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McCoy v. LTD Driving School, Inc.

United States District Court, D. New Mexico

February 21, 2017



          M. CHRISTINA ARMIJO Chief United States District Judge

         THIS MATTER is before the Court on the following: Plaintiff's Counsel's Response to Order to Show Cause [Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1]; Defendants' Motion for Attorneys' Fees and Costs Awarded Pursuant to this Court's August 5, 2');">2');">2');">201');">1');">1');">16 Order [Doc. 1');">1');">1');">11');">1');">1');">10]; and Defendants' Motion for Review of the Clerk's Order Settling Costs [Doc. 1');">1');">1');">11');">1');">1');">17]. The Court has considered the submissions, the relevant case law, and has been fully informed in the premises.


         The parties are familiar with the facts of this case, which were set forth in the Court's August 5, 2');">2');">2');">201');">1');">1');">16 Memorandum Opinion and Order. [Doc. 1');">1');">1');">106');">1');">1');">1');">106] Briefly, Plaintiff filed a four-count action in state court, which Defendants removed to this Court. Ultimately, Plaintiff sought to voluntarily dismiss three of her four claims with prejudice, and this Court dismissed those claims. [Doc. 1');">1');">1');">106');">1');">1');">1');">106, pp. 8-1');">1');">1');">11');">1');">1');">1] The Court also granted summary judgment for Defendants on the remaining claim. [Doc. 1');">1');">1');">106');">1');">1');">1');">106, 1');">1');">1');">19');">p. 1');">1');">1');">19] The Court's Memorandum Opinion and Order recounted instances of unprofessional behavior and unnecessary filings by both Plaintiff's and Defense Counsel.[1');">1');">1');">1" name="FN1');">1');">1');">1" id= "FN1');">1');">1');">1">1');">1');">1');">1] [Doc. 1');">1');">1');">106');">1');">1');">1');">106, pp. 4-6, 8-1');">1');">1');">11');">1');">1');">1] The Court further ordered Plaintiff's Counsel to show cause why he should not be personally responsible for paying for the excess costs, expenses, and attorneys' fees incurred by Defendants in responding to Plaintiff's Motion to Strike Answer or, Alternatively, to Deem Allegations Admitted and Supporting Memorandum pursuant to 2');">2');">2');">28 U.S.C. § 1');">1');">1');">192');">2');">2');">27. [Doc. 1');">1');">1');">106');">1');">1');">1');">106, pp. 4-6, 1');">1');">1');">19]

         In Plaintiff's Motion to Strike Answer, Plaintiff requested the Court to apply its inherent authority, rather than Federal Rule of Civil Procedure 1');">1');">1');">12');">2');">2');">2(f) (allowing motions to strike “redundant, immaterial, impertinent, or scandalous” from pleadings), to strike the entire answer or the particular paragraphs to which Plaintiff objected.[2');">2');">2');">2" name="FN2');">2');">2');">2" id= "FN2');">2');">2');">2">2');">2');">2');">2] [Doc. 2');">2');">2');">25');">2');">2');">2');">25');">2');">2');">2');">25');">2');">2');">2');">25, p. 3');">p. 3');">p. 3');">p. 3] In its Memorandum Opinion and Order, the Court denied Plaintiff's Motion to Strike and further determined that:

Mr. Carrillo's actions in requesting the Court to strike the entire answer in this case violated 2');">2');">2');">28 U.S.C. § 1');">1');">1');">192');">2');">2');">27, given the combination of the following factors: 1');">1');">1');">1) the motion was untimely; 2');">2');">2');">2) Mr. Carrillo unreasonably cut off good faith discussions to resolve the issue before filing the motion; and 3) the cases Plaintiff cite[s] do not even arguably support Plaintiff's argument.

