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SCHOTTENSTEIN v. SCHOTTENSTEIN

United States District Court, S.D. New York


April 18, 2005.

SARAH SCHOTTENSTEIN, Plaintiff,
v.
STEVEN SCHOTTENSTEIN; M/I HOMES, INC.; and DOES I through X, Defendants.

The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge

MEMORANDUM OPINION & ORDER

I. INTRODUCTION

  In a Memorandum Opinion and Order dated March 2, 2005, this Court imposed Rule 11 sanctions on Thomas M. Burton, Esq. ("Burton"), the former counsel to the plaintiff Sarah Schottenstein ("Schottenstein"), in the amount of $21,503.50, payable to the defendant, Steven Schottenstein.*fn1 Burton now moves for reconsideration of these sanctions.

  II. LEGAL STANDARD

  A motion for reconsideration is governed by Local Rule 6.3 and is appropriate where a court overlooks "controlling decisions or factual matters that were put before it on the underlying motion . . . and which, had they been considered, might have reasonably altered the result before the court."*fn2 Alternatively, a motion for reconsideration may be granted to "correct a clear error or prevent manifest injustice."*fn3

  Local Rule 6.3 should be "narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court."*fn4 A motion for reconsideration "is not a substitute for appeal."*fn5 Courts have repeatedly been forced to warn counsel that such motions should not be made reflexively, "to reargue those issues already considered when a party does not like the way the original motion was resolved."*fn6 The purpose of Local Rule 6.3 is to "ensure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters."*fn7

  III. DISCUSSION

  Burton points to two factual matters that he believes the Court overlooked. First, he insists that his former client, Schottenstein, was the prevailing party in the litigation. Even accepting Burton's theory that Schottenstein's lawsuit was the "catalyst" for her recovering substantial sums of money from her father, the defendant Steven Schottenstein,*fn8 this point is irrelevant to a Rule 11 analysis. As stated in this Court's March 2nd Opinion, the standard for determining sanctionable conduct is whether it was objectively reasonable for the attorney to believe at the time of submitting a pleading that "the claims . . . and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law."*fn9 The fact that after her claims were dismissed Schottenstein received from her father funds that allowed her to continue her education in New York is simply besides the point.

  Second, Burton asserts that the defendant's counsel, Barry Wolinetz, misled Schottenstein into voluntarily dismissing her conversion claim. This point, too, is irrelevant. The Court did not deem Schottenstein's conversion claim sanctionable, nor do the circumstances of its dismissal have any bearing on the objective unreasonableness of Burton's asserting claims that were not warranted by existing law or by a nonfrivolous argument for the establishment of new law. Therefore, neither of the factual matters raised by Burton provides a basis for reconsideration.

  Burton also asserts that the Court ignored two cases that he believes support Schottenstein's due process claim, which the Court determined was sanctionable. The first of these cases, Campbell v. State Farm Ins.,*fn10 was not cited in Burton's brief and in any event has no bearing whatsoever on Schottenstein's Fourteenth Amendment claim against her father.*fn11 Campbell does not support the proposition that Schottenstein's father's use of Ohio courts to gain custody of his minor daughters constitutes state action.*fn12 Burton cited the second case, Roe v. Wade,*fn13 to support the proposition that just as liberty and privacy interests are "sufficient in Roe to end life, they should be sufficient in this case to live life in New York instead of Ohio."*fn14 While it is true that the Court did not explicitly address this argument, because this analogy does not constitute a nonfrivolous argument for the extension of existing law or the establishment of new law, Roe does not affect the Court's determination that Schottenstein's due process claim was sanctionable.

  With respect to Schottenstein's petition for habeas corpus relief on behalf of her two minor sisters, which the Court also determined was sanctionable, Burton vehemently disagrees with the Court's interpretation of two cases cited in the March 2nd Opinion: Lehman v. Lycoming County Children's Servs. Agency*fn15 and Rumsfeld v. Padilla.*fn16 As stated in that Opinion, these cases clearly barred Schottenstein's habeas petition, and a reasonable pre-filing investigation would, therefore, have revealed that the petition was not warranted by existing law or by a nonfrivolous argument for the establishment of new law.*fn17 That Burton disagrees with the Court's interpretation of Lehman and Padilla is a basis for an appeal, not for reconsideration.*fn18 Finally, Burton raises a number of arguments contesting the manner in which the Court applied Rule 11. First, Burton contends that the sanctions imposed in this case will chill creative advocacy in the future. In general, it is true that in applying Rule 11 courts must walk a fine line: deterring abusive litigation on the one hand while allowing the growth and development of the law on the other. However, sanctioning Burton for signing Schottenstein's complaint and persisting in asserting the frivolous claims contained therein does not pose a significant risk of stifling the development of new legal theories. Burton's behavior in this regard is sufficiently beyond the pale of reasonable conduct that future litigants, and their attorneys, will not be deterred from advancing arguably meritorious claims and arguments.*fn19

  Second, Burton argues that the Court's sanctions are too harsh. Burton is correct to point out that because the purpose of imposing Rule 11 sanctions is deterrence, a court should impose the least severe sanctions necessary to achieve that goal.*fn20 Burton further asserts that the Court failed to consider his ability to pay when determining the amount of sanctions to impose.*fn21 In fact, Burton never suggested in his original brief opposing sanctions that he was unable to pay even the amount of sanctions originally demanded by the defendant, which was in excess of $69,000.*fn22 Moreover, in his motion to reconsider, Burton does not represent he is unable to pay the $21,503.50 in sanctions that were in fact imposed. Nevertheless, Burton may submit an affidavit supported by appropriate financial documents that states in detail his inability to pay the sanctions awarded by the Court. The Court will reserve its decision on this ground for reconsideration until Burton has had an opportunity to provide this information.*fn23

  IV. CONCLUSION

  For the foregoing reasons, Burton's motion for reconsideration is denied in part. The Court reserves its decision on whether to reduce the amount of sanctions imposed based on Burton's ability to pay.

  SO ORDERED.


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