Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-00774/USCOURTS-azd-2_09-cv-00774-1/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332 Diversity-Employment Discrimination

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Martin Flosi, et al., 

Plaintiffs, 

vs.

Peakstone Financial Services, Inc., 

Defendant. 

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No. CV 09-774-PHX-MHM

AMENDED ORDER

Pending before the Court are Defendant Peakstone Financial Services, Inc.’s

(“Peakstone’s”) Motion to Dismiss, or in the Alternative, to Transfer (Doc. # 15) and

Defendants Martin Flosi’s, Tamara Flosi’s, and Roger Seth Carstens’ (collectively, the

“Flosis’”) Motion to Consolidate (Doc. # 32) The Court has considered the parties’

arguments presented in their briefs and at oral argument, as well as the applicable law, and

now enters its ruling.

I. BACKGROUND

On March 27, 2009, Peakstone filed separate actions against Mr. Flosi, Mrs. Flosi, and

Mr. Carstens (the “Peakstone Suit”) in the Chancery Court of the First Judicial District of

Hinds County, Mississippi. The complaints alleged, among other things, breaches of

employment and other agreements, misappropriation of trade secrets, tortious interference

with business relations, and conversion. The Hinds County Chancery Court entered ex parte

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temporary restraining orders against the Flosis on the same day the complaints were filed.

On March 31, 2009, the Flosis removed the lawsuits from the Hinds County Chancery Court

to the U.S. District Court for the Southern District of Mississippi, Jackson Division. On

April 14, 2009, Peakstone filed amended complaints against Mr. and Mrs. Flosi, and on June

16, 2009, filed an amended complaint against Mr. Carstens in the Southern District of

Mississippi.

On April 16, 2009, the Flosis filed the above-captioned lawsuit against Peakstone in

the U.S. District Court for the District of Arizona (the “Flosi Suit”). On April 17, 2009, the

Flosis filed a Motion to Consolidate the three Peakstone Complaints in the Mississippi

District Court and a Joint Motion to Transfer the consolidated cases to the District Court in

Arizona. Thereafter, on June 19, 2009, Mr. and Mrs. Flosi filed their answers in the

Peakstone Suit in Mississippi, which contained counterclaims that are identical to the claims

they raised in the Flosi Suit. On July 8, 2009, Mr. Carstens filed his answer to the Peakstone

Suit in Mississippi, which likewise contained counterclaims that are identical to the claims

he raised in the Flosi Suit. On October 13, 2009, the Mississippi District Court granted the

Flosis’ motions, consolidating the actions and transferring the Peakstone Suit to this District.

(See Peakstone v. Carstens, CV-09-2170-NVW) 

On July 30, 2009, prior to the consolidation and transfer of the Peakstone Suit,

Peakstone filed a Motion to Dismiss the Flosi Suit in Arizona, or in the alternative, to transfer

the Flosi Suit to Mississippi. (Doc. # 15) On October 22, 2009, following the transfer of the

Peakstone Suit to this District, the Flosis filed a Motion to Consolidate the Peakstone Suit

into the Flosi Suit, with the Flosi Suit as the lead case so that “the Flosis are the plaintiffs

. . . .” (Doc. # 32)

II. DISCUSSION

Peakstone moves for dismissal on the grounds that the Flosi Suit was improperly filed

in this Court. Peakstone maintains that the Flosi Suit is duplicative of the Peakstone Suit

because the claims asserted in the Flosi Suit are identical to the compulsory counterclaims

the Flosis asserted in the Peakstone suit. Peakstone contends that “a claim already pending

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before one court cannot and should not be simultaneously filed in another subsequent

lawsuit.” 

