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The Diamond Consortium, Inc. v. Hammervold

United States District Court, M.D. Tennessee, Nashville Division

May 23, 2019

MARK HAMMERVOLD, ET AL. Defendants/Counter-Plaintiffs BOAZ RAMON, Deponent.



         Pending before the court is an Objection (Docket No. 38) seeking review of the magistrate judge's Report and Recommendation issued on April 8, 2019 (Docket No. 37), filed by third parties Boaz Ramon and Afsoon Hagh.[1] The plaintiffs, The Diamond Consortium, Inc. d/b/a The Diamond Doctor (“The Diamond Doctor”) and David Blank, have filed a Response in opposition. (Docket No. 40.) For the reasons discussed herein, Ramon and Hagh's Objection will be sustained in part.


         This matter arises from a lawsuit filed by the plaintiffs in the United States District Court for the Eastern District of Texas. (Docket No. 2-1.) The lawsuit asserts claims against a host of defendants-Brian Manookian; Cummings Manookian, PLC; Mark Hammervold, and; Hammervold, PLC-related to the purported extortion of The Diamond Doctor's jewelry business. (See id.) In the course of litigating the Texas case, the plaintiffs issued a subpoena to depose, and direct document production from, third party Boaz Ramon. (Docket No. 1-1.) Ramon is a Nashville resident who owns and operates a jewelry retailer headquartered in Nashville. (Docket No. 1 at 2.) The subpoena called for Ramon to appear for a deposition in Nashville on December 17, 2018. (Docket No. 1-1 at 1.)

         In response, Ramon filed a Motion to Quash in this court on December 11, 2018.[2] (Docket No. 1.) Hagh was Ramon's attorney on the motion, which served as the first notice to the plaintiffs' counsel that Hagh was representing Ramon. Ramon argued in the motion that the December 17 deposition date presented an undue burden because it coincided with the peak holiday sales season at Ramon's jewelry stores. (Id. at 2-3.) On December 14, 2018, the court referred the matter to the magistrate judge. (Docket No. 3.) Ramon did not appear for his deposition on December 17 or produce the requested documents by that date. (Docket No. 10-4 at 4.) The magistrate judge held a telephonic conference the day after Ramon's failure to appear, during which he directed counsel to meet and attempt to resolve their issues. Counsel were unable to do so. On December 28, 2018, the magistrate judge[3] denied Ramon's Motion to Quash. (Docket No. 8.) The magistrate judge ordered Ramon to appear for deposition between January 9, 2019 and January 23, 2019, and to produce all requested documents by January 7, 2019. (Id. at 3.) The magistrate judge specified that, if the parties were unable to agree upon a date within that window, Ramon should appear on January 23, 2019 at 9:00 a.m., at a location designated by the plaintiffs' counsel. (Id.) Ramon's attorney, Hagh, emailed counsel for the plaintiffs, and the parties agreed that Ramon would be deposed on January 23, 2019 at 9:30 a.m., at a location provided by Hagh. (Docket No. 29-1 at 5-7.)

         On January 10, 2019, the plaintiffs filed a Motion for Award of Fees and Costs. (Docket No. 9.) The plaintiffs sought $2, 970.00 in attorney's fees and $958.84 in costs for Ramon's failure to appear at the December 17 deposition. (Id.) On January 18, 2019, the Friday before the federal three-day Martin Luther King Jr. holiday, Mark Hammervold and Hammervold, PLC (the “Hammervold Defendants”) filed a Motion for Protective Order to prevent the plaintiffs from deposing Ramon on January 23. (Docket No. 11.) They argued that the scheduled deposition was after the discovery deadline in the underlying Texas case and that the Hammervold Defendants' counsel had personal obligations that prevented him from participating in Nashville on January 23. (Docket No. 11.) On January 22, 2019, the court referred all pending and future motions in the case to the magistrate judge. (Docket No. 13.) That same day, counsel for the plaintiffs traveled from Dallas, Texas to Nashville, in order to depose Ramon the following day.

         Ramon and Hagh did not appear for the January 23 deposition. (Docket No. 29-3 at 2.) Instead, that day, Ramon filed a Response in opposition to the requested fees and costs stemming from Ramon and Hagh missing the first deposition. (Docket No. 12.) Ramon contended that, because counsel for the Hammervold Defendants indicated that he, too, was unavailable on the scheduled date of the first deposition (December 17), Hagh “had no reason to believe the Plaintiffs, in good faith, would proceed with the deposition.” (Id. at 1.) Ramon further argued that Hagh's unresponsiveness to inquiries about the scheduled deposition was the result of her recent maternity leave. (Id. at 2.) Also on January 23, 2019, Hagh filed a Notice of Withdrawal stating only that, “for good cause, she is no longer counsel of record” for Ramon. (Docket No. 14 at 1.) Hagh notified the plaintiffs of her intention to withdraw approximately an hour and a half before Ramon's scheduled deposition. (Docket No. 29 at 2.) This notification came after multiple earlier emails between Hagh and the plaintiffs' counsel, confirming the date, time, and location of the scheduled deposition. (Docket Nos. 29-1, 29-2.) Hagh made no effort to withdraw as Ramon's counsel prior to January 23, 2019.

