. 29. The application stated that Mr. Gallagher had lost his license to practice law as of January 18, 2019 and the California State Bar was in the process of disbarring him for several ethics violations. Appl., Ex. 2, ECF No. 29-4. The court takes notice of State Bar records reflecting that Mr. Gallagher defaulted at a State Bar Court proceeding on January 15, 2019. In the Matter of Mark T. Gallagher- #180514, 18-O-13772-CV (Cal. State Bar Ct., Jan. 15, 2019). The Supreme Court of California has since ordered Mr. Gallagher disbarred, on October 31, 2019. In re Mark T. Gallagher on Discipline, 18-O-13772-CV, slip op. S256339 (Cal. S.Ct. Oct. 31, 2019). Following plaintiff's July 1 application and before Mr. Gallagher's disbarment, on July 8, 2019, this court issued an order to show cause to Mr. Gallagher, which was returned as undeliverable. Order to Show Cause, ECF No. 30. On July 30, 2019, the court issued an order notifying defendants their counsel was ineligible to practice law and directing them to find new counsel or proceed pro se. Order, ECF No. 31.

         On August 19, 2019, the court authorized new counsel Richard J. Morin to substitute as counsel of record for defendants. ECF No. 35. On August 29, defendants filed the instant motion for reconsideration. Mot., ECF No. 34. Defendants aver in support of their motion that Mr. Gallagher told them he would file a motion to dismiss, but in fact they now know he never did. Mot., Declaration of Rita Ngan Chan (“Chan Decl.”), ECF No. 34-2. They also allege Mr. Gallagher never told them the motion for summary judgment had been filed; they now know he did not oppose the motion. Id. ¶ 4. Particularly relevant to injunctive relief, defendants assert the Subway restaurant at issue ceased operations in January 2019. Mem. P. & A., ECF No. 34-1 at 2; Chan Decl. ¶ 7. Finally, defendants claim Mr. Gallagher never informed them he was unable to practice law, and that they only became aware of this development after they were served with the court's order directing them to find new counsel. Mem. P. & A. at 2; Chan Decl. ¶ 6.


         As pertinent here, a court may relieve a party from an order under Rule 60 of the Federal Rules of Civil Procedure for “mistake, inadvertence, fraud, or excusable neglect” or for “any other reason that justifies relief.” Fed.R.Civ.P. 60(b)(1), (b)(6).

         To determine when neglect is excusable, the court examines four factors: (1) the danger of prejudice to the opposing party; (2) the length of the delay and its potential impact on the proceedings; (3) the reason for the delay; and (4) whether the movants acted in good faith. Lemoge v. United States, 587 F.3d 1188, 1192 (9th Cir. 2009) (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd., 507 U.S. 380, 394 (1993) (analyzing excusable neglect under Federal Rules of Bankruptcy Procedure)); cf. Briones v. Riviera Hotel & Casino, 116 F.3d 379, 381 (9th Cir. 1997) (extending Pioneer standard of excusable neglect to Federal Rule of Civil Procedure 60(b)(1)).

         “As a general rule, parties are bound by the actions of their lawyers, and alleged attorney malpractice does not usually provide a basis to set aside a judgment pursuant to Rule 60(b)(1).” Casey v. Albertsons's Inc., 362 F.3d 1254, 1260 (9th Cir. 2004) (citing Pioneer, 507 U.S. at 397). However, attorney error may constitute excusable neglect if the Pioneer-Briones factors are met. Bateman v. U.S. Postal Service, 231 F.3d 1220, 1223-24 (9th Cir. 2000).


         In this case, plaintiff is not likely to suffer substantial prejudice from reconsideration of the motion for summary judgment. If the Subway restaurant at issue has, in fact, closed, reconsideration of the order for injunctive relief will in no way inhibit plaintiff's ability to frequent that establishment. Plaintiff asserts that having to “re-try aspects of the case that have been decided already” constitutes prejudice. Opp'n at 3. As noted, however, the motion for summary judgment went unopposed and was submitted without argument. Plaintiff's argument is not persuasive in the context of issues the court decided while defendants were effectively in absentia. The Ninth Circuit rejected just such an argument in Bateman, in which it reviewed the reconsideration of summary judgment and concluded that prejudice was insufficient to deny the motion for reconsideration. Bateman, 231 F.3d at 1225 (“The prejudice to the Postal Service was minimal. It would have lost a quick victory and, should it ultimately have lost the summary judgment motion on the merits, would have had to reschedule the trial date.”).

         Here, the delay between the court's order on summary judgment and the motion for reconsideration was relatively short. The court granted summary judgment on June 12, 2019. Crediting the defendants' unchallenged assertions, they had no idea it had been filed, let alone decided, until they received the court's order directing them to find new counsel, issued July 30, 2019. Defendants acted with diligence to find new counsel, who worked quickly to unwind the damage done by Mr. Gallagher to his clients' interests. The delay between the order granting the motion for summary judgment and the motion for reconsideration was less than three months; the time between the Chans' discovery that Mr. Gallagher could not practice law and the filing of the motion for reconsideration, less than a month. Little activity occurred in the case in the interim. Thus, defendants have not unduly delayed their motion for reconsideration.

         The third factor, the reason for the delay, weighs in favor of the defendants as well. Although an attorney's failure to attend to his clients' case with due diligence rarely amounts to excusable neglect, this case is distinguishable from other analogous cases. See, e.g., Willis v. JP Morgan Chase Bank, N.A., No. 2:17-CV-00366-WBS-AC, 2017 WL 5665834 at *2 (E.D. Cal. 2017) (holding counsel's failure to calendar deadline not excusable neglect); see also Allmerica Fin. Life Ins. & Annuity Co. v. Llewellyn, 139 F.3d 664, 666 (9th Cir. 1997) (“[N]either ignorance nor carelessness on the part of the litigant or his attorney provide grounds for relief under Rule 60(b)(1).”) (modified by Bateman, 231 F.3d at 1223-24). Generally, courts disapprove of attempts to reconsider attorney errors that are simply run-of-the-mill ineptitude. In other cases involving attorney error, the movants continued to act through the attorneys whose errors they were attempting to remedy. See, e.g., Yeschick v. Mineta, 675 F.3d 622, 628 (6th Cir. 2012) (attorney continued in case after failure to timely remedy defunct email address); see also Willis, 2017 WL 5665834 at *1 (attorney continued in ...

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