Opinion
NO: 1:19CV14-MPM-DAS
11-23-2020
Ethan HOGGATT, et al., Plaintiffs v. ALLSTATE INSURANCE, et al., Defendants
Victoria Jean Johnson Hoggatt, Victoria Johnson Hoggatt — Attorney at Law, Amory, MS, for Plaintiffs. Cory L. Radicioni, Charles E. Cowan, Wise Carter Child & Caraway, P.A., Jackson, MS, for Defendant Allstate Insurance. Harry Case Embry, Jay Marshall Atkins, McAngus Goudelock and Courie, Oxford, MS, for Defendants Andy Dyson, Mrs. Hand.
Victoria Jean Johnson Hoggatt, Victoria Johnson Hoggatt — Attorney at Law, Amory, MS, for Plaintiffs.
Cory L. Radicioni, Charles E. Cowan, Wise Carter Child & Caraway, P.A., Jackson, MS, for Defendant Allstate Insurance.
Harry Case Embry, Jay Marshall Atkins, McAngus Goudelock and Courie, Oxford, MS, for Defendants Andy Dyson, Mrs. Hand.
Order
Michael P. Mills, UNITED STATES DISTRICT JUDGE
This matter comes before the court after a November 18, 2020 hearing for Ethan Hoggatt, Eric Hoggatt, and their attorney Victoria Hoggatt to show cause why they should not be held in civil contempt for failing to comply with two orders imposing Rule 11 sanctions in the form of attorneys' fees: this Court's August 19, 2019 Order [59] and July 23, 2020 Order [82].
Since the first imposition of sanctions, Victoria Hoggatt has on multiple occasions claimed that she and her clients cannot afford to comply. At the November 18, 2020 evidentiary hearing, the Court gave Victoria Hoggatt the opportunity to prove her claim of insolvency. She offered one piece of evidence: a letter from the Internal Revenue Service ("IRS") indicating that she, Victoria Hoggatt, owes the IRS $11,951.04 in taxes. The letter further states that she must pay the outstanding taxes within thirty days or the IRS will levy her state tax refund or other property.
This Court explained in its October 7, 2020 Order [98] that insolvency—if true—would be a complete defense against contempt. United States v. Rylander , 460 U.S. 752, 757, 103 S. Ct. 1548, 75 L.Ed.2d 521 (1983). It also stated that the party raising insolvency has the burden of proof. Id. Victoria Hoggatt has not met her burden. First, she offered no evidence of her, Eric Hoggatt's, or Ethan Hoggatt's income or assets. In fact, she presented no evidence whatsoever related to Eric or Ethan Hoggatt. Second, the single exhibit she put into evidence was not persuasive. Owing money to the IRS is not synonymous with insolvency. After all, the same question that is before the Court now—whether the Hoggatts' have failed to comply with the sanctions orders by choice or due to insolvency—has equal force with regard to Victoria Hoggatt's failure to pay her taxes. The Court cannot know based on the letter alone whether she is choosing not to pay her taxes or whether she cannot afford to pay her taxes. The Court finds that the letter—the only evidence Victoria Hoggatt proffered—does not satisfy her burden of proof. Therefore, the Court does not find that the Hoggatts are insolvent.
Victoria Hoggatt's failure to put forth more evidence hints at a deeper issue. By now it is apparent to the Court that she does not understand the difference between an allegation and proof. Through the course of these proceedings she has treated the two concepts as interchangeable at every turn. Having given them a fair hearing, it is now appropriate for the Court to hold the Hoggatts in civil contempt.
"[T]he power to punish for contempt is inherent in all courts." Chambers v. NASCO, Inc. , 501 U.S. 32, 44, 111 S. Ct. 2123, 115 L.Ed.2d 27 (1991). Once it finds a party in civil contempt, a court may sanction "to coerce compliance with a court order or to compensate another party for the contemnor's violation." In re White-Robinson , 777 F.3d 792, 795 (5th Cir. 2015) (quoting In re Terrebonne Fuel & Lube, Inc. , 108 F.3d 609, 612–13 (5th Cir. 1997) ).
Here, having found the Hoggatts in civil contempt, the Court imposes the following sanction. Victoria Hoggatt is barred from making any future filings in the Northern District of Mississippi without prior approval from the Court. The sanction will cease when the Hoggatts comply with the Court's August 19, 2019 Order and July 23, 2020 Order. In addition, to make sure that this Court's orders are enforced, the August 19, 2019 Order and the July 23, 2020 Order will be reduced to judgments against Victoria Hoggatt, Ethan Hoggatt, and Eric Hoggatt.
