Judge Wright Denies John Steele's Motion, Says Any Problem Is Steele's Own Fault, Directs Him To Legal Clinic

from the oh,-and-more-sanctions-on-the-way dept

Steele’s instant Motion for Reconsideration fails on every front. First, he does not assert a proper legal basis for reconsideration. Steele cites no law in his Motion. And during the hearing, Steele claimed that his basis for reconsideration was his Fifth Amendment right to due process. Exactly how this translates to a legal basis for reconsideration is anyone’s guess. Steele’s Motion offers nothing new for the Court to consider—he uses it only as a vehicle to rehash his earlier-rejected arguments.

Second, assuming this is a proper motion for reconsideration, the Court finds that any failure by Pietz and Ranallo to serve papers to Steele was caused by Steele’s own incompetence. On May 16, 2013, Steele filed his Request for Approval of Substitution of Attorney, where he requested to represent himself in place of his attorney Thomas Mazzucco. (ECF No. 143.) But in the Request and the accompanying forms, Steele entered his address incorrectly—not once, but four times. And because the Clerk of Court entered on the docket Steele’s address as shown, it is very likely that correspondence sent via mail since May 16, 2013, never reached Steele. Nevertheless, it is Steele’s duty to ensure that the Court has his proper address. See L.R. 41-6 (authorizing the Court to dismiss an action for a pro se party’s failure to update his address with the Court). And Steele has a duty to provide the Court with not only his current address, but also his telephone number, fax number, and email address. See id.; L.R. 83-2.7. Steele cannot skirt this duty merely because he is in pro se—the Local Rules apply whether a party is represented by an attorney or in pro se. L.R. 1-3 (“Persons appearing pro se are bound by these rules, and any reference in these rules to ‘attorney’ or ‘counsel’ applies to parties pro se unless the context requires otherwise.”).

Fourth, although Steele seems to contend that this lack of service prejudiced him, because he was nonetheless involved in the motions filed by his cohorts through his joint and several liability for the Court-ordered sanctions, evidence suggests that Steele had actual knowledge despite any failure by Pietz and Ranallo to properly serve him. Pietz presents an email chain suggesting that Steele was centrally involved in the entire supersedeas bond issue, with Steele commenting, “Philip [Vineyard], Great motion.” (Pietz Decl., Ex. 2.) Moreover, Steele’s intimate knowledge of the case docket—in sufficient detail to point out the documents that have not been served— further suggests that he had actual knowledge of the papers filed by Pietz and Ranallo. (See e.g., ECF No. 197, at 2.) This raises the question how Steele was able to do this given his assertions at the hearing that he did not log onto CM/ECF or otherwise see the case docket.

Finally, the Court notes that the Prenda parties (John Steele, Paul Duffy, Paul Hansmeier, Peter Hansmeier, Mark Lutz, AF Holdings LLC, Ingenuity 13 LLC, and Prenda Law, Inc.) continue to act in concert. Philip Vineyard’s email chain, addressed to a number of these Prenda parties, confirms this. Also, the similarities in the substance, formatting, footers, and service list of the three Notices to the Court, filed by Mark Lutz, Paul Hansmeier, and Peter Hansmeier, in relation to Steele’s instant Motion further indicate that at least the four of them are in cahoots. (ECF Nos. 201– 204.) The concurrent filing of their papers are another indication of their relatedness. Even without these indicia, the Court has already determined that the Prenda parties have a history of conspiring together—there is nothing to suggest that they have stopped.

Steele is advised that the Federal Pro Se Clinic is located in the United States Courthouse at 312 N. Spring Street, Room G-19, Main Street Floor, Los Angeles, California 90012. The clinic is open on Mondays, Wednesdays, and Fridays between the hours of 9:30 a.m. to 12:00 p.m. and 2:00 p.m. to 4:00 p.m. The Federal Pro Se Clinic offers free, on-site information and guidance to individuals who are representing themselves in federal civil actions. Steele is encouraged to visit the clinic for advice concerning his case.