[Doc. 1');">1');">1');">106');">1');">1');">1');">106, pp. 4-5] The Court ordered Plaintiff's Counsel to show cause why he should not be personally liable for Defendants' fees and costs incurred by responding to the Motion to Strike. [Doc. 1');">1');">1');">106');">1');">1');">1');">106, pp. 6, 1');">1');">1');">19]

         Plaintiff's Counsel has now responded to the Court's order to show cause. [Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1] In addition, Defendants filed a Motion for Attorneys' Fees and Costs pertaining to the Motion to Strike. [Doc. 1');">1');">1');">11');">1');">1');">10] Defendants also moved for costs as the prevailing party [Doc. 1');">1');">1');">109], which the Clerk addressed in the Clerk's Order Settling Costs. [Doc. 1');">1');">1');">11');">1');">1');">16] Defendants filed a Motion for Review of the Clerk's Order Settling Costs. [Doc. 1');">1');">1');">11');">1');">1');">17]


Attorney Liability for Costs and Fees under 2');">2');">2');">28 U.S.C. § 1');">1');">1');">192');">2');">2');">27
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.

2');">2');">2');">28 U.S.C. § 1');">1');">1');">192');">2');">2');">27. Section 1');">1');">1');">192');">2');">2');">27 sanctions do not require a finding of subjective bad faith. Braley v. Campbell, 2');">2');">2');">2 F.2');">2');">2');">2d 1');">1');">1');">1504');">832');">2');">2');">2 F.2');">2');">2');">2d 1');">1');">1');">1504, 1');">1');">1');">151');">1');">1');">12');">2');">2');">2 (1');">1');">1');">10th Cir. 1');">1');">1');">1987) (en banc). Rather,

conduct that, viewed objectively, manifests either intentional or reckless disregard of the attorney's duties to the court, warrants the imposition of excess costs, expenses, or attorney's fees personally against the attorney responsible for unreasonably multiplying the proceedings. After all, to excuse objectively unreasonable conduct by an attorney would be to state that one who acts with an empty head and a pure heart is not responsible for the consequences.

Miera v. Dairyland Ins. Co., 1');">1');">1');">143 F.3d 1');">1');">1');">1337');">1');">1');">1');">143 F.3d 1');">1');">1');">1337, 1');">1');">1');">1342');">2');">2');">2 (1');">1');">1');">10th Cir. 1');">1');">1');">1998) (internal quotation marks, citations and brackets omitted). Thus, Section 1');">1');">1');">192');">2');">2');">27 provides an “incentive for attorneys to regularly re-evaluate the merits of their claims and to avoid prolonging meritless claims.” Steinert v. Winn Grp., Inc., 440 F.3d 1');">1');">1');">12');">2');">2');">21');">1');">1');">14, 1');">1');">1');">12');">2');">2');">22');">2');">2');">24 (1');">1');">1');">10th Cir. 2');">2');">2');">2006).

         In response to the Court's order to show cause, Plaintiff's Counsel submits, first, that the Motion to Strike was not untimely because it was not filed pursuant to Federal Rule of Civil Procedure 1');">1');">1');">12');">2');">2');">2(f). Second, Plaintiff's Counsel submits that he “engaged in good faith communication regarding resolving issues surrounding the motion.” [Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1, p. 4] Third, Plaintiff's Counsel submits that “this Court should not find that Plaintiff's counsel's citation to case law which the Court finds to be unpersuasive vitiates in favor of finding that Plaintiff's counsel acted unreasonably and vexatiously for the purpose of multiplying the litigation so as to justify an award of sanctions.” [Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1, 1');">1');">1');">10');">p. 1');">1');">1');">10] The Court addresses the first and third arguments together, as they are related, and then addresses Plaintiff's Counsel's second argument.

