RDLG, LLC v. Fred Leonard, Jr.

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:10-cv-00204-DLH. Copies to all parties and the district court/agency. [999830013]. [15-1153]

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 1 of 23

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 15-1153

RDLG, LLC,
Plaintiff - Appellee,
v.
FRED M. LEONARD, JR., a/k/a Chip Leonard,
Defendant – Appellant,
and
RPM GROUP BROKERAGE, LLC; JESSICA LEWIS LEONARD; JASON
BENTON; NICK JAMES; DEXTER HUBBARD; GLENN G. GOLDAN; RPM
GROUP, LLC,
Defendants.

Appeal from the United States District Court for the Western
District of North Carolina, at Asheville.
Dennis L. Howell,
Magistrate Judge. (1:10-cv-00204-DLH)

Argued:

March 24, 2016

Decided:

May 23, 2016

Before DUNCAN and THACKER, Circuit Judges, and DAVIS, Senior
Circuit Judge.

Affirmed by unpublished per curiam opinion.
wrote an opinion concurring in the judgment.

Senior Judge Davis

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 2 of 23

ARGUED: John C. Hunter, JOHN C. HUNTER, ATTORNEY AT LAW,
Asheville, North Carolina, for Appellant. Ross Fulton, RAYBURN,
COOPER & DURHAM, P.A., Charlotte, North Carolina, for Appellee.
ON BRIEF:
Benjamin E. Shook, RAYBURN, COOPER & DURHAM, P.A.,
Charlotte, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

2

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 3 of 23

PER CURIAM:
RDLG,

LLC

(“RDLG”)

sued

Fred

M.

default

judgment

in

RDLG’s

favor

Jr.

The district court 1

(“Leonard”), raising state law fraud claims.
entered

Leonard,

as

a

sanction

Leonard’s misconduct during the pretrial conference.

for

A jury

then considered the proper amount of damages resulting from the
default judgment and awarded RDLG $500,580.36.
Leonard now challenges the default judgment, asserting
it violated his right to due process, and the damages verdict,
contending the district court erred when instructing the jury.
We disagree on both counts.

The default judgment complied with

due process, as it was imposed after the court provided Leonard
both clear warning that the sanction would result from further
misconduct
sanction.

and

an

opportunity

to

oppose

imposition

of

the

And Leonard’s proposed jury instruction was properly

rejected as irrelevant to the issue submitted to the jury.

We,

therefore, affirm the judgment below.

1

The parties consented to the jurisdiction of a United
States magistrate judge.
See 28 U.S.C. § 636(c).
As “the
magistrate judge was acting for the court, . . . we . . . refer
to [its] decisions as those of the district court.” Lee-Thomas
v. Prince George’s Cty. Pub. Schs., 666 F.3d 244, 247 n.2 (4th
Cir. 2012).

3

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 4 of 23

I.
A.
RDLG filed this diversity action in the United States
District Court for the Western District of North Carolina in
September

of

2010.

RDLG

sued

Leonard,

a

number

of

other

individuals, and some related business entities under state law,
alleging a pattern of fraudulent activity.

The merits of the

fraud claims are not at issue in this appeal.
The

events

underlying

this

appeal

began

on

May

2,

2012, when attorneys Terri Lankford and Seth Neyhart entered
appearances

on

defendants.

behalf

of

Leonard

and

two

business-entity

Both attorneys were still representing the same

three defendants on September 6, 2012, when the district court
entered an order scheduling a pretrial conference for October 3.
On September 30, just two business days before the
scheduled conference, Lankford and Neyhart filed a motion to
continue

the

pretrial

withdraw as counsel.
communicating
Lankford

had

representation

with

conference

Lankford 2

of

a

separate

motion

to

They explained that Leonard had not been

informed
as

and

or

paying

Leonard

September

2

for

that
1.

She

her
she
had

services,

so

would

cease

waited

until

Neyhart’s sole involvement to that point was that of local
counsel. He had not communicated directly with Leonard prior to
the morning of the pretrial conference.

4

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 5 of 23

September 30 to move to continue the pretrial conference because
Leonard had represented to her that he intended to file for
bankruptcy (on behalf of himself and the business entities) no
later than September 28, 2012, 3 which would have obviated their
involvement in the impending conference.

Lankford added that

she planned to be in Puerto Rico on October 3.
The district court denied the motion to continue and
the motion to withdraw the next day -- October 1.

The court

ordered

both

represent

Leonard

and

Lankford
the

and

related

Neyhart
business

to

appear

entities

at

and
the

pretrial

conference and explained that either attorney’s absence would
result in a further order holding counsel in contempt.
On October 2, Lankford responded to the court’s order
by

filing

a

declaration.

