Durant v. Traditional Investments, Ltd.

135 F.R.D. 42, 1991 U.S. Dist. LEXIS 2208, 1991 WL 26619
CourtDistrict Court, S.D. New York
DecidedFebruary 26, 1991
DocketNo. 88 Civ. 9048 (PKL)
StatusPublished
Cited by10 cases

This text of 135 F.R.D. 42 (Durant v. Traditional Investments, Ltd.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Durant v. Traditional Investments, Ltd., 135 F.R.D. 42, 1991 U.S. Dist. LEXIS 2208, 1991 WL 26619 (S.D.N.Y. 1991).

Opinion

ORDER AND OPINION

LEISURE, District Judge:

This is an action for the collection of attorneys’ fees and costs arising out of a prior representation of defendants by plaintiffs.1 Plaintiffs have now moved for an order awarding plaintiffs sanctions against defendant B.T. Onitiri (“Onitiri”) pursuant to the inherent powers of the Court and under Rule 11 of the Federal Rules of Civil Procedure, and for an order awarding plaintiffs partial summary judgment on their first and second causes of action.2 Onitiri has filed numerous cross-motions. The Court will not herein review the entire, tortured history of this litigation, which has been the subject of prior decisions of the Court, but will limit its review of the facts to those relevant to the instant motions.

Background

On August 27, 1988, Onitiri, on behalf of himself and Limited, entered into a retainer agreement pursuant to which the law firm of Durant & Isaacs would represent Onitiri and Limited in the parent action.3 In the following four months, Durant & Isaacs expended a significant amount of time and money in an effort to settle the parent action. According to plaintiffs, Durant & Isaacs presented Onitiri with bills totalling $141,760.43, which, after deducting a $10,-000 retainer paid by Onitiri on August 29, 1988, left a balance due of $131,760.43, which remains unpaid to this day.

Onitiri, however, asserts that in late October 1988, plaintiff Sandra Durant stated that her firm would not continue to represent Onitiri and Limited in the parent action unless $15,000 to $18,000 was immediately paid to her firm as past due legal fees. By letter dated December 19, 1988, Onitiri formally terminated the retainer [44]*44agreement with Durant & Isaacs, stating as his reasons for doing so his claims that Durant & Isaacs had effectively withdrawn its services in late October or early November, had overbilled him, and had misled him.

On December 21, 1988, plaintiffs filed the complaint in this action, seeking to collect the legal fees allegedly due them for their work on the parent action. Plaintiffs named as defendants in this action Onitiri and Limited, as well as the other party plaintiffs in the parent action (i.e., Incorporated, GmbH and N.V.). On or about December 30, 1988, Onitiri and the corporate defendants in the instant action, as plaintiffs in the parent action, settled the parent action in the amount of $3,050,000. On January 9, 1989, the Court signed a Stipulation and Order directing Berliner Bank International, S.A. to deposit the sum of $200,000 in an interest-bearing account with Bank of Boston International (the “escrow fund”). Berliner Bank subsequently complied with the Court’s order.

Also on January 9, 1989, defendants in the instant action served an answer with counterclaims upon plaintiffs. The introductory sentence of the answer reads as follows: “Defendants in the ancillary proceeding, by their attorney-in-fact, B.T. Onitiri, Pro Se, as and for his verified answer to the complaint, respectfully states as follows....” The answer is signed by “B.T. Onitiri, Pro Se for Ancillary Defendants.”4

Thereafter, settlement discussions commenced between the parties in this action, and continued until they broke down in the fall of 1989 when plaintiffs required, as part of the settlement and pursuant to § 701 of the New York Business Corporation Law, resolutions from the corporate defendants in this action authorizing payment of plaintiffs’ fees from the escrow fund. In response to this request, Onitiri claimed that he did not have the power to secure such resolutions.

On or about October 2, 1989, Onitiri served on plaintiffs an amended answer, erroneously denominated “Answer,” and on October 6, 1989, Onitiri served on plaintiffs a second amended answer, erroneously denominated “First Amended Answer.” 5 Each of these answers asserted as an affirmative defense that “ ‘Indispensable’ parties so designated by plaintiffs ... have not been joined in this action pursuant to Federal Rules [sic] of Civil Procedure 19, subjecting this lawsuit to dismissal under Rules 19 and 12 of the Federal Rules of Civil Procedure.” Amended Answer ¶ 14; Second Amended Answer ¶ 14. Shortly thereafter, in late October 1989, Onitiri moved to dismiss the complaint in this action on the ground, inter alia, that Incorporated, GmbH and N.V. were indispensable parties to the litigation, which parties had purportedly never been served. After extensive briefing, including a 92-page reply brief submitted by Onitiri in support of his motion, the Court on March 22, 1990, ordered plaintiffs to amend service on all five defendants because of technical deficiencies in the original service that had been performed in December 1988 (“March 22 Order”).6 In addition, the Court found that “Onitiri’s guiding principle [in this litigation] appears to be expediency rather than candor and forthrightness,” March 22 Order at 13, and thus the Court imposed a sanction in the amount of $1,000 on Onitiri “in the hope that future duplicity might be deterred.” March 22 Order at 13.

In response to the Court’s March 22 Order, plaintiffs attempted to re-serve Onitiri [45]*45and the corporate defendants.7 Plaintiffs served Onitiri by having a process server hand deliver the amended summons and complaint to Onitiri’s New York office and New York residence, leaving the papers with one Ms. Paulette Owens, formerly an attorney practicing in this Court,8 and now identified by plaintiffs as Onitiri’s co-tenant and business associate. The papers were then mailed by the process server to Onitiri at his New York address.9 Plaintiffs also served Onitiri by having the papers hand delivered to Onitiri’s London residence, leaving them with a female relative of Onitiri at that address, followed by mailing the papers to him at that address.

Plaintiffs re-served Limited by having a process server hand deliver the papers to Limited’s New York office, leaving the papers with Limited’s New York business agent. Plaintiffs also had a United Kingdom process server hand deliver copies of the papers to Limited’s registered office in the Isle of Man, and had a New York process server hand deliver copies of the papers to the Office of the New York Secretary of State, followed by mailings of the papers to Limited. Plaintiffs re-served Incorporated by having a Delaware process server deliver a copy of the papers upon the Office of the Delaware Secretary of State.

Plaintiffs re-served GmbH by having a United Kingdom process server hand deliver the papers to GmbH’s General Manager, namely Limited, at Limited’s registered office in the Isle of Man. Plaintiffs also had the papers served by hand delivery to the Office of the New York Secretary of State, followed by mailing the papers to GmbH. Plaintiffs re-served N.V. by having a Curacao, Netherlands Antilles process server serve the papers in accordance with the laws of the Netherlands Antilles. Plaintiffs also served N.V.

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Bluebook (online)
135 F.R.D. 42, 1991 U.S. Dist. LEXIS 2208, 1991 WL 26619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/durant-v-traditional-investments-ltd-nysd-1991.