United States District Court, District of Columbia
AUSTIN INVESTMENT FUND, LLC, by and through BRUCE ELIEFF, Plaintiffs,
UNITED STATES OF AMERICA, Defendant.
COLLEEN KOLLAR-KOTELLY, District Judge.
Presently before the Court is Plaintiff's  Motion to Set Aside Order of Dismissal. Upon consideration of the pleadings, the relevant legal authorities, and the record as a whole, the Court GRANTS Plaintiff's Motion. Accordingly, this action is REINSTATED. The parties shall adhere to the schedule set out in the accompanying Memorandum Opinion.
On May 16, 2011, Austin Investment Fund, by and through individuals Bruce Elieff and Kathy Abrahamson, filed a  Petition for Review of Final Partnership Administrative Adjustments in the United States District Court for the Central District of California. On December 29, 2011, the case was transferred to this Court. See Minute Order (Dec. 30, 2011). Soon after the case was transferred to this Court, Abrahamson's then-counsel filed a  Motion to Withdraw. This motion listed Abrahamson's current mailing address as 26 Pelican Point Drive, Newport Beach, CA 92657 (the "Newport Beach address"). Rather than respond to this motion, Abrahamson then entered a  Notice of Appearance Pro Se in which she indicated that she should be served at the Newport Beach address. However, after Abrahamson failed to appear at the Initial Scheduling Conference on April 13, 2012, the Court dismissed her claims without prejudice. See Order, ECF No. .
With Abrahamson's claims dismissed, the case proceeded to discovery. On April 13, 2012, the Court issued a  Scheduling and Procedures Order setting out deadlines for discovery, which was set to conclude on March 29, 2013. However, quickly after discovery began, Elieff's counsel, Edward O.C. Ord, moved to stay proceedings in this case due to his diagnosis with oral cancer. See Bruce Elieff's Mot. to Extend All Court Set Deadlines for Six Months and to Put a Stay on All Proceeding in this Matter for that Same Period, ECF No. . The Court granted this stay, see Minute Order (July 9, 2012), which continued through August 2013 when Mr. Ord filed a  Motion to Withdraw as Legal Counsel. Mr. Ord represented that he was withdrawing both because of his health and because "[a] conflict has arisen which the plaintiff has not been able to resolve which precludes counsel from continuing as counsel in this case." On August 6, 2013, the Court granted Mr. Ord's motion, see Order, ECF No. . On the same day, the Court issued a Minute Order stating "Plaintiffs shall secure new counsel and have that attorney enter an appearance by no later than September 20, 2013. If Plaintiffs are unable to secure counsel by that date, they shall file a report on that date explaining their efforts." Minute Order (Aug. 6, 2013). Because Elieff purported to represent the interests of Austin Investment Fund, a corporation, the Court presumed that he could not proceed pro se in this matter. See Rowland v. Cal. Men's Colony, 506 U.S. 194, 201-02 (1993) ("It has been the law for the better part of two centuries... that a corporation may appear in the federal courts only through licensed counsel."). Having no address on file for Plaintiff other than the Newport Beach address, the Clerk of the Court mailed a copy of the Minute Order to this address.
On September 19, 2013, apparently having received the Court's Minute Order, Elieff filed a  Status Report which stated: "I request that I be given an additional 30 days to arrange for and have counsel appear." Elieff did not provide any additional information regarding his efforts to obtain counsel. He signed the Status Report and listed the following address below his signature: 2392 Morse Avenue, Irvine, CA 92614 (the "Irvine address"). Elieff, however, did not file a notice of change of address, as required by the Local Civil Rules. See LCvR 5.1(c)(1) ("Unless changed by notice filed with the Clerk, the address and telephone number of a party or an attorney noted on the first filing shall be conclusively taken as the last known address and telephone number of the party or attorney."). On September 23, 2013, the Court issued another Minute Order granting Elieff until October 21, 2013 to either arrange for counsel to appear, or file a detailed explanation of his efforts to obtain counsel. Minute Order (Sept. 23, 2013). The Clerk of the Court, unaware that the Irvine address was a possible address of record for Plaintiff, mailed this Minute Order to the Newport Beach address, which was listed on the docket as the address of record for Plaintiff.
