Fishman Jackson PLLC v. Israely

• Decision Date: 12 April 2016
• Docket Number: CIVIL ACTION NO. 3:15-CV-2897-G
• Citation: 180 F.Supp.3d 476
• Parties: Fishman Jackson PLLC f/k/a Fishman Jackson Luebker PLLC, Plaintiff/Counter-Defendant, v. Ilan Israely, Defendant/Counter-Plaintiff.
• Court: U.S. District Court — Northern District of Texas

180 F.Supp.3d 476

Fishman Jackson PLLC f/k/a Fishman Jackson Luebker PLLC, Plaintiff/Counter-Defendant,
v.
Ilan Israely, Defendant/Counter-Plaintiff.

CIVIL ACTION NO. 3:15-CV-2897-G

United States District Court, N.D. Texas, Dallas Division.

Signed April 12, 2016

180 F.Supp.3d 479

Donald O. Walsh, Fishman Jackson & Luebker PLLC, Dallas, TX, for Plaintiff/Counter-Defendant.

Brad Jackson, Cheryl L. Mann, Law Offices of Brad Jackson, Dallas, TX, for Defendant/Counter-Plaintiff.

MEMORANDUM OPINION AND ORDER

A. JOE FISH, Senior United States District Judge

Before the court is the plaintiff's motion to vacate (docket entry 19) the stay granted by the court on December 14, 2015 (docket entry 18). For the reasons stated below, the motion is denied.

I. BACKGROUND

A. Factual Background

This case concerns claims by Fishman Jackson PLLC (“Fishman Jackson”) against Ilan Israely (“Israely”) for unpaid attorney's fees, as well as Israely's counterclaims against Fishman Jackson for breach of contract and legal malpractice. Defendant's Motion to Stay Proceeding Pending State Court Appeal and Brief in Support (“Defendant's Motion to Stay”) ¶ 1 (docket entry 15). Fishman Jackson represented Israely as a defendant in a lawsuit tried before a state court jury in the 370th District Court in Hidalgo Country, Texas (“the Hidalgo County lawsuit”). See id. The jury reached a verdict adverse to Israely, and, in October 2014, the state trial court entered judgment against Israely in the amount of $2,665,832.72 for damages and $569,062 for attorney's fees. Id.

Israely appealed the judgment of the state trial court. Id. Israely's appeal (“the state court appeal”) is currently pending before the Texas Thirteenth District Court of Appeals. Id. The parties to the state court appeal are Israely and Sky View at Las Palmas LLC, as appellants, and Roman Geronimo Martinez Mendez and San Jacinto Title Services of Rio Grande Vallet, LLC, as appellees. Plaintiff's Motion to Vacate Stay (“Plaintiff's Motion to Vacate”) ¶ 8 (docket entry 19).

On September 3, 2015, Fishman Jackson filed the current suit seeking recovery of unpaid legal fees for the services it rendered to Israely defending him in the Hidalgo County lawsuit. Defendant's Motion to Stay ¶ 2. Israely filed a counterclaim for breach of contract and legal malpractice. Id. In his counterclaim, Israely alleged that “Fishman Jackson failed to object at trial to the presentation of... evidence of [the] [state court] plaintiff's attorney's fees which were awarded in full against [Israely]” and that Fishman Jackson's alleged failure to object “resulted in an award of attorney's fees against Israely on fraud claims for which no attorney's fees were recoverable.” Id. Israely also alleged that he had other potential malpractice claims against Fishman Jackson. Id. Fishman Jackson maintains that Israely's malpractice

180 F.Supp.3d 480

claims are “frivolous and utterly without merit.” Plaintiff's Reply to Defendant's Response to Motion to Vacate Stay (“Plaintiff's Reply”) ¶ 12 (docket entry 21). Israely intends to use his claims of attorney malpractice as a defense to Fishman Jackson's fee claims. See Defendant's Motion to Stay ¶ 5.

In the state court appeal, the state appellate court will decide whether the award of attorney's fees against Israely in the Hidalgo County lawsuit was “excessive.” Id. ¶ 7. If the state appellate court finds that the award was excessive, it could remand the case to the state trial court, rendering Israely's primary malpractice counterclaim in the current case moot. Id. Israely also claims that the state appellate court could reverse most of the damages against him or, conversely, give him grounds for additional malpractice claims against Fishman Jackson. Id. ¶ 9. The reply brief in the state court appeal was due on January 15, 2016. Defendant's Motion to Stay ¶ 11.

