Opinion
99-MC-0036E.
August 9, 2002
MEMORANDUM and ORDER
This decision may be cited in whole or in any part.
Familiarity with the facts of this case is presumed. In a Memorandum and Order dated February 25, 2002, this Court denied movant Blair Roach's July 10, 2001 motion to recover $62,176.70 in unreimbursed costs it had incurred in complying with a May 12, 1999 subpoena duces tecum ("the subpoena") which had been issued by defendant Columbia/HCA Healthcare Corporation ("Columbia") and granted Columbia's August 3, 2001 cross-motion for a refund of $55,382.42 for payments it had made to Blair Roach for documents that were never produced. Florida Software Systems, Inc. v. Columbia/HCA Healthcare Corp., No. 99-MC-0036E, 2002 WL 1020777 (W.D.N.Y. Feb. 25, 2002). On March 13, 2002 Blair Roach filed a motion to alter/amend the judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure ("FRCvP") and requested permission to order a transcript of the August 10, 2001 oral argument and thereafter supplement its papers. Columbia filed a cross-motion April 8, 2002 seeking to recover the attorneys fees and costs it had incurred in opposing Blair Roach's FRCvP 59(e) motion on the basis that such motion was frivolous. A hearing was held on Blair Roach's motion April 11, 2002 during which the undersigned granted its request to obtain a transcript of the August 10, 2001 oral argument and thereafter submit additional briefing. The transcript of the August 10, 2001 oral argument was obtained and filed with the Court April 24, 2002. Supplementation of the motions was subsequently completed and such were argued and submitted July 26, 2002.
While not so noted on such Memorandum and Order, the same may be cited in whole or in any part.
A motion to alter or amend a judgment under FRCvP 59(e) will be granted in only three limited circumstances — viz., (1) an intervening change in the controlling law, (2) the availability of new evidence or (3) the need to correct a clear legal error or prevent manifest injustice. Cray v. Nationwide Mut. Ins. Co., 192 F. Supp.2d 37, 39 (W.D.N.Y. 2001); Cavallo v. Utica-Watertown Health Ins. Co., Inc., 3 F. Supp.2d 223, 224 (N.D.N.Y. 1998); Patterson-Stevens, Inc. v. Int'l Union of Operating Eng'rs, 164 F.R.D. 4, 6 (W.D.N.Y. 1995); Bartz v. Agway, Inc., 849 F. Supp. 166, 167 (N.D.N.Y. 1994). The party making an FRCvP 59(e) motion "may not address facts, issues, or arguments not previously presented to the court or reargue those issues already considered." Cray, at 39. In its original FRCvP 59(e) motion, Blair Roach had argued that this Court had "committed clear legal error through mistakes both with respect to the law and the facts, [such] that amending or altering the Judgment is necessary to prevent manifest injustice" — Kerman Mar. 13, 2002 Aff. ¶ 2 — yet had failed to identify any errors of law or of fact that would justify FRCvP 59(e) relief.
Internal punctuation and citations omitted.
Larry Kerman, Esq. of Blair Roach.
Firstly, Blair Roach argues that this Court had erroneously concluded that the April 19, 2000 teleconference had resulted in some sort of a "contractual agreement" between the parties. Blair Roach then contends that, because such "contractual agreement" had first been breached by Columbia, Blair Roach's failure to provide the priority level one privilege log was thereafter excused. Such teleconference resulted however, in an Order from this Court — albeit an oral one — approving the method by which the documents sought by the subpoena were to be produced and the payment therefor was to be made, in accordance with the terms agreed to by the parties, akin to this Court having "so ordered" a written stipulation between the parties. In addition, this Court found that it was Blair Roach, not Columbia that had failed to comply with its obligations thereunder. Furthermore, the Blair Roach attorney who had previously been handling this matter, Robert R. Radel, Esq., clearly understood the obligations of Blair Roach because during the August 10, 2001 oral argument, he admitted that he had known that "the privilege log for each priority level [was to] be produced at the end of production for that priority level." Aug. 10, 2001 Tr. at 5.
