Innovative Sports Management, Inc. v. Gutierrez

Background

Innovative Sports Management, Inc. asked the court not to vacate its earlier order granting in part a motion for default judgment and the resulting judgment. It also asked for a 30-day stay, meaning a temporary pause in the case.

The request followed an order in a related proceeding, No. CV 19-08726 (C.D. Cal.). That order vacated a default judgment in the plaintiff’s favor after finding that the plaintiff’s New Jersey certificate of incorporation had been revoked in 2015. It also prohibited the plaintiff from filing new lawsuits, prosecuting pending lawsuits, or enforcing outstanding judgments pending further order. The plaintiff told this court that it had been reinstated as a valid New Jersey corporation, retroactive to the date of revocation, and sought a stay while the related proceeding addressed its ability to prosecute other matters.

Court’s Analysis

The court reserved final decisions on whether the judgment should be vacated and whether the case should be dismissed with prejudice. It instead analyzed whether a stay was appropriate. The court considered whether discovery was complete or a trial had been scheduled, whether a stay would simplify the issues, and whether the stay would unfairly prejudice the nonmoving party.

The court found that these factors favored a stay. Although the case was at a late stage because the court had entered a default judgment and awarded attorneys’ fees and costs, no discovery had occurred and no trial date had been set. A stay could simplify the questions of whether the judgment should be vacated and whether the case should be dismissed, because those questions depended on the effect of the plaintiff’s reinstatement on lawsuits brought between 2015 and 2023. The court also noted that the related proceeding was likely to address those issues and that deciding the plaintiff’s pending motion to alter the judgment could waste judicial resources if the judgment could not be enforced.

The court found no undue prejudice or clear tactical disadvantage to the defendants, who had failed to appear or respond to the summons. It also noted that the plaintiff could face prejudice from conflicting rulings if the case were not stayed.

Disposition

The court GRANTED the plaintiff’s request for a limited stay. It ORDERED that the case remain stayed pending further order in the related proceeding, No. CV 19-08726 (C.D. Cal.). The plaintiff must file a status report about that proceeding, attaching any written decision concerning its ability to prosecute or enforce the judgment in this case, no later than September 27, 2023. The order was issued by Beth Labson Freeman, United States District Judge.