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Swan Global Investments, LLC v. Young

United States District Court, D. Colorado

February 12, 2019



          N. Reid Neureiter Magistrate Judge

         This matter came before the Court on February 6, 2019 for a hearing (Dkt. #37) on Defendant Thomas Richard Young's (“Mr. Young”) Motion to Dismiss Pursuant to Fed.R.Civ.P. 41(b) (Dkt. #25). Swan Global did not appear at the hearing. Only after attempts by my chamber's staff to reach either Swan Global's attorney of record or Swan Global's company headquarters did an attorney call back, saying he had only recently been retained, and effectively conceding he was unprepared to address the substance of the motion to dismiss.

         As outlined below, Plaintiff Swan Global is ordered to SHOW CAUSE in writing by February 20, 2019 why this matter should not be dismissed with prejudice as a sanction for (1) making misrepresentations or material omissions to opposing counsel and the Court; (2) failing to file a “short and plain” statement of the case, and failing to make it either shorter or plainer in multiple amendments; (3) failing to respond in a timely manner to Defendant's Motion to Dismiss; (4) failing to have replacement counsel timely enter an appearance to replace counsel who has twice sought to withdraw from the case, even after being ordered to do so by the Court; and (5) failing to appear at the February 6, 2019 motions hearing.

         I. Procedural History of the Case

          The case was originally filed in the District Court for La Plata County, Colorado on November 16, 2018. Defendant Young removed the case to federal court on December 4, 2018. (Dkt. #1.)

         Swan Global is a Durango, Colorado-based company providing investment management services. Defendant Young lives in Illinois. The Complaint alleges that Mr. Young was an independent contractor for Swan Global from 2013 until January 31, 2016, when he was terminated for alleged breach of contract, fraud, and non-performance. Using 182 paragraphs, the original twenty-four-page Complaint alleged seventeen claims for relief against Mr. Young, including everything from breach of contract, to theft of confidential information in violation of Colorado statute, to intentional interference with contractual relations, to fraud, conspiracy and conversion. (Dkt #1-1.)

         On November 26, 2018, while the case was still in La Plata County District Court, Swan Global filed an Amended Complaint. (Dkt. #4.) The twenty-five-page Amended Complaint upped the number of paragraphs to one hundred ninety-nine and the number of counts to twenty-three. Added were claims for, among other things, civil theft and injunctive relief.

         The removed case was assigned to Magistrate Judge Nina Wang on December 6, 2018. Judge Wang issued an order setting a scheduling conference for February 11, 2019, and ordered the parties to complete and file the Consent/Nonconsent Form by January 28, 2019. (Dkt. #11.)

         Attorney Leslie Fourton, Jr. entered an appearance in this matter on behalf of Swan Global on December 14, 2018. (Dkt. #14.) Mr. Fourton was the attorney who had signed and filed the original and amended Complaints on Swan Global's behalf.

         On December 30, 2018, Mr. Fourton filed two versions of a Third Amended Complaint, Dkt. #18 - later withdrawn - and Dkt. #20. The not-withdrawn Third Amended Complaint (Dkt. #20) added another sixty-nine paragraphs and another eighteen pages to the complaint, taking the document to forty-three pages in length. On its face, the Third Amended Complaint is not a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

         On the same date, December 30, 2018, Fourton also filed a Motion to Withdraw as Counsel. (Dkt. #19.) Attorney Fourton explained in his motion to withdraw that Swan Global was eliminating his position as General Counsel: “[Swan Global] is eliminating the General Counsel position in its entirety as of December 31, 2018. Therefore, it is necessary to withdraw as counsel for Plaintiff/claimant in this matter.” (Dkt. #19 at 1.) The December 30, 2018 withdrawal motion did not comply with our Local Rules in that it did not give an appropriate warning to the client. See D.C.COLO.LAttyR 5(b) (“Where the client of the withdrawing attorney is a corporation, partnership, or other legal entity, the notice shall state that such entity may not appear without counsel admitted to the bar of this court, and that absent prompt appearance of substitute counsel, pleadings and papers may be stricken, and default judgment or other sanctions may be imposed against the entity.”)

         On January 2, 2019, Judge Wang issued a minute order noting that withdrawal by Mr. Fourton would leave Swan Global without representation, and set a hearing for January 9, 2019. Judge Wang ordered “that Plaintiff's counsel and a representative from Plaintiff must appear in person.” (Dkt. #21.)

         Judge Wang held a hearing on January 9, 2019. (Dkt. #22.) Contrary to Judge Wang's order, neither Mr. Fourton nor a representative of Swan Global appeared in person. Instead, Mr. Fourton and Robert Swan appeared by telephone. The transcript of those proceedings is found at Docket No. 36.

         Judge Wang explained to Mr. Swan that Swan Global, as a corporate entity, could not appear without a lawyer. (Dkt. #36 at 15-16, 18-19.) Judge Wang also noted that Swan Global would have to a have a lawyer to appear at a scheduled February 11, 2019 scheduling conference, and to comply with the ...

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