Kriegman v. Ponton et al, No. 2:2022cv00307 - Document 54 (W.D. Wash. 2022)
Court Description: ORDER granting Plaintiff's 48 Motion to Dismiss Garnishment Proceeding, Vacate Order Freezing Accounts, and Withdraw Certification to State Supreme Court. Plaintiff's Motion to dismiss the garnishment proceeding with prejudice under Rule 41(a)(2), vacate the Order Freezing Accounts, and withdraw the Order Certifying Issues to the Washington Supreme Court, Dkt. # 48 , is GRANTED. The Clerk is DIRECTED to submit to the Washington Supreme Court certified copies of this Order. The Clerk shall notify the parties as soon as possible, but no more than three days, after the above-described record is filed with the Washington Supreme Court. All pending motions are terminated. This matter is now CLOSED. Signed by Judge Ricardo S. Martinez. (SB)
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Kriegman v. Ponton et al Doc. 54 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 10 11 12 BRUCE KRIEGMAN, solely in his capacity as court appointed Chapter 11 trustee for LLS America, LLC, ORDER GRANTING MOTION TO DISMISS GARNISHMENT PROCEEDING, VACATE ORDER FREEZING ACCOUNTS, AND WITHDRAW CERTIFICATION TO STATE SUPREME COURT 13 Plaintiff, 14 15 16 Case No. C22-307RSM v. RONALD PONTON, JR. and TOMIKA PONTON, 17 18 Defendants. 19 20 21 I. INTRODUCTION This matter comes before the Court on Plaintiff Bruce Kriegman (“Trustee”)’s Motion to 22 23 (1) dismiss with prejudice the garnishment proceeding under Rule 41(a)(2), (2) vacate this Court’s 24 Order Freezing Accounts, and (3) withdraw the Order Certifying Issues to the Washington 25 Supreme Court. Dkt. #48. Defendants Ronald Ponton and Tomika Ponton have filed a brief 26 responding to the Motion. Dkt. #51. The Court has reviewed and finds that oral argument is not 27 28 ORDER GRANTING MOTION TO DISMISS- 1 Dockets.Justia.com 1 necessary. For the reasons stated below, the Court GRANTS Plaintiff’s Motion, vacates the Order 2 Freezing Accounts, and withdraws its Order Certifying Issues to the Washington Supreme Court. 3 4 II. BACKGROUND In 2015, a judgment was entered against Defendants—who reside in Alabama—in the 5 6 Eastern District of Washington for $117,411. See Dkt. #13-7. Plaintiff registered the judgment in 7 King County, Washington in 2022. See Dkt. #1-1. Plaintiff Bruce Kriegman, Chapter 11 trustee, 8 filed an application for a writ of garnishment with the Superior Court in King County naming JP 9 Morgan Chase Bank (“Chase”) as the garnishee. See Dkt. #1-2. Defendants removed the action 10 to this Court. See Dkt. #1. On March 25, 2022, at the request of the parties, the Court issued an 11 12 Order Freezing Accounts of Defendants. See Dkt. #17. Defendants challenged jurisdiction 13 arguing that since they are Alabama residents and the situs of their bank deposits is Alabama, the 14 bank deposits can not be garnished from the state of Washington. See Dkt. #18. The Court denied 15 Defendants’ motion to quash writ, finding the exercise of in rem jurisdiction did not violate due 16 process. See Dkt. #28 (reasoning that “the garnishee undeniably has contacts with this forum and 17 18 holds accounts with Defendants’ funds”). Subsequently, at the request of Defendants, the Court 19 certified an issue to the Washington Supreme Court to determine whether the writ of garnishment 20 attaches to Defendants’ bank account in Washington. See Dkt. #44. 