Thomas America Corp. v. Fitzgerald

175 F.R.D. 462, 1997 U.S. Dist. LEXIS 13308, 1997 WL 543087
District Court, S.D. New York·Decided August 28, 1997·No. No. 94 Civ. 0262(CBM)·Published·Cited by 2 cases

Opinion

[463]*463MEMORANDUM OPINION

MOTLEY, District Judge.

After a hearing on the matter and for the reasons stated below, this court has decided sua sponte to impose sanctions upon plaintiffs former CEO in the amount of $1500. Furthermore, pursuant to an earlier order of the court, defendant’s counsel is directed to pay $5160.20 to plaintiffs counsel for having filed a motion whose sole intent was to delay the proceedings. Finally, the court determines that no further sanctions are necessary against any of the parties in this matter.

BACKGROUND

The underlying facts of this protracted and muddled dispute are set forth in the court’s numerous previous decisions in this matter and familiarity therewith is assumed. See Thomas America v. Fitzgerald, 957 F.Supp. 523 (S.D.N.Y.1997)(denying request by defendant to enforce settlement agreement); Thomas America v. Fitzgerald,, 968 F.Supp. 154 (S.D.N.Y.1997)(reconsidering previous opinion and enforcing settlement agreement); Thomas America v. Fitzgerald, 869 F.Supp. 221 (S.D.N.Y.1994) (granting plaintiff partial summary judgment on patent claims); Thomas America v. Fitzgerald, 1994 WL 440935 (S.D.N.Y.1994)(denying change of [464]*464venue motion). The facts relevant to the issues raised in this opinion are the following:

1. There have been three prior actions between these parties. In the first action, Fitzgerald, defendant in this matter, and his licensee TT Systems Corporation brought suit in this court against Thomas America, plaintiff in this matter, alleging that Thomas America had infringed one of Fitzgerald’s design patents, United States Design Letters Patent No. Des. 297,532 (the “ ’532 Patent”). See Fitzgerald v. Thomas America Corp., 92 Civ. 3835(CBM). This action was voluntarily dismissed by the plaintiffs therein in early fall 1992. Shortly thereafter, Thomas America filed a declaratory judgment action against Fitzgerald and TT Systems Corporation in the United States District Court for the District of New Jersey. See Thomas America Corp. v. Fitzgerald, 2:92 CV 02351(HLS). In that action, Thomas America sought declarations of the invalidity and non-infringement of both of Fitzgerald’s design patents, the ’532 Patent and United States Design Letters Patent No. Des. 297,-533 (the “ ’533 Patent”). However, the complaint in that action was dismissed as against Fitzgerald for lack of personal jurisdiction on April 21, 1993. In the same month, Fitzgerald subsequently filed the third action in the United States District Court for the District of Colorado alleging that Thomas America had infringed both the ’532 Patent and one of Fitzgerald’s trademarks, United States Trademark Registration No. 1,479,454 (“The Country Store Telephone”). See Fitzgerald v. Thomas America Corp., Civil Action No. 93-M-889. On January 6, 1994, that action was dismissed for lack of personal jurisdiction over Thomas America. Thomas America subsequently filed this action, seeking declaratory judgments with respect to two of Fitzgerald’s patents as well as his trademarks in two models of telephones, “The Country Store Telephone” and “The County Line Telephone.”

2. Just prior to trial in this matter, in August of 1995, defendant brought a belated motion to dismiss on the grounds that the court lacked subject matter jurisdiction over Count IV, dealing with the alleged noninfringement of “The County Line Telephone.” Defendant asserted that he had never claimed that any of plaintiffs telephones infringed this mark. However, the two trademarks at issue involved telephones remarkably similar to one another. Moreover, as should be clear from 111 supra, plaintiff had a history of claiming infringement of different patents and trademarks in different courts throughout the country, making plaintiffs apprehension that it would be sued on the “The County Line Telephone” quite reasonable. Finally, the court found it significant that defendant had failed to raise this issue in his answer, in opposition to defendant’s motion for summary judgment, or at any other time prior to August of 1995, little more than a month before trial was to begin.

3. For these reasons, by Order dated September 7, 1995, the court granted plaintiffs motion for attorney’s fees and directed plaintiff to submit time records as to the number of hours he spent defending against the frivolous motion. Though plaintiff submitted these records, the court never ordered defendant’s counsel to pay them because the court was informed on September 13, 1995 that plaintiff had declared bankruptcy. This matter was then placed on the suspense calendar until the beginning of 1996, when plaintiffs counsel obtained leave to proceed with the litigation. On April 15, 1996, defendant requested that the case be referred to mediation on the grounds that a settlement had been reached in August of the previous year and the parties therefore only needed to formalize the terms of that settlement. Over the plaintiffs objection, this case was referred to mediation by Order dated May 7,1996.

4. The mediation was unsuccessful, and the court removed the case from the suspense calendar in October of 1996.

5. At a pretrial conference on October 31, 1996, defendant Fitzgerald introduced a letter sent by him to Mr. Pacconi, plaintiffs former CEO, dated August 28,1995, in which a settlement was proposed wherein plaintiff would agree to drop the instant suit, - and defendant would then refrain from pressing any further claims against plaintiff regarding the infringement of his patents. Defendant claimed that he had faxed this letter to Mr. Pacconi and that Mr. Pacconi faxed it back with the words “I agree” written on it. Defendant argued that this created a binding settlement agreement between the parties. [465]*465By order dated October 31, 1996, the court directed the parties to brief the subject.

6. Plaintiff in his submissions indicated, inter alia, that the agreement was not enforceable because it had lapsed before it was accepted. Plaintiff claimed that this was proven by the fact that Mr. Pacconi’s secretary, Ms. Meyer, placed a “posb-it” dated August 31,1995 on the return fax. Since the offer itself stated that it was valid for only a 48 hour period, the argument regarding lapse appeared compelling. Rather than decide the question, however, the court granted defendant leave to respond to plaintiffs contentions. When defendant did not address the question of lapse in his answering papers, the court ruled, by Memorandum Order and Opinion dated March 27, 1997, that the agreement had lapsed and was not enforceable. Thomas America, 957 F.Supp. at 524-25.

7. Defendant then introduced evidence demonstrating that Ms. Meyer is not Mr. Pacconi’s secretary, as Mr. Pacconi swore in his declaration; she is Mr. Fitzgerald’s secretary. This means that the August 31 date written by Ms. Meyer was not written prior to her sending it from defendant’s office but rather after she had already received it in plaintiff’s office a day earlier. Thus, the offer had not lapsed.

8. As a result, by Order dated May 2, 1997, the court directed Mr. Pacconi to appear on July 17 to show cause why he should not be sanctioned for misleading the court as to the identity of Ms. Meyer. Defendant’s counsel was also directed to appear on the same date to show cause why he should not be sanctioned for waiting so long to bring these matters to the court’s attention. The court then enforced the settlement agreement by Memorandum Opinion and Order dated July 11,1997.

9.

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Thomas America Corp. v. Fitzgerald, 175 F.R.D. 462, 1997 U.S. Dist. LEXIS 13308, 1997 WL 543087 (S.D.N.Y. 1997).

175 F.R.D. 462 (Thomas America Corp. v. Fitzgerald) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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