Netcare Life v. Rote

• Court: Superior Court of Guam
• Decided: January 9, 2013
• Docket: CV0789-10
• Status: Unknown

Opinion

4 IN THE SUPERIOR COURT OF GUAM 5

6 ) NETCARE LIFE and HEALTH INSURANCE COMPANY, INC., ) CASE NO. CV0789-10 7 ) 8 Plaintiff, ) ) 9 DECISION AND ORDER ON v. ) DEFENDANT'S MOTION TO 10 ) DISMISS AND PLAINTIFF'S CARMELITA ROTE and ROBERT ) MOTION FOR SUMMARY II KEOGH, personally and the LAW ) JUDGMENT 12 OFFICES OF ROBERT L. KEOGH, ) ) 13 Defendants. ) 14

15 INTRODUCTION 16 This matter came before the Honorable Alberto C. Lamorena III on July 30, 17 2012 on Defendant's Motion to Dismiss and Plaintiffs Motion for Summary 18 Judgment. Attorney Benjamin Hueber represented Plaintiff, Netcare Life and 19 Health Insurance Company, Inc. Attorney Robert Keogh represented the 20 Defendants Carmelita Rote, who was not present, himself pro se, and the Law

21 Offices of Robert Keogh. Following the hearing the Court took the matter under

22 advisement. Having considered the parties' arguments and the applicable law, this

23 Court now issues its Decision and Order. FACTUAL BACKGROUND 24 On May 18, 2010, Plaintiff filed its complaint seeking payment under a 25 subrogation agreement signed by Defendant Rote. Subsequently, Plaintiff filed 26 with the Court a motion to disqualifY Attorney Keogh as Defendant Rote's counsel 27 as well as a motion to amend the complaint. On June 27, 2011, this Court denied 28 Decision and Order Case No. CV0789-l 0

the motion to disqualifY Attorney Keogh as Defendant's counsel and granted leave 2 for Plaintiff to amend the complaint. The next day, on June 28, 2011, Plaintiff filed 3 its First Amended Complaint, now naming Attorney Keogh personally and the Law 4 Offices of Robert Keogh as Co-Defendants in addition to Defendant Rote. On July 5 18, 2011, Defendants filed their Answer to the First Amended Complaint. 6 The record shows no further activity occurred until May 21, 2012, when

7 Defendants filed the motion to dismiss for failure to prosecute. On July 9, 2012,

8 Plaintiff filed an opposition to the motion to dismiss and motion for summary

9 judgment. The Court then held a hearing on the motions on July 30, 2012. Based on the applicable law and the circumstances of this case, this Court finds that 10 denial of both Defendant's motion to dismiss and Plaintiffs motion for summary II judgment is appropriate. 12

13 DISCUSSION 14 Defendant brings a motion to dismiss for failure to prosecute and Plaintiff 15 brings a motion for summary judgment. Each motion is discussed below. 16

17 I. Motion for Dismissal for Failure to Prosecute

18 Defendants assert that Plaintiff has not taken any substantive action to move 19 this case forward since they filed their Answer to the first amended complaint and 20 therefore move for dismissal for failure to prosecute under Rule 41(b) of the Guam 21 Rules of Civil Procedure. Rule 41(b) allows for dismissal where a plaintiff fails to 22 prosecute an action or fails to comply with a court order or Guam's rules of 23 procedure. In determining whether to grant a motion to dismiss for failure to 24 prosecute under Rule 41(b), this Court applies the five-factor test adopted by the 25 Guam Supreme Court in Santos v. Carney, 1997 Guam 4. The Court must consider 26 "(1) the public's interest in expeditious resolution of litigation; (2) the court's need to 27 manage its docket; (3) the risk of prejudice to the defendants; (4) the public policy 28 favoring the disposition of cases on their merits; and (5) the availability of less drastic sanctions." Id. ,[ 5 (quoting In re Eisen 31 F.3d 1447, 1451 (9th Cir. 1994)).