21 III. DISCUSSION 22 23 A. Legal Standard under Rule 41(a)(2) 24 Federal Rule of Civil Procedure 41(a) governs the voluntary dismissal of an action in federal 25 court. Rule 41(a)(2) provides that unless a plaintiff files a notice of dismissal before the opposing 26 party serves either an answer or a motion for summary judgment, or the parties stipulate to the 27 dismissal of the action, “[a]n action may be dismissed at the plaintiff's request only by court order, 28 ORDER GRANTING MOTION TO DISMISS- 2 1 on terms that the court considers proper.” Fed. R. Civ. P. 41(a)(2). A motion for voluntary 2 dismissal pursuant to Rule 41(a)(2) should be granted unless a defendant can show that it will 3 suffer some plain legal prejudice as a result of the dismissal. Smith v. Lenches, 263 F.3d 972, 975 4 (9th Cir. 2001); Stevedoring Services of America v. Armilla Intern. B.V., 889 F.2d 919, 921 (9th 5 6 Cir. 1989) (stating that the purpose of Rule 41(a)(2) is “to permit a plaintiff to dismiss an action 7 without prejudice so long as the defendant will not be prejudiced ... or unfairly affected by 8 dismissal”). Legal prejudice “means prejudice to some legal interest, some legal claim, some legal 9 argument.” Smith, 263 F.3d at 976 (quoting Westlands Water Dist. v. United States, 100 F.3d 94, 10 96 (9th Cir.1996)). A dismissal does not legally prejudice a defendant because it leaves a dispute 11 12 unresolved or because of the uncertainty caused by the threat of future litigation. Id. Nor is a 13 defendant prejudiced by having to defend in state court or because of the expense incurred in 14 defending against a lawsuit. Id.; Westlands, 100 F.3d at 97. However, the decision to grant or 15 deny a motion pursuant to Rule 41(a)(2) is within the sound discretion of the trial court and may 16 be reviewed only for abuse of that discretion. Sams v. Beech Aircraft Corp., 625 F.2d 273, 277 17 18 (9th Cir. 1980). 19 B. Dismissal with Prejudice 20 Plaintiff seeks to dismiss its garnishment against Defendants with prejudice, asserting that 21 continuing to pursue the funds is not a prudent business decision. See Dkt. #48 at 4. Defendants 22 23 oppose the motion, stating that a motion to dismiss with prejudice is similar to one without 24 prejudice when a foreign judgment is involved. See Dkt. #51 at 1. They opine that Plaintiff is 25 forum shopping and dismissal would allow Plaintiff to start a new case in another Washington 26 county at a later date. Id. However, they cite no legal authority for their assertions. 27 28 ORDER GRANTING MOTION TO DISMISS- 3 1 As stated by Plaintiff, “[f]ollowing the dismissal of this garnishment case with prejudice, 2 it would be legally impermissible for the Trustee to initiate an identical garnishment proceeding 3 in any other county.” See Dkt. #52 at 4 (citing Mann v. HEW, Health Care Financing Agency, 4 769 F.2d 590,593 (9th Cir.1985), which held “[t]here can be little doubt that a dismissal with 5 6 prejudice bars any further action between the parties on the issues subtended by the case”). 7 Additionally, Plaintiff certifies that he is not forum shopping and “will not apply for another writ 8 of garnishment … in King County Superior Court or in the superior court for any other county in 9 the state of Washington.” See Dkt. #53 at 2. Given the legal authorities cited by the parties and 10 Plaintiff’s certification, the Court agrees that dismissal with prejudice would constitute a final 11 12 judgment in this case. 13 Next, Defendants argue that they will suffer legal prejudice if the Washington Supreme 14 Court is not permitted to decide the certified question because they expect to prevail. See Dkt. 15 #51 at 4. Additionally, Defendants opine a favorable decision by the Washington Supreme Court 16 would allow them to bring claims against the Trustee’s attorneys for filing the writ in Washington. 17 18 Id. at 4. Plaintiff responds that Defendants suffer no prejudice upon dismissal as their frozen funds 19 would be released to them. See Dkt. #52 at 4. Furthermore, they state that dismissal does not 20 preclude filing of claims against Trustee’s attorneys. Id. at 5. 