This website previously reported that Kelly Sugano and her dba Taka-O (“Sugano”) was awarded $18,105 in attorney’s fees from Slep-Tone.
Sugano claims to have had 1:1 correspondence between the karaoke tracks she had on her computer and the karaoke tracks she had on genuine, original Sound Choice disks in her possession, but Slep-Tone failed to accept her invitation to audit her system. So much for Slep-Tone not suing its good, honest customers or being concerned with seeking a quick dismissal against anyone it sued by mistake.
Sugano attempted to settle with Slep-Tone for $5,000 because this represented a nuisance value far below the cost Sugano expected to pay in attorney’s fees to take the case Slep-Tone brought against her and numerous other Los Angeles karaoke bar venues and karaoke jockeys to trial.
So Slep-Tone sued Sugano who had been a loyal Sound Choice customer and who had 1:1 correspondence, and Slep-Tone sued Sugano without any notice or opportunity to clear herself to avoid the cost of litigation. On October 4, 2012, Sugano paid Slep-Tone $5,000, but Slep-Tone then failed to dismiss its case against Sugano even after her check was cashed.
On November 8, 2012, Slep-Tone’s Los Angeles case was then dismissed against all the remaining defendants, including Sugano, because Slep-Tone failed to file any pretrial documents, and the Court was “unaware of any reason why the parties [were] comatose * * * * evidencing [Slep-Tone’s] failure to prosecute [its] case.”
On November 27, 2012, Sugano moved for an award of attorneys fees and sanctions bringing to the Court’s attention that Sugano “had invited Slep-tone to visit Taka-O to inspect all . . . genuine Slep-Tone discs and receipts of purchase . . . had signed Slep-Tone’s audit form submitting to a full inspection of [Sugano’s] computer and genuine Slep-Tone discs . . . [had sent the executed audit form to Slep-Tone’s counsel on February 9, 2012, and that] Slep-Tone never followed up to arrange for an inspection” * * * * that Sugano “propounded interrogatories and document requests asking Slep-Tone to provide information to support its claims [but Slep-Tone] responded in bad faith with only frivolous boilerplate objections [and] did not produce any documents or interrogatory answers in discovery [and] stiffed [Sugano and her] requests for information to support its claims * * * * [and that] [p]ursuant to the terms of the settlement agreement, payment was timely made by [Sugano] and all terms of the agreement had been fulfilled except [that] Slep-Tone failed to dismiss [Sugano] from the case within 5 days of receiving the settlement payment [and that Sugano had even sent Slep-Tone’s counsel a simple stipulation to sign and] offered to tend to its filing making it as easy as possible for [Slep-Tone’s] counsel to dismiss the case [but that Sugano’s counsel’s] requests for such cooperation [were] ignored as was a noticed meet and confer . . . and two follow-up voice mails [asking] to simply provide an approval via e-mail to [Sugano’s] counsel to sign the stipulation on Slep-tone’s counsel’s behalf.” Sugano argued that “[b]y failing to timely dismiss the claims against [Sugano], Slep-Tone breached the settlement agreement.”
Sugano further argued “the conduct of Slep-Tone and its counsel has been groundless, unreasonable, vexations and in bad faith [and that] [a]ny of these grounds provides ample basis for a finding of exceptionality and a fee award.”
By December 17, 2012, the time had expired for Slep-Tone to respond to Sugano’s motion, and Central District of California Local Rule 7-12 provides that “[t]he failure to file any required document, or the failure to file it within the deadline, may be deemed consent to the granting or denial of the motion.” Donna Boris remained as Slep-Tone’s attorney, and Fox Rothschild LLP did not make an appearance on behalf of Slep-Tone until December 18, 2012. Because no response had been timely filed, the Court took the motion off calendar and announced that the matter stood submitted and would be decided upon without oral argument.
Fox Rothschild filed an ex parte application for an extension of time to file opposition papers on December 20, 2012 citing as its reason difficulties Slep-Tone had with Boris and the fact Plaintiff was not given direct notice. As previously blogged in this website, Slep-Tone had notice Boris’ failures in the Sound Choice Las Vegas lawsuit months before the Los Angeles case came to a head, but Slep-Tone still kept Boris on as its attorney in the Los Angeles case, and service of Sugano’s motion upon Slep-Tone would have been improper as service is to be made upon the attorney of any party represented by counsel.
Fox Rothschild argued that Slep-Tone’s “failure to respond on a timely basis was due not to neglect but to factors beyond its immediate control.” That argument was bunk because Slep-Tone knew it should have fired Boris and had other counsel take over the LA case many months earlier. As stated in Sugano’s opposition to Slep-Tone’s ex parte application for an extension of time, “The option to fire Ms. Boris and/or to bring in new or additional counsel has always been available to Slep-Tone in this case. * * * * Slep-tone’s experiences with Ms. Boris . . . are not new. According to papers filed by Slep-Tone in a different case, Slep-Tone has been aware of difficulties with her since at least as early as April 2012. . . . in Las Vegas, she failed to timely file oppositions in response to motions to dismiss. . . .”
Accordingly, Judge Otis D. Wright, II, denied Slep-Tone’s application for an extension of time to respond to Sugano’s motion for attorney’s fees and sanctions.
