The Abramson Law Group v. Cardea Capital Group

Background

The Clerk entered a default judgment on January 22, 2025, for The Abramson Law Group, PLLC and against Cardea Capital Group, Inc. (CCG), Cardea Capital Advisors, LLC (CCA), Cardea Corporate Holdings, Inc. (CCH), and Cardea Holdings USA, LLC (CHU). The law group registered the judgment in the U.S. District Court for the Northern District of Georgia. Because the defendants had not satisfied the judgment, the law group moved to compel depositions under Federal Rule of Civil Procedure 30(b)(6), which permits an organization to designate representatives to testify about information known or reasonably available to it.

The defendants later appeared and moved to vacate the judgment and dismiss the law group’s claims. They argued that the federal court lacked subject-matter jurisdiction because complete diversity of citizenship did not exist. They also argued that the retainer agreement required the fee dispute to go to binding arbitration under New York’s fee-arbitration rules.

Vacating the Judgment

The court analyzed the defendants’ request under Federal Rule of Civil Procedure 60(b)(4), which allows a court to vacate a judgment that is void. A judgment is void when the court lacked jurisdiction over the subject matter or parties, or acted inconsistently with due process.

The complaint did not present a federal question, so jurisdiction could exist only through diversity of citizenship. The law group alleged that it was a New York citizen and that the defendants were citizens of Georgia and/or states other than New York. The defendants showed, however, that at least one member of CCA was a New York citizen. Because a limited liability company has the citizenship of all its members, CCA was also a New York citizen. The court therefore held that complete diversity was absent when the case was filed and that the default judgment was void.

The law group did not challenge that conclusion. Instead, it asked the court to remove CCA as a dispensable nondiverse party under Federal Rule of Civil Procedure 21. The court held that CCA was dispensable because the record did not show that CCA or another party would be prejudiced by a judgment in CCA’s absence, a judgment against the other defendants would be adequate, and the law group had an interest in preserving the judgment at this late stage. The court therefore vacated the judgment against CCA and dismissed CCA from the action.

The defendants also stated that a member of CHU was a New York citizen, but they did not establish CHU’s citizenship by identifying every member and each member’s citizenship. The court ordered the defendants, by September 23, 2025, to show cause in writing why the judgment should not be enforced against CHU and why CHU should not be dismissed.

Fee Arbitration

The court rejected the defendants’ argument that the complaint had to be dismissed because the retainer agreement required fee arbitration. New York’s Part 137 fee-arbitration rules do not apply to disputes involving more than $50,000 unless both parties consent. The law group sought more than $50,000 in unpaid legal fees, and neither side had consented to arbitration. The court therefore did not dismiss the claims against the defendants on that ground.

Post-Judgment Discovery

The defendants challenged the law group’s deposition notices on service and location grounds. Although the defendants did not consent to email service, the law group also served the notices by first-class mail, which the court held was valid under Rule 5. The court also noted that the notices allowed depositions at the law group’s office or remotely, including by Zoom, so the defendants could participate from their own office.

The court held that the requested depositions were permissible post-judgment discovery under Federal Rule of Civil Procedure 69(a)(2). That rule gives a judgment creditor broad authority to obtain discovery to aid enforcement of a judgment. The court granted the law group’s motion to compel discovery against the remaining three defendants—CCG, CCH, and CHU. The defendants had to designate one or more representatives and provide their availability by September 23, 2025; all depositions had to be completed by October 7, 2025.

Disposition

The defendants’ motion to vacate the default judgment and dismiss the law group’s claims was granted only as to CCA and denied in all other respects. The court directed the Clerk to vacate the judgment against CCA and dismiss the claims against it. The law group’s motion for Rule 30(b)(6) discovery was granted as to CCG, CCH, and CHU. The court also terminated as moot the law group’s motion to expedite.