Opinion
19-27507-A-7 Adv. 20-02027-A
04-12-2022
In re: KENNETH LEE STEERS, JR. and LIELANIE OLIVIA STEERS, INC., Debtors. v. KENNETH LEE STEERS, JR. and LIELANIE OLIVIA STEERS, Defendants. AMERISOURCE FUNDING, INC., Plaintiff,
MEMORANDUM
Fredrick E. Clement, United States Bankruptcy Judge
Parties must attend the pretrial conference. Fed.R.Bankr.P. 16(c)(1), incorporated by Fed. R. Bankr. P. 7016; Am. Scheduling Order §§ 1.0, 8.0, ECF No. 38. This court ordered the counsel for each party to attend the pretrial conference scheduled for March 29, 2022. Am. Scheduling Order §§ 1.0, 8.0. Neither party appeared, through counsel or otherwise, at that date and time.
This court issued an order to show cause for sanctions. Order, ECF No. 43. The ordered stated:
Amerisource Funding, Inc. and Attorneys Timothy Flaherty and/or Kevin Morse and Kenneth and Lielanlie Steers and Attorney Nicholas Lazzarini are ordered to show cause why sanctions, including dismissal of the complaint and/or monetary sanctions, and/or strike the answer for failure to appear at the status conference, Fed.R.Civ.P. 16(f), incorporated by Fed.R.Bankr.P. 7016.
...
[N]ot later than April 6, 2022, the respondents may file written opposition to the order to show cause and any such opposition shall be supported by specific and admissible evidence as to why this case should not be dismissed and/or monetary sanctions imposed.
[A]bsent good and sufficient reason supported by admissible evidence, the court will resolve the order to show cause without further notice or hearing.Order ¶¶ 1(A), (C), (D).
On April 6, counsel for the parties filed a joint response. Joint Response, ECF NO. 48. It was unsupported by declaration or other admissible evidence. In November 2021, the parties "exchanged fully executed settlement agreements" and exchanged a draft stipulation for settlement of the adversary proceeding. Joint Response 2:8-17. The stipulation for dismissal was not filed with the court and, on March 29, 2022 (four months after the parties executed a settlement agreement), neither party appeared at the pretrial conference.
Failure to attend the pretrial conference is a basis for monetary sanctions. Fed.R.Civ.P. 16(f)(1)(A), incorporated by Fed. R. Bankr. P. 7016. Bad faith is not required for imposition of sanctions and negligence support the imposition of sanctions. Ayers v. City of Richmond, 895 F.2d 1267, 1270 (9th Cir. 1990) (that the "date slipped by me" is insufficient).
Sanctions are appropriate here. First, notwithstanding clear instructions to the contrary, the response is unsupported by admissible evidence. Second, and more importantly, the respondents stated reason, i.e., "it was an unfortunate collective oversight between counsel," is insufficient. Ayers, 895. F.2d at 1270. Third, and finally, this was not a momentary failure; rather, the parties failed to dismiss the adversary proceeding for four months. The settlement was signed November 9, 2021. Response 2:10-11. The adversary proceeding was to be dismissed and counsel for the plaintiff circulated stipulation for dismissal to defendant; defendants signed it and returned it. Neither side followed up to ensure the stipulation was filed with the court.
For these reasons, counsel for each side will be sanctioned $250, 00; the court will issue a separate judgment, Fed.R.Civ.P. 54(b), incorporated by Fed. R. Bankr. P. 54(a), from chambers. No further appearance on the order to show cause is required.