The opinion of the court was delivered by: CONSTANCE BAKER MOTLEY
MEMORANDUM OPINION ON PLAINTIFF'S MOTION TO AMEND THE JUDGMENT
Plaintiff has moved this court under Rule 59(e) of the Federal Rules of Civil Procedure to amend so much of the judgment as ordered that defendant is entitled, under Rule 11 of the Federal Rules of Civil Procedure, to recover the reasonable costs and attorney's fees incurred in taking the deposition of Peter O. Schundler on December 18, 1991. The relevant facts leading up to this motion are briefly set forth as follows.
By opinion dated May 21, 1992, and an accompanying order filed on that date, the court granted defendant's motion for judgment as a matter of law with respect to plaintiff's damage claim and entered findings of fact and conclusions of law with respect to plaintiff's equitable claims. At the same time, the court granted defendant's request for monetary sanctions under Rule 11 on the grounds that plaintiff's attorney materially misrepresented the substance of the future testimony of a potential witness, causing defendant to needlessly take that witness' deposition. The reasons for the court's imposition of sanctions are more fully set forth in the court's opinion of May 21, 1992.
By order of May 21, 1992, the court required the parties to appear on June 19, 1992 for a hearing to determine the reasonableness of the amount of sanctions to be awarded. Plaintiff filed a motion for reargument of that part of the order granting sanctions and a motion to amend the judgment under Rule 59(e). By order of June 12, 1992, the court granted plaintiff's request for a hearing on the issue of sanctions because there had been no prior hearing on the appropriateness of sanctions.
After a hearing on June 19, 1992, the court now reaffirms its previous finding that plaintiff's attorney acted improperly in materially misrepresenting the substance of a prior conversation with the witness without a reasonable inquiry. Rule 11 imposes a duty on attorneys to conduct a reasonable inquiry to determine that papers signed and filed with the court are well grounded in fact, and requires the court to impose an appropriate sanction where an attorney fails to comply with this requirement. Plaintiff's attorney's misrepresentation in the instant case was central to his claim for damages. The substance of the witness' testimony was crucial to plaintiff's right to obtain a jury trial, and the importance of the testimony to plaintiff's case required plaintiff's attorney to exercise a high degree of care in describing how the witness would testify. Plaintiff's reliance on his memory of a conversation with the witness that took place much earlier as the basis for altering his description of how a key witness would testify was not reasonable under the circumstances.
In addition, local Rule 5 of the General Rules of the United States District Courts for the Southern and Eastern Districts of New York permits the court to impose sanctions for a party's failure to complete the necessary preparations for trial. Plaintiff's attorney's change in the description of how a key witness would testify on the eve of trial indicated a lack of trial preparation and caused defendant to take the witness' deposition at a time when all discovery was to have been completed. Under these circumstances, Rule 5(b) permits the court to exclude the testimony of Mr. Schundler and Rule 5(c) permits the court to assess reasonable costs against plaintiff's counsel.
However, having reaffirmed the appropriateness of sanctions, the court nevertheless agrees with plaintiff's attorney that the exclusion of the witness' testimony from plaintiff's case at trial was a sufficient sanction. After defendant brought to the court's attention plaintiff's counsel's misrepresentation of the witness' testimony, the court ruled from the bench that Mr. Schundler's testimony would be excluded from the trial. The court therefore finds that monetary sanctions are not warranted because the exclusion of the witness' testimony was an appropriate and sufficient sanction.
The court's prior order of May 21, 1992 is amended to strike that portion of the order awarding defendant reasonable costs and attorney's fees incurred in taking the deposition of Peter O. Schundler, and the judgment is amended to that extent.
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