21 First, absent a decision by the Washington Supreme Court, neither party is deemed to have 22 23 prevailed. Second, the Court agrees that upon dismissal, Defendants will have their funds 24 released. Finally, Defendants do not cite any legal authority for their assertions related to claims 25 against Plaintiff’s attorneys. Thus, Defendants have not met their burden to show they would 26 suffer prejudice as a result of dismissal. 27 28 ORDER GRANTING MOTION TO DISMISS- 4 1 Defendants also argue that Trustee’s explanation for his motion for voluntary dismissal is 2 inadequate, particularly given the outstanding questions certified to the Washington Supreme 3 Court. See Dkt. #51 at 5. The parties both assert detailed factual background related to their prior 4 attempts to mediate this case, and expenses they would incur if they were to continue to litigate. 5 6 Defendants cite a number of cases, where courts have denied motions for voluntary dismissal, to 7 support their argument. However, as acknowledged by Defendants themselves, none of these 8 cases are exactly on point here. Id. at 6. Additionally, Plaintiff points out that all of those cases 9 were dismissed without prejudice, and many of which are unreported. See Dkt. #52 at 7-10. 10 Nonetheless, granting dismissal is within this Court’s discretion. The Court finds Plaintiff’s 11 12 13 reasons adequate and finds dismissal appropriate, especially given Plaintiff’s certification that he will not attempt to litigate the issue in another Washington court. 14 C. Recovery of Attorneys’ Fees 15 Plaintiff states that Defendants may not recover attorneys’ fees because Trustee is 16 dismissing the action with prejudice, and this was a business decision notwithstanding sound legal 17 18 arguments related. See Dkt. #48 at 4 (citing Aerotech, Inc. v. Estes, 110 F.3d 1523, 1528-29 (10th 19 Cir.1997) and Stevedoring Services of America, Ltd v. Armilla 4 International, B. V., 889 F.2d 20 919, 921 (9th Cir. 1989)). Defendants argue that pursuant to RCW 6.27.230, they are entitled to 21 be awarded attorneys’ fees as they would be the prevailing parties upon dismissal. See Dkt. #51 22 23 at 8-9 (citing Park Place Motors, Ltd. v Elite Cornerstone Constr., LLC, 18 Wn. App 2d 748, 24 757-58, 493 P3d 136, 142 (2021)). Plaintiff responds that these arguments are premature, and that 25 they will respond upon entry of an order of dismissal, and any subsequent claims brought by 26 Defendants for attorneys’ fees. The Court has the discretion to condition dismissal upon payment 27 of costs and attorney's fees. Westlands, 100 F.3d at 97. The Court is not persuaded by Defendants’ 28 ORDER GRANTING MOTION TO DISMISS- 5 1 arguments and does not currently see a basis for awarding attorneys’ fees. However, the Court 2 will permit Defendants to submit a subsequent claim to seek attorneys’ fees in a separate motion 3 to be filed no later than 30 days after entry of this order. 4 D. CONCLUSION 5 6 7 Having reviewed the relevant pleadings and the remainder of the record, the Court hereby finds and ORDERS that: 8 1. Plaintiff’s Motion to dismiss the garnishment proceeding with prejudice under Rule 9 41(a)(2), vacate the Order Freezing Accounts, and withdraw the Order Certifying 10 Issues to the Washington Supreme Court, Dkt. #48, is GRANTED. 11 12 2. The Clerk is DIRECTED to submit to the Washington Supreme Court certified copies 13 of this Order. The Clerk shall notify the parties as soon as possible, but no more than 14 three days, after the above described record is filed with the Washington Supreme 15 Court. 16 3. All pending motions are terminated. This matter is now CLOSED. 17 18 19 DATED this 29th day of November, 2022. 20 21 A 22 23 RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE 24 25 26 27 28 ORDER GRANTING MOTION TO DISMISS- 6
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