B. Procedural Background

On December 10, 2015, Israely filed a motion to stay proceedings in this court pending the state court appeal. See id. In the motion, Israely argued that this court should stay the current case under the court's inherent powers. Id. ¶ 4. Israely relied on a legal test derived from the United States Supreme Court's decision in Landis v. North American Co. , 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1936). Id. He maintained that Fishman Jackson could suffer no injury from the stay, because the resolution of the state court appeal could possibly help Fishman Jackson. Id. ¶ 9. Israely also argued that granting the stay would be an efficient use of judicial resources and that the stay could help him by giving him grounds for additional malpractice claims against Fishman Jackson. Id. ¶¶ 9-10. The court granted the stay requested by Israely four days later on December 14, 2015, pending the result of the state court appeal. See Order of December 14, 2015 (docket entry 18).

On December 21, 2015, after the court granted the stay, Fishman Jackson filed a motion to vacate the stay. See Plaintiff's Motion to Vacate. Fishman Jackson argued that this court may only issue a stay pending a state court decision under “extraordinary circumstances.” Id. ¶ 3. Fishman Jackson relied on a legal test derived from the United States Supreme Court's decision in Colorado River Water Conservation District v. United States , 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). See id. ¶ 6. First, Fishman Jackson argued that a stay was inappropriate under Colorado River, because the state court appeal and the case before this court are not “parallel.” Id. ¶ 7. In the alternative, Fishman Jackson contended that, even if the cases were parallel, the court did not have discretion to grant the stay, because the Colorado River factors weighed against a stay. Id. ¶ 10.

On January 11, 2016, Israely filed a response to Fishman Jackson's motion to vacate. See Defendant's Response to Motion to Vacate Stay (“Defendant's Response”) (docket entry 20). In his response, Israely did not address the Colorado River factors. See id. ¶ 3. Instead, Israely reiterated that he had sought a stay under the court's inherent powers recognized in the Landis decision, rather than under the Colorado River test. Id. ¶ 4. Israely incorporated the arguments he made in his original motion to stay into his response. Id.

On January 25, 2016, Fishman Jackson filed a reply. See Plaintiff's Reply. In the reply, Fishman Jackson argued that “as between state and federal courts,” the Colorado River test, not the Landis decision, controls. Id. ¶ 3. In the alternative, Fishman

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Jackson argued that—even under a test derived from the Landis decision—a stay pending the state appellate court decision was inappropriate. Id. ¶¶ 4-10. In particular, Fishman Jackson argued that Israely would not be harmed by going forward with the case, that only Fishman Jackson stands to gain from the outcome of the state court appeal, and that Fishman Jackson did not want a stay. Id. ¶ 8, 12. Fishman Jackson also argued that it could be years before the state court appeal is finally resolved before the Texas Supreme Court. Id. ¶ 6.

II. ANALYSIS

The instant motion to vacate will be construed as a motion for reconsideration. “[T]he Federal Rules of Civil Procedure do not recognize a general motion for reconsideration....” St. Paul Mercury Insurance Company v. Fair Grounds Corporation , 123 F.3d 336, 339 (5th Cir.1997). However, courts do rule on motions for reconsideration under Rules 54(b), 59, and 60. See Rotella v. Mid – Continent Casualty Company , No. 3:08–CV–0486–G, 2010 WL 1330449, at *5 (N.D.Tex. Apr. 5, 2010) (Fish, J.). A request that the court reconsider an interlocutory order falls under Rule 54(b). See FED. R. CIV. P. 54(b) ; see also Lavespere v. Niagara Machine & Tool Works, Inc. , 910 F.2d 167, 185 (5th Cir.1990), cert. denied , 510 U.S. 859, 114 S.Ct. 171, 126 L.Ed.2d 131 (1993), abrogated on other grounds by Little v. Liquid Air Corporation , 37 F.3d 1069, 1075 n. 14 (5th Cir.1994) (en banc).

Under Rule 54(b), “any order or other decision, however designated, that adjudicates fewer than all claims or the rights and liabilities of fewer than all the parties...may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” Although the precise standard for evaluating a motion to reconsider under Rule 54(b) is unclear, “whether to grant...a motion [to reconsider] rests within the discretion of the court.” Dos Santos v. Bell Helicopter Textron, Inc. District , 651 F.Supp.2d 550, 553 (N.D.Tex.2009) (Means, J.). Further, even though the standard for evaluating a motion to reconsider under Rule 54(b) “would appear to be less exacting than that imposed by Rules 59 and 60 ..., considerations similar to those under Rules 59 and 60 inform the [c]ourt's analysis.” Id.

In contrast to Rule 54(b), which deals with reconsideration of interlocutory orders, Rules 59 and 60 deal with reconsidering judgments. Under these two rules, “[m]otions for reconsideration have a narrow purpose and are only appropriate to allow a party to correct manifest errors of law or fact or to present newly discovered evidence.” Arrieta v. Yellow Transportation, Inc. , No. 3:05–CV–2271–D, 2009 WL 129731, at *1 (N.D.Tex. Jan. 20, 2009)...