IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

DAWN GUIDOTTI on behalf of 

herself and other class members 

similarly situated,

Plaintiff,

v.

LEGAL HELPERS DEBT RESOLUTION, 

L.L.C., et al.,

Defendants.

HONORABLE JEROME B. SIMANDLE

Civil No. 11-1219 (JBS/AMD)

MEMORANDUM OPINION

SIMANDLE, Chief Judge:

This matter is currently before the Court on a motion to 

stay pending appeal by Defendants Global Client Solutions, LLC 

(“Global”) and Rocky Mountain Bank & Trust (“RMBT”) 

(collectively “Defendants”). [Docket Item 123.] Defendants 

have filed an interlocutory appeal to the Third Circuit of this 

Court’s December 20, 2011 decision, [Docket Item 102], which 

denied a motion to compel arbitration. Defs.’ Br. in Supp. of 

Mot. to Stay; [Docket Item 123.] Defendants argue that a stay 

is appropriate because Defendants timely filed an interlocutory 

appeal pursuant to Section 16 of the Federal Arbitration Act 

(“FAA”), and an appeal under Section 16 automatically divests 

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this Court of jurisdiction to proceed until the appeal has been 

fully litigated [Id.] THE COURT FINDS AS FOLLOWS:

1. The facts of this case are set forth in this Court’s 

December 20, 2011 Opinion. [Docket Item 102]; Guidotti v. Legal 

Helpers Debt Resolution, L.L.C., --- F. Supp. 2d ---, 2011 WL 

6720936 (D.N.J. Dec. 20, 2011). This case is a putative class 

action alleging a conspiracy to commit unlicensed debt 

adjustment services in violation of the New Jersey Debt 

Adjustment and Credit Counseling Act, N.J. Stat. Ann. § 17:16G–1 

et seq., the New Jersey RICO statute, N.J. Stat. Ann. § 2C:41–1 

et seq., the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 

56:8–2 et seq., and various other common law causes of action. 

Id. at *1. Plaintiff named twenty two defendants and charged

all defendants collectively with eight different causes of 

action. Id. 

2. This Court’s December 20, 2011 decision resolved three 

separate pairs of motions to dismiss and/or compel arbitration. 

[Docket Items 20, 21, 23, 24, 26, & 27.] These three pairs of 

motions were filed by three groups of defendants. Guidotti, 

2011 WL 6720936, at *2. The first group, the “Law Firm 

Defendants,” connects to this action through Plaintiff’s 

contract for legal and debt negotiation services. Id. This 

group includes two organizational entities, Legal Helpers Debt 

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Resolution, LLC (“LHDR”) and Eclipse Servicing, Inc. 

(“Eclipse”), and seven individual lawyers and corporate officers 

affiliated with these organizations. Id. 

3. The second group, the “Bank Defendants,” connects to 

this action through Plaintiff’s contract to open and operate a 

special bank account out of which she would pay LHDR and 

Eclipse’s fees and in which she would save money that was 

intended ultimately to be paid to her settling creditors. Id.

at *3. Plaintiff names Rocky Mountain Bank & Trust (“RMBT”) as 

the financial institution where she opened this account and 

Global Client Solutions (“Global”) as the “processing agent” 

that would operate the automatic fund transfers into this 

account and automatic payments out of it to LHDR and Eclipse. 

Id. 

4. There are other defendants currently actively 

litigating in this action, such as Defendants Joel Gavalas and 

JG Debt Solutions, L.L.C. These Defendants were not party to 

the motions resolved in the December 20, 2011 Opinion, and they 

are not implicated in the instant motion to stay pending appeal.

5. On December 20, 2011, this Court granted the Law Firm 

Defendants’ motion to compel arbitration and consequently denied

the Law Firm Defendants’ motion to dismiss as moot. Guidotti, 

2011 WL 6720936, at *13. Therefore, the Court dismissed from 

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the action Defendants LHDR, Eclipse, Macey, Aleman, Searnes, 

Hyslip, Nicely, Duncan, and Hedaya. Id. However, the Court 

denied the Bank Defendants’ motion to compel arbitration, 

concluding that Plaintiff did not manifest an intention to be 

bound by the arbitration clause because the clause was 

insufficiently incorporated into the agreement Plaintiff signed. 

