Smith v. All persons claiming a present or future Interest

DISTRICT COURT OF THE VIRGIN ISLANDS
DIVISION OF ST. THOMAS AND ST. JOHN
IDA SMITH,
Plaintiff,
v.
ALL PERSONS CLAIMING A PRESENT OR
FUTURE INTEREST IN ESTATE 13, FRIIS,
LINDA V. SMITH-FRANCIS, WILLIAM E.
SMITH, ELOISE V. SMITH-HENDRICKS, BAB
FRIIS NO. 1, PAUL HOFFMAN, JANE
HOFFMAN-WALKER, ELEANOR ADAMS
HOFFMAN, MAXWELL ADAMS HOFFMAN,
GLORIA FRANCOIS MCGOWAN, DAVID A.
BORNN AS TRUSTEE TO THE GAF TRUST
ESTATE 14 JOHN’S FOLLY EXCLUDING ALL
HEIRS AT LAW, ESTATE 15 CONCORDIA A,
CORAL BAY QUARTER, ST JOHN UNITED
STATES VIRGIN ISLANDS, NATIONAL PARK
SERVICE, LAND RESOURCES DIVISION,
DEPARTMENT OF INTERIOR, THE UNITED
STATES OF AMERICA, STANLEY SELENGUT,
WILLIAM B. POPPELTON, LORRAINE A.
POPPELTON, KEVIN M. WALSH, MARIA K.
STURATIS, SCOTT E. WILMOSKI, CHARLES
M. PERDUE, MONICA PERDUE, JOZSEF
NEMETH, NANCY NEMETH, FRED S.
PATTERSON, MARGARET D. PATTERSON,
JOHN R. PERGOLIZZI, TREASURE VIEW LLC,
GEORGE PILLORGE, DEBORAH PILLORGE,
SCOTT L. HARTSHORN, CLAUDETTE C.
HARTSHORN, HEINZ G. FISHER, LINDA G.
BURDET TRUSTEES OF THE HEINZ G.
FISHER TRUST, DONALD DURANTE, SAFIA
B. DURANTE, CRAIG E. MITCHELL, ALAN
MARTIN KAUFMAN, RACHELLE KAUFMAN,
JEFFREY J. McCRAVE, ANN McCRAVE,
DOROTHY K. JANOSKO, WILLIAM R.
KINCER, SUSAN B. KINCER, SUSAN GREER
LITTLEFIELD, WAYNE CHESTERFIELD,
MONIQUE FRANCOIS, PEDRITO FRANCOIS,
SALT POND VISTA LLC, V.I. JOSEPH
PALMINTERI, CARRIE GLENN, MARC KAVE,
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Case: 3:11-cv-00041-RAM-GAT Document #: 591 Filed: 03/13/17 Page 1 of 9

Smith v. All Persons Claiming a Present or Future Interest, et al.
Civil No. 2011-41
Page 2
EMILY J. BRATTON, RICK HATHAWAY,
RENE A. SERVANT aka RENE H. SERVANT,
MARIE THERESE L. SERVANT, LORI JANE
SNACK, BRIAN K. WALDEN,
MINISTER ISHMAEL R. MUHAMMED,
MICHAEL CARPER, REUBEN WHEATLEY, et
al.,
Defendants.
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REPORT AND RECOMMENDATION
On March 1, 2016, plaintiff Ida Smith moved the Court to enter sanctions pursuant to 28
U.S.C. §1927 or under the Court’s inherent powers, against Mark Hodge, Esq. 	[ECF 467].
Attorney Hodge filed an opposition [ECF 473], and plaintiff replied. [ECF 475]. On February 13,
2017, the District Court referred the motion to the undersigned for a Report and Recommendation.
For the reasons that follow, this Court recommends that the motion be denied.
I. 	FACTUAL AND PROCEDURAL BACKGROUND
The parties are well familiar with the facts of this case, so only such facts as are necessary
to resolve the motion will be discussed. Ida Smith filed this “Action to Determine Boundary Lines
and Quiet Title” on March 24, 2011.1 The matter centers around certain real property located in
Coral Bay Quarter on St. John, U.S. Virgin Islands. 	Treasure View, LLC (“Treasure View”) and
Kevin Walsh, Attorney Hodge’s clients, apparently own an interest in real property in Estate
Concordia2 abutting the land in which plaintiff claims an interest, Estate 14 John’s Folly. In this
1 	Plaintiff has attempted to amend the complaint several times, although the essential claims have remained
constant.