The Court recognizes the difficulties that the Prenda parties are encountering in trying to obtain a bond. Nonetheless, the Prenda parties have missed their July 15, 2013 deadline, which the Court previously extended. Prenda’s characteristic last-minute scramble once again falls short. Having fallen short, they once again seek relief. But none will be given.



The Court hereby sanctions each of the following persons or entities $500 per day, per person or entity, retroactive to July 16, 2013: John Steele, Paul Duffy, Paul Hansmeier, Ingenuity 13 LLC, AF Holdings LLC, and Prenda Law, Inc. This sanction must be paid to the Clerk of Court at the same time the cashier’s check is deposited. Thus, if the Prenda parties deposit the cashier’s check on Friday, July 19, 2013, then they must also pay a sanction of $12,000 to the Clerk of Court. If they deposit the check on Monday, July 22, 2013, the sanction rises to $21,000.

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Well, this hardly comes as a surprise, but after John Steele tried, via multiple motions and a disastrous in court appearance , to argue that his own due process rights had been violated because opposing attorneys Morgan Pietz and Nick Ranallo had not properly "served him" (and, further to have those lawyers sanctioned for such "fraud"), Judge Wright has denied the motion . The full filing is, once again, worth reading. He points out that this second motion doesn't offer anything new from the earlier motion, and explains why Steele failed, by any definition under the law, to meet the requirements for such a motion. But, that's only the warmup to Wright verbally benchslapping Steele for his ridiculous conduct once again. First, in response to the Fifth Amendment claims from Steele, Wright is direct and to the point:As for the basic claims that Pietz and Ranallo somehow failed to serve Steele, Wright points out that, even if Steele was not properly served, it was solely as a result of his own mistakes.You may remember that, during the hearing, Judge Wright pulled up that Request for Approval of Substitution of Attorney and asked Steele about it -- leading to what multiple people present noted was an extremely uncomfortably long silence. That silence, of course, was likely Steele's brain coming to terms with the fact that he'd painted himself into a total corner.Furthermore, Wright points out that contrary to Steele's suggestion that he had no idea what was going on in the case and had not even looked at the document -- a highly unbelievable claim in the first place -- the actual evidence, including Steele's own statements, showed the exact opposite.Oops. It looks like, as expected, Steele's inability to stop himself from trying to talk his way out of his situation has meant that he's been caught out by his own wordsJudge Wright also notes that it's also clear that Steele is still working closely with the rest of Team Prenda, despite denials. This was rather obvious from the fact that Steele, both Hansmeiers and Lutz all filed motions making the same argument on the same day -- including the formatting, footers and other bits of the filings being identical. In the courtroom, Wright had asked about this, leading Steele to try to tapdance around it, and then get angry and yell at the judge (leading to the quick end of the hearing).The end result is not just a dismissal, but Judge Wright declaring the motion "meritlessfrivolous" and then says that because it was frivolous, Pietz and Ranallo can seek Rule 11 sanctions against Steele for making them go through the whole process of dealing with those motions (including having to hire a lawyer of their own to defend against the accusations of fraud on their part).And, as a final kick in the pants, Judge Wright adds this little kicker to the end of the order:Of course, incases, a pro se party is a non-lawyer, so it might be reasonable to direct them to a clinic to learn a bit about the judicial process. In a situation like this, where Steele is (amazingly, I know) an actual bar-certified lawyer (though not in California) suggesting he visit the Federal Pro Se Clinic for "advice concerning his case" is about the nicest ways possible for Judge Wright to John Steele "you are a really, really, really bad lawyer."Oh, and that wasn't the final piece of business for Judge Wright on the Prenda matter either. There was also the issue of the bond for the money they already owe in sanctions. Wright responded to Paul Duffy's request for an order allowing a cashier's check, rather than a bond (apparently, they're having trouble getting a bond), by noting no such order is necessary, but also pointing out that Team Prenda -- as per usual, waited until the last minute, and did not pay on time, and thus, extra sanctions have been added:It feels like there needs to be a "Judge Wright is not impressed" meme...

Filed Under: due process, john steele, morgan pietz, nicholas ranallo, otis wright, pro se, sanctions

Companies: af holdings, prenda, prenda law