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Holland v. MGA, Inc.

United States District Court, M.D. Alabama, Southern Division

December 15, 2017

BARBARA HOLLAND, d/b/a CHOICE VIDEO, Plaintiff,
v.
MGA, INC., and all holding companies and affiliated entities doing business as MOVIE GALLERY, et al., Defendants.

          ORDER

          W. KEITH WATKINS, CHIEF UNITED STATES DISTRICT JUDGE.

         Before the court are the following motions: Marla Y. Newman's pro se motions to vacate the judgment against Malcolm Rance Newman[1] (Doc. # 112; Doc. # 114); Defendant LFP, Inc.'s motion to revive the judgment (Doc. # 115); and Barbara Holland's motion for relief from judgment (Doc. # 117). On December 13, 2017, the court held oral argument on the motions. Present at oral argument were counsel for Defendant LFP, counsel for Barbara Holland, and Barbara Holland. Marla Y. Newman[2] and Malcolm Rance Newman[3] were not present.

         Malcolm Rance Newman filed this case on behalf of Barbara Holland d/b/a Choice Video. Based on the clear, uncontradicted evidence and an independent review of the record, the court finds that Malcolm Rance Newman was never authorized to represent Barbara Holland or any entity known as Choice Video. At the time the lawsuit was filed, there was no business entity known as “Barbara Holland d/b/a Choice Video.”[4] Malcolm Rance Newman never met or spoke with Barbara Holland. Barbara Holland had no or limited dealings with the Defendants, and she had no motive or desire to sue any of them. Until Barbara Holland received Defendant LFP, Inc.'s motion to revive the judgment in May 2017, she was unaware of the existence of this case, the filing of the frivolous appeal, and the judgment awarding attorney's fees and costs for the pursuit of the frivolous appeal.

         Barbara Holland bore no personal responsibility for the frivolous appeal. The judgment against Barbara Holland is the product of Malcom Rance Newman's fraud on the court.[5] Moreover, because Barbara Holland was never a party to this case and did not appear in the case prior to entry of the judgment, the judgment is void as to her. Therefore, Barbara Holland is entitled to relief from the judgment awarding attorneys' fees and costs for that appeal.[6] See Fed. R. Civ. P. 60(b)(6) (“On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding” on grounds that the judgment is void or for “any . . . reason that justifies relief” not listed in Rule 60(b)(1)-(5)); Fed.R.Civ.P. 60(d)(3) (providing that a court may “set aside a judgment for fraud on the court”); Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991) (noting the court's “inherent power . . . to vacate its own judgment upon proof that a fraud has been perpetrated upon the court”).[7] Cf. Ala. Code § 34-3-22 (“If it is alleged by a party for whom an attorney appears that he or she does so without authority, the court may at any stage of the proceedings, upon proof of the allegation, relieve the party for whom the attorney has assumed to appear from the consequences of his or her acts.”).

         Based on the clear, undisputed evidence, the court finds that Malcolm Rance Newman acted in bad faith and perpetrated a fraud on the court when he filed this case in the name of a person who was not his client. He also violated Alabama state law, the Alabama Rules of Professional conduct, and the local rules of this court.[8]Therefore, the court finds it appropriate to sanction Malcolm Rance Newman by requiring[9] him to pay Defendants' reasonable attorney's fees and costs incurred in relation to this case, and by requiring him to pay Barbara Holland's reasonable attorney's fees and costs incurred in conjunction with her motion for relief from judgment. This sanction is designed as a reasonable and proportional remedy for the damage caused by Malcolm Rance Newman's bad faith conduct. Chambers, 501 U.S. 32, 43, 45-46 (1991) (holding that “a federal court has the [inherent] power to control admission to its bar and to discipline attorneys who appear before it, ” and that, “if a court finds that fraud has been practiced upon it, or that the very temple of justice has been defiled, it may assess attorney's fees against the responsible party” or attorney (citations and internal quotation marks omitted)).

         A lawyer is entitled to notice and an opportunity to be heard before sanctions are imposed. Chambers, 501 U.S. at 50 (1991) (“[A] court . . . must comply with the mandates of due process, both in determining that the requisite bad faith exists and in assessing fees.”). However, in this case, a show cause order would be futile. Malcolm Rance Newman's whereabouts are unknown. The court's previous service attempts were unsuccessful. Malcolm Rance Newman cannot be found at any address on file with this court or with the Alabama State Bar Association. The court's independent effort to locate his correct address through public records has been unfruitful. Barbara Holland and Defendant LFP, Inc., have also attempted, unsuccessfully, to locate him.

         Therefore, the court will allow Malcolm Rance Newman an opportunity to seek relief from the imposition of sanctions under the following conditions: he may appear to oppose the imposition of sanctions no later than 14 days after being served a motion for attorney's fees. If Defendants or Barbara Holland are unable, with reasonable diligence, to timely serve Malcolm Rance Newman with their motions for attorney's fees, or if Malcolm Rance Newman does not file a timely response to a motion for attorney's fees, then he will be deemed to have waived his right to contest the imposition and amount of sanctions.

         Accordingly, and for the reasons stated at oral argument, it is ORDERED as follows:

         1. Marla Y. Newman's motions to vacate the judgment against Malcolm Rance Newman (Doc. # 112 and Doc. # 114) are DENIED.

         2. Defendant LFP, Inc.'s motion to revive the judgment (Doc. # 115) is DENIED IN PART as to the judgment against Barbara Holland. As to the judgment against Malcolm Rance Newman, the court will reserve ruling on the motion until January 5, 2018, to allow Defendant LFP, Inc., an opportunity to perfect service in accordance with the applicable rules of procedure.

         3. On or before January 5, 2018, Defendant LFP, Inc., shall file either (1) proof of proper service on Malcolm Rance Newman of the motion to revive the judgment (Doc. # 115), or (2) a notice briefly describing its unsuccessful service attempts and stating whether it wishes to proceed with the motion to revive judgment as to Malcolm Rance Newman.

         4. On or before January 5, 2018, Barbara Holland or any Defendant may file a well-supported motion for all attorneys' fees and costs incurred as a result of this case, except for the costs and attorneys' fees incurred in litigating appeals. Motions for attorney's fees should be supported with evidentiary submissions establishing the reasonableness of the award requested.[10] The movants shall file written notice with the court if they are unable, with reasonable effort, to serve Malcolm R. Newman with their motions.

         5. Malcolm Rance Newman may respond to any motion for attorney's fees not later than 14 days after being served with that motion.

         6. On or before December 22, 2017, Barbara Holland shall (1) file and serve a proposed order granting her motion for relief from judgment; and (2) submit a copy of the proposed order, in Microsoft Word[11] or Wordperfect ...


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