Krim v. First City Bancorp. of Texas Inc.

282 F.3d 864, 2002 U.S. App. LEXIS 3440
CourtCourt of Appeals for the Fifth Circuit
DecidedMarch 5, 2002
Docket01-10491
StatusPublished
Cited by32 cases

This text of 282 F.3d 864 (Krim v. First City Bancorp. of Texas Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Krim v. First City Bancorp. of Texas Inc., 282 F.3d 864, 2002 U.S. App. LEXIS 3440 (5th Cir. 2002).

Opinion

PER CURIAM:

After listening to the oral arguments of the parties and closely examining the record, we conclude that the sanctioned lawyer in this case, Harvey Greenfield, was appropriately sanctioned by the bankruptcy court. His attitude and remarks toward opposing attorneys, opposing parties, and the bankruptcy court were — to understate his conduct — obnoxious. Although incivility in and of itself is call for concern, what is most disconcerting here is the rationale Greenfield gives for his behavior. Greenfield asserts that his deplorable and wholly unprofessional conduct helps him recover more money for his clients. Unre-morsefully and brazenly, Greenfield contends that his egregious behavior serves him well in settlement negotiations and is therefore appropriate. Because we find that the bankruptcy court did not abuse its discretion when it issued sanctions in this case, we affirm the district court’s judgment affirming the bankruptcy court’s sanction order.

I

In 1990, Jerry Krim, Harold L. Harris, and several other claimants filed a class action lawsuit against First City Baneorpo-ration of Texas Inc. (“First City”), its officers and directors, and Donaldson, Lufkin & Jenrette Securities Corporation. Greenfield represented the plaintiff class. In 1992, the parties reached a $20 million dollar settlement. The settlement, however, was set aside when federal regulators seized control of First City’s assets. First City then filed a bankruptcy petition under Chapter 11. Greenfield pursued the claims of the plaintiff class in bankruptcy, reaching a settlement agreement with First City for over $10 million in cash and stock. First City incorporated this settlement agreement into its Joint Plan for Reorganization.

First City then filed a motion to sanction Greenfield, based in part on his conduct during a July 13, 1995 deposition when Greenfield deposed A. Robert Abboud, a director of First City and a claimant in bankruptcy for indemnification of legal expenses. Abboud was represented by Hy-man Schaffer.

One day before the deposition, the bankruptcy judge conducted a telephone conference with Schaffer, Greenfield, and Kenneth Carroll (counsel for First City Liquidating Trust). During this hearing, *866 the bankruptcy court directed the parties to restrict the deposition to issues pertinent to Abboud’s indemnification claim. The bankruptcy court also denied Greenfield’s motion for leave to refer to a confidential report compiled by Baker & Botts for the audit committee at First City. Finally, the bankruptcy court urged Greenfield not to engage in personal attacks during the deposition.

At the deposition, in apparent defiance of the bankruptcy court’s order, Greenfield used the Baker & Botts report in the questioning of Abboud. Also during the deposition, the parties continued to disagree about the proper scope of the deposition inquiry. So, they again went to bankruptcy court to clarify the exact issues to be covered at the deposition. At this second telephone hearing, the bankruptcy court once more cautioned Greenfield to refrain from personal attacks.

Despite these multiple warnings, during the deposition Greenfield stated that “I am going to have Mr. Abboud indicted.” He also accused Schaffer of having been fired from Sullivan and Cromwell.

Greenfield’s obnoxious behavior, however, was not limited to Abboud’s deposition. Some of the other statements made by Greenfield during the bankruptcy proceeding — noted by both the district court and the bankruptcy court — are the following:

• He characterized other attorneys, including an Assistant United States Attorney, as (1) a “stooge”; (2) a “puppet”; (3) a “weak pussyfooting ‘deadhead’ ” who “had been ‘dead’ mentally for ten years”; (4) “various incompetents”; (5) “inept”; (6) “clunks”; (7) “falling all over themselves, and wasting endless hours”; (8) “a bunch of starving slobs”; and (6) an “underling who graduated from a 29th-tier law school.”

• He called the chairman of First City a “hayseed” and a “washed-up has been,” and he also called other First City directors “scoundrels.”

• He referred to one law firm, Carrington, Coleman, Sloman & Blumenthal, L.L.P. as “stooges” of another law firm, Vinson & Elkins, L.L.P.

• He referred to the work of other attorneys as “garbage” that demonstrated “legal incompetence” while involving “ludicrous additional time and expense.”

• He asserted that Vinson & Elkins was using First City as a “private piggy-bank.”

• He described an executive compensation plan approved by the bankruptcy court as a “bribe.”

The bankruptcy court found that Greenfield’s “egregious, obnoxious, and insulting behavior ... constituted an unwarranted imposition upon and an affront to [the bankruptcy court] and the parties and practitioners who have appeared in this bankruptcy that should not have to be endured in the future.” Accordingly, the bankruptcy court imposed a monetary sanction of $22,500 and barred Greenfield from practicing in the bankruptcy courts of the Northern District of Texas unless he first obtained written permission from the court.

Greenfield appealed the sanction order to the district court. Meanwhile, in an unrelated appeal that involved sanctions against Greenfield for not conducting a reasonable inquiry into the facts before filing a pleading, we reversed the sanctions. Krim v. BancTexas Group, Inc., 99 F.3d 775 (5th Cir.1996). In the light of this decision, the district court remanded the case to the bankruptcy court for reconsideration.

On remand, the bankruptcy court removed the sanction that barred Greenfield from practicing in the Northern District’s bankruptcy courts but maintained the *867 monetary penalty. In addition, the court increased the penalty by $2,500 “in light of the other findings and conclusions and because Mr. Greenfield filed a motion seeking to have this Court lift all sanctions against him ... and therefore caused counsel for First City Liquidating Trust, A. Robert Abboud, and Mr. Schaffer to devote time in appearing and responding to that motion.... ”

Greenfield appealed to the district court, which affirmed. Greenfield now appeals the district court’s decision.

II

We review the bankruptcy court’s findings of fact under the clearly erroneous standard and decide issues of law de novo. Henderson v. Belknap (In re Henderson), 18 F.3d 1305, 1307 (5th Cir.1994), ce rt. denied, 513 U.S. 1014, 115 S.Ct. 573, 130 L.Ed.2d 490 (1994). The imposition of sanctions is discretionary — thus, we review the exercise of this power for abuse of discretion. Matter of Terrebonne Fuel and Lube, Inc., 108 F.3d 609, 613 (5th Cir.1997). “A court abuses its discretion when its ruling is based on an erroneous view of the law or on a clearly erroneous assessment of the evidence.” Chaves v. M/V Medina Star,

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Bluebook (online)
282 F.3d 864, 2002 U.S. App. LEXIS 3440, Counsel Stack Legal Research, https://law.counselstack.com/opinion/krim-v-first-city-bancorp-of-texas-inc-ca5-2002.