Opinion ID: 771992
Heading Depth: 2
Heading Rank: 1

Heading: The Parade of Defense Attorneys and the Entry of Defaults

Text: 7 Defendants were initially represented by the firm of Spilky & Spilky (Spilky firm). In January 1998, that firm moved to be relieved on the ground, inter alia, that defendants had failed to pay fees in connection with the defense. The district court allowed the Spilky firm to withdraw and gave defendants four weeks to obtain new counsel. It stated that if new counsel were not obtained within that time, the court would permit Powerserve to move for a default judgment. In February 1998, defendants indicated that Tompkins & Kokkoris would represent them; Tompkins & Kokkoris did not enter its appearance, however, until April 1998. 8 In November 1998, Tompkins & Kokkoris moved to withdraw from representing all defendants on the ground, inter alia, of defendants' failure to pay fees. The district court held the motion in abeyance, ordering the firm to inform its clients of the motion to withdraw and to appear with the clients at a conference on December 11 (December 1998 Conference). At the December 1998 Conference, all counsel appeared; Zar, Edward, and Edmond appeared personally (a new law firm entered an appearance for Edward and Edmond in January 1999; Zar continues pro se). Lavi did not appear at the December 1998 Conference. His daughter Angella Lavi Mottahedeh attended and stated that Lavi was unable to attend because he was incarcerated on an unrelated matter. 9 The court granted Tompkins & Kokkoris's motion to withdraw with respect to all of the individual defendants; it reserved decision as to Omega, pending the parties' attempt to settle the case. The court gave Lavi and Omega four weeks to negotiate a settlement or retain new counsel; it informed Mottahedeh that if there were no settlement and no retention of new counsel, the court would permit Powerserve to file a motion for a default judgment. 10 On January 8, 1999, another conference (January 1999 Conference) was held. The case had not been settled, and Mottahedeh reported that neither Omega nor Lavi had obtained new counsel. The district court granted Tompkins & Kokkoris's motion to be relieved as counsel for Omega. Mottahedeh attempted, pursuant to a power of attorney, to represent Lavi. The district court rejected her attempt as she was not an attorney. Mottahedeh then requested an extension of time to obtain counsel for her father and Omega; the district court denied her request. In accordance with its warning at the December 1998 Conference, the court authorized Powerserve to move for a default judgment against Lavi and Omega. It set a January 29, 1999 deadline for the filing of the motion and a March 1, 1999 deadline for the submission of opposition papers. 11 On March 11, 1999, in accordance with Fed. R. Civ. P. 55(a), the district court clerk entered the defaults of Lavi and Omega. The default certification noted, inter alia, that Lavi and Omega, having been granted until January 8, 1999, to obtain legal representation, and having advised the court on that date that Lavi could not appear in person and that no attorney had been obtained for either defendant, Parviz Lavi was in default for not appearing in person or by an attorney as directed by the Court and Omega is also in default for not appearing by an attorney as directed by the Court, Clerk's Certificate entered March 11, 1999, ¶3(c). 12 In the meantime, Powerserve timely moved for a default judgment. In addition to recounting the course of the litigation and noting that discovery had been impeded by the repeated withdrawals of counsel, each of which had asserted a lien on defendants' files, Powerserve argued that the delays imperiled its collection of an eventual judgment against Lavi and Omega because of collusive conveyances. In support of its contentions, Powerserve's counsel submitted an affidavit stating, inter alia, that discovery had revealed that in May 1998, a judgment for more than $1 million had been obtained against Lavi and Omega by Lavi's brother, and that during the past several years 13 Parviz Lavi ha[d] wire transferred substantial sums of money in excess of $100,000 to his son Edmond Lavi... and... when such funds were needed by Parviz Lavi, Edward Lavi wire-transferred those funds to accounts of Parviz Lavi's daughter, Angela [sic] Mottahedeh for Parviz Lavi's use. 14 (Affidavit of Michael R. Klekman dated January 22, 1999, ¶14.) Thus, Powerserve noted that though Parviz Lavi is the real or beneficial owner of several properties in New York and California[,]... there is a danger of transfer of those properties and assets out of the reach of judgment creditors. (Id.) 15 Lavi and Omega did not file opposing papers by the March1 deadline. On March 10, a third firm, Reisman, Peirez, Reisman & Calica wrote to the court seeking permission to appear as counsel for Lavi/Omega and to cross-move under Fed. R. Civ. P. 6(b) for a nunc pro tunc enlargement of time within which to oppose Powerserve's motion for a default judgment. 16