         Federal Rule of Civil Procedure 1');">1');">1');">12');">2');">2');">2(f) states: “The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” A party must bring a Rule 1');">1');">1');">12');">2');">2');">2(f) motion to strike “within 2');">2');">2');">21');">1');">1');">1 days after being served with the pleading.” Fed.R.Civ.P. 1');">1');">1');">12');">2');">2');">2(f)(2');">2');">2');">2). Plaintiff's Motion to Strike was filed 1');">1');">1');">11');">1');">1');">12');">2');">2');">2 days after Plaintiff was served with the Answer. [Doc. 4; Doc. 2');">2');">2');">25');">2');">2');">2');">25');">2');">2');">2');">25');">2');">2');">2');">25; Doc. 1');">1');">1');">106');">1');">1');">1');">106] Accordingly, under Rule 1');">1');">1');">12');">2');">2');">2(f)(2');">2');">2');">2) the Motion to Strike was not timely. Though Plaintiff attempts to circumvent this time limit by invoking an alternative standard, outside of Rule 1');">1');">1');">12');">2');">2');">2(f), Plaintiff offered no persuasive reason to apply such a standard. Any extra-rule ground for striking an entire pleading, or portions thereof, must be more onerous than that set forth by Rule 1');">1');">1');">12');">2');">2');">2(f). See Nwachukwu v. Karl, 2');">2');">2');">21');">1');">1');">16 F.R.D. 1');">1');">1');">176');">2');">2');">2');">21');">1');">1');">16 F.R.D. 1');">1');">1');">176, 1');">1');">1');">180 (D.D.C. 2');">2');">2');">2003) (unpublished decision) (stating “[t]he court has authority to [strike an entire answer] only if the plaintiff can demonstrate misconduct on the part of the defendant”). Plaintiff's Motion to Strike lacked citation to any case applying this alternative standard, causing the Court to conclude in its Memorandum Opinion and Order that the cases Plaintiff cites “do not even arguably support Plaintiff's argument.” [Doc. 1');">1');">1');">106');">1');">1');">1');">106, pp. 4-5] Specifically, [3]the Court concludes that the following cases, on which Plaintiff relied, do not to support Plaintiff's request for this Court to apply a standard other than that set forth by Fed.R.Civ.P. 1');">1');">1');">12');">2');">2');">2(f), or to allow what is otherwise a late Rule 1');">1');">1');">12');">2');">2');">2(f) motion to strike: Agstar Fin. Servs., PCA v. Union Go-Dairy, LLC, 2');">2');">2');">201');">1');">1');">11');">1');">1');">1 WL 772');">2');">2');">2754 (S.D. Ind. 2');">2');">2');">201');">1');">1');">11');">1');">1');">1) (a four paragraph, unpublished district court, case cited by only one other case, discussing the Court's inherent authority to strike an answer but denying the plaintiff's request to invoke that power); Link v. Wabash R.R. Co., 2');">2');">2');">26');">370 U.S. 62');">2');">2');">26, 630-33 (1');">1');">1');">1962');">2');">2');">2) (recognizing and discussing the district court's inherent authority to dismiss a case for lack of prosecution by the plaintiff); Nwachukwu, 2');">2');">2');">21');">1');">1');">16 F.R.D. at 1');">1');">1');">178-80 (denying the plaintiff's request to strike an answer and portions thereof under Fed.R.Civ.P. 1');">1');">1');">12');">2');">2');">2(f) and rejecting a request to strike an answer based on “misconduct on the part of the defendant”); Vakharia v. Little Co. of Mary Hosp. & Health Care Ctrs., 2');">2');">2');">2 F.Supp.2');">2');">2');">2d 1');">1');">1');">102');">2');">2');">28');">2');">2');">2');">2 F.Supp.2');">2');">2');">2d 1');">1');">1');">102');">2');">2');">28, 1');">1');">1');">1033-34 (N.D. Ill. 1');">1');">1');">1998) (rejecting the defendants' request to strike portions of complaint; applying only Fed.R.Civ.P. 1');">1');">1');">12');">2');">2');">2(f)); Bisharat v. Vill. of Niles, 2');">2');">2');">201');">1');">1');">10 WL 301');">1');">1');">19962');">2');">2');">2 (N.D. Ill. 2');">2');">2');">201');">1');">1');">10) (applying Fed.R.Civ.P. 1');">1');">1');">12');">2');">2');">2(f)(1');">1');">1');">1) to sua sponte strike an answer due to pervasive errors, including the failure to disclaim enough information to form a belief as to the truth of an allegation; granting leave to file an amended answer); SMS Assocs. v. Clay, 868 F.Supp. 3');">p. 3');">p. 3');">p. 337 (D.D.C. 1');">1');">1');">1994) (not addressing any legal issues presented by this case); Lane v. Page, 2');">2');">2');">272');">2');">2');">2 F.R.D. 581');">1');">1');">1, 584, 602');">2');">2');">2 (D.N.M. 2');">2');">2');">201');">1');">1');">11');">1');">1');">1) (applying Fed.R.Civ.P. 1');">1');">1');">12');">2');">2');">2(f) in considering a motion to strike); Donnelly v. Frank Shirley Cadillac, Inc., 2');">2');">2');">2005 WL 2');">2');">2');">2445902');">2');">2');">2, * 2');">2');">2');">2 (N.D. Ill. 2');">2');">2');">2005) (considering a motion to strike but not stating whether it was applying Fed.R.Civ.P. or its inherent authority). Thus, only two cases cited by Plaintiff, Agstar Financial Services and Nwachukwu, considered the court's inherent authority to strike an answer, and in both cases the court declined to use it power to strike the answer. In sum, the cases cited by Plaintiff do not even arguably support the application of any rule but Fed.R.Civ.P. 1');">1');">1');">12');">2');">2');">2(f), and, accordingly, Plaintiff's Motion to Strike, filed three months beyond Rule 1');">1');">1');">12');">2');">2');">2(f)(2');">2');">2');">2)'s deadline, was untimely.