2 	See Pl.’s Mot. [ECF 467] at 4 (“They allegedly claim interest in Estate Concordia parcel 2-13, recorded at
the Lieutenant Governor Office as document number 2003009755”).
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Smith v. All Persons Claiming a Present or Future Interest, et al.
Civil No. 2011-41
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action, plaintiff Smith seeks to have the Court “determine the external boundary lines to Estate 14
John’s Folly.” Pl.’s Mot. [ECF 467] at 4.
After Treasure View received a summons, Attorney Hodge, on its behalf, filed a “Motion
to Rescind All Summonses to Date” on September 20, 2011 [ECF 135], in which Walsh joined.
[ECF 179]. 	That motion alleged that summonses were erroneously issued, and argued that
defendants who received them need not respond to Smith’s lawsuit. Attorney Hodge’s clients then
opposed Smith’s efforts to file an amended complaint, see, e.g., [ECF 196], and opposed other
efforts by Smith to move her action along. On November 7, 2014, Attorney Hodge’s clients moved
to dismiss the matter for lack of proper service on them. [ECF 355]. On September 28, 2015, the
District Court denied the motion to dismiss and ordered Smith to serve the defendants with the
Second Amended Complaint she had filed on November 1, 2013. Order [ECF 386]. Smith then
sought, and was granted, additional time to serve Attorney Hodge’s clients. 	See Pl.’s Mot. for
Enlargement of Time [ECF 391]; Order [ECF 395].
After service was again attempted on them, on October 22, 2015, Treasure View and Walsh
renewed their motion to dismiss [ECF 439], again based on a lack of proper service. After other
defendants did likewise, and Smith engaged in that skirmish, she ultimately filed a “Motion in
Opposition to, ECF document Numbers 439, 449 and 450, All Defendants [sic] Motion to
Dismiss.” [ECF 452]. Characterizing this motion as a “sur-reply” filed without leave in violation
of the local rules, Treasure View and Walsh moved to strike it. [ECF 453]. On January 28, 2016,
Attorney Hodge’s clients moved for clarification [ECF 458] of the District Court’s scheduling
order [ECF 457] of that same date, seeking to determine if his clients, who had a pending motion
to dismiss, were expected to engage in discovery and attend trial.
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Smith v. All Persons Claiming a Present or Future Interest, et al.
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Meanwhile, with the service of process issues unresolved, Smith had filed a motion seeking
summary judgment. [ECF 384, docketed September 21, 2015]. On February 22, 2016, Smith filed
a “Petition for Ruling on Motion for Summary Judgment.” 	[ECF 463]. 	Later that same day,
Attorney Hodge, on behalf of Treasure View and Walsh, responded to that petition. [ECF 464].
It is the filing of this response that generated the instant motion for sanctions.
Treasure View and Walsh’s response begins by repeating a theme running through many
of their filings: 	noting certain motions relative to summonses and service that are pending and
remain unresolved. With respect to plaintiff’s motion for summary judgment, Treasure View and
Walsh take the position that, inasmuch as they have not yet been properly served with process,
entry of summary judgment would be premature. Defs.’ Resp. [ECF 464] at 4.
Plaintiff Smith brings this motion for sanctions pursuant to 28 U.S.C. §1927 or, in the
alternative, under the Court’s inherent powers. 	While most of the motion appears to deal with
the merits of her motion for summary judgment, Smith argues that Treasure View and Walsh were
indeed properly served, and that they should have answered the complaint and not moved to
dismiss it. Pl.’s Mot. at 4. 	She argues further that her motion for summary judgment could not
be premature where the Court has entered summary judgment for other defendants, who were
served in the same manner as Attorney Hodge’s clients. Id. at 5-6. She therefore asks that Attorney
Hodge be (1) sanctioned for “filing vexatious, persisting in meritless argument, improper, baseless
claims, responding to a petition for a ruling on summary judgment,” and (2) enjoined from filing
“further motions for dismissal for lack of service, improper service, service of process.” Id. at 6-
7. She also seeks an award of “reasonable fees, costs and expenses incurred in responding to this
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Smith v. All Persons Claiming a Present or Future Interest, et al.
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instant matter.” Id. at 7. Finally, she declares the Court is authorized to sanction Attorney Hodge
for “bad faith conduct.”3 Id.
In opposition, Treasure View and Walsh characterize the instant motion as meritless and
abusive. Defs.’ Opp’n [ECF 473] at 1. They repeat their litany of unresolved motions relative to
summonses and service, and the motions that were directed to the service deficiencies. Id. at 2-4.