Nor as Blair Roach suggests, did this Court credit the recollection of Julio Gomez, Esq. as to what had been said during the April 19, 2000 teleconference — Kerman Mar. 13, 2002 Aff. ¶ 7 —; indeed, Gomez had not even participated therein. Rather the undersigned relied upon his own recollection and notes of such teleconference.
Second, Blair Roach makes the incredulous argument that, although Radel had agreed to produce the priority level one privilege log after Columbia had tendered payment in the amount of $25,010.20, it never had stated "when the privilege log would be produced [and] simply states that after receipt of the payment, the privilege log and further documents would be produced." Kerman Mar. 13, 2002 Aff. ¶ 6. In his December 21, 2000 letter Julio Gomez, Esq. stated that Columbia was "prepared to pay all outstanding amounts (minus specific line item costs that we object to) on [Blair Roach's] unpaid invoices if [Blair Roach] simultaneously produces a privilege log." Gomez Aug. 2, 2001 Decl. Ex. I (Gomez Dec. 21, 2000 Letter). Gomez and Radel spoke on the telephone January 10, 2001 and on January 15, 2001 Radel replied to Gomez stating that "[u]pon receiving the check *** I will provide to you the privilege log ***." Id. at Ex. J (Radel Jan. 15, 2001). Blair Roach falsely states that after Radel's January 15, 2002 letter "there was not a single written request by Columbia to produce the privilege log" — Kerman Mar. 13, 2002 Decl. ¶ 7 —; however, in his January 22, 2001 cover letter transmitting the $25,010.20 check, Gomez had noted that Columbia had received another invoice from Blair Roach and that such would not be paid until Columbia had received the priority level one privilege log. Gomez Aug. 2, 2001 Decl. Ex. K (Gomez Jan. 22, 2001 Letter). Furthermore, Blair Roach was certainly aware of such because during the August 10, 2001 oral argument Radel stated that, "by letter dated January 22d 2001, Columbia refused to pay for any other invoices until a privilege log was produced." Aug. 10, 2001 Tr. at 5. In light of the above, Kerman's suggestion that Blair Roach could wait until some unspecified date in the future — which presumably has yet to be reached — to produce the priority level one privilege log is unsupportable.
Although it has been over eighteen months since Blair Roach agreed to provide Columbia with the priority level one privilege log in return for a check for $25,010.20 Blair Roach has still not adequately explained why it failed to do so. Blair Roach has come up with numerous excuses, most of which involve pretending that the draft ninety-nine page priority level two privilege log Radel had brought to Court August 10, 2001 was the priority level one privilege log. However, a review of the transcript of the August 10, 2001 hearing makes it perfectly clear that such was a draft priority level two privilege log, the preparation of which should not have begun until the priority level one privilege log had been turned over to Columbia. The undersigned accordingly fails to comprehend why Kerman finds it "most interesting" that he did not review the irrelevant draft priority level two privilege log during oral argument. Aug. 10, 2001 Tr. at 6, 9-10, 16; Kerman July 12, 2002 Decl. ¶ 4b.
Third, Blair Roach argues that this Court had concluded that Blair Roach's failure to produce a single document — an August 22, 1994 forbearance agreement signed by defendant Norman R. Dobiesz on behalf of FSS and by Vice President Greco on behalf of Columbia — had caused Columbia to settle the underlying Florida litigation and that such was the primary basis for this Court's February 25, 2002 decision. Kerman Mar. 13, 2002 Decl. ¶ 8. Such a reading of this Court's Order is completely untenable; however, this Court will nonetheless clarify its Order to state that Blair Roach's failure to produce such document had played no part in the ultimate holding, which was based on Blair Roach's failure to provide the level one privilege log. Blair Roach also states that such document was not produced because it was to be produced under priority level two; however, this Court has already held that such document was "clearly covered by priority level one." February 25, 2002 Memorandum and Order at 12.
