Sorenson v. Wolfson

16-1224
Sorenson v. Wolfson
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
New York, on the 16th day of March, two thousand seventeen.
PRESENT:
ROBERT A. KATZMANN,
Chief Judge,
ROSEMARY S. POOLER,
GERARD E. LYNCH,
Circuit Judges.
_____________________________________
Sigurd A. Sorenson,
Plaintiff-Counter-Defendant-Appellee,
v. 16-1224
Stanley Wolfson,
Defendant-Counter-Claimant-Appellant,
Robert Friedman, Bernard Friedman, Penmark
Realty Corporation, 257/117 Realty LLC,
Defendants-Counter-Claimants.
_____________________________________
For Plaintiff-Counter-Defendant-Appellee: Sigurd A. Sorenson, pro se, Edgewater, NJ.
For Defendant-Counter-Claimant-Appellant: Jacques X. Catafago, Catafago Fini LLP, New
York, NY; Lawrence F. Morrison, Morrison
Tenenbaum PLLC, New York, NY.
Appeal from an order of the United States District Court for the Southern District of New
York (Koeltl, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the order of the district court is AFFIRMED.
Appellant Stanley Wolfson appeals from the district court’s denial of his motions for
sanctions against Sigurd Sorenson under Federal Rule of Civil Procedure 11, 17 U.S.C. § 505, 28
U.S.C § 1927, and the district court’s inherent powers. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
I. Rule 11 Sanctions
“A pleading, motion or other paper violates Rule 11 either when it has been interposed for
any improper purpose, or where, after reasonable inquiry, a competent attorney could not form a
reasonable belief that the pleading is well grounded in fact and is warranted by existing law or a
good faith argument for the extension, modification or reversal of existing law.” Kropelnicki v.
Siegel, 290 F.3d 118, 131 (2d Cir. 2002) (internal quotation marks omitted). For example, Rule 11
is violated “where it is patently clear that a claim has absolutely no chance of success under the
existing precedents.” Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 254 (2d Cir.
1985), superseded on other grounds by rule. Even when Rule 11 is violated, “sanctions under Rule
11 are discretionary, not mandatory.” Ipcon Collections LLC v. Costco Wholesale Corp., 698 F.3d
58, 63 (2d Cir. 2012). Thus, we review the district court’s denial of a motion for sanctions under
Rule 11 for abuse of discretion. Perez v. Posse Comitatus, 373 F.3d 321, 326 (2d Cir. 2004). “A
district court has abused its discretion if it based its ruling on an erroneous view of the law or on a
clearly erroneous assessment of the evidence, or rendered a decision that cannot be located within
the range of permissible decisions.” In re Sims, 534 F.3d 117, 132 (2d Cir. 2008) (internal
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quotation marks, citation, and brackets omitted).
The district court did not abuse its discretion by denying Rule 11 sanctions. We have held
that “[s]anctions are not to be imposed for unsuccessful litigation of a cognizable claim.” O.N.E.
Shipping Ltd. v. Flota Mercante Grancolombiana, S.A., 830 F.2d 449, 454 (2d Cir. 1987). Here,
the district court determined that Sorenson’s motion for reconsideration was meritless but not
objectively unreasonable. In so concluding, the district court considered, among other things, the
lengthy response that Wolfson felt the motion warranted. Given our policy of restraint when
awarding sanctions, it cannot be said that the district court abused its broad discretion by denying
Wolfson’s Rule 11 motion on these grounds. See MacDraw Inc., v. CIT Group Equipment Fin.,
Inc., 73 F.3d 1253, 1259 (2d Cir. 1996) (“Rule 11 sanctions must be imposed with caution.”).
The district court also denied Sorenson’s Rule 11 request for an anti-suit injunction. When
considering whether to issue an anti-suit injunction, a court should consider:
(1) the litigant’s history of litigation and in particular whether it
entailed vexatious, harassing or duplicative lawsuits; (2) the
litigant’s motive in pursuing the litigation, e.g., does the litigant
have an objective good faith expectation of prevailing?; (3) whether
the litigant is represented by counsel; (4) whether the litigant has
caused needless expense to other parties or has posed an
unnecessary burden on the courts and their personnel; and (5)
whether other sanctions would be adequate to protect the courts and
other parties.
Safir v. U.S. Lines, Inc., 792 F.2d 19, 24 (2d Cir. 1986). Anti-suit injunctions are typically used in
cases where the movant has egregiously “abused the judicial process.” See, e.g., Moates v.
Rademacher, 86 F.3d 13, 15 (2d Cir. 1996) (describing twelve complaints based on the same
events).
Wolfson argues that the district court abused its discretion because it did not consider any
of the Safir factors. Although the district court did not explicitly consider these factors, it did
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consider whether Sorenson’s had exhibited “the type of abuse of the judicial process” seen in other
cases as “ris[ing] to the level of harassment that has triggered anti-suit injunctions.” S. App. 7.
Sorenson has filed three suits, two state court cases and this case. While there was extensive
motion practice in this case, both parties were responsible for it. And as the district court noted,
Wolfson himself filed three separate motions seeking attorney’s fees. The district court did not
abuse its discretion by denying the requested anti-suit injunction in these circumstances.