They posit that (1) injunctive relief is not available under §1927, and (2) there is no proof of any
fees, costs or expenses incurred. Id. at 8. Treasure View and Walsh argue the motion practice was
not excessive given the procedural history of the case, and point out a lack of evidence of any bad
faith. Id. at 9-10.
II. 	APPLICABLE LAW
A. 	28 U.S.C. §1927
28 U.S.C. §1927 provides as follows:
Any attorney or other person admitted to conduct cases in any court of the United
States or any Territory thereof 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 U.S.C. §1927. The statute is aimed at addressing acts by attorneys that unreasonably extend
court proceedings. 	Zuk v. Eastern Pa. Psychiatric Inst., 103 F.3d 294, 297 (3d Cir. 1996)
(“Although a trial court has broad discretion in managing litigation before it, the principal purpose
3 	In her reply memorandum, Smith states: “The bottom line is, the law does not allow for Mark Hodge to
respond or reply to Plaintiff’s petition for ruling on motion for summary judgment. A ruling is made by a Court.”
Pl.’s Reply [ECF 475] at 3.
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of imposing sanctions under 28 U.S.C. §1927 is the deterrence of intentional and unnecessary
delay in the proceedings.” (internal quotation marks and citation omitted)).
Moreover, §1927 sanctions require a finding of willful bad faith, not merely a showing of
objectively unreasonable conduct. Baker v. Cerberus, Ltd., 764 F.2d 204, 208-09 (3d Cir. 1985)
(“conduct must be of an egregious nature, stamped by bad faith that is violative of recognized
standards in the conduct of litigation”). See also Grider v. Keystone Health Plan Central, Inc.,
580 F.3d 119, 142 (3d Cir. 2009) (“sanctions may not be imposed under §1927 absent a finding
that counsel’s conduct resulted from bad faith, rather than misunderstanding, bad judgment, or
well-intentioned zeal”)(quoting LaSalle National Bank v. First Connecticut Holding Group, L.L.C.
XXIII, 287 F.3d 279 (3d Cir. 2002)). While §1927 grants courts the authority to impose sanctions
for misconduct by attorneys, "it is a power which the courts should exercise only in instances of a
serious and studied disregard for the orderly process of justice." Williams v. Giant Eagle Markets,
Inc., 883 F.2d 1184, 1191 (3d Cir. 1989) (quotation marks omitted).
In cases where courts have granted §1927 sanctions, bad faith is usually apparent and
egregious. For example, in Administrator-Benefits for the ExxonMobil Savings Plan v. Williams,
the Court levied §1927 sanctions after an attorney disobeyed the Court’s scheduling order and filed
numerous frivolous motions:
Attorney Rogers acted unreasonably in requesting the continuance only hours
before the conference was scheduled to commence. By untimely filing the motion
for continuance on the same day as the scheduled conference, and by failing to
communicate with the Court or make any effort to participate in the conference,
Rogers demonstrated bad faith. Rogers also demonstrated bad faith by filing a
frivolous 	motion 	on 	Patricia 	Benjamin’s 	behalf 	to 	dismiss 	this 	action 	on
jurisdictional grounds. . . . In this case, Rogers intentionally and unreasonably
disobeyed the Court's scheduling order. Rogers failed to appear or participate by
telephone in the conference and offered no excuses for his absence, except perhaps
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Smith v. All Persons Claiming a Present or Future Interest, et al.
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the frivolous motions he filed. He thereby necessitated the scheduling of another
conference, wasting the time and resources of the Court and plaintiff's counsel. He
acted willfully in bad faith, evidencing a serious and studied disregard for the
orderly processes of justice.
2009 U.S. Dist. LEXIS 120213, at *3 (D.V.I. Dec. 22, 2009). Similarly serious conduct was at
issue in Griffith v. Hess Oil V.I. Corp., 5 F. Supp. 2d 336 (D.V.I. 1998), where the Court imposed
§1927 sanctions for significantly aberrant behavior. In that case, the Court found that “a conscious
and deliberate effort by an attorney of the bar of this Court to withhold highly relevant case
authority from the Court would constitute bad faith.” Id. at 340.