         Plaintiff's Counsel argues that the Court should not conclude that he “acted unreasonably and vexatiously for the purpose of multiplying the litigation” simply because the Court found the case law upon which he relied “unpersuasive.” [Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1, 1');">1');">1');">10');">p. 1');">1');">1');">10] Here, however, Plaintiff's Counsel's request that this Court apply a rule outside of the Rules of Procedure was more than simply “unpersuasive, ” it lacked an arguable basis in the law. The patent lack of merit or a plausible basis for Plaintiff's Counsel's argument is a crucial factor in considering whether an attorney's conduct was unreasonable under 2');">2');">2');">28 U.S.C. § 1');">1');">1');">192');">2');">2');">27. See Miera, 1');">1');">1');">143 F.3d at 1');">1');">1');">1342');">2');">2');">2 (“A lawyer's reckless indifference to the law may impose substantial costs on the adverse party. Section 1');">1');">1');">192');">2');">2');">27 permits a court to insist that the attorney bear the costs of his own lack of care. . . . Sanctions are appropriate, then, when an attorney is cavalier or . . . intentionally acts without a plausible basis [or] when the entire course of the proceedings was unwarranted.” (Internal quotation marks and citations omitted.)). The Court concludes that Plaintiff's Counsel's argument was made with “reckless indifference to the law.” Miera, 1');">1');">1');">143 F.3d at 1');">1');">1');">1342');">2');">2');">2. Specifically, it demonstrated reckless indifference to the applicability of Rule 1');">1');">1');">12');">2');">2');">2(f) and its deadline, as well as the necessity for a substantial justification (clearly lacking here) for the Court to apply its inherent authority to strike an entire pleading. Further, Plaintiff's Counsel actions “impose[d] substantial costs on the adverse party.” Id.

         Moreover, Plaintiff's Counsel's cavalier reliance on a baseless argument alone was not the only factor contributing to the Court's conclusion that Plaintiff's Counsel unreasonably and vexatiously multiplied the proceedings in violation of 2');">2');">2');">29 U.S.C. § 1');">1');">1');">192');">2');">2');">27. Rather, it was the meritless argument combined with Plaintiff's Counsel's abrupt termination of efforts to resolve the motion, and his representation to the Court that the Motion was opposed [Doc. 2');">2');">2');">25');">2');">2');">2');">25');">2');">2');">2');">25');">2');">2');">2');">25, 2');">2');">2');">2');">p. 2');">2');">2');">2] which merits application of 2');">2');">2');">29 U.S.C. § 1');">1');">1');">192');">2');">2');">27 in this case.

         The Court has reviewed, for a second time, the correspondence between Plaintiff's and Defendants' Counsel. [Doc. 1');">1');">1');">106');">1');">1');">1');">106, pp. 3');">p. 3');">p. 3');">p. 3-4; Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1-1');">1');">1');">1, p. 1');">1');">1');">1 to Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1-2');">2');">2');">2, p. 3');">p. 3');">p. 3');">p. 3] In short, it began with Plaintiff's Counsel sending the draft Motion to Strike to Defendants' Counsel [Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1');">1');">1');">1');">11');">1');">1');">11');">1');">1');">1-1');">1');">1');">1, p. 1');">1');">1');">1], who responded by asking “whether your client will not oppose the filing of an amended answer[?]” [Doc. 1');">1');">1');">11');">1');">1');">11');">1');">1');">1');" ...

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