See also, Kerman July 17, 2002 Decl. ¶ 15 ("The main reason this Court held against Blair Roach was Columbia's claim of prejudice" based upon the former's failure to produce such document.).
This Court referred to such document in two sentences on the twelfth page of a twenty-one page opinion. Such sentences were in the background/factual section of the opinion and the failure to produce such document played no part in the holding of this Court and, indeed, it was never even mentioned again in the decision.
Blair Roach also contends that this Court mistakenly held that such document should have been produced as part of priority level one based upon the Bates number it had assigned to such document. Lisa Primerano, Esq. Decl. ¶¶ 3, 6-7. This Court did not determine that such document should have been produced as part of priority level one based upon the Bates number that Blair Roach had arbitrarily assigned to it, however, but rather based upon the substance of such document.
Fourth, Blair Roach argues that this Court "sanctioned" and "punished" it by denying it full payment of the costs it had incurred in complying with Columbia's subpoena because most of the priority level one documents that it had reviewed were privileged and therefore were not produced. Kerman Mar. 13, 2002 Decl. ¶ 8. To the contrary, this Court did not "sanction" or "punish" Blair Roach due to its non-production of privileged documents — privileged documents are, of course, not supposed to be produced to the opposing party —, but rather held that Blair Roach was not entitled to be paid for priority level one documents that it had withheld on the basis of privilege because it had failed to produce a privilege log to justify withholding them on such basis. Blair Roach would obviously have been entitled to be paid for the costs it incurred in complying with the subpoena even if every single responsive document it had reviewed was privileged; however, because Blair Roach never produced a priority level one privilege log to Columbia justifying its withholding of such documents it is, just as obviously, not entitled to be paid for such.
In support of this argument, Norman R. Dobiesz, President of Florida Software Systems, Inc., Receivable Dynamics, Inc. and Nevada Communications Corporation, submitted a declaration stating that he had instructed Blair Roach to submit all responsive documents and draft privilege logs to Marion Hale, Esq. trial counsel in the underlying Florida litigation, for a second round of review. Dobiesz July 6, 2002 Decl. ¶¶ 1-3. John N. Blair, Esq., states that in early March 2001 — when Blair Roach was finalizing the "next level of production and a 99-page privilege log," — Dobiesz called and instructed him to send such to Hale for her review and that, pursuant to Dobiesz's instructions, on March 15, 2001 Radel sent six boxes of documents and a draft ninety-nine page privilege log to Hale. Blair July 10, 2002 Decl. ¶¶ 8-11 and Ex. A. Such is completely irrelevant, however, because the six boxes of documents and ninety-nine page privilege log pertained to priority level two, whereas the basis of this Court's decision was Blair Roach's failure to provide the privilege log for priority level one.
Fifth, Blair Roach argues that this Court applied the pre-1991 amendment version of FRCvP 45 in its decision — even though this Court quoted the current version thereof and cited to cases applying such — because those cases in turn had cited to the pre-1991 version of FRCvP 45. Nonetheless, Blair Roach states that this Court ultimately reached the correct conclusion — i.e., that, pursuant to FRCvP 45(c)(2)(B), Columbia had to compensate Blair Roach for the costs it incurred in complying with the subpoena. See Blair Roach's Mem. of Law in Supp. of Mot. to Alter or Amend J. at 3-5; Reply Mem. of Law in Supp. of Mot. to Alter or Amend J. at 4-5. This argument is also patently ridiculous and, because Blair Roach does not disagree with this Court's application of the law, the undersigned fails to comprehend any basis for even raising such argument. This Court will nonetheless clarify that it relied on the post-1991 amendment version of FRCvP 45; indeed FRCvP 45(c)(2)(B) which was quoted by and relied upon by this Court did not even exist prior to the 1991 amendment.
