Nos. 99-1152B, 01-2647B.Commonwealth of Massachusetts Superior Court. WORCESTER, SS.
January 4, 2007.
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MEMORANDUM AND ORDER ON THE DEFENDANT’S MOTION FOR FEES AND COSTS AND THE PLAINTIFF’S CROSS-MOTION FOR THE SAME
Hon. LLOYD MACDONALD.
In its order dated December 1, 2006 (“December 1st Order”) the Court took under advisement the defendant’s request that he be awarded his costs and attorney’s fees for responding to the plaintiff’s Supplemental Memorandum in Support of Plaintiff’s Motion for Post-Judgment Security. In doing so, the Court further ordered that the plaintiff could file a reply memorandum to the defendant’s request.
The plaintiff availed itself of such opportunity, and with it the plaintiff also filed a submission styled, “PCC’s Memorandum Report on Coz’s Post-Hearing Real Estate Disclosure.” The plaintiff concluded with a request that the Court not only deny the defendant’s motion for fees and costs but that it reconsider its denial of the plaintiff’s October 6, 2006 motion to compel the further disclosure of the defendant’s assets, allow such motion and award fees and costs in connection with it. The Court thereafter allowed the defendant to file a surreply.
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The Court has now reviewed all of the filings and exhibits that flowed from the December 1st Order. In addition, the Court revisited the original motion and related filings that formed the basis of the December 1st Order. The Court concludes that sanctions on the plaintiff in the form of costs and attorney’s fees are appropriate because of what, in substance, has been a substantial waste of the parties’ and the Court’s time in addressing an issue of post-judgment security that was capable of being readily and timely resolved without the need for the Court’s intervention. The Court denies the plaintiff’s cross motion for fees and costs.
The defendant predicated his motion on the standards for sanctions pursuant to Mass. R. Civ. P. 11(a). However, the Court sees the most appropriate framework for assessing sanctions in the present context as that of Rule 37(a)(4), rather than Rule 11. That is because what is at issue here is essentially a discovery dispute arising from the plaintiff’s motion to compel in connection with the plaintiff’s post-judgment Rule 69 discovery.
As such, the Court makes no finding (as would be required in the Rule 11 context) as to the plaintiff’s bad faith, nor plaintiff’s “design to defraud” or its effort to “seek and unfair advantage”. See Van Christo Advertising, Inc. v. M/A-Com/LCS, 426 Mass. 410, 416 (1998). The Court also makes no finding as to plaintiff having failed to act in “good faith”, as that phrase was given substance in Crystal Constr. Co. v Hartigan, 56 Mass. App. Ct. 324, 333 (2002) (“among other things, an absence of design to defraud or to seek an unconscionable advantage”).
Instead, Rule 37(a)(4) permits sanctions to be imposed when a motion to compel is denied unless the Court “finds that the making of the motion was substantially justified or
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that other circumstances make an award of expenses unjust”. As such, a showing of wilfullness by the unsuccessful party is not required Gos v. Brownstein, 403 Mass. 252, 256 (1988). See James W. Smith, Hiller B. Zobel and Charlotte S. Murphy, Rules Practice § 37.1, at 417 (2006).
What is at issue in the Rule 37 context is whether the motion to compel was justified and the justness of a sanctions order.
Here, there was no justification for the plaintiff to have brought its motion to compel further interrogatory answers relating to the defendant’s assets, including his pension and retirement accounts under circumstances, where the defendant had already offered to stipulate to an attachment of his real estate and further to stipulate to injunctive relief with respect to his substantial security holdings. While the plaintiff challenged the adequacy of such assets to secure its $2.7 million judgment, the plaintiff failed to submit appraisals or other convincing objective evidence that could have raised a reasonable question as to the soundness of the defendant’s estimate of the assets’ worth. The plaintiff’s failure to do so was particularly significant because, through counsel, the defendant had offered to cooperate with any appraiser or appraisers hired by the plaintiff for the task.
Furthermore, the plaintiff’s persistence in briefing and thereafter arguing to the Court that all but $74,453 of the defendants’ IRA and 401k retirement accounts were attachable (and ought to be attached) notwithstanding federal ERISA preemption is difficult to square with responsible advocacy. While the subject is clearly complex, the defendant’s counsel timely prepared and communicated to the plaintiff a convincing memorandum refuting all material points of the plaintiff’s submission. In doing so, the
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defendant requested that the plaintiff’s filing be withdrawn before the issue had to be joined before the Court. However, the plaintiff refused. The defendant then was compelled to file a formal opposition, and the Court was itself thereafter required to focus on and dispose of the issue. In its December 1st Order the Court rejected the plaintiff’s position on the basis of the authority advanced by the defendant.
In a recent decision, Judge Sikora (since elevated to the Appeals Court) aptly observed that “[b]eyond the letter and purpose of the legal standards, conscientious judges and attorneys attempt to implement our litigation system with reasonable efficiency, civility and common sense.” P.V. Construction v. L. Perrina Construction Co., Inc., et al, 20 Mass. L. Rptr. 596-598 (May 1, 2006). The rules of discovery should be self-executing, reserving only the most objectively contentious issues for resolution by the Court.
Here, while there was no lapse of civility in plaintiff’s conduct, there certainly was a lapse of reasonable efficiency and common sense. The scope of the Rule 69 discovery in dispute depended on the discrete issue of reasonable post-judgment security. For that lapse it is entirely appropriate that the plaintiff should bear the costs and fees incurred by the defendant from that point in time where it was clear that the defendant had offered the plaintiff facially reasonable post-judgment security.
Under the latter circumstances, if the plaintiff wished to test the adequacy of the security that was offered, it was incumbent on the plaintiff — before moving to compel further discovery — to provide objective evidence, for example, via appraisals, of the unreliability of the defendant’s valuations. That among the assets the plaintiff targeted for further discovery and attachment were retirement plan assets protected by the law of the Commonwealth and ERISA preemption aggravated the plaintiff’s error of judgment. As
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such, it reinforced the judicial interest in imposing sanctions to compensate the defendant for the burden of having to respond and to deter others similarly situated in the future.
Accordingly, the following ORDER shall issue:
The defendant’s motion for costs and fees is ALLOWED. Within ten days of the entry of this order, counsel for the defendant shall file an affidavit of reasonable fees and costs incurred after November 14, 2006 in connection with the plaintiff’s motion for post-judgment security. The original of the filing shall be made in the ordinary course with the Clerk of the Worcester Superior Court. A copy shall be simultaneously communicated via regular mail to the undersigned justice at the Fall River Superior Court, 441 North Main Street, Fall River, MA 02720. The plaintiff’s cross motion for costs and fees is DENIED.