Ultimately, “[i]n order to award attorneys’ fees under 28 U.S.C. § 1927, a court must find
that an attorney has (1) multiplied proceedings; (2) in an unreasonable and vexatious manner; (3)
thereby 	increasing 	the 	cost 	of 	the 	proceedings; 	and 	(4) 	doing 	so 	in 	bad 	faith 	or 	by
intentional misconduct.” Toy v. Plumbers & Pipefitters Local Union No. 74 Pension Plan, 317
Fed. Appx. 169, 172 (3d Cir. 2009). To the extent a party seeks "costs" and "expenses" under §
1927, in addition to attorney's fees, such costs and expenses are limited to those enumerated in 28
U.S.C. § 1920. Martin v. Brown, 63 F.3d 1252, 1264-65 (3d Cir. 1995). 	Moreover, a party is
entitled to only those attorney's fees, costs and expenses that result from the particular misconduct.
Id. at 1265.
B. 	Inherent Authority
A court has the power to sanction counsel for bad faith conduct pursuant to its inherent
authority. 	Chambers v. NASCO, Inc., 501 U.S. 32, 45-52 (1991); Ferguson v. Valero Energy
Corp., 454 Fed. Appx. 109 (3d Cir. 2011) (noting a court's inherent power "extends to the
regulation of attorneys"); In re Prudential Ins. Co. Am. Sales Practice Litig. Actions, 278 F.3d 175
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Smith v. All Persons Claiming a Present or Future Interest, et al.
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(3d Cir. 2002) (explaining "an award of fees and costs pursuant to the court's inherent authority to
control litigation will usually require a finding of bad faith"); Eash v. Riggins Trucking, Inc., 757
F.2d 557, 566 (3d Cir. 1985) (noting a district court has the inherent power "to sanction errant
attorneys financially") (citing Roadway Express, Inc. v. Piper, 447 U.S. 752, 765 (1980)).
"[B]ecause of their very potency, inherent powers must be exercised with restraint and discretion."
The Republic of the Philippines v. Westinghouse Elec. Corp., 43 F.3d 65, 74 (3d Cir. 2001)
(quoting Chambers, 501 U.S. at 44). "Thus, a district court must ensure that there is an adequate
factual predicate for flexing its substantial muscle under its inherent powers, and must ensure that
the sanction is tailored to address the harm identified." The Republic of the Philippines, 43 F.3d
at 74.
A court may only use its inherent power to assess attorney's fees as a sanction in narrowly-
defined circumstances. Roadway, 447 U.S. at 765. These rare situations are, for example, when
a party has engaged in egregious acts such as litigating in bad faith, abusing judicial processes, or
threatening witnesses with violence. See, e.g., The Republic of the Philippines, 43 F.3d at 73-74;
Alyeska Pipeline Svc. Co. v. Wilderness Society, 421 U.S. 240, 258-59 (1975) (party who "has
acted in bad faith, vexatiously, wantonly, or for oppressive reasons" subject to sanctions pursuant
to a court's inherent power). "[G]enerally a court should not resort to [] sanctions" pursuant to its
inherent power where bad-faith conduct in the course of litigation can be adequately addressed by
other sanctioning provisions, such as §1927. 	Ferguson v. Valero Energy Corp., 454 Fed. Appx.
109, 112 (3d Cir. 2011); see Chambers, 501 U.S. at 50 (stating "if in the informed discretion of
the court, neither the statute [i.e., §1927] nor the Rules are up to the task, the court may safely rely
on its inherent power").
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Smith v. All Persons Claiming a Present or Future Interest, et al.
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III. 	DISCUSSION
Based upon the record presented, the Court discerns no sanctionable conduct has occurred
here. Apart from one reference to the term, plaintiff Smith has not shown that Attorney Hodge
proceeded in bad faith, or unreasonably or unnecessarily delayed or frustrated the resolution of
this case. While it may not have been truly necessary for counsel to repeat his client’s version of
the procedural history of this matter in each filing, every such filing was in fact directed to a
specific event in the matter, and Treasure View and Walsh were entitled to file the motions and
oppositions that they filed. Plaintiff’s motion for sanctions displays more of a disagreement with
the positions Attorney Hodge took on behalf of his clients, than demonstrates the type of conduct
warranting sanctions under either §1927 or by virtue of the Court’s inherent authority.
IV. 	CONCLUSION
Accordingly, it is hereby RECOMMENDED that the motion [ECF 467] for sanctions be
DENIED.
Any objections to this Report and Recommendation must be filed in writing within 14 days of
receipt of this notice. Failure to file objections within the specified time shall bar the aggrieved
party from attacking such Report and Recommendation before the assigned District Court Judge.
28 U.S.C. § 636(b)(1); LRCi 72.3.
Dated: March 13, 2017 	S\ ___________________________
RUTH MILLER
United States Magistrate Judge
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