II. Attorney’s Fees under 17 U.S.C. § 505
Federal Rule of Civil Procedure 54(d)(2) requires that a motion for attorney’s fees must be
filed within 14 days of the judgment and include “the amount [of fees] sought or . . . a fair
estimate.” Fed. R. Civ. P. 54(d)(2)(B)(iii). While a court may extend the time to file a motion for
fees, it may only do so if the movant demonstrates “excusable neglect.” Tancredi v. Met. Life, Ins.
Co., 378 F.3d 220, 227–28 (2d Cir. 2004); see also Fed R. Civ. P. 6(b)(1)(B). Excusable neglect is
determined by considering “[1][t]he danger of prejudice to the [opposing party], [2] the length of
the delay and its potential impact on judicial proceedings, [3] the reason for the delay, including
whether it was in the reasonable control of the movant, and [4] whether the movant acted in good
faith.” Tancredi, 378 F.3d at 228 (alterations in original).
Wolfson did not provide an estimate of his fees in his initial § 505 motion. After Sorenson
pointed this out in his opposition, Wolfson provided an estimate in his reply brief, filed more than
14 days after the judgment. Wolfson did not offer any reason at that time for this delay, a fact
independently sufficient to justify denial the requested extension. See Tancredi, 378 F.3d at 228
(“Absent a sufficient reason for its delay, the fact that the delay and prejudice were minimal would
not excuse [the movant’s] mere inadvertence.”). For the first time on appeal, Wolfson now argues
that his estimate should be considered timely due to the complexity of the litigation, citing Dolby
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Labs., Inc. v. Lucent Techs., No. C 01-20709 JF, 2006 WL 1320475 (N.D. Cal. May 15, 2006).
Dolby is not controlling authority, and, in any event, does not apply here. In Dolby, the district
court did not require the moving party in a patent case to file an estimate of fees sought because the
“length and complexity of the instant litigation would have made it difficult for [the movant] to
provide [such] an estimate.” Id. at *5. Here, the litigation was not nearly as complex, and Wolfson
did provide an estimate of attorney’s fees—that estimate was just untimely. Because Wolfson did
not adequately explain this delay, the district court properly denied attorney’s fees under 17 U.S.C.
§ 505 for procedural error.
III. Attorney’s Fees under 28 U.S.C. § 1927 and the Court’s Inherent Powers
Under 28 U.S.C. § 1927, the district court may impose sanctions on an attorney who
“multiplies the proceedings in any case unreasonably and vexatiously.” An award of sanctions
under this provision requires a showing that an “attorney’s actions are so completely without merit
as to require the conclusion that they must have been undertaken for some improper purpose such
as delay.” In re 60 East 80th Street Equities, Inc., 218 F.3d 109, 115 (2d Cir. 2000). Furthermore,
we have held that such sanctions may only be imposed “when there is a finding of conduct
constituting or akin to bad faith.” Id. The same standards apply to the issuance of sanctions
pursuant to the court’s inherent powers. See Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir.
1986). We review decisions regarding sanctions under § 1927 for abuse of discretion. Gollomp v.
Spitzer, 568 F.3d 355, 368 (2d Cir. 2009).
The district court did not abuse its discretion by denying sanctions under § 1927 and the
court’s inherent powers. Although Sorenson’s arguments for reconsideration were meritless, mere
lack of merit does not warrant the imposition of sanctions. See MacDraw, 73 F.3d at 1262
(vacating § 1927 sanctions where district court failed to make any findings of specific bad faith).
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Wolfson argues that Sorenson acted with bad faith because he withdrew claims immediately prior
to and during trial and submitted a witness’s affidavits when the evidence at trial contradicted the
affidavits. But the district court considered these arguments when it considered whether
Sorenson’s actions constituted bad faith. We have affirmed determinations of bad faith where the
actions of counsel were egregious or dilatory. See Sassower v. Field, 973 F.2d 75, 78, 81 (2d Cir.
1992) (counsel made personal attacks, moved for reconsideration on virtually every unfavorable
ruling, filed and withdrew two improper interlocutory appeals, and filed a motion “seek[ing] to
reargue vritually every aspect of the litigation for the third time”). The district court reasonably
concluded that Sorenson’s conduct did not reach that level. The withdrawal of one claim on the
second day of trial, although inconvenient, was not dilatory; the withdrawn claim survived
extensive motion practice. Cf. Enmon v. Prospect Capital Corp., 675 F.3d 138, 146-47 (2d Cir.
2012) (affirming sanctions for voluntarily withdrawn frivolous appeals filed in bad faith with
dilatory motive).
Wolfson also argues that the district court abused its discretion when it considered his own
conduct in the litigation, namely his refusal of Sorenson’s settlement offer, because it
misconstrued the reasons for Wolfson’s refusal. District courts are entitled to examine all
“surrounding circumstances” when making a determination of bad faith. See Oliveri, 803 F.2d at
1277. The district court considered Wolfson’s argument for refusing to settle—that he had already
expended substantial fees—and found it inconsistent with Wolfson’s subsequent conduct. The
district court also observed that Wolfson, too, had pursued meritless counterclaims and had raised
meritless claims in his motions for attorney’s fees. In light of all the circumstances, the district
court’s denial of sanctions based in part on Wolfson’s own conduct did not constitute an abuse of
discretion.
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We have considered all of Wolfson’s remaining arguments and find them to be without
merit. Accordingly, we AFFIRM the order of the district court.
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk
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