-2- :!}, ,.. . Decision and Order Case No. CV0789-l 0

"Dismissal is appropriate if at least four factors favor dismissal or three factors 2 'strongly' support dismissaL Park v. Kawashima, 2010 Guam 10 ,110. 3 a. Expeditious Resolution of Litigation and the Court's Need to Manage 4 Its Docket 5 "The docket management factor is ordinarily considered in conjunction with 6 the public's interest in the expeditious resolution of litigation in determining 7 whether there was an unreasonable delay." Santos v. Carney (citing In re Eisen, 31 8 F.3d at 1452). This Court need not devote extensive analysis to these two factors as 9 it is clear that efficiently resolving cases as well as this court's need to manage its 10 docket both strongly favor dismissaL In more than 26 months, parties have filed II numerous pleadings and motions and yet are no closer to bringing this matter to the 12 discovery process, let alone litigation for resolution on the merits. Were the Court's 13 docket and speedy resolution the only factors for Court to consider, dismissal would 14 certainly be warranted. The Court finds that these two factors strongly support 15 dismissal. 16 b. Risk of Prejudice to Defendant 17 "Once a delay is determined to be unreasonable, prejudice ... is presumed." 18 Santos 1997 Guam 4 ~ 8. Here, Defendants allege that they are prejudiced in that 19 the time it has taken for Plaintiff to bring the matter forward is overly lengthy and 20 inexcusable. Defendants are quick to point out that it has been over two years since 21 the complaint was filed and there has been no discovery in the case. Additionally, 22 they point out that Defendant Rote has since left Guam to seek more affordable 23 living conditions and medical treatment thus impairing their ability to 24 communicate and defend against Plaintiffs action. Defendant Keogh contends that 25 the First Amended Complaint includes some allegations which speak to his ethical 26 duties as an attorney and that he would want an expeditious resolution to the 27 matter. Plaintiff contends that Defendants have not alleged prejudice. This Court 28 is inclined to agree.

-3- Decision and Order Case No. CV0789-10

As the Ninth Circuit wrote in Westlands Water Dist. v. U.S., 100 F.3d 94, 97 2 (9th Cir. 1996), "legal prejudice is just that- prejudice to some legal interest, some 3 legal claim, some legal argument. Uncertainty because a dispute remains 4 unresolved is not legal prejudice." This Court is unconvinced that an eight-month 5 period of relative inactivity has led to prejudice to the Defendants. While 6 circumstances may make defending against the action more difficult, this does not

7 rise to the level of prejudice as described in Westlands. Id.

8 Further, this Court notes that fault for the delay does not rest entirely with Plaintiff. At the time of this motion, the case had not proceeded beyond the pleading 9 stage despite the fact that both parties share the responsibility under Rule 26(f) for 10 scheduling a meeting to discuss discovery and other matters related to the efficient II resolution of the case. That rule specifically states: 12

13 The attorneys of record and all unrepresented parties that have appeared in the case are jointly responsible for arranging the 14 conference, for attempting in good faith to agree on the proposed 15 discovery plan, and for submitting to the court within 14 days after the conference a written report outlining the plan. 16

17 Guam R. Civ. P. 26(f) (emphasis added). The evidence before this Court indicates

18 that on multiple occasions, Defendant declined to meet with Plaintiff pursuant to Rule 26. While it is true there was once a pending motion to disqualify Defendant 19 Keogh as counsel for Defendant Rote, it did not excuse him from his obligations 20 under Rule 26. Indeed, that issue has long since been resolved yet parties have not 21 taken it upon themselves to arrange a conference. In short, any perceived prejudice 22 to Defendant resulting from the delay is offset by Defendants' own actions in failing 23 to work with Plaintiff to craft a discovery plan and present a proposed schedule to 24 this Court. Therefore, this Court finds that this third factor does not support 25 dismissal. 26

27 c. Public Policy Favoring Disposition of Cases on their Merits

28 "Although public policy always favors a resolution of cases on their merits, and this factor generally weighs in favor ofthe plaintiff, 'it must be weighed against

-4- Decision and Order Case No. CV0789-l 0

the first two factors, the expeditious resolution of litigation and the court's need to 2 manage its docket."' Park v. Kawashima, 2010 Guam 10 ~ 22 (quoting In re Estate 3 of Concepcion v. Siguenza, 2003 Guam 12 ~ 23.). Generally "[i]t is sufficient to 4 demonstrate that the plaintiff has 'ignored his responsibilities to the court 5 in prosecuting the action and the defendant had suffered prejudice as a result 6 thereof."' Santos, 1997 Guam 4 ~ 9 (quoting Anderson v. Air West, Inc., 542 F.2d

7 522, 526 (9th Cir.1976)).

8 While there has been a lull in these proceedings lasting approximately eight

9 months, this Court is not convinced that Plaintiff has completely ignored the obligation to diligently prosecute this action. Furthermore, Defendants have not 10 demonstrated that they have suffered prejudice resulting in the delay. This Court II finds that resolution of this case on its merits is most desirable and, when weighed 12 against the first two factors, the policy favoring disposition of cases on their merits 13 favors denying dismissal. 14

15 d. Availability of Less Drastic Sanctions 16 The fifth factor for the Court's consideration IS whether less drastic 17 alternatives to dismissal are available. Two possible alternatives are monetary 18 sanctions and a formal warning. Considering the circumstances of this case and the 19 record before this Court, monetary sanctions may be appropriate. Though the 20 Guam Supreme Court has found that a warning or lesser sanction is not necessary 21 prior to dismissal on a Rule 41(b) motion, 1 this Court has previously admonished 22 both parties: 23 "Both Netcare and Rote are admonished not to use the rules of procedure and practice as mere munitions to be deployed whenever 24 doing so might result in a strategic advantage; the parties are to abide 25 by the spirit and ethics of the rules and the purposes for which they were adopted." 26

