Sequatchie Mountain Creditors et al v. Detweiler et al

OCR transcription for search; preserved printed pages are authoritative

The court incorporates by reference in this paragraph and adopts as the findings and orders
of this court the document set forth below.

Russ KHendig
United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO

EASTERN DIVISION
In re: )
) CHAPTER 11
JOSEPH J. DETWEILER, )
) CASE NO. 09-63377
Debtor. )
) ADV. NO. 09-6118
)
SEQUATCHIE MOUNTAIN ) JUDGE RUSS KENDIG
CREDITORS, )
)
Plaintiffs, )
)
v. )
)
JOSEPH J. DETWEILER, )
) MEMORANDUM OF OPINION
Defendant. ) (NOT FOR PUBLICATION)
)

The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b) and the
general order of reference entered in this district on July 16, 1984. This is a core proceeding

under 28 U.S.C. § 157(b)(2)(A), (B), (1) and (0).

This opinion is not intended for publication or citation. The availability of this opinion, in
electronic or printed form, is not the result of a direct submission by the court.

On May 10, 2011, defendant filed Defendant’s Motion to Dismiss as docket number 25

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(“motion to dismiss”). On June 17, 2011, plaintiffs filed First Motion to Join Parties to
Adversary Proceeding Pursuant to Rule 7020 of the Federal Rules of Bankruptcy Procedure as
docket number 33 (“motion to join”). On June 22, 2011, the court held a hearing on both
motions. Peter Tsarnas appeared for plaintiffs and Scott M. Zurakowski appeared for defendant.
At hearing, the court announced that it would take the motion to dismiss under advisement and
set a briefing schedule regarding the motion to join. Briefs have been filed and the court now

decides both motions.

At the core of the motions are the identities of the plaintiffs. The court deals with the
issues raised by the motions as follows. First, the court determines the identities of the
Sequatchie Mountain Creditors as of the date the complaint was filed. Second, the court
considers the motion to dismiss. Third, the court considers the motion to join.

A. The Identities of the Sequatchie Mountain Creditors

On October 19, 2009, plaintiffs filed their complaint. In the title of the complaint, the
plaintiffs are identified only as the “Sequatchie Mountain Creditors.” In the body of the
complaint, the plaintiffs are identified by name as follows:

NOW COMES Creditors Donald Bird and Wife, Patricia Bird, John Hallman and
Wife, Shirley Hallman, Gay Glassman, Vincent S. Agusta and Wife, Mary Alice R.
Agusta, Wesley Jinks, Roger A. Pearson and Wife, Sharon K. Pearson, Robert D.
Friske and Wife, Deborah C. Friske, Paul Meschino and Wife, Lana L. Meschino,
Robert M. Allen and Wife, Lisa Allen, Joseph Kohan and Wife Teresa Kohan and
known for identification purposes in the underlying bankruptcy case per the Notice
of Appearance (Doc. No. 14) dated August 26, 2009 as the Sequatchie Mountain

Creditors ....

The court finds that, for purposes of this litigation, the plaintiffs are the individuals
identified by name in the complaint. The complaint has not been amended. It does not
incorporate any other document by reference or otherwise suggest that any other individuals are
plaintiffs. While the complaint mentions the Notice of Appearance filed in the main case as
docket number 14, it does not state that any additional individuals named in that document are
plaintiffs. It certainly does not mention any additional individuals named in subsequent notices of

appearance or in state court filings.

Even if the complaint did purport to incorporate plaintiffs by reference, this would not be
permissible under Federal Rule of Civil Procedure 10(a), made applicable to this proceeding by
Federal Rule of Bankruptcy Procedure 7010. Rule 10(a) states in pertinent part that “[t]he title of
the complaint must name all the parties; the title of other pleadings, after naming the first party
on each side, may refer generally to other parties.” Rule 10(a) requires that plaintiffs be identified
with specificity. Duisen v. Terrel, 332 F. Supp. 127, 129 (W.D. Mo. 1971). The use of a fictitious
name for an unincorporated entity, such as “Sesquatchie Mountain Creditors,” is not adequate.
Agresta v. Philadelphia, 694 F. Supp. 117, 119 (E.D. Pa. 1988).

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Accordingly, the court concludes that, as of the filing of the complaint, the plaintiffs
were the individuals identified by name in the complaint: Donald Bird, Patricia Bird, John
Hallman, Shirley Hallman, Gay Glassman, Vincent S. Agusta, Mary Alice R. Agusta, Wesley Jinks,
Roger A. Pearson, Sharon K. Pearson, Robert D. Friske, Deborah C. Friske, Paul Meschino, Lana L.
Meschino, Robert M. Allen, Lisa Allen, Joseph Kohan and Teresa Kohan.

B. The Motion to Dismiss

Defendant seeks the dismissal of the following parties: Donald Bird, Patricia Bird, Joseph
Kohan, Teresa Kohan, Lisa Allen, Robert M. Allen, John Hallman (deceased), Shirley Hallman,
Wesley Jinks, Roger Pearson and Sharon Pearson. The plaintiffs do not oppose the dismissal of
Donald Bird, Patricia Bird, Joseph Kohan, Teresa Kohan, John Hallman, Roger Pearson and
Sharon Pearson (collectively “the non-contested parties”). Accordingly, the non-contested parties

are dismissed.