I. Bar on Future Filings
A district court may, as a civil contempt sanction, bar a vexatious litigant from filing any future lawsuit in the district. Barnes v. United States , 800 F. App'x 284, at *286 (5th Cir. 2020). Courts have imposed this sanction against litigants who fail to comply with Rule 11 sanctions. Dobbs v. Delta Corr. Facility , No. 4:07cv191, 2008 WL 4280026 (N.D. Miss. Sept. 16, 2008). The decision to impose such a sanction must be supported by the contemnor's "history as a vexatious litigant." Barnes , 800 F. App'x at *286.
"In devising sanctions, ‘the district court must impose the least severe sanction adequate to accomplish the purposes of Rule 11.’ " Hampton v. Henderson , 14 F.3d 53 (5th Cir. 1994) (quoting Akin v. Q-L Invs. , 959 F.2d 521, 535 (5th Cir. 1992) ). In that vein, courts that have barred future filings in a district have limited the bar to civil cases. See id. Additionally, courts have typically created an exception to their sanction and have allowed contemnors to file a complaint if they first receive permission from the Court. See id. Finally, to ensure that the contemnor has the ability to completely purge the sanction, which is necessary for the contempt to be characterized as civil and not criminal contempt, courts have ordered that the bar on future filings ceases if and when the contemnor complies with the court order that warranted civil contempt in the first place. See Gelabert v. Lynaugh , 894 F.2d 746, 748 (5th Cir. 1990).
Victoria Hoggatt is a vexatious litigant. At the outset of these proceedings she instigated a discovery dispute by requesting documents directly from Allstate instead of going through formal discovery. Allstate informed Victoria Hoggatt that she needed to go through formal discovery. Instead of making a formal request, Victoria Hoggatt responded by having Eric Hoggatt send a letter and a criminal affidavit to Mississippi Insurance Commissioner Mike Cheney, United States Attorney for the Northern District of Mississippi Chad Lamar, and District Attorney for the Fifth Circuit of Mississippi John Weddle. Eric and Ethan Hoggatt signed the criminal affidavit. The enclosed letter explicitly stated that Victoria Hoggatt prepared the letter and affidavit. The affidavit accused Allstate, two Allstate employees, Allstate's attorneys, and the attorneys' law firm of violating the Fair Credit Reporting Act, violating the Sarbanes-Oxley Act, intentionally destroying evidence, obstructing justice, and of wire fraud. The affidavit also showed that Victoria Hoggatt had been secretly recording phone calls with Allstate employees despite the fact that Allstate was represented by counsel.
Defendants filed a motion for sanctions.
Next, still without making any formal discovery requests, Victoria Hoggatt filed two nearly identical motions to amend her complaint. She sought to add Allstate's counsel as defendants in the action before this Court, apparently to pursue a claim against them for obstructing justice.
A Magistrate Judge found that Victoria Hoggatt's discovery dispute had unnecessarily protracted the litigation. Therefore, the Magistrate Judge entered the first sanctions order against the Hoggatts.
Victoria Hoggatt quickly earned another sanctions order when she filed two motions in this Court challenging the Magistrate Judge's sanctions order. The Court denied both motions and agreed that the discovery dispute and related filings unnecessarily protracted the proceedings. Thus, this Court awarded Allstate reasonable attorneys' fees incurred in responding to both motions.
That same day, in a separate order, this Court dismissed the Hoggatts' complaint for the failure to state a claim [83]. In response, Victoria Hoggatt filed a motion under Fed. R. Civ. P. 60 [85]. Once again, Victoria Hoggatt's Rule 60 motion warranted sanctions. She used Rule 60 not as intended by the Federal Rules of Civil Procedure, but as a vehicle to rehash dismissed arguments, and also to raise arguments that were plainly inapposite and entirely unsupported by the law.
Victoria Hoggatt's Rule 60 motion read much like her prior motions. Indeed, she has established a pattern of rearguing the substance of her claims every time she files a motion. No matter the stage of the litigation, no matter the title on her motion, and no matter what the opposing side has or has not argued, Victoria Hoggatt rehashes the same merits arguments, typically with little or no citations to law. For instance, even though her claims had already been dismissed, she reiterated the same merits arguments when she responded to Defendants' motion for contempt and when she filed a motion to stay the enforcement of sanctions.
Victoria Hoggatt has demonstrated another alarming pattern. She neither understands nor respects the distinction between criminal and civil matters. Not only did she distribute the criminal affidavit mentioned above, but, as she informed the Court at the November 18, 2020 evidentiary hearing, she has now also filed a complaint against Defendants with the Federal Trade Commission. It appears that Victoria Hoggatt will not accept that her grievances lack merit.
