Adam T Carralejo v USA Legal Group Inc et al

Case Number

22CV04588

Case Type

Hearing Date / Time

Wed, 03/27/2024 - 10:00

Nature of Proceedings

1) Three Opposed Motions of Attorney John R. Rydell II for Defendant Richard Wade, Unlimited Solutions Today, LLC, and USA Legal Group, Inc., to be relieved as counsel; and, 2) Plaintiff’s motion to re-refer the matter to CMADRESS and for sanctions.

Tentative Ruling

Plaintiff Adam Carralejo: James C. Huber; Steven M. Benson

Defendants Unlimited Solutions, USA Legal, and Richard Wade: John Rydell II

Richard Alex Wade

USA Legal Group

Unlimited Solutions Today, LLC

Brian David Suder and The Suder Company LLC; reportedly previously dismissed.

           

Issues

(1) Three opposed motions of attorney John R. Rydell II for Defendant Richard Wade, Unlimited Solutions Today, LLC, and USA Legal Group, Inc., to be relieved as counsel,

(2) Plaintiff’s motion to re-refer the matter to CMADRESS and for sanctions.

RULINGS 

1. The proposed orders on the motions to be relieved as counsel do not check box 5a, which is required; an order granting the motion to be relieved is not effective until proof of service on the client is filed with the Court.

2. When item #1 is accomplished the Motion to be relieved as counsel for Richard Wade, Unlimited Solutions Today, LLC, and USA Legal Group, Inc., is GRANTED.

3. Plaintiff’s motion to be referred to CMADRESS is premature as there is no counsel for these Defendants on board and the Court’s experience is that an early ADR works but only if both sides have a lawyer.

4. Plaintiff’s request for monetary sanctions on Defendants for Defendants in the amount of $1,500.00, award Plaintiff $10,622.50 as reimbursement for his attorneys’ fees and costs incurred in preparing for and appearing at CMADRESS on Tuesday, February 6, 2024, and for making the instant motion, and further order Defendants’ attendance at a new CMADRESS conference is GRANTED in part as follows: John R. Rydell II shall pay sanctions of $6,000 on April 1, 2024.

5. Plaintiff’s requests that this Court issue an order requiring Counsel for Defendants to submit to this Court a declaration stating with particularity the reasons for why Counsel for Defendants failed to appear for CMADRESS, and that if Defendants fail to appear for CMADRESS a second time, this Court should strike Defendants’ joint answer and re-enter their default is DENIED because it has no real purpose.

6. Defendants’ joint answer that has been filed is stricken and the Court re-enters their default.

7. The Court re-enters judgment for Plaintiff of $1,280,708.00 plus the legal rate of interest since April 22, 2023, and the Judgment will incur interest at the legal rate hereafter until paid.

8. There are dates already set that are now vacated; to wit: CMC 5/29/2024; MSC 6/28/2024; TCC 7/31/2024.

9. Mr. John R. Rydell II to give notice.

Analysis

John R. Rydell II, via declaration, testifies: “There has been a breakdown of the attorney-client relationship which makes it impossible to adequately represent the client.”

Requests that he be relieved as the lawyer for the Defendants.

Opposition by the Plaintiff

Summarized; Contends this case illustrates how misdirection and dilatory tactics can overcomplicate what would have otherwise been a relatively simple matter.

This action was filed on November 18, 2022.

After Defendants filed neither a response, nor a notice of appearance, Plaintiff filed a request for entry of default against Defendants. This Court entered Defendants’ default on January 10, 2023 (the “First Default”).

On April 22, 2023, this Court entered an amended default judgment against Defendants in the amount of $1,280,708.00.

On November 30, 2023, Plaintiff and Defendants stipulated to set aside the default judgment, and the Court adopted the Stipulation as the order of the Court on December 4, 2023.

In the Stipulation, the Parties agreed that Defendants would file an answer to Plaintiff’s complaint.

On December 13, 2023, the Court ordered the Parties to an early settlement conference via this Court’s CMADRESS program. The date on which the Parties were set to appear for CMADRESS was February 6, 2024.

On January 8, 2024, Plaintiff’s counsel contacted Counsel for Defendants, specifically John R. Rydell II, with an inquiry concerning the status of the yet-to-be filed answer. This inquiry was 35 days following entry of this Court’s order setting aside the First Default.

Counsel for Defendants did not respond.

Plaintiff’s counsel again followed up with Counsel for Defendants on or about January 10, 2024, with a second inquiry concerning the status of the yet-to-be filed answer. Again, Plaintiff’s counsel received no response.

Plaintiff’s counsel indicated that by Plaintiff's counsel ’s estimation, and by utilizing December 4, 2023, (the date on which the First Default was set aside) as an operative date relating to the answer, Plaintiff’s counsel would be required to file the Second Default on January 16, 2024, if no answer was filed. This was 37 days following the entry of this Court’s order setting aside the First Default.

Counsel for Defendants were engaged and otherwise involved in matters relative to this case on and around January 11, 2024, specifically regarding the CMADRESS date, but provided no response to Plaintiff regarding the status of the answer.

On January 16, 2024, having never received an answer from Defendants, Plaintiff requested another entry of default against Defendants. This Court entered default against Defendants on the same day (the “Second Default”).

On January 23, 2024, Defendants allegedly filed an answer to Plaintiff’s complaint. The purported answer consisted of a one sentence general denial, but since the answer was filed untimely, it was rejected by the Court.

Thereafter, Defendants moved ex parte on February 5, 2024, to request the Court to set aside the Second Default, which the Court granted. Counsel for Defendants’ primary basis for setting aside the Second Default was that Defendants could not participate in CMADRESS unless the Second Default was set aside.

Defendants failed to appear at the CMADRESS conference on February 6, 2024, despite Plaintiff’s counsel’s attendance.

Simply put, Counsel for Defendants’ assertion that the Second Default needed to be set aside in order for Defendants and Counsel for Defendants to attend CMADRESS was nothing more than a delaying tactic. Sanctions should be imposed to punish Defendants and to deter further behavior in these proceedings.

The Court’s Conclusions

The Court is very sympathetic to Plaintiff’s plea. Plaintiff is entitled to most of what is requested.