James Allen Zow, Sr. v. Regions Financial Corporation , 595 F. App'x 887 ( 2014 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-11769
Non-Argument Calendar
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D.C. Docket No. 4:13-cv-00190-BAE-GRS
JAMES ALLEN ZOW, SR.,
VERONICA ZOW,
Plaintiffs-Appellants,
versus
REGIONS FINANCIAL CORPORATION,
REGIONS BANK,
d.b.a. Regions Mortgage,
MERSCORP HOLDINGS, INC.,
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
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(December 11, 2014)
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Before HULL, MARCUS and MARTIN, Circuit Judges.
PER CURIAM:
James Allen Zow, Sr. and Veronica Zow appeal the dismissal of their case
with prejudice as a sanction for being in contempt of a discovery order. They
argue that dismissal with prejudice was an inappropriate sanction because they had
already voluntarily dismissed their case without prejudice under Federal Rule of
Civil Procedure 41(a)(1)(A)(i), and because they failed to comply with the
discovery order only based on a good-faith belief that it was invalid. They also
argue that the district judge and magistrate judge violated their ethical obligations
by refusing to disclose certain business relationships, and that the magistrate judge
improperly failed to recuse himself despite his business relationship with defendant
Mortgage Electronic Registration Systems, Inc. 1 After careful review, we affirm.
I.
We review de novo dismissals under Rule 41(a)(1). Matthews v. Gaither,
902 F.2d 877, 879 (11th Cir. 1990) (per curiam). That rule permits a plaintiff to
“dismiss an action without a court order by filing . . . a notice of dismissal before
the opposing party serves either an answer or a motion for summary judgment.”
Fed. R. Civ. P 41(a)(1)(A) & (A)(i). But after dismissal, the district court retains
1
Although the Zows also argue that the district judge failed to recuse himself, this issue is
beyond our jurisdiction, because the order denying the motion to recuse was entered after the
notice of appeal was filed. See Bogle v. Orange Cnty. Bd. of Cnty. Comm’rs, 162 F.3d 653, 661
(11th Cir. 1998) (holding that Federal Rule of Appellate Procedure 3(c) requires that a notice of
appeal designate an existing judgment or order).
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jurisdiction to consider collateral issues which do not require a determination on
the merits, including imposition of contempt sanctions, even after a plaintiff
voluntarily dismisses a complaint pursuant to Rule 41(a)(1). Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 395–96, 110 S. Ct. 2447, 2455–56 (1990).
Dismissal with prejudice is a permissible sanction if a party fails to comply
with a discovery order. Fed. R. Civ. P. 37(b)(2)(A)(v); see also Fed. R. Civ. P.
41(b). Our review of discovery sanctions “is sharply limited to a search for an
abuse of discretion and a determination that the findings of the trial court are fully
supported by the record.” Serra Chevrolet, Inc. v. Gen. Motors Corp., 446 F.3d
1137, 1146–47 (11th Cir. 2006) (quotation omitted). In sanctioning a party, a
district court abuses its discretion if “it misconstrues its proper role, ignores or
misunderstands the relevant evidence, and bases its decision upon considerations
having little factual support.” Id. at 1147 (quotation omitted). Because dismissal
with prejudice is a drastic sanction, a district court may implement it only as a last
resort, when a party’s failure to comply with a court order is a result of willfulness
or bad faith and lesser sanctions would not suffice. Malautea v. Suzuki Motor Co.,
987 F.2d 1536, 1542 (11th Cir. 1993). Nonetheless, if a party disregards an order
despite being warned of the possible consequences, dismissal is generally not an
abuse of discretion. Moon v. Newsome, 863 F.2d 835, 837 (11th Cir. 1989).
These principles apply with equal force to pro se parties. Id.3
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A finding that a party failed to comply with a discovery order is a finding of
civil contempt, Serra Chevrolet, 446 F.3d at 1147, and we review the grant of a
motion for civil contempt under the same abuse-of-discretion standard, McGregor
v. Chierico, 206 F.3d 1378, 1383 (11th Cir. 2000). A finding of civil contempt
must be based upon clear and convincing evidence that: “1) the allegedly violated
order was valid and lawful; 2) the order was clear, definite, and unambiguous; and
3) the alleged violator had the ability to comply with the order. Id. (quotation
omitted).