Id. at *17. Additionally, the Court denied the motion to 

dismiss for lack of personal jurisdiction or failure to state a 

claim by Defendants Global and RMBT. Id. at *20.

6. On January 17, 2012, Defendants Global and RMBT filed 

a notice of appeal pursuant to Section 16 of the Federal 

Arbitration Act (“FAA”). [Docket Item 104.] The appeal is 

presently pending in the United States Court of Appeals for the 

Third Circuit. See Third Circuit Docket No. 12-1170. Global 

and RMBT’s initial appellate brief was filed with the Third 

Circuit on May 17, 2012. Id. The parties have not yet engaged 

in any discovery, and there are no pending deadlines in this 

Court.

7. On April 13, 2012, Defendants Global and RMBT filed 

the present motion to stay pending appeal of this Court’s 

December 20, 2011 decision. [Docket Item 123.] Plaintiff filed 

opposition on April 19, 2012. [Docket Item 126.] On April 30, 

2012, Defendants filed their reply. [Docket Item 127.] 

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8. In Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 

215 n.6 (3d Cir. 2007), the Third Circuit held that an appeal 

pursuant to §16(a) of the FAA automatically deprives the 

district court of jurisdiction to proceed, so long as the appeal 

is neither frivolous nor forfeited. This ruling has been 

recognized by other district courts in this Circuit since the 

Ehleiter decision. “According to the majority of courts of 

appeals, this standard strikes an appropriate balance between 

the following competing concerns: promoting efficient dispute 

resolution; avoiding inconsistent handling of a case; and 

preventing a party from disrupting a schedule or ‘stalling’ by 

filing a frivolous appeal.” Kirleis v. Dickie, McCamey & 

Chicolte, PC, Civ. No. 06-1495, 2007 WL 3023950, at *2 n.3 (W.D. 

Pa. Oct. 12, 2007) (referencing several cases, including 

McCauley v. Halliburton Energy Servs., Inc., 413 F.3d 1158, 

1162-63 (10th Cir. 2005); Blinco v. Green Tree Servicing, LLC,

366 F.3d 1249, 1253 (11th Cir. 2004); Bradford-Scott Data Corp., 

Inc. v. Physician Computer Network, Inc., 128 F.3d 504, 505 (7th 

Cir. 1997)). 

9. For purposes of determining whether the Court can 

retain jurisdiction over Plaintiffs’ claims against Global 

and RMBT here, where the appeal is currently pending and 

has not been forfeited, the only consideration is whether 

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Defendants’ appeal is frivolous. The Court must apply an 

objective standard to determine whether the appeal is 

frivolous. See Quiroga v. Hasbro, Inc., 943 F.2d 346, 347 

(3d Cir. 1991). More specifically, “[t]he test is whether, 

following a thorough analysis of the record and careful 

research of the law, a reasonable attorney would conclude

that the appeal is frivolous.” Id. (quoting Hilmon Co. 

(V.I.) v. Hyatt Int’l, 899 F.2d 250, 253 (3d Cir. 1990)). 

An appeal is frivolous if, upon review of the record and 

the law, it lacks “colorable support” or is “wholly without

merit.” Nagle v. Alspach, 8 F.3d 141, 145 (3d Cir. 1993). 

10. The Third Circuit “has been reluctant to classify 

appeals as frivolous, so that novel theories will not be 

chilled and litigants advancing any claim or defense which 

has colorable support under existing law or reasonable 

extensions thereof will not be deterred.” Hilmon Co., 899 

F.2d at 253. 

11. Under the circumstances presented here, the Court 

does not find Defendants’ appeal frivolous. Defendants’ 

appeal is not “wholly without merit” and does not lack 

“colorable support” See Nagle, 8 F.3d at 145. This 

decision best comports with the goals of promoting 

efficient dispute resolution and avoiding inconsistent 

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handling of a case. See Kirleis, 2007 WL 3023950, at *2 

n.3. Therefore, Defendants’ motion will be granted.

12. Based on the foregoing reasons, the Court will grant 

Defendants’ motion to stay pending appeal. The order to stay 

will apply only to Plaintiff’s claims against Global and RMBT, 

the sole parties to the pending appeal. The accompanying Order 

will be entered.

August 7, 2012 s/ Jerome B. Simandle

Date JEROME B. SIMANDLE

Chief U.S. District Judge

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