At this point, two truths are clear. One, Victoria Hoggatt has demonstrated a fundamental disregard for the Federal Rules of Civil Procedure and an inability to comport with the Model Rules of Professional Conduct. Two, Victoria Hoggatt has shown a determination to harass Defendants and their counsel with threats of criminal charges, even though such threats have no basis in fact or law. Therefore, this Court finds that Victoria Hoggatt is a vexatious litigant and that barring her from future filings in this district is warranted.
Pursuant to this Court's October 7, 2020 Order, Victoria Hoggatt is already barred from making any additional filings in the instant matter. Now, Victoria Hoggatt is barred from filing any pleadings in this or any other civil matter without prior permission from this Court.
II. Sanctions Judgment
At the November 18, 2020 evidentiary hearing, the Court asked Victoria Hoggatt: "[D]o you have any intention of paying the sanctions that have ... been awarded against you?" She responded: "I certainly would if the Court said you must pay them today and I would pay it." Because it seems that Victoria Hoggatt does not understand that the Court has already ordered her to pay sanctions, the Court will now make it emphatically clear by reducing the orders to judgments.
A district courts enjoys broad discretion to enforce its sanctions orders. See, e.g., In re United Mkts. Int'l Inc. , 24 F.3d 650, 656 (5th Cir. 1994). Relevant here, "a sanctions award may be reduced to a judgment if the sanctioned party has failed to pay the sanctions despite being provided with the opportunity to do so." Mass. Mutual Life Ins. Co. v. Williamson , Nos. 4:15cv166 & 4:15cv184, 2019 WL 7195318, at *3 (N.D. Miss. Dec. 26, 2019) (citing Moore v. Harris , 600 F. App'x 201, 204–05 (5th Cir. 2015) ). Here, the Hoggatts have had ample opportunity to pay the sanctions orders and have failed to do so. Therefore, this Court's August 19, 2019 Order and its July 23, 2020 Order will be reduced to judgments.
When imposing Rule 11 sanctions, it is up to the court whether to impose the sanctions solely on counsel, solely on the clients, or both. 5A. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1336.2(4th ed.). Here, the August 19, 2019 Order was entered against Victoria Hoggatt and her clients jointly. The July 23, 2020 Order was entered "consistent with [the] decision of the Magistrate Judge." Therefore, keeping in line with the orders, the judgments entered on this date will be entered against Ethan Hoggatt, Eric Hoggatt, and Victoria Hoggatt, jointly and severally.
Pursuant to the August 19, 2019 Order, judgment will be entered against Victoria Hoggatt, Ethan Hoggatt, and Eric Hoggatt, jointly and severally, in the amount of $6,282.50. Pursuant to the July 23, 2020 Order, judgment will be entered against Victoria Hoggatt, Ethan Hoggatt, and Eric Hoggatt, jointly and severally, in the amount of $1,802.50. This Court imposed additional sanctions against the Hoggatts in its October 7, 2020 Order, but because that order succeeded Allstate's motion for contempt, and because it was not a subject of the November 18, 2020 evidentiary hearing, it will not be reduced to a judgment at this time.
By reducing the sanctions orders to judgments, the Court ensures that Allstate will be able to use the tools made available under Mississippi law for enforcing judgments. See Miss. R. Civ. P. 69 ; First Miss. Nat'l Bank v. KLH Indus., Inc. , 457 So. 2d 1333 (Miss. 1984). Conclusion
Victoria Hoggatt is HENCEFORTH PROHIBITED from filing any civil action in this district without prior permission of the Court. The prohibition will cease when (1) the Hoggatts comply with this Court's August 19, 2019 Order [59] and its July 23, 2020 Order [82] imposing sanctions, and (2) Victoria Hoggatt files a sworn affidavit with this Court stating that the Hoggatts have satisfied the orders.
Additionally, the Court will enter a separate judgment this date, pursuant to Fed. R. Civ. P. 58, reducing its August 19, 2019 Order [59] into a judgment against Victoria Hoggatt, Ethan Hoggatt, and Eric Hoggatt, jointly and severally, in the amount of $6,282.50.
Likewise, the Court will enter a second separate judgment this date, pursuant to Fed. R. Civ. P. 58, reducing its July 23, 2020 Order [82] into a judgment against Victoria Hoggatt, Ethan Hoggatt, and Eric Hoggatt, jointly and severally, in the amount of $1,802.50.
SO ORDERED , this the 23rd day of November, 2020.