While the Zows were certainly entitled to dismissal of their action under
Rule 41, the district court retained jurisdiction to determine the collateral issues of
discovery and contempt sanctions. See Cooter & Gell, 496 U.S. at 395–96, 110 S.
Ct. at 2455–56; cf. Matthews, 902 F.2d at 880 (holding that district courts retain
jurisdiction to dismiss an action with prejudice even after the plaintiff files a notice
of dismissal under Rule 41 where the plaintiff acted in bad faith by misstating
assets on an in forma pauperis affidavit); accord In re Exxon Valdez, 102 F.3d 429,
431 (9th Cir. 1996) (finding jurisdiction where a district court dismissed an action
with prejudice as a discovery sanction even after the action was otherwise
dismissed, because a sanction of dismissal with prejudice “imposed . . . under Rule
37 [is] collateral to the merits of the action[] . . .; though [it] terminate[s] the
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action[], [it] [does] not signify a district court’s assessment of the legal merits of
the complaint.” (alteration adopted) (citation omitted)).
Beyond the question of its jurisdiction, the Zows argue that the district court
abused its discretion by finding that they were in contempt of the discovery order.
We disagree. The discovery order was lawful and valid, and it merely directed
them to attend a Rule 26(f) conference for the purpose of planning discovery.
Though the Zows cite Chudasama v. Mazda Motor Corp., 123 F.3d 1353 (11th Cir.
1997), in support of their position, we only found an abuse of discretion there
because the district court ordered the parties to engage in substantive discovery
despite failing to rule on the defendants’ motion to dismiss for over eighteen
months. See id. at 1366–68. By contrast, the discovery order here was clear, and
there was no evidence that the Zows were unable to comply with its directive. See
McGregor, 206 F.3d at 1383.
Nor did the district court abuse its discretion in determining that dismissal
with prejudice was an appropriate sanction. The Zows were warned by the
magistrate judge on two occasions that their case could be dismissed if they did not
participate in the Rule 26(f) conference. They simply chose to disregard these
warnings. See Moon, 863 F.2d at 837. And the record amply supports the district
court’s finding that their choice to disregard the discovery order was willful. So
too with the finding that lesser sanctions would not suffice.
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II.
We also review the denial of a recusal motion for abuse of discretion. In re
Walker, 532 F.3d 1304, 1308 (11th Cir. 2008). A judge must recuse if he is
personally biased or prejudiced concerning a party, or whenever his “impartiality
might reasonably be questioned.” 28 U.S.C. § 455(b)(1), (a); In re Walker, 532
F.3d at 1310. A judge’s impartiality might reasonably be questioned if an
objective, fully informed lay observer would entertain significant doubt about his
impartiality. In re Walker, 532 F.3d at 1310. Consumer transactions made in the
ordinary course of business do not warrant recusal. See Delta Air Lines, Inc. v.
Sasser, 127 F.3d 1296, 1297–98 (11th Cir. 1997) (per curiam) (holding that a
frequent-flyer account was not a financial interest within the meaning of
§ 455(b)(4) and that no reasonable person could question a judge’s impartiality
because he had a frequent-flyer account with the plaintiff-airline). Judges are
required by the Ethics in Government Act to make certain financial disclosures. 5
U.S.C. App. §§ 101–105. The disclosures include identifying interest in property
held for investment or production of income, such as certificates of deposit or other
personal savings accounts. Id. § 102(a)(3).
The magistrate judge did not abuse his discretion by refusing to recuse. The
challenged relationship was a personal mortgage that arose from the execution of a
standard contract during the ordinary course of business. Nothing about such a
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transaction would give rise to doubts about the magistrate judge’s impartiality.
And neither the district judge nor the magistrate judge violated ethical obligations
by declining to disclose business relationships at the Zows’ request. Judges are
obligated to file financial disclosure reports only as required by statute. See 5
U.S.C. App. § 102(a).
AFFIRMED.
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