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Jared Sibley v. Jamestown Board of Public Utilities

September 19, 2012

JARED SIBLEY, PLAINTIFF,
v.
JAMESTOWN BOARD OF PUBLIC UTILITIES, ET AL DEFENDANTS.



The opinion of the court was delivered by: Honorable Richard J. Arcara United States District Judge

DECISION AND ORDER

INTRODUCTION

On July 13, 2012, this Court issued a Decision and Order granting the motion of Defendants Jamestown Board of Public Utilities ("Jamestown BPU"), David Leathers, David Watkins and Chris Rogers (collectively referred to as "Defendants") to vacate the Clerk of the Court's entry of default and denying Plaintiff Jared Sibley's ("Plaintiff") motion for default judgment and request to conduct a "pre-discovery" deposition. The Court also ordered Plaintiff's counsel to show cause as to why Defendants' request for sanctions for filing a meritless motion for a default judgment, in the form of costs and attorneys fees, should not be granted.

On August 14, 2012, Plaintiff's counsel submitted a memorandum of law in support of her contention that sanctions are not warranted. Defendants submitted a reply affidavit on August 21, 2012. Oral argument was held on August 23, 2012.

After reviewing the parties' submissions and hearing argument from the parties, the Court declines to impose sanctions on Plaintiff's counsel based upon the filing of the meritless motion for default judgment. However, the Court cautions that if Plaintiff's counsel engages in any similar conduct during the remainder of this litigation, the Court will likely impose sanctions.

DISCUSSION

Section 1927 of Title 28 of the United States Code provides in pertinent part that:

Any attorney or other person admitted to conduct cases in any court of the United States...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. 28 USC §1927; Unite Here v. Cintas Corp., 500 F.Supp 2d 332 (SDNY 2007). The principle purpose of Section 1927 is to deter attorneys from engaging in conduct that causes unnecessary delay or generates needless proceedings. Sicurelli v. Jeneric/Pentron, Inc., 2005 US Dist. LEXIS 38943 (EDNY 2005); United States v. Int'l Bhd. Of Teamsters, 948 F.2d 1338, 1345 (2d Cir. 1991) ("Section 1927 is intended to preserve judicial resources and to prevent delays in court proceedings resulting from counsel's conduct.")

Section 1927 requires a court to find an attorney has: (1) multiplied proceedings; (2) in an unreasonable and vexatious manner; (3) thereby increasing the cost of the proceeding; and (4) done so in bad faith or by intentional misconduct. In re Prudential Insurance Co., 278 F.3d 175 (3d Cir. 2002). Sanctions are a harsh remedy and a district court may sanction counsel pursuant to Section 1927 "only when there is a finding of conduct constituting or akin to bad faith." Salovaara v. Eckert, 222 F.3d 19 (2d Cir. 2000); Mone v. Commissioner of Internal Revenue, 774 F.2d 570, 574 (2d Cir. 1985) (instructing that Section 1927 should be construed narrowly and with great caution). Bad faith can be inferred "when the actions taken are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose." Schlaifer Nance & Co., Inc. v. Estate of Warhol, 194 F.3d 323, 337 (2d Cir. 1999)

Here, Plaintiff's counsel's motion for a default judgment was a waste of time. Plaintiff's counsel attempted service on Jamestown BPU and the individual Defendants. Shortly after receiving notice of the complaint and before the time to answer had expired, William Wright, counsel for Jamestown BPU, contacted Plaintiff's counsel and stated that service had not been made on an authorized agent for Jamestown BPU, and that none of the individual Defendants had been properly served. Plaintiff's counsel never responded. Instead, she filed requests for entries of default with the Clerk of the Court three days later.

Shortly thereafter, Jeremy Colby, Jamestown BPU's litigation counsel, contacted Plaintiff's counsel via email. Mr. Colby reiterated that the summons and complaint were not properly served, but that Defendants were willing to waive service and proceed with defense of the action. Plaintiff's counsel disregarded Mr. Colby's communication and proceeded to pursue a default judgment. Moreover, in pursing the motion for default judgment, Plaintiff's counsel failed to disclose to this Court that defense counsel contacted her and offered to resolve the service issues.

In denying Plaintiff's motion for default judgment, this Court noted that once Plaintiff's counsel received defense counsel's letter contesting the manner of service, she was obligated to come forward with proof of proper service. Furthermore, regardless of whether a legitimate dispute over the correctness of service of process existed, Plaintiff's decision not to respond in good faith to communications by opposing counsel, and not to disclose the communications to the Court, is unacceptable. Plaintiff's counsel needlessly and unreasonably delayed and multiplied these proceedings by filing a motion for default judgment that lacked a legally sufficient basis. Plaintiff's counsel's lack of consideration for the Court's and the litigants' time and resources, and for the legal standard for entry of a default judgment, prompted this Court's order to show cause.

Plaintiff's counsel provides a myriad of reasons why sanctions should not be imposed. She argues at length about the sufficiency of the affidavits of service, contending that she had a reasonable basis to conclude that service was effectuated and a "colorable argument" that service on Jamestown BPU was correct. Further, Plaintiff's counsel maintains that she did not respond to Mr. Wright's letter because he was a "represented party" in a related case. She states that she read Mr. Colby's email communication only after she had already filed the motion for default judgment. Plaintiff's counsel also contends that she had no obligation to accept Defendants' offer to waive service and that the Court should consider the bitterness and contentiousness of the present litigation in evaluating the imposition of sanctions.

Plaintiff's counsel's contention that the motion for default was "understandable" given the bitterness and contentiousness of the present litigation is mistaken. This Court expects counsel to recognize that it is most important to adhere to standards of reasonable and ...


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