The

declaration

expanded

her

explanation of how she came to request a continuance so close to
the date of the pretrial conference.

Lankford asserted that she

did not receive the district court’s October 1 order directing
her to appear at the pretrial conference under pain of contempt
until she had already left for Puerto Rico.

But she assured the

court that both Leonard and Neyhart would appear at the pretrial
3

Neither Leonard nor his business organizations, in fact,
filed for bankruptcy prior to the pretrial conference. Leonard
did file for personal bankruptcy, but not until October 10, a
week after the conference.
The two business entities never
filed for bankruptcy while this action was pending against them.

5

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 6 of 23

conference in person, while she would be available to appear via
teleconference.
As
person.

promised,

However,

the

Leonard

and

pretrial

Neyhart

both

conference

did

appeared
not

go

in

well.

Having anticipated that a bankruptcy stay would delay both the
conference

and

the

trial,

Leonard

and

his

counsel

were

not

that

potential

prepared for either.
Preparation

aside,

Neyhart

conflict of interest had arisen.

worried

a

He reported to the court that

Leonard was disputing some of Lankford’s representations in her
declaration and in the motion to continue.

Neyhart asked the

court for time to clarify the scope and consequences of any
dispute between counsel and client.
During

the

pretrial

This request was denied.

conference,

RDLG

moved

sanctions, citing Leonard’s lack of preparation.

RDLG argued

that entry of a default judgment would be appropriate.
R.

Civ.

P.

16(f)(1)(B),

37(b).

Neyhart

for

opposed,

See Fed.
arguing

a

warning from the court was required prior to imposing default
judgment

as

a

consideration.

sanction.
But

prior

The
to

court

took

concluding

the

the

motion

under

conference,

it

expressly stated on the record that it was considering striking
Leonard’s answer and entering default judgment.
Two days later, the district court imposed sanctions
pursuant

to

Federal

Rule

of

Civil
6

Procedure

16(f)

and

the

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 7 of 23

court’s inherent power, finding that “the actions of Defendants
and their counsel at the pretrial conference and leading up [to]
the conference made a mockery of the judicial process.”

RDLG,

LLC v. RPM Grp., LLC, No. 1:10-cv-204, 2012 WL 4755669, at *7
(W.D.N.C. Oct. 5, 2012).

Leonard was fined “$2500.00 pursuant

to Rule 16(f)(l)(C)” and ordered to pay his fine “to the Clerk
of Court within five (5) days of the entry of [the court’s]
Order.”

Id. at *5.

The court warned, “failure . . . to comply

with this Order within the time frame set forth in this Order
will result in the Court striking the answer . . . and entering
default judgment.”

Id.

Neyhart was also assessed a $2,500

fine, and Lankford was assessed a $5,000 fine.
Separately, the district court raised the prospect of
imposing

additional

sanctions

pursuant

to

Rule

Federal

of

against
Civil

Lankford

Procedure

11

and
and

Neyhart
directed

Lankford and Neyhart “to Appear at a hearing at 10:00 a.m. on
Thursday, October 11, 2012, . . . and SHOW CAUSE why they should
not be further sanctioned.”

RDLG, LLC, 2012 WL 4755669, at *7.

October 10 -- the deadline for paying the assessed
fines -- came and went without Leonard attempting to pay his
fine.

Instead, he filed for personal bankruptcy.
On the other hand, Lankford and Neyhart paid their

fines on time.

They also appeared at the Rule 11 hearing on

October 11 as directed.

Leonard, who had not been ordered to
7

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 8 of 23

attend the hearing, chose not to attend.

Lankford and Neyhart

both presented evidence at the show cause hearing.
The court decided no additional sanctions should be
imposed on the two attorneys.

It then turned to the previously

imposed Rule 16 sanction, which Leonard had failed to pay.
failure,

the

district

court

decided,

warranted

That

striking

Leonard’s answer and entering default judgment against him.
court

reasoned,

bankruptcy,

“It’s

the

excusable . . . .

my

belief

court

that

ordered

even

though

The

he’s
are

sanctions

filed
not

[I]t was [Leonard] who plotted and schemed to

cause a delay and continuance of this matter and to cause the
Court difficulty in trying to administer this case and prepare
it for trial.”

J.A. 204-05. 4

The court followed up with a written order on October
24.

The court recounted that its October 5 order cautioned that

failure

to

pay

any

assessed

fine

would

result

in

default.

