Opinion
No. 99-10717-RGS
February 15, 2001
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR SANCTIONS AND MOTIONS BY COUNSEL TO WITHDRAW
This case involves a straightforward issue: the extent of defendant John J. Meldon's liability on a note. After a finding for plaintiff Ninth RMA Partners, L.P. (RMA) on the issue of liability, on October 27, 2000, the case was set for a jury trial on damages. The trial was scheduled to begin at 9:00 A.M. on February 12, 2001, a date deliberately set far enough in advance to avoid scheduling conflicts on the part of counsel and witnesses. On February 7, 2001, Michael B. Feinman, the attorney for plaintiff RMA, and Paul F. Lynch, the attorney for defendant Meldon, filed a Joint Pretrial Memorandum as required by the court's Standing Order. Jurors were duly summoned for the trial.
On Thursday, February 8, 2001, Mr. Feinman filed a motion to continue the trial for largely unspecified reasons, which was denied. The following day, Friday, February 9, 2001, Mr. Feinman filed an Emergency Motion to Withdraw as Counsel, stating that he had learned from RMA that morning that the underlying note had been sold to Premier Capital, Inc. (Premier), creating an ethical conflict that made it impossible for him to represent Premier at trial. Ironically, the sale of the note created a similar conflict for defendant's attorney, Mr. Lynch, who also moved to withdraw, indicating, however, that his client opposed any continuance and had obtained a new lawyer who would be prepared to go forward with the trial as scheduled. The court then entered an Order stating that it would hear the motions to withdraw on Monday morning, February 12, the trial date. It also instructed Mr. Feinman to be prepared to show cause why he should not be sanctioned for failing to sooner inform the court that his client had divested its interest in the contested note.
According to Mr. Feinman's motion, when he first learned that the note might potentially be sold to Premier "approximately two weeks prior to trial," he "made it quite clearly known to the client that, based upon prior dealings, he would not represent Premier Capital, Inc. in this matter." Motion to Withdraw, P. 2, ¶ 4.
At the Monday morning hearing, Mr. Feinman again stated that RMA had only told him of the sale of the note on the previous Friday morning, February 9. Accepting Mr. Feinman's word as an officer of the court, but doubting that the note had been sold on an impulse, the court ordered Priscilla Stevens, RMA's Managing Agent, to appear today, Thursday, February 15, at 9:30 A.M., to explain the circumstances of the sale, and more particularly why RMA, knowing of the pending trial, had not alerted Mr. Feinman of the divestiture.
Ms. Stevens had previously filed an affidavit with the court in support of RMA's motion for summary judgment representing herself as RMA's representative in the matter of the Meldon note.
At this morning's hearing, Ms. Stevens did not appear, despite Mr. Feinman's assurance that he had notified Ms. Stevens both orally and in writing that the court had ordered her to be present. Nor did RMA send any other representative knowledgeable of the circumstances of the sale of the note. RMA's unexplained failure to notify the court or counsel of the impending (or completed) sale has caused the unnecessary summonsing (and cancellation) of jurors, the loss of a week of the court's time in which another case could have been scheduled for trial, and unnecessary expense to the defendant in the redundant time spent by Mr. Lynch preparing for a trial, which RMA had every reason to know by its actions was a nullity. In an affidavit filed with the court, Mr. Lynch has detailed the 40.4 hours he spent in trial preparation billed at a $150 an hour between February 5, 2001, and February 9, 2001 for a total of $6,060.00. In addition, defendant incurred $210.00 in costs in subpoenaing witnesses.
According to Mr. Feinman, Ms. Stevens questioned whether RMA had any stake in the proceeding "because Premier now owns the note." When Mr. Feinman told Ms. Stevens that was not the issue, she replied that Premier was "going to take care of it" and she had elected not to show.
According to the affidavit of Paul W. George, Esq., who has entered an appearance for Premier, the note was sold to Premier as part of a pool of some 20,000 similar notes. Given the size of the transaction one would believe that the sale of the Meldon note was contemplated well before February 8, 2001.
According to an affidavit filed by Mr. Meldon, he had been personally involved in settlement discussions with Ms. Stevens as late as February 5, 2001. A reasonable inference is that RMA was using the fact of the trial date to bluff Mr. Meldon into settling with RMA before Premier took physical possession of the note.
The first and last dates are mistakenly given in Exhibit B to Mr. Lynch's affidavit as February 6, 2000 (presumably February 5, 2001) and February 8, 2001 (presumably February 9, 2001).
ORDER
The Motion for Sanctions is ALLOWED. RMA will pay the sum of $5,270 to defendant's attorney Paul Lynch, such sum to be credited to defendant Meldon against attorney Lynch's bill for the time and expense of preparing for trial. RMA will further pay a fine of $5,000 to the Clerk of the United States District Court for the District of Massachusetts as compensation to the court for its expenses in summonsing and cancelling jurors and as a sanction for the failure to obey the court's order to produce the requested witness (or a reasonable substitute) at this morning's hearing. The motion of attorney Lynch to withdraw is ALLOWED. The motion of attorney Feinman to withdraw will beALLOWED upon payment by RMA of the sanctions imposed. The Motion to Substitute Premier Capital as Party Plaintiff will be deferred pending the court's receipt of a reply from defendant's successor counsel. The Clerk will reschedule the case for trial.
I have reduced the sum requested by $1,000, as some of the preparatory work will be of assistance to successor counsel in preparing for trial.