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Sky Cable, LLC v. Coley

United States District Court, W.D. Virginia, Harrisonburg Division

January 31, 2017

SKY CABLE, LLC, et al., Plaintiffs,
v.
RANDY COLEY, et. al., Defendants.

          MEMORANDUM OPINION

          Michael F. Urbanski, United States District Judge.

         This matter is before the court on judgment creditor DIRECTV, Inc.'s ("DIRECTV') motion for a cost bond under Rule 7 of the Federal Rules of Appellate Procedure ("Rule 7"). ECF No. 337. Randy and Kimberli Coley (collectively, "the Coleys") filed briefs in opposition, ECF Nos. 342, 343, and the matter was referred to Magistrate Judge Robert Ballou, ECF No. 339. On December 5, 2016, Judge Ballou issued a report recommending that DIRECTVs motion be granted, and that a $75, 000 appeal bond be imposed. ECF No. 362. The Coleys timely filed objections, ECF Nos. 365, 366, to which DIRECTV responded, ECF No. 369. For the reasons that follow, the court ADOPTS the . report and recommendation in its entirety (ECF No. 362), GRANTS DIRECTVs motion (ECF No. 337), and requires the appellants, Randy Coley, Kimberli Coley, and Its Thundertime, LLC[1] ("Its Thundertime") to furnish a Rule 7 cost bond in the amount of $75, 000.

         I.

         Rule 72(b) of the Federal Rules of Civil Procedure permits a party to "serve and file specific, written objections" to a magistrate judge's proposed findings and recommendations within fourteen days of being served with a copy of the report. See also 28 U.S.C. § 636(b)(1). The Fourth Circuit Court of Appeals has held that an objecting party must do so "with sufficient specificity so as reasonably to alert the district court of the true ground for the objection." United States v. Midgette, 478 F.3d 616, 622 (4th Cir. 2007), cert, denied. 127 S.Ct. 3032 (2007).

To conclude otherwise would defeat the purpose of requiring objections. We would be permitting a party to appeal any issue that was before the magistrate judge, regardless of the nature and scope of objections made to the magistrate judge's report. Either the district court would then have to review every issue in the magistrate judge's proposed findings and recommendations or courts of appeals would be required to review issues that the district court never considered. In either case, judicial resources would be wasted and the district court's effectiveness based on help from magistrate judges would be undermined.

Id. The district court must determine de novo any portion of the magistrate judge's report and recommendation to which a proper objection has been made. "The district court may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Fed.R.Civ.P. 72(b)(3); accord 28 U.S.C. § 636(b)(1). "General objections that merely reiterate arguments presented to the magistrate judge lack the specificity required under Rule 72, and have the same effect as a failure to object, or as a waiver of such objection." Moon v. BWX Techs., Inc., 742 F.Supp.2d 827, 829 (W.D. Va. 2010) (citing Veney v. Astrue, 539 F.Supp.2d 841, 845 (W.D. Va. 2008)), aff'd, 498 F.App'x 268 (4th Cir. 2012); see also Thomas v. Am, 474 U.S. 140, 154 (1985) ("[T]he statute does not require the judge to review an issue de novo if no objections are filed.").

         Further, objections that only repeat arguments raised before the magistrate judge are considered general objections to the entirety of the report and recommendation. See Veney v. Astrue. 539 F.Supp.2d 841, 845 (W.D. Va. 2008). As the court noted in Veney:

Allowing a litigant to obtain de novo review of her entire case by merely reformatting an earlier brief as an objection "mak[es] the initial reference to the magistrate useless. The functions of the district court are effectively duplicated as both the magistrate and the district court perform identical tasks. This duplication of time and effort wastes judicial resources rather than saving them, and runs contrary to the purposes of the Magistrates Act. Howard [v. Sec'y of Health & Human Servs.], 932 F.2d [505], 509 [(6th Cir. 1991)].

539 F.Supp.2d at 846 (first brackets in original). A plaintiff who reiterates his previously raised arguments will not be given "the second bite at the apple []he seeks." Id. Instead, his re-filed brief will be treated as a general objection, which has the same effect as a failure to object. Id.

