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Neal v. Neal

United States District Court, D. Arizona

December 1, 2017

Richard Leland Neal, Plaintiff,
v.
B Marc Neal, et al., Defendants.

          ORDER

          Douglas L. Rayes United States District Judge

         Before the Court is the Motion Regarding Judgment Creditor's Underlying Judgment as Being Void as a Matter of Law filed on behalf of Defendants B. Marc Neal ("Marc"), Michael Kenneth Neal ("Michael"), and Richard Wayne Neal ("Richard"). (Doc. 78.) The motion is fully briefed and no party requested oral argument. For the following reasons, the motion is denied.

         I. Background

         In this action, Plaintiff Richard Leland Neal ("Neal") accuses Defendants of mismanaging the assets of the Claude K. Neal Family Trust B ("Trust") and violating the Racketeer Influenced and Corrupt Organizations ("RICO") Act in the process. (Doc. 27.) Defendants have moved to dismiss the amended complaint, arguing in part that Neal lacks standing to raise these claims because he is not a beneficiary of the Trust. (Doc. 38.) The Court currently has Defendants' motion to dismiss under review and will be issuing a decision in due course.

         Shortly after Defendants moved to dismiss Neal's amended complaint, non-party Patricia Lewis moved to intervene as a plaintiff pursuant to Federal Rule of Civil Procedure 24. (Doc. 48.) In her motion, Lewis represented that she is a judgment creditor of Neal's in an action before the Mohave County Superior Court, holding judgments in excess of $4.6 million ("Superior Court Action"). In the Superior Court Action, Lewis served a writ of garnishment upon Marc in his capacity as trustee of the Trust. Lewis sought to intervene in this action "to protect her ability to collect her judgments, and guard against the possibility of collusion between the parties now in this suit to defeat her rights." (Id. at 2.) Defendants opposed Lewis' request. (Docs. 56, 73.)

         After full briefing on Lewis' motion to intervene, Defendants filed the instant motion, in which they contend that the underlying state court judgment upon which Lewis' asserted right to intervene is based is unenforceable because it was not timely renewed. Specifically, Defendants contend that Lewis filed her judgment renewal affidavit one day late back in 2009. (Doc. 78.) In addition to renewing their request that the Court deny Lewis' motion to intervene, Defendants ask the Court to declare the underlying state court judgment void and to award Defendants their reasonable attorneys' fees incurred in opposing Lewis' intervention.

         II. Discussion

         In response to Defendants' motion, Lewis withdrew her motion to intervene. (Doc. 79.) Defendants' opposition to Lewis' intervention therefore is moot. The sole remaining issue is whether Defendants are entitled to recover their reasonable attorneys' fees incurred in opposing Lewis' intervention.

         As an initial matter, the Court finds that Defendants are not entitled to their attorneys' fees because they failed to articulate a basis for those fees in their motion. Instead, Defendants merely request fees without explaining why they are entitled to them. (Doc. 78 at 6.) Defendants cited for the first time in their reply memorandum five sources potentially entitlement them to an award of fees: (1) Federal Rule of Civil Procedure 41(a)(2), (2) A.R.S. § 12-349, (3) Rule 11, (4) A.R.S. § 14-11004, and (5) Arizona Rules of Professional Conduct ("Ethical Rules") 3.3, 4.4 and 8.4. (Doc. 81.) But "the district court need not consider arguments raised for the first time in a reply brief." Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007). Indeed, Defendants' failure to raise these arguments in their initial motion deprived Lewis of a meaningful opportunity to be heard on them. Nevertheless, the Court finds on the merits that Defendants are not entitled to fees under any of the provisions cited in their reply memorandum.

         A. Rule 41(a)(2)

         Rule 41 governs voluntary dismissals in federal court. As a general rule, "an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper." Fed.R.Civ.P. 41(a)(2). A court order is not needed, however, if a plaintiff files "a notice of a dismissal before the opposing party serves either an answer or a motion for summary judgment, " or "a stipulation of dismissal signed by all parties who have appeared." Fed.R.Civ.P. 41(a)(1)(A). Relying on Rule 41(a)(2), Defendants contend that Lewis cannot withdraw her motion to intervene without a court order, and that the Court may require her to pay Defendants' reasonable attorneys' fees as a condition of the voluntary dismissal.

         Defendants' reliance on Rule 41(a)(2) is misguided. The rule applies only to the voluntary dismissal of actions, and Lewis has not dismissed an action. Nor could she- Lewis never was a party to this action because the Court did not rule on her motion to intervene before she withdrew the request. Defendants' reliance on Rule 41(a)(2) would be appropriate had the Court granted Lewis' request to intervene, Lewis filed her complaint-in-intervention, Defendants either answered or moved for summary judgment on the complaint-in-intervention, and Lewis thereafter sought to voluntarily dismiss her intervener complaint. These hypothetical circumstances, however, are a far cry from what has occurred here.

         Lewis never was a party to this action. She merely filed, then withdrew, a motion to intervene. Defendants cite no authority applying Rule 41(a)(2) to these circumstances, nor has the Court found any. To the contrary, parties typically are able to withdraw their own motions at their own discretion. If a motion is withdrawn in bad faith or prejudices the non-movant, other provisions or doctrines might entitle the non-movant to a fee award, but Defendants fail to show that Rule 41(a)(2) is a source of any such entitlement.

         B. ...


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