“Despite this warning,” the court observed, Leonard “failed to
comply with the Court’s Order.”
Leonard

more

blameworthy

J.A. 211.

than

“[Leonard]

manipulated

counsel”

ability

prepare

the

to

for

his
and

Pretrial

4

The court then found

attorneys,

concluding,

“undermined
Conference

and

counsel’s
for

the

Citations to the “J.A.” refer to the Joint Appendix
filed by the parties in this appeal.

8

Appeal: 15-1153

Doc: 43

trial.”

Filed: 05/23/2016

Id. at 211-12.

Pg: 9 of 23

The court determined sanctions less

drastic than default judgment “would be of no avail in this
matter.”

Id. at 212.
B.
The default judgment resolved the issue of liability

but

did

not

set

an

amount

of

damages.

That

determination

required a jury trial, which began on January 12, 2015. 5
At
instructed,

trial,
“Actual

Leonard
damages

requested
recoverable

that
by

the

be

plaintiff

the

jury

for

fraudulent misrepresentation are limited to the amount of money,
property,
plaintiff

services,
by

misrepresentations.”

or
means

credit
of

J.A. 243.

obtained

by

defendant

defendant’s

from

fraudulent

The court declined to do so,

and the jury subsequently returned a verdict for $500,580.36 in
damages.

The district court entered judgment accordingly.

This

timely appeal followed.
II.
Leonard challenges both the default judgment and the
damages jury instruction.

We begin with the argument that the

entry of default judgment violated his due process rights.

5

The case was stayed due to Leonard’s bankruptcy for much
of the period between the October 2012 pretrial conference and
January 2015 damages trial.

9

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 10 of 23

A.
Normally, “[w]e review the district court’s grant of
sanctions

under

[Federal]

Rule

[of

Civil

Procedure]

37,

including the imposition of a default judgment, for abuse of
discretion.” 6

Anderson v. Found. for Advancement, Educ. & Emp’t

of Am. Indians, 155 F.3d 500, 504 (4th Cir. 1998); see also
Nat’l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639,
642 (1976) (per curiam).

“In the case of default, the ‘range of

discretion is more narrow’ than when a court imposes less severe
sanctions.”

Hathcock v. Navistar Int’l Transp. Corp., 53 F.3d

36, 40 (4th Cir. 1995) (quoting Wilson v. Volkswagen of Am.,
Inc., 561 F.2d 494, 503 (4th Cir. 1977)).
Leonard is not challenging whether the district court
exceeded the bounds of its discretion, though.

Rather, Leonard

contends that he is entitled to relief from the sanction because
he “had neither notice nor a meaningful opportunity to respond
6

The district court’s orders sanctioning Leonard refer to
Federal Rule of Civil Procedure 16, not Rule 37.
Rule 16
authorizes a district court to sanction a party who is
unprepared to participate in a pretrial conference by “issu[ing]
any
just
orders,
including
those
authorized
by
Rule
37(b)(2)(A)(ii)-(vii).”
Fed. R. Civ. P. 16(f)(1).
Rule
37(b)(2)(A)(iii) authorizes the court to “strik[e] pleadings in
whole
or
in
part,”
and
Rule
37(b)(2)(A)(vi)
authorizes
“rendering a default judgment against the disobedient party.”
So while the district court referred to its authorization to
order default pursuant to Rule 16, the ultimate source of that
authorization is Rule 37.
See Rabb v. Amatex Corp., 769 F.2d
996, 999-1000 (4th Cir. 1985).

10

Appeal: 15-1153

to

Doc: 43

the

Filed: 05/23/2016

allegations

leveled

Pg: 11 of 23

against

imposing” the default judgment.

him

prior

to

the

court

Leonard’s Br. 24.

We agree that there are due-process-based limits on a
court’s

power

provisions

to

of

person

shall

law,”

sanction

through

Fifth

Amendment[,

the
be

impose

deprived

of

“constitutional

default

judgment.

which

property

provide]

without

limitations

that

no

process

due

upon

“[T]he

of

power

of

the

courts, even in aid of their own valid processes, to dismiss an
action without affording a party the opportunity for a hearing
on

the

merits

of

his

cause.”

Societe

Internationale

Pour

Participations Industrielles Et Commerciales, S. A. v. Rogers,
357

U.S.

197,

209

(1958).

Accordingly,

a

default

judgment

generally may not be entered as a sanction “without first giving
notice

of . . .

intent

to

opportunity for a hearing.”

do

so

and

without

affording

an

Ford v. Alfaro, 785 F.2d 835, 840

(9th Cir. 1986).
But Leonard was provided ample notice and hearing in
this

case.

district

Prior

court

to

issued

imposing
both

the

oral

and

sanction

at

written

issue,

warnings

the
that

continued recalcitrance would result in default judgment.