After supplementing its original FRCvP 59(e) motion, plaintiff raised a new argument based upon newly discovered evidence, in addition to continuing to rely upon its original meritless arguments. Blair Roach argues that the terms of an April 30, 2001 General Release ("the release") — executed as part of the settlement agreement resolving the underlying Florida litigation and of which it had only belatedly become aware — barred Columbia's August 3, 2001 cross-motion upon which Columbia had been granted a refund from Blair Roach in the amount of $55,382.42. Kerman July 12, 2002 Decl. ¶¶ 2, 10; Blair July 10, 2002 Decl. ¶ 13. Such release states that Columbia
"for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby for itself, its assigns, successors, agents, officers, directors, employees and subsidiaries, fully remise, acquit, release and forever discharge Nevada Communications Corp., Florida Software Systems, Inc., Receivable Dynamics, Inc., Norman R. Dobiesz, Stuart Lopata and Maureen Donovan Dobiesz [and] their *** attorneys *** of and from all claims, demands, suits, damages, actions, causes of actions, known or unknown, direct or indirect, of any nature whatsoever, whether arising at law or in equity, by reason of any matter, cause, happening or thing, from the beginning of time to the present. This release includes but is not limited to all those claims which were raised or could have been raised in Nevada Communications Corp. v. Columbia/HCA Healthcare Corp., et al. case no. 98-3039 which is pending in the Circuit Court for the Twelfth Judicial Circuit of the State of Florida, Manatee County, Florida, and in Florida Software Systems, Inc. v. Columbia/HCA Healthcare Corp., et al., case no. 97-2866-CIV-T-17B, pending in the U.S. District Court, Middle District of Florida, Tampa Division." Marian Hale, Esq. June 12, 2002 Aff. Ex. D.
Hale states that she had negotiated the release on behalf of the plaintiffs in the underlying Florida litigation and that, although Blair Roach had never been consulted regarding the terms of the release, the intention of the parties thereto had been to release any claims against any law firm — including that which Columbia subsequently raised against Blair Roach in its August 3, 2001 cross-motion. Hale Aff. ¶¶ 9-13. Elizabeth A. Wilkinson, Esq. states that she had participated in the settlement negotiations on behalf of Columbia, that Blair Roach's compliance vel non with the subpoena had not been discussed therein and that it had not been Columbia's intention to release any claims it had against Blair Roach "that did not arise out of the events and transactions at issue on the merits in the Federal and State lawsuits." Wilkinson July, 18, 2002 Aff. ¶¶ 3-7. However, the intentions of the parties in entering into the release are irrelevant because its language is clear and unambiguous. Blair Roach was counsel of record to the plaintiffs in both the state and the federal cases in the underlying Florida litigation and, based upon the terms of the release, Columbia's August 3, 2001 cross-motion seeking a refund from Blair Roach was clearly barred by the release. Based upon the release, this Court will vacate its February 25, 2002 Memorandum and Order to the extent that it ordered Blair Roach to pay $55,382.42 to Columbia.
As a result of what it perceived to be a frivolous FRCvP 59(e) motion by Blair Roach, Columbia filed a cross-motion seeking to recover $4,885.94 in attorney fees that it had incurred in responding to such motion through June 2002 pursuant to either (1) 28 U.S.C. § 1927, (2) FRCvP 11 or (3) the inherent power of a court to supervise and control its own proceedings. Gomez July 11, 2002 Decl. ¶¶ 1, 10. Based upon the meritless — if not frivolous — arguments Blair Roach raised in its original FRCvP 59(e) motion, this Court would have been inclined to grant Columbia's cross-motion to recover its attorney fees; however because this Court will be granting Blair Roach's FRCvP 59(e) motion in part, due to the subsequently discovered release relied upon Blair Roach after supplementing its motion, this Court will deny Columbia's cross-motion for attorney fees.
"Any attorney or other person admitted to conduct cases in any court of the United States *** 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."
Accordingly, it is hereby ORDERED that Blair Roach's motion to alter or amend this Court's February 25, 2002 Memorandum and Order is granted in part, that such Order is vacated to the extent that it ordered Blair Roach to pay $55,382.42 to Columbia and is denied in all other respects and that Columbia's cross-motion for attorney fees is denied.