Whether the court should dismiss Lisa Allen, Robert M. Allen, Shirley Hallman and
Wesley Jinks (collectively “the contested parties”) remains in controversy. The basis for the
motion for dismissal is the contested parties’ failure to comply with the Order Compelling
Discovery Responses, filed by the court as docket number 23 on April 20, 2011. The order was
accidentally two days retroactive. It required the contested parties to produce discovery by April
18, 2011 and stated that they would be dismissed if they failed to obey the order. Obviously,
strict compliance with the order was impossible. It is uncontested that the contested parties
produced the required discovery by no later than May 12, 2011. Under these circumstances, the
court cannot conclude that the contested parties failed to obey the order. Accordingly, the motion

to dismiss is denied with regard to the contested parties.

C. The Motion to Join Parties

The plaintiffs seek to add as plaintiffs all of the individuals named in the Notice of
Appearance filed as docket number 14 in the main case and all of the individuals listed in the
Amended Notice of Appearance filed on November 5, 2010 as docket number 152. A total of 82
individuals are listed in these documents. Taking into account the stipulated dismissals, the
plaintiff is seeking to add 64 individuals (collectively “the new plaintiffs”) to bring the total

number of plaintiffs to 75.

The defendant argues that the motion to join should be denied for two reasons. First, the
defendant argues that the court should deny leave to amend the complaint to add new parties
because it would prejudice the defendant.

Courts have held that after the filing of a responsive pleading, amendment of the
complaint is required to add new parties. Commodity Futures Trading Comm’n y. American
Metal Exchange Corp., 693 F. Supp. 168, 189 (D.N.J. 1988). Amendment of the complaint is
governed by Federal Rule of Procedure 15(a)(2), made applicable to this proceeding by Federal

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Rule of Bankruptcy Procedure 7015. Rule 15(a)(2) provides that “a party may amend its pleading
only with the opposing party’s written consent or the court’s leave. The court should freely give
leave when justice so requires.” Whether to allow a party to amend its complaint is within the
discretion of the court. Commercial Money Center, Inc. v. Illinois Union Ins. Co,, 508 F.3d 327,
346 (6th Cir. 2007). “Factors that may affect that determination include undue delay in filing,
lack of notice to the opposing party, bad faith by the moving party, repeated failure to cure
deficiencies by previous amendment, undue prejudice to the opposing party, and futility of the

amendment.” Id.

The defendant argues that leave to amend should be denied because it would result in
prejudice. The court agrees. Granting the motion to join would effectively reset this litigation,
which is already 21 months old. In those 21 months, defendant has invested considerable time
and money under the very reasonable assumption that the plaintiffs are the people listed in the
complaint. The court is not persuaded by the plaintiffs’ argument that no prejudice exists because
the defendant served some but not all of the new plaintiffs with discovery in anticipation of an
amended complaint, which the plaintiffs never filed. The litigation would still need to be reset to
accommodate the defendants who were not served.

Second, the defendant argues that joinder of the new plaintiffs is not permissible under
Federal Rule of Civil Procedure 20, made applicable to this proceeding by Federal Rule of
Bankruptcy Procedure 7020, which provides in pertinent part:

(1) Plaintiffs. Persons may join in one action as plaintiff if:

(A) they assert any right to relief jointly, severally, or in the alternative
with respect to or arising out of the same transaction, occurrence, or
series of transactions or occurrences; and

(B) any question of law or fact common to all plaintiffs will arise in
the action.

The court agrees with the defendant. As the defendant points out, the claims of the new
plaintiffs may not be similar. The facts of each plaintiff's case may depend on such factors as
how they learned about the land for sale, what they were promised, whether timber rights were
involved and whether they financed their purchase. The plaintiffs provide no specific information
that links any of the new plaintiffs’ claims together in any fashion. As the movants, the plaintiffs
have not met their burden of demonstrating that the claims of the new plaintiffs arise out of the
same series of transactions or involve a common question of law or fact. Accordingly, Rule 20 is

an independent basis for denying plaintiffs’ motion.

In summary, the plaintiffs have attempted to create a category (for lack of a better word)
of litigants without following the Federal Rules applicable to either classes or parties. The result
has been confusion about one of the most fundamental issues in any litigation: the identity of the

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plaintiffs. Allowing the plaintiffs to backtrack and correct their mistakes 21 months into this
litigation would prejudice the defendant and further bog down this already slow-moving
litigation. For this reason, the plaintiffs are bound by the consequences of failing to observe the

Federal Rules.
An order will issue with this opinion.

#t #f #

Service List:

Sequatchie Mountain Creditors
c/o William C. Killian, Esq.

1 Oak Avenue

Jasper, TN 37347

Joseph J. Detweiler
2814 Edison Street NW
Uniontown, OH 44685

Peter G. Tsarnas
Goldman & Rosen, Ltd.
11 South Forge Street
Akron, OH 44304

Anthony J DeGirolamo
116 Cleveland Ave., N.W.
Suite 307

Canton, OH 44702

Scott M Zurakowski

PO Box 36963

4775 Munson St NW
Canton, OH 44735-6963

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