27 1 Santos v. Carney, 1997 Guam 4 ,[ 10. 28

-5- Decision and Order Case No. CV0789-l 0

June 27, 2011 Decision and Order at p.10. This Court shall, in this Decision and 2 Order, issue another warning to parties. There being less drastic sanctions 3 available, the Court weighs this factor as not supporting dismissal. 4 II. Motion for Summary Judgment. 5 Plaintiff Netcare has moved for summary judgment pursuant to Guam R. 6 Civ. P. 56(a). In considering a motion for summary judgment, this Court "must 7 draw inferences and view the evidence in a light most favorable to the non-moving 8 party." Bank of Guam v. Flores, 2004 Guam 25 ~ 7. Summary judgment is proper 9 when "the pleadings, depositions, answers to interrogatories, and admissions on 10 file, together with the affidavits, if any, show that there is no genuine issue as to 11 any material fact and that the moving party is entitled to a judgment as a matter of 12 law." Id. at~ 8 (quoting Guam R. Civ. P. 56(c)). 13 A material fact is one that is relevant to an element of a claim or defense or 14 which might affect the outcome of the suit. See Iizuka Corp. v. Kawasho Intern. 15 (Guam), Inc., 1997 Guam 10. The party seeking summary judgment bears the 16 responsibility of informing the court of the basis of the motion and demonstrating 17 the absence of a material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 18 (1986). Only admissible evidence may be considered by the trial court in ruling on a

19 motion for summary judgment. Beyene v. Coleman Sec. Services, Inc., 854 F2d

20 1179, 1181 (9th Cir. 1988); See also Guam R. Civ. P. 56(e)(requiring supporting and

21 opposing affidavits set forth facts as would be admissible in evidence). Plaintiff relies on various communications between parties' counsel as a 22 means of showing that Defendants acknowledge liability to Plaintiff in addition to 23 the amount for which they are liable. Defendant takes the position that these 24 communications were made in the process of settlement which would render them 25 inadmissible for the Court's consideration pursuant to the Guam Rules of Evidence 26 which state: 27 "Evidence of (1) furnishing or offering or promising to furnish, or (2) 28 accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was

-6- Decision and Order Case No. CV0789-l 0

disputed as to either validity or amount, is not admissible to prove 2 liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not 3 admissible." 4 Guam R. Evid. 408. Parties are in dispute as to whether or not these 5 communications fall under the umbrella of Rule 408. The record before this Court 6 is similarly unclear. However, taken in a light most favorable to the non-moving 7 party, the inferences to be made regarding the communications could show that 8 they were made in an effort compromise a claim which is disputed as to validity or 9 amount. As such, the Court disregards the communications as inadmissible

10 evidence. Thus, the question remains as to the amount for which Defendants are

II liable, if at all.

12 This Court has previously expressed its apprehension with the underlying claim in this case as it pertains to Defendant Keogh. See June 27, 2011 Decision 13 and Order p.4. Guam law governing this issue remains unsettled in that there is no 14 binding case law governing this form of attorney liability. Because of the 15 uncertainty regarding the laws of this claim as well as the existence of genuine 16 issues of material fact, this Court is unconvinced that Plaintiff is entitled to 17 Judgment as a matter oflaw. 18 CONCLUSION 19

20 I. Only two of the Santos factors strongly weigh in favor of dismissal while the 21 remaining three do not support dismissal. This Court therefore finds that 22 dismissal for failure to prosecute is not appropriate at this time. Defendant's

23 motion to dismiss is hereby DENIED. 24 II. The Court finds that this case presents genume Issues of material fact. 25 Furthermore, the unsettled state of the law governing the claim precludes a 26 finding that Plaintiff is entitled to judgment as a matter of law. Plaintiffs 27 motion for summary judgment is hereby DENIED. 28

-7- Decision and Order Case No. CV0789-l 0

This Decision should serve as a warning to Plaintiff that any further delays 2 will result in dismissal. Defendants should also take note that this Court is 3 cognizant of their role in the delays which have occurred thus far and any further 4 delays on the part of Defendants will not be tolerated. Netcare, Rote, Keogh and all 5 legal counsel involved shall take all necessary steps to move this matter forward. 6 Additionally, this Court reminds both parties of their shared responsibility to 7 engage in a 26(f) conference as the Rule so provides. The parties shall communicate 8 regarding their Rule 26(f) obligations within 30 days from the date of this Decision. 9 Additionally, a status hearing is set for February 25, 2013 at 2:00p.m. 10

16 HONORABLE ALBERTO C. LAMORENA, III 17 Presiding Judge, Superior Court of Guam