In their Response to Peakstone’s Motion to Dismiss, the Flosis “acknowledge that

their claims in this case are compulsory counterclaims in the [Peakstone] cases.” (Doc. # 19,

p.7) They also admit in their Motion to Consolidate that “the claims of the parties are

essentially the same in both cases.” (Doc. # 32, p.7) The Flosis assert that they “did not have

the luxury of assuming this Court [would] see the issues their way [including “maintain[ing]

this case to be adjudicated here”] and refraining from answering the [Peakstone Suit] with

these allegations in the form of counterclaims.” (Doc. # 19, p. 7) The Flosis’s convoluted

reasoning assumes as its premise that filing the instant lawsuit is somehow permitted under

Title VII and the Federal Rules of Civil Procedure. It is not. 

First, while Title VII may allow a litigant to bring his claims in any forum, it does not

allow a litigant to file a duplicative lawsuit as a hedge against a possible unfavorable ruling

in another jurisdiction. Further, Title VII does not entitle a claimant to litigate his case as a

plaintiff. In the first-filed Peakstone suit, the Flosis were required under Federal Rule of

Civil Procedure 13(a) to allege any counterclaims. See Fed. R. Civ. P. 13(a) (requiring that

a “pleading must state as a counterclaim any claim that–at the time of its service–the pleader

has against an opposing party if the claim . . . arises out of the transaction or occurrence that

is the subject matter of the opposing party’s claim . . . .”) (Emphasis added.) The Flosis--

represented by experienced counsel--were obviously aware of Rule 13(a)’s requirement that

they must file their claims as compulsory counterclaims in the Peakstone Suit, but instead

they chose to file the instant suit as a preemptive measure in an attempt to ensure that their

claims were heard in the District of Arizona.

Next, under the Rules of Civil Procedure, if the Flosis wished to litigate their claims

in the District of Arizona, they were required to file a motion to transfer the pending

Peakstone case to this District, not file a duplicative lawsuit. Indeed, the Flosis filed a

Motion to Transfer, which the Mississippi court granted. Accordingly, the Flosis have

achieved their goal of litigating their claims in the District of Arizona. 

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In sum, because the Flosis’ case was improperly filed and is duplicative of the

Peakstone lawsuit, the Court will dismiss the Flosis’s suit. This dismissal does not affect any

of the Flosis’ rights as all of the claims raised in this suit are now pending before Judge Wake

as counterclaims.

As a result of the Court’s ruling above, the Flosis’ Motion to Consolidate is moot.

Nevertheless, the Court notes that the Flosis’s stated reason for consolidation–so that they

may litigate their claims as plaintiffs–is not a compelling one. The Flosis are urged to have

faith in the jury’s ability to render a just verdict based on the merits of the case regardless of

the parties’ status as plaintiff or defendant. 

Accordingly, based on the foregoing,

IT IS ORDERED granting Peakstone’s Motion to Dismiss. (Doc. # 15)

IT IS FURTHER ORDERED dismissing this case without prejudice.

IT IS FURTHER ORDERED denying the Flosis’ Motion to Consolidate as moot.

(Doc. # 32)

Peakstone has requested that the Court award it attorneys’ fees and costs in

responding to this lawsuit pursuant to U.S.C. § 1927, which allows an award of fees against

“[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably and

vexatiously . . . .” As discussed above, the Flosis filed this duplicative lawsuit in clear

contravention of the Federal Rules of Civil Procedure in order to ensure that the case was

litigated in the District of Arizona. In so doing, the Court finds that the Flosis have

unreasonably and vexatiously multiplied the proceedings in this case. Accordingly, 

IT IS FURTHER ORDERED granting Peakstone’s request for attorneys’ fees and

costs in an amount to be determined upon Peakstone’s submission of supporting

documentation.

/ / /

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The Court having granted Peakstone’s Motion to Dismiss and request for attorneys’

fees,

IT IS FURTHER ORDERED denying Peakstone’s Motion for Rule 11 Sanctions.

(Doc. # 45)

IT IS FURTHER ORDERED directing the Clerk of the Court to enter judgment

accordingly.

DATED this 15th day of June, 2010.

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