         On January 25, 2019, the plaintiffs filed a Motion for Order to Show Cause, asking the court to direct Ramon and Hagh to appear and show cause why they should not be held in contempt for failing to comply with the magistrate judge's December 28 order. (Docket No. 16.) On February 7, 2019, Hagh filed a Motion to Withdraw (Docket No. 19) and a separate Motion for Extension of Time to Respond (Docket No. 21). Hagh's basis for withdrawal was an allegedly irreconcilable conflict in representing Ramon because of purported connections between lawyers in her law firm and the underlying litigation. (Docket Nos. 19 and 19-1.) The plaintiffs contested Hagh's request (Docket No. 30) and, on February 21, 2019, filed a Second Motion for Attorney Fees and Costs, seeking attorney's fees of $5, 265.00 and costs of $2, 531.92 for the failure of Ramon and his counsel to appear for Ramon's second scheduled deposition. (Docket No. 28.) No. response to the plaintiffs' second motion for costs and fees was filed.

         On March 1, 2019, the Hammervold Defendants filed a Notice, stating that the plaintiffs had voluntarily dismissed the underlying Texas case (Docket No. 33), along with an order granting the “Unopposed Motion for Voluntary Dismissal without Prejudice” entered by the Eastern District of Texas (Docket No. 33-1.) The order of dismissal states that “[a]ll relief not previously granted is hereby denied.” (Id.) On March 8, 2019, the magistrate judge issued her Report and Recommendation. The Report and Recommendation sets forth the magistrate judge's conclusion that, while the dismissal of the underlying Texas case resolved some of the motions pending between the parties in this case, the motions for attorney's fees and other sanctions are collateral issues that remain appropriate for disposition in this court. (Docket No. 37 at 2.) The magistrate judge recommends that the plaintiffs' two motions for fees and costs be granted, [4] that the Hammervold Defendants' motion for a protective order be denied as moot, that the plaintiffs' motion for a show cause order be denied, that Hagh's motion to withdraw be granted, and that Ramon's motion for an extension of time be denied as moot. (Id. at 11.) On April 19, 2019, Ramon and Hagh filed their Objection. They seek review of the recommendation that the plaintiffs' two motions for costs and fees be granted.


         The standard of review applicable to a party's objections to a magistrate judge's ruling depends upon whether the objections pertain to a dispositive or non-dispositive matter. If the issue is dispositive, any party may, within fourteen days after being served with a magistrate judge's recommended disposition, “serve and file specific written objections to the proposed findings and recommendations.” Fed.R.Civ.P. 72(b)(2). The district court must review de novo any portion of the report and recommendation to which objections are “properly” lodged. Fed.R.Civ.P. 72(b) (3); 28 U.S.C. § 636(b)(1)(B) & (C). An objection is “properly” made if it is sufficiently specific to “enable[ ] the district judge to focus attention on those issues-factual and legal-that are at the heart of the parties' dispute.” Thomas v. Arn, 474 U.S. 140, 147 (1985). “The filing of vague, general, or conclusory objections does not meet the requirement of specific objections and is tantamount to a complete failure to object.” Holloway v. Palmer, No. 16-2450, 2017 WL 4844457, at *2 (6th Cir. Apr. 5, 2017); see also Special Learning, Inc. v. Step by Step Acad., Inc., 751 Fed.Appx. 816, 819 (6th Cir. 2018). In conducting its review, the district court “may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.” Fed.R.Civ.P. 72(b)(3).

         A party may also file objections to a magistrate judge's nondispositive order within fourteen days of being served with such order, but this court's review of a magistrate judge's resolution of a non-dispositive pretrial matter is limited to determining whether the order is “clearly erroneous” or “contrary to law.” 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). “Thus, § 636(b) creates two different standards of review for district courts when a magistrate court's finding is challenged in district court. A district court shall apply a ‘clearly erroneous or contrary to law' standard of review for the ‘nondispositive' preliminary measures of § 636(b)(1)(A). Conversely, ‘dispositive motions' . . . are governed by the de novo standard.” United States v. Curtis, 237 F.3d 598, 603 (6th Cir. 2001) (quoting United States v. Raddatz, 447 U.S. 667, 673- 74 (1980)). Under the “clearly erroneous or contrary to law” standard, the court is not empowered to reverse the magistrate judge's finding simply because the court would have decided the issue differently.

         As noted above, Ramon and Hagh style their motion as one for review of a nondispostive order, which would limit the court's review to the “clearly erroneous or contrary to law” standard. However, under Federal Rule of Civil Procedure 54(d)(2)(D), “the court may . . . refer a motion for attorney's fees to a magistrate judge under Rule 72(b) as if it were a dispositive pretrial matter.” Fed. R. Civ. Pro. 54; see Toliver v. JBS Plainwell, Inc., No. 1:11-CV-302, 2016 WL 165031, at *4 (W.D. Mich. Jan. 14, 2016) (“While a motion for attorney fees is, by its ordinary meaning, ‘nondispositive,' the governing statute directs courts to treat the referral of such motions as it would “dispositive pretrial matters.”). Because such motions are “dispositive of a claim, ” Massey v. City of Ferndale, 7 F.3d 506, 510 (6th Cir. 1993), the magistrate judge correctly addressed the motions by issuing a Report and Recommendation, which is subject to “de novo review by the district court.” Id. The court will thus review de novo the portions of the Report and Recommendation to which Ramon and Hagh have raised objections.


         Ramon and Hagh object on three grounds to the magistrate judge's recommendation that the plaintiffs' motions for fees and costs both be granted. First, Ramon and Hagh argue that the dismissal of the underlying Texas case mooted and adjudicated both of the plaintiffs' motions. Second, they argue that, even if the motions remain viable following dismissal of the Texas case, an award of ...

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