Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-02276/USCOURTS-azd-2_06-cv-02276-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1330 Breach of Contract

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 Defense counsel failed to contemporaneously provide adverse counsel with a copy

of this letter and failed to certify on the letter itself that a copy was delivered to adverse

counsel. Thus, the Court deems the letter a prohibited ex parte communication with the

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Best Western International, Inc., etc., 

Plaintiff, 

vs.

Melbourne Hotel Investors, LLC, et al., 

Defendants. 

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No. CV-06-2276-PHX-MHM

ORDER

On February 28, 2008, the assigned District Judge referred this case to the

undersigned Magistrate Judge for purposes of conducting a settlement conference. (docket

# 33) In response to this referral and after granting the parties’ request to continue the

settlement conference, the undersigned reset the settlement conference to Wednesday, July

30, 2008. (docket # 37)

As authorized in the Settlement Conference Order, docket # 35, counsel for

both sides provided the Court with letters, dated July 23 and July 24, 2008, indicating that

a Receiver has been appointed “over the assets of Defendant Robert Falor” “which prevent

the Defendants from making any monetary settlement proposal at the upcoming [Settlement]

Conference.” Letter from Louis D. Lopez, counsel for Defendants, dated July 23, 2008.1

Case 2:06-cv-02276-MHM Document 49 Filed 07/28/08 Page 1 of 3
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Court, contrary to the procedural rules and, arguably, an ethical violation. See, Rule 5(a),

FED.R.CIV.P.; ER 3.5(b), 17A, A.R.S. Sup.Ct.Rules, Rule 42. “[E]x parte communications

are barred even if it is not clear that the lawyer intended to influence the judge.” In re Bemis,

189 Ariz. 119, 122, 938 P.2d 1120, 1124 (1997). The Court’s chambers promptly provided

adverse counsel with a faxed copy of Defendants’ letter. Thus, there was no prejudice to

Plaintiff. Counsel, not the court, should provide to adverse counsel copies of all written

communications to a judge assigned to a case or any portion of it.

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 A copy of this letter to the Court was appropriately faxed to adverse counsel and

contained an indication that a copy of the letter was faxed to adverse counsel.

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Plaintiff’s counsel responded, stating that “if the defendants are either unwilling or unable

to enter good faith discussions, then I agree that proceeding with the Settlement Conference

would be futile, and should be cancelled.” Letter from Michael G. Helms, counsel for

Plaintiff, dated July 24, 2008.2

In view of these letters, it is clear to the undersigned that conducting a

settlement conference at this time would be a waste of time, a waste of limited resources and

inconsistent with Rule 1, FED.R.CIV.P. The federal civil procedure “rules . . . shall be

construed and administered to secure the just, speedy, and inexpensive determination of

every action.” Rule 1, FED.R.CIV.P. Although the law favors the voluntary settlement of

civil suits, ABKCO Music, Inc. v. Harrisongs Music, Ltd., 722 F.2d 988, 997 (2d Cir.

1983), it does not sanction efforts by trial judges to effect settlements through coercion.

Del Rio v. Northern Blower Co., 574 F.2d 23, 26 (1st Cir. 1978) (citing Wolff v. Laverne,

Inc., 17 A.D.2d 213, 233 N.Y.S.2d 555 (1962)). In the Wolff case, cited with approval in

Del Rio, supra, the Court said:

We view with disfavor all pressure tactics whether directly or

obliquely, to coerce settlement by litigants and their counsel. Failure to

concur in what the Justice presiding may consider an adequate

settlement should not result in an imposition upon a litigant or his

counsel, who reject it, of any retributive sanctions not specifically

authorized by law.

17 A.D.2d at 215, 233 N.Y.S.2d at 557. In short, any pressure tactics to coerce settlement

are simply not permissible. Schunk v. Schunk, 84 A.D.2d 904, 905, 446 N.Y.S.2d 672

(1981); Chomski v. Alston Cab Co., 32 A.D.2d 627, 299 N.Y.S.2d 896 (1969). “The judge

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must not compel agreement by arbitrary use of his power and the attorney must not

meekly submit to a judge’s suggestion, though it be strongly urged.” Brooks v. Great

Atlantic & Pacific Tea Co., 92 F.2d 794, 796 (9th Cir. 1937).

Rule 16(c)(9), FED.R.CIV.P., which expressly authorizes civil settlement

conferences, “was not designed as a means for clubbing the parties - or one of them - into

an involuntary compromise.” Kothe v. Smith, 771 F.2d 667, 669 (2nd Cir. 1985). The

purpose of Rule 16, FED.R.CIV.P., is not “to impose settlement negotiations on unwilling

litigants.” Fed.R.Civ.P. 16 Advisory Committee’s Notes; In re Novak, 932 F.2d 1397,

1405 n. 15 (11th Cir. 1991). It is unreasonable to force the parties and their counsel and

representatives to incur unnecessary attorneys’ fees and travel expenses to participate in a

settlement conference in Phoenix, Arizona, knowing in advance that the parties agree that

a settlement conference would be futile.

Pursuant to counsels’ letters and good cause appearing,

IT IS ORDERED that the July 30, 2008 settlement conference is hereby

VACATED.

DATED this 25th day of July, 2008.

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