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Berrey v. Plaintiff Investment Funding LLC

United States District Court, D. Arizona

May 5, 2015

Andrew Berrey, Plaintiff,
v.
Plaintiff Investment Funding LLC, et al., Defendants.

ORDER

BRIDGET S. BADE, Magistrate Judge.

Plaintiff Andrew Berrey and Defendant Injury Assistance, LLC have filed cross motions for summary judgment. (Doc. 66, 72.) On March 30, 2015, the Court entered an order related to these cross motions and directed the parties to file supplemental briefing on various issues. (Doc. 89.) In response, Defendant Plaintiff Investment Funding, LLC (PIF) filed a brief on April 27, 2015. (Doc. 95.) Berrey filed a joinder to PIF's brief. (Doc. 96.)

As set forth below, the Court strikes Sections III through V of PIF's brief because the arguments in these sections are not authorized by any rule or court order. In addition, because PIF and Berrey did not brief "the nature of PIF's claim against the settlement proceeds, " they did not comply with the Court's order. Therefore, the Court orders PIF and Berrey to show cause why the Court should not dismiss PIF's claims to the interpleaded funds based on these violations of the Court's order and dismiss this interpleader action for lack of jurisdiction.

I. PIF's Unauthorized Arguments Related to Injury Assistance's Lien Claim

In its March 30, 2015 Order, the Court ordered Berrey and Injury Assistance to "submit additional briefing on Injury Assistance's affirmative defense asserting it has statutory health care provider lien rights as the assignee or agent of the referred providers." (Doc. 89 at 22.) The Court further ordered Berrey and Injury Assistance to file supplemental briefing addressing:

(1) whether any of the referred providers properly perfected a health care provider lien, with copies of relevant documents, (2) whether any of the referred providers assigned any health care provider liens to Injury Assistance, again with relevant documents, [and] (3) whether any of the referred providers entered agency agreements with Injury Assistance that authorized Injury Assistance to record liens on behalf of the referred providers or that authorized Injury Assistance to enforce any recorded health care provider liens, again with relevant documents, ..."

(Id. ) The Order set deadlines for Berrey and Injury Assistance to exchange their briefs on these issues before filing. (Id. ) The Court did not order or authorize any other party, including PIF, to file briefing on these issues, and did not order any other party to exchange briefing with Berrey and Injury Assistance on these issues. (Id. ) The Court clearly identified these issues as arising from Berrey's and Injury Assistance's cross motions for summary judgment. (Id. at 10, 12-13.) Thus, the Court's March 30, 2015 Order did not direct or authorize PIF to file briefing on these issues. Nonetheless, PIF's brief included argument on these issues. (Doc. 95 at 3-7.)

PIF did not identify any rule or authority that would allow it to file briefing on issues raised in cross motions for summary judgment that were filed by other parties, that PIF did not join, and after the conclusion of briefing on these motions. Local Rule 56.1 authorizes a motion, response, and reply. See LRCiv 56.1. Rule 56 authorizes the Court to direct additional briefing, but it does not authorize the parties to file additional or supplemental briefing beyond the briefing the Court's order required. See Fed. R. Civ. 56(f). Thus, PIF's briefing on issues related to Injury Assistance's lien claim was not authorized by any rule. Therefore, the Court strikes Sections III through V of PIF's brief and will not consider the arguments in these sections. (Doc. 95 at 3-7.)

II. Order to Show Cause Why the Court Should Not Strike PIF's Claims

A. PIF and Berrey Did Not Comply with the Court's Order

In its March 30, 2015 Order, the Court directed PIF and Berrey to file "briefing addressing (1) the citizenship of PIF's owners and members, and (2) the nature of PIF's claim against the settlement proceeds, including whether PIF's claim may be unenforceable as an assignment of a personal injury claim or the proceeds of a personal injury claim, with relevant documents."[1] (Doc. 89 at 22, 23.) The Court explained that it raised these issues sua sponte because they implicated the Court's jurisdiction. (Id. at 2.) In addition, the Court stated its concern that the parties had not submitted the agreements between Berrey and PIF that purportedly formed the basis of PIF's claim against the settlement proceeds of Berrey's personal injury claim, which had been deposited in the Court's registry. (Id. at 21.) The Court further explained that "the nature of PIF's claims could affect the Court's jurisdiction. If PIF does not have a claim against the settlement proceeds, but only has a contract claim, then it will not have an interpleader claim." (Id. )

Despite the Court's clear order, and its explanation for the order, PIF did not submit any briefing addressing "the nature of [its] claim against the settlement proceeds, including whether [its] claim may be unenforceable as an assignment of a personal injury claim or the proceeds of a personal injury claim." ( See Doc. 89, 95.) In addition, PIF did not submit any agreements with Berrey that formed the basis of its claim to the interpleaded funds. Berrey also did not brief this issue and instead filed a "joinder" to PIF's brief in which he stated only that "PIF has an interest in the funds in interpleader." (Doc. 96.) Therefore, PIF and Berrey did not comply with the Court's Order.

B. Berrey's and PIF's April 2015 Settlement Agreement

Instead, PIF filed a brief stating that it has "confidence in the validity of its agreements, " but "recognizes a ruling that declared PIF's agreement with Mr. Berrey void was a possible outcome of the litigation." (Doc. 95 at 2.) Therefore, the day after the Court's March 30, 2015 Order, PIF and Berrey entered a settlement agreement that purported to "supersede all previous agreements between PIF and Mr. Berrey" and in which Berrey would "assign[] any present interest he has in the interplead funds to PIF." (Id. at 3.) PIF does not explain how this settlement agreement, which appears to be an attempted end run around the Court's Order and Arizona law prohibiting the assignment of personal injury claims, responds to the Court's order to address the "nature of PIF's claims against the settlement proceeds." Nor does PIF's brief explain the basis of its "claim for $30, ...


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