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Xstrata Canada Corp. v. Mauriello

United States District Court, N.D. New York

September 30, 2014

XSTRATA CANADA CORP., Plaintiff,
v.
MARK MAURIELLO, et al., Defendants.

MEMORANDUM-DECISION and ORDER

LAWRENCE E. KAHN, District Judge.

I. INTRODUCTION

This matter comes before the Court on Defendant Mark Mauriello's ("Defendant") Motion for costs, disbursements, and attorney's fees against Plaintiff Xstrata Canada Corporation ("Plaintiff" or "Xstrata") and Plaintiff's counsel, Freeborn & Peters, LLP, pursuant to 28 U.S.C. § 1927, Federal Rule of Civil Procedure 54, and the Court's inherent power to award such costs and fees. Dkt. Nos. 74 ("Motion"); 74-14 ("Memorandum"). Plaintiff filed a Response. Dkt. No. 76 ("Response"). For the reasons discussed below, Defendant's Motion is denied.

II. BACKGROUND

A. Factual History

During the 19th century and up until the mid-to-late 1960s, Gorham Manufacturing Company ("Gorham") produced fine flatware, silverware, and other precious metal objects at their facility in Providence, Rhode Island. Dkt. No. 74-7 ¶ 1 ("Plaintiff's Response SMF"). Gorham's manufacturing process created a waste byproduct called "slag." Id . Gorham repeatedly buried this slag in a landfill in the rear premises of its manufacturing facility. Id . ¶ 2. This process continued until Textron bought Gorham in 1967. Id . On March 29, 2006, Rhode Island Superior Court Judge Procaccini issued an Order of Consent mandating that the buried slag located at the former Gorham premises be excavated because it was officially deemed an environmental hazard. Id . ¶ 4. In response to the Consent Order, Textron hired Clean Harbor Environmental Services, Inc. ("Clean Harbor") to remove the slag from the affected area. Id . ¶ 6.

On or about May 10, 2006, Stephen McDougall ("McDougall") of Clean Harbor contacted Defendant Thomas Delia ("Delia")-a principal of Advanced Recycling Technology, Inc. ("ART"), which is a precious metal waste recycling company with an office in Hudson, New York-about the removal of the slag material on the premises. Id . ¶ 6. Delia responded the next day expressing his interest in the slag project and requesting that McDougall send him any "total metals" analysis that Clean Harbors had; on May 12, 2006, McDougall sent Delia all of the information that Clean Harbors had in its possession. Id . Moreover, around May 22, 2006, Delia and Defendant, a coprincipal of ART, met Chris Kaihler and James DeWolf, both associates of Clean Harbor, at the Gorham site in Providence, Rhode Island. Mauriello recounted the visit:

We walked around the site. We looked at the slag which was-there was a place where the slag was just on the surface, you could see that the rest of it looked like it was still in the ground, and visually observed it and any pieces or material that was readily available, I know Tom collected some of that so that we could do some independent- the company could do some independent testing.

Pl.'s Resp. SMF ¶ 10. On May 24, 2006, Delia drove to Philadelphia, PA and delivered to Abington Metals 38.5 pounds of the 80 pounds of slag, which he had collected at the Gorham site. Id . ¶ 15. Moreover, it was this "cherry-picked sample" that was then used to create an assay, which was used to induce Plaintiff's entry into contract negotiations with ART to take delivery of the slag. Id . ¶ 16. Another sample of this slag material prepared by Abington was then sent to Ledoux & Company by ART for additional analysis "by semi-quantitative X-Ray scan and by fire assay." Id . ¶ 17. On May 31, 2006, Ledoux performed an X-Ray scan on the Abington sample. Id . ¶ 20. On June 13, 2006, Delia sent the assay results via email to Ian Parkinson, a sales representative for Xstrata, and a correspondence began regarding details of the metal slag material. Id . ¶ 23. In or around August of 2006, Xstrata agreed with ART to process the Gorham material at its smelter in New Brunswick Canada and "pay for [the] gold and silver recovered therefrom pursuant to agreed upon terms." Dkt. No. 1 ("Complaint") ¶ 21.

During the middle of November, Delia and Mauriello "shipped a small quantity of the Gorham material to Xstrata by trucks known as B-Trains, '" and both Xstrata and ART performed assays of the B-Train material. Id . ¶ 22. Thereafter, ART delivered nearly 2000 tons of the Gorham material to Xstrata via three shipments between December 2006 and February 2007. Id . ¶ 23. Xstrata paid ART $1, 170, 477 in accordance with their agreement. Id . ¶ 24.

As a result of the foregoing, Xstrata filed a complaint against ART in late December of 2008, alleging that "ART breached the contract and misrepresented the quantity of metals contained in the slag and sought damages totaling $1.5 million." Xstrata Canada Corp. v. Advanced Recycling Tech., Inc., No. 08-CV-1366, Dkt. No. 1 (N.D.N.Y. filed on Dec. 23, 2008). In January of 2010, ART notified Xstrata that "it would not be defending the action, and accordingly, Xstrata moved for a default judgment; the motion was granted, and a judgment against ART in favor of Xstrata for $1.5 million was entered on April 19, 2010." Id . When Xstrata sought to collect its judgment, ART filed for bankruptcy in the Southern District of New York and was found to be insolvent. Id.

In 2009, Plaintiff commenced this lawsuit alleging fraudulent misrepresentations against Defendants in an effort to collect upon their judgment against ART, because both Defendants were co-principals of the company. Dkt. No. 76 at 5. Shortly thereafter, Delia filed for bankruptcy in the Southern District of New York; this bankruptcy action consequently prevented Plaintiff from pursuing its claims against him in the Northern District of New York. Id. at 6. Defendant did, however, answer Plaintiff's complaint despite Delia's non-response. Id.

On November 19, 2013, the Court dismissed the case and entered judgment in favor of the Defendants; this dismissal occurred as a result of Plaintiff's Rule 41(a)(1) Motion for dismissal with prejudice. Dkt. No. 72 at 1. In response to the Court's order, Plaintiff filed a Motion to reconsider and/or amend the judgment dismissing the case against Defendants. Dkt. No. 73 at 4. Plaintiff stated it "no longer wishe[d] to pursue claims against Mauriello" and accordingly moved to dismiss its claim against ...


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