Elieff never responded to the September 23, 2013 Minute Order, and after the October 21, 2013 deadline came and went, the Court issued another Minute Order on November 18, 2013 stating that if the report regarding efforts to obtain counsel was not received by December 6, 2013, "this Court [would] dismiss Plaintiffs' claims without prejudice for want of prosecution." See Minute Order (Nov. 18, 2013). Again, the Clerk of the Court mailed this Minute Order to the Newport Beach address.
Receiving no response to the November 18, 2013 Minute Order, the Court issued another  Order on December 20, 2013. The Order first stated that Abrahamson's claims, which had already been dismissed without prejudice (as discussed), were dismissed without prejudice for her failure to respond to the Court's orders. More importantly, the Order also recognized that the Court's previous Minute Orders regarding reports as to obtaining counsel and potential dismissal for want of prosecution had only been sent to the Newport Beach address, and thus may not have reached Elieff. On this point, the Order explained:
The Court also notes that copies of these Minute Orders were not sent to Plaintiff Bruce Elieff, who did not supply an address of record on the docket. The Court is aware that in the past, Plaintiff Elieff has responded to notices that the Clerk's Office has only mailed to Plaintiff Abrahamson, suggesting that he too has received notice of the Court's most recent orders. See Plaintiff Bruce Elieff's Status Report, ECF No. . However, out of an abundance of caution, because it is unclear whether Plaintiff Elieff has received actual notice of the Court's Minute Orders of September 23, 2013 and November 18, 2013, the Court will provide Plaintiff Elieff one final opportunity to respond to these orders. If, by January 15, 2014, new counsel does not enter an appearance in this action or Plaintiff Elieff does not file a report explaining in detail his efforts to obtain new counsel, the Court will dismiss this entire action without prejudice for want of prosecution. The Clerk of the Court shall mail of the copy of this Order to Plaintiff Elieff at the address indicated in previous filings with the Court. See Plaintiff Bruce Elieff's Status Report, ECF No. .
See Order, ECF No.  at 1-2. At the Court's instruction, the Clerk of the Court mailed a copy of this Order to the Irvine address.
The Court received no response from Elieff by the January 15, 2014 deadline and on January 23, 2014, it issued another  Order which dismissed this case without prejudice for want of prosecution. At the Court's instruction, the Clerk of the Court mailed a copy of this Order to the Irvine address.
On February 14, 2014, Mr. Ord entered an appearance as counsel for Elieff. See Notice of Appearance, ECF No. . The following day, Elieff, through counsel, filed the present  Motion to Set Aside Order of Dismissal. In this motion and the supporting documents, Elieff states that he did not receive the Court's December 20, 2013 Order, nor was he aware of its existence from any source in December 2013 or January 2014. Pl.'s Mem. at 2. As support for this statement, Elieff provides his own declaration as well as the declaration of his assistant, Angela Vinci. Pl.'s Mem., Ex. A (Decl. of Bruce Elieff) ¶ 3; Id., Ex. B (Decl. of Angela Vinci) ¶¶ 5, 10. Elieff states in his declaration that Abrahamson, his ex-wife, did not inform him of the December 20, 2013 Order. Id., Ex. A ¶ 8. Elieff does not address whether he received notice of the Court's earlier Minute Orders sent to Abrahamson's Newport Beach address. In addition, in response to the Court's prior requests that he explain his efforts to obtain counsel, Elieff states that he lacked the monetary resources to afford counsel due to his financial struggles since the 2008 bankruptcy of Lehman Brothers, which he states was the principal source of funding for his company. Id. at 4-5, Ex. A ¶ 6. Elieff further states that the continued dismissal of the case would result in liability of $10 million for him. Id. at 7-8.
The United States subsequently filed a Response in Opposition to Bruce Elieff's Motion to Set Aside Order of Dismissal. See Def.'s Opp'n. The United States argues that Plaintiff's motion should be denied because Elieff failed to communicate with the Court even before the December 20, 2013 Order. Id. at 3. The United States argues that Elieff's complete failure to follow up with the Court between September 2013 and February 2014 justifies this action's continued dismissal. Id. at 2. In addition, Defendant takes issue with Elieff's assessment of his potential liability if this case is dismissed, arguing that $10 million is a grossly exaggerated estimate. Id. ...