Southmark Investment Group 86, Inc. v. Turner Development Corp.

140 F.R.D. 1, 1991 U.S. Dist. LEXIS 17273, 1991 WL 253135
CourtDistrict Court, M.D. Florida
DecidedOctober 4, 1991
DocketNo. 89-863-CIV-T-17B
StatusPublished

This text of 140 F.R.D. 1 (Southmark Investment Group 86, Inc. v. Turner Development Corp.) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southmark Investment Group 86, Inc. v. Turner Development Corp., 140 F.R.D. 1, 1991 U.S. Dist. LEXIS 17273, 1991 WL 253135 (M.D. Fla. 1991).

Opinion

ORDER ON DEFENDANT’S MOTION TO IMPOSE SANCTIONS ON PLAINTIFF’S COUNSEL

KOVACHEYICH, District Judge.

FACTS

1. This action, which included claims of fraud and civil RICO violations in conjunction with the sale of commercial real estate, went to a jury trial on December 6, 1990 before U.S. District Judge Lee Gagliardi in Fort Myers. After a week of trial, just before the case was to be submitted to the jury, the Judge declared a mistrial upon request of Plaintiff’s counsel.

2. Defendants then moved to reset the case for immediate retrial before Judge Robert Merhige, Jr. in January 1991. However, before the second trial began, Plaintiff agreed to submit to binding arbitration and took a voluntary dismissal of the case with prejudice, relinquishing the RICO claims and the right to treble damages under this provision.

3. Defendants have moved for this Court to impose sanctions against Plaintiff’s counsel, Gregory Jones, pursuant to the Court’s authority under Fed.Rule Civ. Pro. 11, 28 U.S.C. § 1927, or through the inherent powers of the Court. Defendants allege that Jones wasted judicial resources and caused Defendants to incur unnecessary expense by pursuing the aborted trial. Only after presentation of the case, when counsel and the Judge were conferring on jury instructions, did Jones raise the issue of the Judge’s bias against Plaintiffs.

4. This matter was submitted for outside arbitration, and a decision was rendered in favor of Plaintiffs on September 12, 1991.

DISCUSSION

The issue before this Court is whether sanctions are appropriate against Plaintiff’s attorney, Gregory G. Jones, for his alleged misconduct at trial leading to the declaration of a mistrial, and his dismissal of the suit in order to submit to arbitration. Defendants point to several legal bases for imposing sanctions. One such basis put forth by Defendants is Fed.R.Civ. Pro. 11, which requires that attorneys sign all pleadings, motions and other paper to certify that to the best of their knowledge, after reasonable inquiry, it is well grounded in fact and law and not interposed to harass or delay. Defendants have not alleged that any particular paper pleading was deficient, and despite a vague implica[3]*3tion that the merits of this suit were groundless, have not substantiated that Rule 11 should apply. As the court noted in Business Guides v. Chromatic Com. Enterprises, 892 F.2d 802, 818 (9th Cir.1989), aff'd, — U.S. -, 111 S.Ct. 922, 112 L.Ed.2d 1140 (1991), Rule 11 does not apply to sanction oral argument or attorney conduct. Thus, Defendants’ request for Rule 11 sanctions is baseless and should be denied.

Defendants also request that sanctions be levied pursuant to 28 U.S.C. § 1927, which provides that an attorney 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.” Defendants also request that this Court employ its inherent equitable powers to impose sanctions. This Court finds that all of Defendants’ requests are without merit, and no sanctions should be imposed.

In their memorandum to support imposition of sanctions, Defendants discuss the substantive merits of Plaintiff’s claim and allege that it is suggestive of the bad faith of Plaintiff’s action. The substantive nature of this dispute is not before this Court. Defendant has failed to show that any specific portion of the Plaintiff’s complaint, motions or other pleadings was not well grounded in law or fact. This is the objective test required by Rule 11, as noted in Hashemi v. Campaigner Publications, Inc., 784 F.2d 1581, 1583 (11th Cir.1986). Vague allegations of bad faith do not justify the imposition of sanctions. If no color-able case existed to justify a jury trial, Defendants should have made this point in pre-trial motions.

Defendant’s Memorandum supports its request for sanctions by criticizing the Plaintiff’s trial strategy, describing the presentation as “astonishing.” In particular, Defendant notes that Plaintiffs counsel called only one representative of his client as a witness, although he had deposed many more. Defendants’ Memorandum says, “it is shocking that no effort was made by the plaintiffs to refute [Defendant’s] defenses and put on a credible case.” It occurs to this Court that trial counsel should generally be pleased when its opponent fails to present a credible case, as that should spell a certain victory. In any event, Plaintiff’s failure to call certain witnesses or present certain evidence cannot be said to have unreasonably or vexatiously multiplied the proceedings so as to justify sanctions.

Next, Defendants allege that the trial proceeding was premised on “artifice and cheap tactics,” citing as an example Plaintiff’s attempt to call one of opponent’s trial attorneys as a witness. The record before this Court clearly indicates that Attorney Jones attempted to minimize the prejudice to Defendants arising from the possible disqualification of one of their nine attorneys on the day of trial.. In addition, this Court finds the law clearly allows counsel to elicit an opposing attorney’s pri- or statement in a related state proceeding as an “admission of party opponent.” See Hanson v. Waller LVL, Inc., 888 F.2d 806, 814 (11th Cir.1989); U.S. v. McKeon, 738 F.2d 26, 30 (2d Cir.1984). Defendants’ disagreement with this strategic decision is no basis for sanctions against Plaintiff’s counsel.

Defendants’ Memorandum continues: “Perhaps the most outrageous example of abuse by plaintiff’s counsel, in addition to never presenting any evidence from involved witnesses, was its expert testimony.” Defendants claim that Plaintiff’s expert offered “sham testimony” because he presented a different basis for calculating building rents than Defendants’ own experts. Having reviewed the testimony by the expert in question, this Court finds that Defendants have mischaracterized the substance of the testimony within their memorandum. Such a misstatement to this Court will not be tolerated, and Defendants’ counsel stands warned that such conduct may be cause for sanctions. In any event, short of allegations that Plaintiff’s counsel suborned perjury or perpetrated a fraud on the court, disagreement [4]*4with an opponent’s expert is not a basis for imposing sanctions.

Defendants additionally state that “the trial record is replete with incidents whereby [Plaintiff’s] counsel endeavored to affect the outcome through unprofessional and improper tactics.” Defendants have not referred this Court to any specific instances of improper tactics, however. Vague references are made that counsel “objected strenuously to many of the court’s rulings throughout the trial, and continually argued with the court after dis-positive rulings had been made, requiring frequent admonishment by the judge.” Defendants cite Kiefel v.

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140 F.R.D. 1, 1991 U.S. Dist. LEXIS 17273, 1991 WL 253135, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southmark-investment-group-86-inc-v-turner-development-corp-flmd-1991.