         II.[2]

         In their objections, the Coleys raise four main issues-one factual, three legal. First, they object to the magistrate judge's finding that "the Coley [p]arties have engaged in vexatious or bad faith conduct, " ECF No. 362, at 5, particularly as this finding relates to Kimberli Coley. Second, the Coleys argue that Rule 7 does not permit the court to include the expected costs of attorneys' fees in an appeal bond. Third, they argue that, even if attorneys' fees may be included in an appeal bond in some circumstances, they may not here, where the appeal concerns a matter of Delaware state law unrelated to the judgment under the Federal Communications Act, 47 U.S.C. § 605(a) ("FCA"). Finally, the Coleys suggest that, if the court does adopt the magistrate judge's report, a lis pendens on Its Thundertime's property, rather than a cash bond, should be imposed. The court will address each argument in turn.

         A. Kimberli Coley's Conduct

         Kimberli Coley argues that "the Report and Recommendation is clearly erroneous and contrary to law because it is based on the mistaken fact-finding that the Coley Parties have engaged in Vexatious and bad faith conduct' in the post-judgment proceedings, " which cannot be correct, given that "the term 'Coley Parties, ' as defined in the Report and Recommendation, includes Kimberli Coley, Its Thundertime, and South Raleigh Air-none of whom were parties to the post-judgment proceedings." ECF No. 365, at 5 (citation omitted).

         Kimberli Coley has misstated the findings of the magistrate judge. The report did not consider only conduct during "post-judgment proceedings"; rather, it found that "there is no question that the Coley Parties have engaged in vexatious or bad faith conduct, and have been sanctioned repeatedly for such conduct." ECF No. 362, at 5. Reviewing the Coleys' behavior over the lengthy course of this litigation confirms the accuracy of the report's factual findings.

         For instance, the court's memorandum opinion of July 18, 2016, ECF No. 298, chronicles several instances of bad faith conduct involving Kimberli Coley. Kimberli Coley refused to comply with the terms of a settlement agreement she and Randy Coley entered into in bankruptcy court-conduct which the court, agreeing with the plaintiffs, found to amount to "playing fast and loose with the federal judiciary." Id. at 3-4. Even more outrageous, Kimberli and Randy Coley have made inconsistent statements to this court, under oath, in order to serve their own interests at the time. "Throughout the underlying litigation, Randy and Kimberli Coley adamantly maintained that Kimberli Coley had no involvement whatsoever in her husband's cable business or in his business ventures generally." Id. at 9. Relying on these assertions, DIRECTV voluntarily dismissed its claims against her. Id. at 11. Once DIRECTV sought to enforce its judgment against the substantial assets associated with the LLCs, the Coleys changed their tune, averring in expansive terms of Kimberli Coley's involvement in, and part ownership of, these entities. Id. Further, as set forth at some length in the July 18, 2016 memorandum opinion, this sleight of hand included the production in discovery of contradictory Its Thundertime operating agreements, one produced pre-judgment listing Randy Coley as sole manager/member, and another produced post-judgment including Kimberli Coley as a member. Id. at 12-17. In addition, the memorandum opinion addresses the rampant commingling of assets between Randy and Kimberli Coley and the sham LLCs. Id. at 17-22. Accordingly, the court equitably estopped the Coleys from asserting that Kimberli Coley has any membership interest in the LLCs, finding that the Coleys "plainly misled the parties (and the court) about the nature of Kimberli's interest" in her husband's companies. Id. at 31-33. Nonetheless, in her brief in opposition to DIRECTV's bond motion, Kimberli Coley continues to assert that she "owns a 50% membership interest in [Its] Thundertime." ECF No. 343, at 2.

         In short, the record is replete with examples of Randy and Kimberli Coley's attempts to obfuscate, mislead, and generally subvert the cause of justice.[3] The court ADOPTS the factual findings of the magistrate judge.

         B. Attorneys' Fees in ...


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