Judge Wright’s Order granting Sugano’s motion for attorney’s fees and sanctions is one of the opinions all future victims of Slep-Tone’s lawsuits should cite, and as previously reported on this website, it states in pertinent part,
“Upon consideration of Defendants’ motion papers, the Court is convinced that this was nothing more than a shakedown suit. This observation is based not only on evidence presented by Defendants, but also on the Court’s own interaction (or lack thereof) with Slep-Tone. (See e.g., ECF No. 89 dismissing case with prejudice for Slep-Tone’s failure to prosecute).) Overall, the court finds that Slep-tone prosecuted this case to maximize settlement recovery for a minimum amount of work. Ordinarily, such behavior is frowned upon but acceptable. But in this case, Slep-Tone takes trolling to the next level and essentially ignored all requests for discovery, explanations of exculpability, and requirements to act in good faith.”
Although Judge Wright had awarded Sugano $18,105 in attorney’s fees, he inadvertently failed to impose a deadline for Slep-Tone to comply. Thirty-eight days later when Slep-Tone failed to pay, Sugano filed a motion to have Slep-Tone held in contempt and for sanctions. However, before that motion was filed, Slep-Tone had filed a motion for reconsideration of Judge Wright’s order. This host has always referred to motions for reconsideration as “whine and cry” motions, and motions for reconsideration are not to be filed or considered unless the court overlooked a provision of the law or if new facts have come to light which could not have been argued at the time the original motion or response was filed. Motions for reconsideration are not suppose to simply rehash old arguments in a whining, crying, sniffling, pouting, holding-breath-until-blue-faced, baby, child way. By Slep-Tone missing the original deadline to file a response and by having its application for an extension of time to file a response denied, Slep-Tone’s motion for reconsideration was doomed from the onset, and its filing was essentially a frivolous waste of time. The motion for reconsideration was originally filed with James Harrington’s name on it in an illegal manner since Harrington, who is only licensed to practice law in North Carolina, had not been admitted pro hac vice in the Central District of California, and he did not even submit an application to be so admitted, and Harrington’s initial filing was quickly amended to remove his name from the pleading, but it became obvious that Harrington had probably written the motion, and Fox Rothschild were merely hired as messenger boys.
Slep-Tone’s motion for reconsideration argued that Sugano could not be awarded attorney’s fees because she was not a prevailing party because she had modified her behavior by paying the settlement money which she otherwise had no legal obligation to pay.
In Sugano’s response to Slep-Tone’s motion for reconsideration, she argued that Slep-Tone and its attorneys violated Central District of California Local Rule 7-3 requiring at least five days to pass after a meet and confer meeting between counsel before a motion for reconsideration could be filed and that Sugano’s counsel had only received a telephone call from Slep-Tone’s counsel indicating Slep-Tone’s intention to move for reconsideration less than four hours before it filed its motion. Sugano further argued that Slep-Tone’s motion set forth no new authority and failed to explain why it could not have made its arguments in a timely manner in violation of Central District of California Local Rule 7-18 and, finally, that Slep-Tone’s legal argument was neither applicable nor persuasive.
Central District of California Local Rule 7-18 states,
“A motion for reconsideration of the decision on any motion may be made only on the grounds of (a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision.”
Slep-Tone’s reply to Sugano’s opposition failed to address Slep-Tone’s violation of the local rule.
In denying Slep-Tone’s motion for reconsideration, Judge Wright repeated Local Rule 7-18, and noted Slep-Tone’s “procedural impropriety.” He then held that Slep-tone was, in fact, the prevailing party and that only enforceable judgments on the merits and court ordered consent decrees would suffice for Slep-Tone to be considered the prevailing party for purposes of an award of attorney’s fees.
Judge Wright held,
“In this case, the parties entered into a settlement agreement. Although Sugano . . . paid $5,000 under the settlement agreement, Slep-tone failed to move to dismiss [her] from this case. [ ] the court later dismissed the entire case with prejudice because of Slep-Tone’s lack of prosecution. [ ] Sugano . . . [is] the prevailing [party] under § 1117(a) of the Lanham Act because of this dismissal with prejudice. Even if Slep-tone moved to dismiss Sugano . . . under the terms of the parties’ settlement agreement, Sugano . . . would still be considered the prevailing [party]. Highway Equipment Co. [v. FECO, Ltd., 469 F.3d 1027 (Fed. Cir. 2006)] at 1031.
“Contrary to Slep-tone’s argument, the settlement agreement did not render it the prevailing party over Sugano. . . There was never a court-ordered consent decree sufficient to establish “the necessary judicial imprimatur” on the alteration of the parties’ legal relationship. Buckhannon [Bd. & Care Home, Inc. V. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001)] at 605. Indeed, Slep-tone [n]ever lived up to its end of the bargain since it never moved for dismissal or even notified the Court of the settlement.”
Judge Wright denied Sugano’s motion to have Slep-Tone held in contempt because his prior order did not state a date certain when Sugano’s attorney’s fees were to be paid, but Judge Wright obliged Slep-Tone by ordering it pay Sugano its $18,105.00 attorney fee award within 14 days of his order. Judge Wright’s order denying Slep-Tone’s motion for reconsideration and denying Sugano’s motion for sanctions was dated March 25, 2013, so Slep-Tone had until April 9, 2013 to pay Sugano. And finally pay it did.
So let this serve as a lesson to all you innocent venues and karaoke jockeys out there. Keep to your guns.