At

the pretrial conference, the court notified the parties that it
was

considering

“strik[ing]

default.”

J.A. 118.

could

have

not

been

the

answer . . .

and

rul[ing]

in

Moreover, the court’s October 5 order
more

clear,
11

warning,

“failure . . .

to

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 12 of 23

comply . . . will result in . . . default judgment.”
v.

RPM

Grp.,

LLC,

No.

1:10-cv-204,

2012

WL

(W.D.N.C. Oct. 5, 2012) (emphasis supplied).

RDLG, LLC

4755669,

at

*5

Additionally, the

district court heard oral argument about potential sanctions at
a pretrial conference, which Leonard attended.
Such process was constitutionally adequate.
if

it

were

not,

Leonard

fails

to

demonstrate

And even

that

he

was

prejudiced by any violation, so he is not entitled to relief on
appeal.

We discuss the adequacy of the process employed by the

district

court

and

Leonard’s

inability

to

show

prejudice

in

turn.
B.
In
notice

to”

conditions

this

circuit,

parties
[of

adjudication

a

on

“when

court
the

we

“requir[e]

their

order]

merits.

failure

explicit

clear

Choice

meet

the . . .

preclude

will”

to

and

their

right

to

Hotels

Int’l,

Inc.

v.

Goodwin & Boone, 11 F.3d 469, 471 n.2 (4th Cir. 1993); see also
Hathcock,

53

F.3d

at

40

(“[T]his

court

has

emphasized

the

significance of warning a defendant about the possibility of
default before entering such a harsh sanction.”); Lolatchy v.
Arthur

Murray,

Inc.,

816

F.2d

951,

954

n.2

(4th

Cir.

1987)

(“[The] fact is that in National Hockey League[ v. Metropolitan
Hockey Club, Inc.], as well as in Rabb[ v. Amatex Corporation,
769 F.2d 996 (4th Cir. 1985)], the district court explicitly
12

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 13 of 23

warned the defaulting party in advance of the consequence of
default, which was dismissal.
case;

had

there

been,

(citations omitted)).

No such warning was given in this

another

case

would

be

presented.”

When provided, such notice is undoubtedly

constitutionally adequate.

See Link v. Wabash R.R., 370 U.S.

626, 632-33 (1962).
Leonard
notice”

in

this

received
case.

the

requisite

Choice

“explicit

Hotels,

11

F.3d

and

at

clear

471

n.2.

Indeed, he received an unusually clear and explicit warning.
First, he was present at the October 3, 2012 pretrial conference
when the district court announced, “I may strike the answer in
this case and rule in default.”

J.A. 118.

Second, Leonard does

not dispute that he received notice of the court’s follow-on
October 5, 2012 order, which warns, “The failure of [Leonard] or
counsel to comply with this Order within the time frame set
forth in this Order will result in the Court striking the answer
of

[Leonard]

[him] . . . .”
supplied).
*7

(“The

dilatory

and
RDLG,

entering
LLC,

default

2012

WL

judgment

4755669,

at

Indeed, the warning was repeated twice.
Court,
conduct

however,
will

warns

result

in

[Leonard]
the

that

Court

*5

against
(emphasis
See id. at

any

striking

future
[his]

Answer[] and entering default judgment against [him].” (emphasis
in original)); id. at *8 (“The failure of [Leonard] or counsel
to comply with this Order within the time frame set forth in
13

Appeal: 15-1153

this

Doc: 43

Order

Filed: 05/23/2016

will

result

in

Pg: 14 of 23

the

Court

striking

the

answer

of

[Leonard] and entering default judgment against [him] . . . .”).
In Rabb v. Amatex Corporation, we upheld a sanction of
dismissal

against

a

due

process

challenge

because

“counsel[]

conceded full awareness of and utter disregard for the district
court’s discovery timetable set forth in the pre-trial order.”
769 F.2d 996, 1000 (4th Cir. 1985).
more clear.

The instant case is even

Here, the order Leonard was fully aware of -- and

utterly disregarded -- specifically threatened default judgment.
Three times.

That is far more than enough to accord Leonard

constitutionally adequate notice.
C.
Leonard was also provided an adequate opportunity to
be heard.
“[N]ot . . .
without . . .
process.”

a

Link,

every

preliminary
370

U.S.

