Blanco River, L.L.C. v. Christopher Green

457 F. App'x 431
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 6, 2012
Docket10-20080
StatusUnpublished
Cited by9 cases

This text of 457 F. App'x 431 (Blanco River, L.L.C. v. Christopher Green) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blanco River, L.L.C. v. Christopher Green, 457 F. App'x 431 (5th Cir. 2012).

Opinion

PER CURIAM: *

Blanco River L.L.C. (Blanco River), obtained a summary judgment against Christopher Green that awarded damages of approximately $400,000 and attorney’s fees. In post-judgment proceedings, the district court issued three written rulings that Green challenges on appeal and two of which his counsel, Daylen Gallman, also challenges. The district court entered “Supplemental Findings and Declaration,” issued an order imposing sanctions against Green and Gallman, jointly and severally, and entered an injunction against Green and Gallman enjoining them from interfering with the collection of the judgment against Green. We affirm in part but vacate the injunction and remand for further proceedings consistent with this opinion.

I

Blanco River, L.L.C., a real estate investment vehicle, is a limited liability Arizona corporation that sought to purchase and develop land bordering the Blanco River in Texas. Green was the manager of this venture, which failed. Blanco River sued Green, alleging breach of fiduciary duty, conversion, and breach of contract. Green removed the suit to federal district court. Among other allegations, Blanco River asserted that Green had expended the venture’s capital funds for his personal pursuits, including expenditures at “high-end strip clubs,” for limousine services, at designer retail stores, for hotel rooms, and for multiple hotel rooms on a single day. Improper cash withdrawals were also alleged. Green denied the allegations and as an affirmative defense, contended that John Aird, a significant shareholder in Blanco River who animated the suit against Green, was not authorized to bring suit on behalf of Blanco River.

Two months after the case was removed to federal district court, counsel for Green moved for leave to withdraw. These attorneys had their offices in Illinois, and the district court had denied them permission to continue to appear telephonieally. In the motion to withdraw, counsel also stated that Green “has been unable to pay the legal fees incurred to date and has not indicated an ability to do so going forward.” The district court granted the motion to withdraw on December 8, 2008, and gave Green until December 29 to obtain new counsel. Grasso, one of the withdrawing counsel, provided the court with Green’s contact information, including Green’s email address. Green’s email address was entered into the court’s electronic filing database and electronic notification system.

On December 16, after Green’s counsel withdrew and before new counsel entered an appearance, Blanco River moved for summary judgment on its breach of fiduciary duty claim. On December 29 Green faxed and emailed a request for an extension of time until January 9 to obtain new counsel. He used the email address provided by former counsel. The court grant *435 ed the extension. On January 9, 2009, Green emailed the court that he had retained The Beckham Group as counsel. The next business day, Monday January 12, the district court’s case manager emailed Green at 9:10 a.m. that his attorneys had until 3:00 p.m. that day to enter an appearance. Green replied that day, after the 3:00 deadline, saying that he had been traveling and would contact his attorneys in the morning.

The next day, January 13, the district court granted summary judgment in favor of Blanco River and against Green, providing: “On its motion for summary judgment, Blanco River, LLC, recovers $396,575.00 in damages and $7,250.00 in attorney’s fees from Christopher Green.”

Green filed an appeal from this summary judgment, but he subsequently dismissed that appeal pursuant to Fed. R.App. P. 42(b). Blanco River initiated post-judgment discovery, to which Green responded through his new attorney Gallman. Green’s response to each interrogatory was a variant of the assertion that Aird lacked any authority to take legal action on behalf of Blanco River.

Green, represented by Gallman, also filed an action in state court in Hays County, Texas seeking a declaratory judgment that Aird did not have the authority to seek to collect the judgment against Green on behalf of Blanco River. Green also alleged in his state court suit that Aird had improperly been reimbursed $150,000 of his investment in Blanco River, and Green sought a return of that amount to the limited liability corporation.

Blanco River then took further action in federal district court, filing a motion to compel post-judgment discovery and for sanctions. Blanco River attached to its motion a November 2009 letter from Gall-man to an investor in Blanco River asking for a capital call, in which Gallman stated that Blanco River had secured its judgment against Green in federal district court without allowing Green to respond and that “Aird did not ‘prove’ any cause of action against Mr. Green” in that suit. The letter also attached Green’s responses to the post-judgment interrogatories, which contained Green’s assertions that Aird had no authority to act for Blanco River.

At a hearing on these matters, the district court suggested that Blanco River file a motion to enjoin Green’s Hays County action as well as a purported attack on the judgment against Green in an Illinois state court proceeding to register that judgment. Blanco River then filed such a motion. Two days prior to the hearing on the injunction and other pending matters, the Hays County suit was “non-suited with prejudice” by Green through Gallman as his counsel.

In the post-judgment proceedings, the federal district court ordered Gallman to appear personally, despite his protestations that he had not formally appeared in the case. Gallman appeared at the hearings.

The district court ultimately entered three rulings, from which appeal is now taken. The court issued “Supplemental Findings and Declaration,” that included a finding that Green had no “valid authority for Blanco River as manager or otherwise” after July 2006. The court entered a separate order sanctioning Green and Gallman $4,000, jointly and severally, to cover Blan-co River’s attorneys’ fees in seeking to enforce the judgment obtained against Green. The district court’s written order stated that Green and Gallman had “filed a collateral attack” in state court on the district court’s judgment and that the state court suit had “no basis in fact or law” and it “had no legitimate purpose.” Green and *436 Gallman were also enjoined in another order from “interfering in the collection of this court’s judgment,” citing the Hays County suit, the proceedings in Illinois, and Gallman’s failure to investigate Green’s “fals[e]” accusations that the district court had denied due process in granting summary judgment against Green that, even if true, would “not support a collateral attack” on the judgment.

Green appeals all three rulings of or actions by the district court, and Gallman appeals the sanctions order and injunction.

II

Green argues on appeal that the original summary judgment is void, contending that he was deprived of due process in that proceeding. He contends that because the summary judgment was void, the district court had no authority to “modify” the final summary judgment by entering supplemental findings almost a year after the summary judgment issued.

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457 F. App'x 431, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blanco-river-llc-v-christopher-green-ca5-2012.