Garrison v. Ringgold

• Court: District Court, S.D. California
• Decided: January 21, 2020
• Docket: 3:19-cv-00244
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 TOMMY GARRISON, an individual, and Case No.: 19cv244-GPC(RBB) CHRISTINE GARRISON, an individual , 12 ORDER SUA SPONTE VACATING Plaintiffs, 13 DEFAULT JUDGMENT AGAINST v. DEFENDANTS ROSEGOLD 14 INVESTMENTS, LLP AND MASTER REGINALD BUDDY RINGGOLD, III 15 INVESTMENT GROUP, INC. aka Rasool Abdul Rahim El, an 16 individual, ROSEGOLD INVESTMENTS, LLP, a Delaware 17 Partnership, and MASTER 18 INVESTMENT GROUP, INC., a California Corporation, 19 Defendants. 20

21 On September 25, 2019, the Court granted Plaintiffs’ unopposed motion for default 22 judgment against Defendants Rosegold Investments, LLP (“Rosegold”) and Master 23 Investment Group, Inc. (“MIG”) as to liability. (Dkt. No. 36.) Upon the Court’s review, 24 it sua sponte vacates the default judgment entered against Rosegold and MIG. See Fed. 25 R. Civ. P. 55(c) (court “may set aside a final default judgment under Rule 60(b)”; Fed. R. 26 Civ. P. 60(b). 27 / / / 28 1 Background 2 Plaintiff Tommy Garrison, who is over 65 years old, and his wife, Plaintiff 3 Christine Garrison (collectively “Plaintiffs”) filed the operative first amended complaint 4 for securities violations and financial elder abuse against Defendants Reginald Buddy 5 Ringgold, III aka Rasool Abdul Rahim El, (“Ringgold”), Rosegold Investments LLP 6 (“Rosegold”), and Master Investment Group, Inc. (“MIG”) (collectively “Defendants”). 7 (Dkt. No. 17, FAC.) Plaintiffs allege securities violations pursuant to § 10(b) of the 8 Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Securities Exchange 9 Commission Rule 10b-5, 17 C.F.R. § 240.10b-5; violations of California Corporation 10 Code sections 25000 et seq. for unlawful business conduct as an “investment advisor” 11 and “broker”; and financial elder abuse in violation of California Welfare & Institution 12 Code sections 15610 et seq. by Tommy Garrison. (Id. ¶¶ 90-113.) 13 Ringgold, proceeding pro se, filed an answer. (Dkt. No. 18.) But default was 14 entered on the FAC against Rosegold and MIG on August 30, 2019. (Dkt. No. 29.) 15 Plaintiffs subsequently filed their motion for default judgment against Rosegold and 16 MIG. (Dkt. No. 30.) Rosegold and MIG did not file an opposition. On September 25, 17 2019, the Court granted the unopposed default judgment against Rosegold and MIG as to 18 liability.1 (Dkt. No. 36.) 19 Discussion 20 In the Ninth Circuit, a court may sua sponte vacate a final judgment or order for 21 “mistake, inadvertence, surprise, or excusable neglect under Federal Rule of Civil 22 Procedure (“Rule”) 60(b)(1). See Kingvision Pay-Per-View Ltd. v. Lake Alice Bar, 168 23 F.3d 347, 351-52 (9th Cir. 1999) (following Fourth and Fifth Circuits and holding that 24 Rule 60(b) allows for a Court’s sua sponte review of a judgment). 25 26 27 1 The Court denied Plaintiffs’ request for damages because they failed to prove up their damages. (Dkt. No. 36 at 8-9.) On October 25, 2019, Plaintiffs submitted supplemental documents to support their 28 1 Under Federal Rule of Civil Procedure 54(b), the Court must consider whether it is 2 proper to enter judgment against some but not all Defendants. See Frow v. De La Vega, 3 82 U.S. 552, 554 (1872). A default judgment on fewer than all defendants must comply 4 with Federal Rule of Civil Procedure 54(b), which provides in relevant part: “the court 5 may direct entry of a final judgment as to one or more, but fewer than all, claims or 6 parties only if the court expressly determines that there is no just reason for delay.” Fed. 7 R. Civ. P. 54(b). In Frow, the United States Supreme Court held that where one of 8 several defendants who is alleged to be jointly liable defaults, judgment should not be 9 entered against the defaulting defendant until the matter has been adjudicated in regard to 10 all the defendants. Frow, 82 U.S. at 554. Later, the Ninth Circuit, following the 11 Eleventh Circuit, extended the rule “to apply to defendants who are similarly situated, 12 even if not jointly and severally liable.” In re First T.D. & Inv., Inc., 253 F.3d 520, 532 13 (9th Cir. 2001). “Frow’s applicability turns not on labels such as ‘joint liability’ or ‘joint 14 and several liability,’ but rather on the key question of whether under the theory of the 15 complaint, liability of all the defendants must be uniform.” Shanghai Automation 16 Instrument Co., Ltd. v. Kuei, 194 F. Supp. 2d 995, 1008 (N.D. Cal. 2001). The purpose 17 of Frow was to avoid inconsistent adjudications as to liability. In re Uranium Antitrust 18 Litig., 617 F.2d 1248, 1257 (7th Cir. 1980). 19 Here, Defendant Ringgold, proceeding pro se, is alleged to be the founder and 20 managing partner of Rosegold and MIG. (Dkt. No. 17, FAC ¶¶ 21. 22.) Moreover, the 21 liability of all the defendants rests on the same course of conduct, and legal issues. 22 Therefore, all Defendants are similarly situated and default judgment should not have 23 been entered until adjudication of all issues. See In re First T.D. & Inv., Inc., 253 F.3d at 24 532. 25 Conclusion 26 Accordingly, the Court sua sponte vacates the order granting default judgment as 27 to Defendants Rosegold Investments, LLP and Master Investment Group, Inc. and denies 28 1 || without prejudice Plaintiffs’ motion for default judgment until final adjudication of the 2 || case. 3 IT IS SO ORDERED. 4 ||Dated: January 21, 2020 5 Hon. athe Cae 6 United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28