Katz v. Enterprise Solution, et al Doc.

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Case 1:04-cv-01240-JCC-TRJ Document 36 Filed 08/05/2005 Page 1 of 6

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF VIRGINIA

Alexandria Division

KEITH B. KATZ, )
)
Plaintiff, )
)
v. ) 1:04cv1240(JCC)
)
ENTERPRISE SOLUTIONS, INC., )
ET AL., )
)
Defendants. )

M E M O R A N D U M O P I N I O N

This matter comes before the Court on Plaintiff Katz’s

Motions to Reconsider Summary Judgment Order and to Reconsider

Order Staying the Trial of Defendant Michael Goosby. For the

following reasons, the Court will deny Plaintiff’s Motion to

Reconsider its Summary Judgment Order and grant Plaintiff’s

Motion to Reconsider its Order staying the trial of Defendant

Goosby.

I. Background

On October 18, 2004, Plaintiff Keith Katz filed a four-

count Complaint against Defendants Enterprise Solutions, Inc.

(“ESI”) and its president, Michael Goosby. Katz pled causes of

action for breach of contract (Count I), unjust enrichment (Count

III), and wrongful termination (Count IV) against ESI. Count II,

for failure to pay overtime in violation of the Fair Labor

[Link]
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Standards Act, 29 U.S.C. §§ 201, et seq. (“FLSA”), was pled

against both ESI and Goosby.

On May 18, 2005, Plaintiff filed a Motion for Summary

Judgment on all claims. Defendant Goosby did not file a

response. By Order dated June 21, 2005 (the “Summary Judgment

Order”), the Court partially granted and partially denied

Plaintiff’s Motion for Summary Judgment. With respect to Count

II, Plaintiff’s Motion was denied.

Trial was scheduled for June 28, 2005. By Order dated

June 27, 2005 (the “Stay Order”), the Court stayed this action

based on ESI’s filing of a petition for Chapter 7 Bankruptcy.

Plaintiff asks the Court to reconsider the Summary

Judgment Order and enter summary judgment in favor of Plaintiff

on Count II against Defendant Goosby. Plaintiff also asks the

Court to reconsider the Stay Order staying the trial of Defendant

Goosby.

II. Standard of Review

Under Federal Rule of Civil Procedure 59, a party may

make a motion to alter or amend a court’s ruling within ten days

after entry of the judgment. Such a motion is a proper means

“(1) to accommodate an intervening change in controlling law; (2)

to account for new evidence not available at trial; or (3) to

correct a clear error of law or prevent manifest injustice.”

U.S. ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d

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284, 290 (4th Cir. 2002)(quoting Pacific Ins. Co. v. Am. Nat’l

Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)). However,

“because of the interests in finality and conservation of

judicial resources, Rule 59(e) motions should be granted

sparingly.” Thompson v. Direct Impact Co., 63 F. Supp. 2d 721,

724 (E.D. Va. 1998). Such a motion is not the proper vehicle to

obtain reargument on issues already decided. Id. It is “within

the sole discretion of the Court as to whether the granting of a

motion to reconsider is appropriate.” Clark v. Va. Bd. of Bar

Examiners, 861 F. Supp. 512, 518 (E.D. Va. 1994).

III. Analysis

A. The Summary Judgment Order

Plaintiff argues that he is entitled to summary

judgment as a matter of law on Count II of his Complaint against

Defendant Goosby because Goosby failed to file any response to

Plaintiff’s Motion for Summary Judgment.

When a motion for summary judgment is made and

supported as provided in this rule, an adverse party
may not rest upon the mere allegations or denials of
the adverse party’s pleading, but the adverse party’s
response, by affidavits or as otherwise provided in
this rule, must set forth specific facts showing that
there is a genuine issue for trial. If the adverse
party does not so respond, summary judgment, if
appropriate, shall be entered against the adverse
party.

Fed. R. Civ. P. 56(e).

Plaintiff argues that he has established the requisite

elements for Defendant Goosby’s violation of the FLSA. However,

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in addressing Count II in its June 21, 2005 Memorandum Opinion,

the Court determined that the question of whether Plaintiff was

an employee of ESI is a question of fact that cannot be

determined on summary judgment. Accordingly, as the Court

previously found, summary judgment on Count II is not

appropriate.

B. The Stay Order

Plaintiff requests that the Court reconsider its Stay

Order and allow him to proceed to trial against Goosby on Count

II of the Complaint. Goosby has not responded to Plaintiff’s

Motion.

When ESI filed its petition in bankruptcy under Chapter

7 of the Bankruptcy Code, all proceedings against ESI were

automatically stayed in accorded with 11 U.S.C. § 362. The Court

stayed the entire case, so as to avoid trying the matter piece-

meal.

It is well-established that a court may, in the

exercise of its discretion, stay proceedings in an effort to

“control the disposition of the causes on its docket with economy

of time and effort for itself, for counsel, and for litigants.”

Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). Such power is

not without limitation, however. Williford v. Armstrong World

Indus., 715 F.2d 124, 127 (4th Cir. 1983). “[P]roper use of this

authority calls for the exercise of judgment which must weigh

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competing interests and maintain an even balance.” Id.

(citations omitted and internal quotations omitted). A party

seeking a stay “must justify it by clear and convincing

circumstances outweighing potential harm to the party against

whom it is operative.” Id.

ESI argues that it would be greatly prejudiced were the

Court to allow Plaintiff to move forward to trial against Goosby

in his individual capacity because Goosby is the President of

ESI. ESI points out that any statements made at a trial on the

merits by Goosby or any other witness could be admitted at a

future proceeding against ESI. In addition, in its by-laws, ESI

has agreed to indemnify and defend any officer in any suit that

arises in connection with his employment or by association with

ESI. ESI argues that this potential prejudice outweighs any

possible harm to the Plaintiff.

However, the chance of duplicative litigation is slight

here. See Gouker v. Murphy Motor Freight, Inc., 84 B.R. 537, 539

(Bankr. N.D. Ind.)(“The likelihood of duplicative litigation is

slight where, as here, the bankrupt defendant proceeds under

Chapter 7 of the Bankruptcy Code”). Should ESI’s bankruptcy

proceedings be completed and the corporation liquidated, ESI

would not suffer from any admissions by Goosby and Goosby would

still be in the position of defending against the present

litigation unaided by ESI. Katz, on the other hand, is

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significantly prejudiced by a stay. ESI has filed for

liquidation under Chapter 7 of the Bankruptcy Code, so the stay

could last indefinitely. Accordingly, the Court finds that the

small chance of prejudice to ESI does not outweigh the potential

harm to Katz. The Court will amend its Stay Order to lift the

stay with respect to Plaintiff’s claim against Defendant Goosby.

IV. Conclusion

For the foregoing reasons, the Court will deny

Plaintiff’s Motion to Reconsider its Summary Judgment Order and

grant Plaintiff’s Motion to Reconsider its Order staying the

trial of Defendant Goosby. An appropriate Order will issue.

August , 2005 /s/

Alexandria, Virginia James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE