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Fairfield Financial Mortgage Group, Inc. v. Luca

September 30, 2009


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


Pending before the Court is a Report and Recommendation ("R&R") issued by the Honorable Magistrate Judge William D. Wall recommending that the answers of Defendants Eric Forte, David Jacobson, and Shaw Mortgage Group, Inc. (collectively, the "Shaw Defendants") be stricken and default judgments be entered for the Shaw Defendants' noncompliance with the Court's discovery orders. Additionally pending is a motion to disqualify Plaintiff's counsel filed by Defendant James R. Luca ("Luca") and a motion for sanctions against Luca filed by Plaintiff. For the reasons stated below, the Court adopts Judge Wall's R&R in its entirety, denies Luca's motion to disqualify, and grants in part and denies in part Plaintiff's motion for sanctions.

I. Motion for Sanctions

A. Background

On November 19, 2008 ("November 2008 Order), Magistrate Judge Wall issued an Order fully setting forth the history of the Shaw Defendants' noncompliance with Judge Wall's discovery orders. In that Order, Judge Wall considered whether a default judgment should be entered against the Shaw Defendants for their willful noncompliance with discovery orders, but found that lesser sanctions were more appropriate at that time. Accordingly, Judge Wall ordered that the Shaw Defendants pay attorneys' fees to Plaintiff to compensate for the motions that Plaintiff made regarding the Shaw Defendants' non-compliance. Judge Wall further ordered that the Shaw Defendants produce all responsive documents in their control by December 22, 2008, and stated that, if need be, he would reconsider the imposition of dispositive sanctions based upon the Shaw Defendants' responses. Thereafter, Plaintiff renewed its motion for sanctions. The Shaw Defendants did not oppose Plaintiff's motion.

Judge Wall held a hearing on February 23, 2009, during which counsel for Plaintiff and the Shaw Defendants were present. On February 24, 2009, the Shaw Defendants filed a document responding to Judge Wall's Order that should have been filed no later than December 22, 2009. Judge Wall held that he would not consider the document because it was filed two months late and did not contain sworn statements by the Shaw Defendants, as required by Judge Wall's order.

Judge Wall outlined the Shaw Defendants' continued non-compliance with the Court's discovery orders in a thorough manner in his R&R, and therefore, the Court will not recite them in detail. In summary, counsel for Plaintiff repeatedly contacted the Shaw Defendants regarding their outstanding discovery obligations. After a few fruitless discussions, Plaintiff informed the Shaw Defendants that it would file a motion for sanctions if it did not hear from the Shaw Defendants by the close of business on January 29, 2009. Plaintiff did not hear from the Shaw Defendants, and as a result, filed a motion for sanctions requesting that a default judgment be entered against the Shaw Defendants for their repeated non-compliance of the Court's orders.

In his R&R, Judge Wall found that the evidence at the hearing revealed that Defendant Candice Giaccone ("Giaccone") had complied with the outstanding discovery orders, but the Shaw Defendants had not. As a result, Judge Wall recommended that no sanctions be imposed against Defendant Giaccone. As to the Shaw Defendants, Judge Wall found that "the court has reached the point where there is no other viable option than to recommend entry of default." Judge Wall further recommended an award of $300 as reasonable costs for Plaintiff.

B. Standard of Review

"When evaluating the report and recommendation of a magistrate judge, the district court may adopt those portions of the report to which no objections have been made and which are not facially erroneous." Walker v. Vaughan, 216 F. Supp. 2d 290, 291 (S.D.N.Y. 2002) (citation omitted). A party may serve and file specific, written objections to a magistrate's report and recommendation within ten days of receiving the recommended disposition. See FED. R. CIV. P. 72(b). Upon receiving any timely objections to the magistrate's recommendation, the district "court may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge." 28 U.S.C. §636(b)(1)(C); see also Fed. R. Civ. P. 72(b). A party that objects to a report and recommendation must point out the specific portions of the report and recommendation to which they object. See Barratt v. Joie, No. 96-CV-0324, 2002 U.S. Dist. LEXIS 3453, at *2 (S.D.N.Y. March 4, 2002) (citations omitted).

When a party raises an objection to a magistrate judge's report, the Court must conduct a de novo review of any contested sections of the report. See Pizarro v. Bartlett, 776 F. Supp. 815, 817 (S.D.N.Y. 1991). But if a party "makes only conclusory or general objections, or simply reiterates his original arguments, the Court reviews the Report and Recommendation only for clear error." Pall Corp. v. Entegris, Inc., 249 F.R.D. 48, 51 (E.D.N.Y. 2008). Furthermore, even in a de novo review of a party's specific objections, the court ordinarily will not consider "arguments, case law and/or evidentiary material which could have been, but [were] not, presented to the magistrate judge in the first instance." Kennedy v. Adamo, 02-CV-1776, 2006 WL 3704784, at *1 (E.D.N.Y. 2006).

C. Defendants' Objections

Defendants Forte and Jacobson filed objections to Judge Wall's R&R arguing that Judge Wall's sanctions were erroneous, unduly severe, and contrary to the law. Defendants' argument that Judge Wall's R&R is "erroneous" is essentially a rehash of Defendants' claims that they complied with all discovery orders. These arguments were either made, or certainly could have been made, to the Magistrate Judge in the first instance and are inappropriate at this stage. "'[S]ystemic efficiencies would be frustrated and the magistrate's role reduced to that of a mere dress rehearser if a party were allowed to feint and weave at the initial hearing, and save its knock-out punch for the second round . . .,' de novo review means that, 'at most, the party aggrieved is entitled to a review of the bidding rather than to a fresh deal . . . [it] does not permit a litigant to present new initiatives to the district judge.'" Kennedy v. Adamo, No. 02-CV-1776, 2006 U.S. Dist. LEXIS 93900, at *3 (E.D.N.Y. 2006)(quoting Paterson-Leitch Co. v. Massachusetts Municipal Wholesale Elec. Co., 840 F.2d 985, 990-91 (1st Cir. 1988).

Defendants next argue that Judge Wall's R&R is severe and contrary to the law, and that Judge Wall's recommendation that the Court issue a default judgment is an abuse of discretion. The Court has conducted a thorough de novo review of Judge Wall's R&R and finds that Judge Wall did not err in recommending the issuance of a default judgment. Although a default judgment is certainly a severe sanction, "the most severe in the spectrum of sanctions . . . must be available to the District Court in appropriate cases, not merely to penalize those whose conduct may be deemed to warrant such a sanction, but to deter those who might be tempted to such conduct in the absence of such a deterrent.'" Paine, Webber, Jackson & Curtis, Inc. v. ...

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