Marks & Sokolov LLC v. Shahrokh Mireskandari
704 F. App'x 171
| 3rd Cir. | 2017

Background

  • Marks (Pennsylvania attorney) sued Defendants Mireskandari (California) and Baxendale‑Walker (England) to collect unpaid attorney’s fees after representing them in a California RICO matter.
  • Defendants delayed responding, filed a California arbitration petition then withdrew it and filed a malpractice action in California; they used the Complaint here in those proceedings. Plaintiff filed as "Marks & Sokolov, LLC;" Marks later claimed the real party in interest was Marks Law Offices, LLC (his single‑member LLC) d/b/a Marks & Sokolov.
  • After repeated failed service attempts and alternative service authorized by the District Court (mail, email, service on California counsel), the District Court entered default judgment for $229,693.25. Defendants moved under Rule 60(b) to set aside the default; the court denied relief. Defendants appealed multiple orders.
  • The District Court permitted substitution of Marks Law Offices, LLC as the real party in interest under Fed. R. Civ. P. 17(a)(3); the court found Marks Law Offices, LLC was the entity that contracted with Defendants and Marks was its sole member.
  • The District Court found Baxendale‑Walker in civil contempt for refusing post‑judgment discovery; Baxendale‑Walker’s medical evidence was found unreliable and inadequate to show inability to comply.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether substitution of Marks Law Offices, LLC under Rule 17 was proper and whether federal diversity jurisdiction exists Marks argued the captioned plaintiff was a trade name of Marks Law Offices, LLC and the LLC (Marks a PA resident) is the real party in interest Defendants argued the real party in interest was an international partnership including Sokolov (a Russian resident), defeating diversity Court upheld substitution under Rule 17(a)(3); found Marks Law Offices, LLC was the real party in interest and diversity jurisdiction under 28 U.S.C. § 1332(a)(2) exists
Whether default judgment is void for lack of proper service (Rule 60(b)(4)) Marks argued extensive, alternative service (mail, email, service on counsel) satisfied Rule 4 and due process; Defendants had actual notice Defendants argued improper service (challenge to alternative service and Hague/Rule 4(f) constraints for foreign defendant) Court found service reasonably calculated to give notice, consistent with Rule 4 and Due Process; Rule 60(b)(4) relief denied
Whether excusable neglect warrants relief from default (Rule 60(b)(1)) Marks argued Defendants had actual notice and engaged in delay tactics; they offered no meritorious defense or timely action Defendants claimed trouble finding counsel and other procedural excuses for delay Court found no excusable neglect: defendants had notice, delayed nearly a year, acted in bad faith/dilatory fashion; Rule 60(b)(1) relief denied
Whether contempt findings and denial of reconsideration were improper (civil contempt; due process) Marks argued Baxendale‑Walker failed to comply with discovery and offered unreliable evidence of incapacity Baxendale‑Walker argued medical evidence showed inability and that denial of a full evidentiary hearing violated due process Court held contempt orders were proper: submitted medical materials were incompetent under Rule 702; due process satisfied by notice, motion practice, submissions, and oral argument; contempt affirmed

Key Cases Cited

  • Gardner v. State Farm Fire & Cas. Co., 544 F.3d 553 (3d Cir. 2008) (Rule 17(a)(3) aims to avoid forfeiture when plaintiff misnames the real party)
  • Water Splash, Inc. v. Menon, 137 S. Ct. 1504 (U.S. 2017) (Hague Convention Article 10(a) permits service by mail if receiving state has not objected)
  • Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007 (9th Cir. 2002) (Rule 4(f)(3) permits a wide range of alternative service methods, including mail to last known address and service on counsel)
  • Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306 (U.S. 1950) (Due Process requires notice reasonably calculated to apprise interested parties)
  • Nara v. Frank, 488 F.3d 187 (3d Cir. 2007) (factors for excusable neglect and Rule 60(b) analysis)
  • Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (U.S. 1993) (standards for assessing excusable neglect)
  • Coltec Indus., Inc. v. Hobgood, 280 F.3d 262 (3d Cir. 2002) (declining Rule 60(b) relief where party seeks to avoid consequences of counseled decisions)
  • Newton v. A.C. & S., Inc., 918 F.2d 1121 (3d Cir. 1990) (due process standards for civil contempt proceedings)
  • Harris v. City of Philadelphia, 47 F.3d 1311 (3d Cir. 1995) (mere assertion of inability is insufficient to avoid contempt)
  • Budget Blinds, Inc. v. White, 536 F.3d 244 (3d Cir. 2008) (standard of review for Rule 60(b)(4) challenges to default judgment)
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