Insurance Recovery Group, Inc. v. Connolly

95 F. Supp. 3d 73, 2015 U.S. Dist. LEXIS 38637, 2015 WL 1373372
CourtDistrict Court, D. Massachusetts
DecidedMarch 26, 2015
DocketCivil Action No. 11-10935-WGY
StatusPublished
Cited by2 cases

This text of 95 F. Supp. 3d 73 (Insurance Recovery Group, Inc. v. Connolly) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Insurance Recovery Group, Inc. v. Connolly, 95 F. Supp. 3d 73, 2015 U.S. Dist. LEXIS 38637, 2015 WL 1373372 (D. Mass. 2015).

Opinion

MEMORANDUM AND ORDER

YOUNG, District Judge.

I. INTRODUCTION

Insurance Recovery Group, Inc. (“IRG”) seeks an award of attorneys’ fees and costs following this Court’s order on September 30, 2013, granting in part and denying in part IRG’s motion for sanctions against the law firm of Meiselman, Packman, Nealon, Scialabba & Baker P.C.1 (“Meiselman” or the “Firm”), a present member of the Firm, D. Greg Blankinship (“Blankinship”), and an attorney formerly associated with the Firm, Joshua S. Bauchner (“Bauchner”) (collectively, the “Defendants’ Counsel”). See IRG v. Connolly (IRG Sanctions Order), 977 F.Supp.2d 16 (D.Mass.2013).

IRG seeks to recover $94,346.00 in attorneys’ fees and $6,506.34 in costs, for an aggregate total of $100,852.34. See Ins. Recovery Group, Inc.’s Submission Supp. Sept. 30, 2013, Award Costs & Att’ys’ Fees (“IRG’s Submission”) 8, ECF No. 58; Reply Br. Supp. PL’s Fee Submission (“IRG’s Reply”) 8 n. 11, ECF No. 66.

[76]*76II. FACTUAL & PROCEDURAL BACKGROUND2

On May 18, 2011, IRG filed an action against ISG Recoveries, LLC (“ISG Recoveries”), John Connolly (“Connolly”), Neil Salters (“Salters”), Jonathan Ladenheim (“Ladenheim”), and Steven Ieronimo (“Ieronimo”) (collectively, the “Defendants”) in the Massachusetts Superior Court sitting in and for the County of Suffolk, alleging (among other things) violations of consulting agreements. IRG Sanctions Order, 977 F.Supp.2d at 19. The Defendants removed the'case to the District of Massachusetts on May 24, 2011, and retained Blankinship, Bauchner, and other Meiselman attorneys to represent them in the litigation with IRG. Id.

On May 25, 2011, IRG filed an emergency motion for a preliminary injunction to enjoin the Defendants from further violating the terms of their consulting agreements. Id. Judge Gertner granted the motion on May 26, 2011, and issued a ten-day temporary restraining order (“TRO”) against the Defendants. Id. In a preliminary injunction order inscribing the details of the TRO,3 Judge Gertner ordered the Defendants “to return to IRG any and all confidential and proprietary information that they transmitted or removed from IRG or otherwise acquired as a result of their work for or affiliation with IRG” within twenty-four hours. Id. (internal quotation marks omitted).

The day after the entering of the TRO, Blankinship relayed to then-Chief Judge Wolf4 the Defendants’ Counsel’s challenge in meeting Judge Gertner’s twenty-four-hour deadline. Id. at 20. The four IRG-owned laptops subject to the TRO (the “IRG laptops”) contained “attorney-client privileged email communications,” emails “necessary for Defendants’ defense,” and emails “that may be relevant to [the] action and whose destruction would be contrary [to] counsel’s preservation obligations.” Id. (alterations in original) (internal quotation marks omitted). Therefore, Blankinship notified then-Chief Judge Wolf of the Defendants’ Counsel’s plan

[T]o make a forensic copy of the computers ... [and] [o]nce the emails in question have been removed from the IRG computers ... [to] make prompt arrangements for their return.... Defendants’ counsel will then review the emails in question as quickly as possible and purge any confidential or proprietary information contained therein.

Id. (last alteration in original) (internal quotation marks omitted).

On June 2, 2011, the Defendants returned the four IRG laptops to IRG. Id. Computer experts hired by IRG undertook an initial forensic review of the laptops’ hard drives the next day. Id. The experts [77]*77found that each of the hard drives had apparently been “zeroed out,”5 suggesting that “either the drives [had been] intentionally wiped of data or new hard drives [had] been installed in each Laptop.” Id. (alterations in original) (internal quotation marks omitted).

A four-day bench trial of IRG’s claims commenced before this Court on June 9, 2011. Id. On the first day, IRG’s counsel reported to the Court that the laptops were missing data and that it impaired their ability to effectively conduct their case. Id. The Defendants’ Counsel notified the Court of their concerns regarding the sensitive information on the IRG computers and of their retention of forensic' experts to make imaged copies of the computers’ hard drives. Id. at 20-21. The Court nevertheless issued a protective order commanding the Defendants to hand the copied hard drives over to IRG but allowing the Defendants to claim back any materials properly covered by the attorney-client privilege. Id. at 21.

The following day at the bench trial, Bauchner informed the Court that the forensic experts’ efforts to recover the lost material had been slowed by technical difficulties. Id. The Court, inferring that the materials may have been destroyed, gave the Defendants until June 13, 2011, either to restore the hard drive images or submit evidence explaining what caused the information on the IRG computers to disappear. Id. On June 13, 2011, Bauchner provided IRG’s counsel with a hard drive in open court and notified the Court accordingly. Id. A review by IRG’s computer experts revealed that the hard drive contained data from only three of the IRG laptops. Id. Moreover, the hard drive provided by Bauchner contained “dynamically provisioned” virtual hard disk images of the information on the IRG laptops, not identical “fixed provisioned” forensic images.6 Id. IRG’s experts sifted through the hard drive and recovered emails from only one of the Defendants, Ieronimo.7 Id.

On June 16, 2011, the Court found and ruled that the Defendants breached their respective consulting agreements with IRG. Id. The case was then administratively closed to allow the parties to proceed with arbitration. Id. at 22.

At a deposition held on January 6, 2012, in advance of the arbitration, Ladenheim testified to the Defendants’ Counsel’s purportedly shifting advice regarding the handling of his IRG laptop. Id. On July 9, 2012, the arbitrator awarded IRG a total of $1,865,812.08, which included $264,912.08 in attorneys’ fees, $5,000 in expert fees, and $27,900 in arbitration fees.8 Id. On September 6, 2012, IRG moved to reopen its civil action and confirm the arbitration [78]*78award issued. Id. Just over a month later, the Court granted IRG’s request, confirming the arbitration award and entering final judgment in favor of IRG. Id.

On September 6, 2012, IRG filed a motion for sanctions against the Defendants’ Counsel alleging that they counseled their clients to destroy evidence and, by doing so, violated court-issued discovery orders. Id. at 18. On September 30, 2013, the motion was denied to the extent that IRG sought sanctions for spoliation based on 28 U.S.C. section 1927, as the Defendants’ Counsel did not demonstrate the bad faith necessary for such a claim. Id. at 23, 27.

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Bluebook (online)
95 F. Supp. 3d 73, 2015 U.S. Dist. LEXIS 38637, 2015 WL 1373372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/insurance-recovery-group-inc-v-connolly-mad-2015.