Russell v. Maman

Background

Stephen Russell sued several security consultants and related companies, alleging claims including racketeering, fraudulent misrepresentation, unfair competition, and intentional infliction of emotional distress. Nir Maman and CT 707 filed counterclaims against Russell, and Maman and CT 707 filed third-party claims against Ronen Shlomo and Bsecure. Shlomo and Bsecure filed cross-claims against Russell.

The court previously granted some summary-judgment motions and denied another. Russell later failed to appear at a case-management conference and failed to respond to two orders requiring him to explain why his claims should not be dismissed for failing to prosecute the case. The court dismissed Russell’s claims for failure to prosecute. Maman and CT 707 then failed to meet a deadline to show why their counterclaims against Shlomo and Bsecure should not be dismissed. On August 28, 2023, the court entered final judgment: for the defendants on Russell’s complaint; for Shlomo and Bsecure on Maman and CT 707’s third-party complaint; for Shlomo and Bsecure on their cross-claims against Russell; and for Russell on Maman and CT 707’s counterclaim, based on failure to prosecute.

Motion to Set Aside Judgment

Maman moved under Federal Rule of Civil Procedure 60(b), which permits relief from a judgment for reasons including mistake, surprise, or excusable neglect. He argued that he did not receive the order requiring him to respond by August 25, 2023.

The court applied the factors identified in Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership: prejudice to the opposing party, the length and effect of the delay, the reason for the delay and whether it was within the moving party’s control, and good faith. The court found that the prejudice factor favored Maman and CT 707 because Russell had repeatedly failed to appear and had not shown that setting aside the judgment would prejudice him. But the other factors favored denial. The court emphasized Maman’s earlier missed deadlines and conferences, failure to oppose a summary-judgment motion concerning his own claims, failure to keep his contact information current, and failure to obtain new counsel after being advised to do so. It concluded that his repeated failure to follow court rules was not excusable neglect and that he had not acted in good faith.

The court therefore denied Maman’s motion to set aside judgment. Russell’s late opposition was not considered because it was filed twelve days after the court-imposed deadline.

Motion to Establish Costs

The final judgment required Shlomo and Bsecure to seek an award of defense costs, with Russell responsible under an indemnity provision in the relevant contract. Shlomo and Bsecure sought $158,248.38 for fees and expenses incurred defending against Maman and CT 707’s third-party complaint. Their counsel reported spending at least 713.6 hours at an approximate hourly rate of $221.76 and submitted time records and invoices.

The court found the hours and rate reasonable in light of the litigation’s length and attorney rates in the district. It granted Shlomo and Bsecure’s motion to establish costs and ordered Russell to pay $158,248.38 by February 29, 2023, in addition to amounts listed in the final judgment. The court also vacated the November 16, 2023 hearing because the motions could be decided without oral argument.