[dismissal]
adversary

at

632.

order

hearing

entered

offends

Following

Link,

due
other

circuits have expressly held that a court need not hold an oral
hearing before entering a default judgment sanction.

See FDIC

v. Daily, 973 F.2d 1525, 1531 (10th Cir. 1992) (affirming a
default

judgment

sanction

despite

the

lack

of

oral

hearing

because “[t]he right to respond does not necessarily require an
adversarial,

evidentiary

hearing”);

Spiller

v.

U.S.V.

Labs.,

Inc., 842 F.2d 535, 538 (1st Cir. 1988) (“Lack of a hearing does
14

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 15 of 23

not offend due process where the plaintiff had ample warning of
the consequences of his failure to comply with court orders.”).
We need not go that far today, though, because Leonard
was

permitted,

through

default judgment.

counsel,

to

oppose

RDLG’s

motion

for

At the pretrial conference, Neyhart argued in

opposition to the motion and, in fact, convinced the court that
default judgment should not be entered without first warning
Leonard that it could result from further noncompliance.
There is no question that this hearing was adequate.
Like notice, “[t]he adequacy of . . . hearing . . . turns, to a
considerable extent, on the knowledge which the circumstances
show such party may be taken to have of the consequences of his
own conduct.”

Link, 370 U.S. at 632.

the

conference

pretrial

and

the

As discussed, as between

October

5

order,

it

is

abundantly clear that Leonard had knowledge of the consequences
of refusing to pay the court-imposed fine.

No further hearing

was necessary.
Leonard

concedes

as

much.

At

oral

argument,

his

counsel agreed there would have been no violation if, at the
October

11

hearing,

the

district

court

had

simply

entered

default judgment as a sanction for Leonard’s noncompliance.

See

Oral Argument at 3:16–3:34, RDLG, LLC v. Fred M. Leonard, Jr.,
No.

15-1153

(Mar.

24,

2016),

available

http://www.ca4.uscourts.gov/oral-argument/listen-to-oral15

at

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 16 of 23

arguments (“Had the magistrate judge wanted to find [Leonard] in
default for not paying that $2,500, he could have done so, in my
opinion, without any further hearing into [Leonard’s] conduct,
and

he

could

have

done

it

essentially

with

a

one-sentence

order.”).
D.
Leonard nevertheless contends that his right to due
process was violated because he lacked notice that his failure
to pay his fine would be discussed at the October 11 hearing.
That hearing was set to address potential Rule 11 sanctions for
Leonard’s attorneys, but the district court proceeded further,
raising

Leonard’s

Leonard,

relying

failure
on

to

pay,

information

and

drawn

hearing when ordering default judgment.

then,
from

according

the

October

to
11

The court, for example,

ordered the Rule 11 hearing in part because it “ha[d] serious
concern regarding the factual ac[c]uracy of . . . statements in
[Lankford’s] Declaration and pleadings.”
4755669, at *7.

RDLG, LLC, 2012 WL

After considering the testimony Lankford gave

at the hearing, however, the district court relied on those same
documents

as

credible

evidence

supporting

entry

of

default

judgment against Leonard, observing, “From the statements of Ms.
Lankford, in her declaration, it was [Leonard] who plotted and
schemed to cause a delay and continuance of this matter and to
cause the Court difficulty in trying to administer this case and
16

Appeal: 15-1153

Doc: 43

prepare

it

Filed: 05/23/2016

for

trial.”

Pg: 17 of 23

J.A.

205.

Leonard

maintains

that

reliance on findings and credibility assessments made in his
absence violates due process.
But having conceded that, consistent with due process,
the

district

court

“could

have

[entered

default

judgment]

essentially with a one-sentence order,” Oral Argument at 3:23–
3:34, and having neglected to identify any evidence suggesting
that the district court’s findings would have been different had
Leonard

attended

and

testified

at

the

October

11

hearing,

Leonard necessarily concedes that any error is harmless.

Even

if the court’s appeal to additional findings constituted a due
process violation, the violation did not prejudice Leonard if
the findings were neither material to the determination he seeks
to undo nor incorrect.

See Tenn. Secondary Sch. Athletic Ass’n

v. Brentwood Acad., 551 U.S. 291, 303-04 (2007) (holding that
any due process violation arising from an athletic association’s
closed-door discussion with investigators after a disciplinary
hearing
punished
with

the

“g[ave]

was

“harmless

school
board
no

beyond

“identified
that

inkling

[the
of

a

reasonable

nothing

school]
what”

the

did

would

doubt”

where

investigators

not
have

already
changed

the

shared

know”

and

had

the

investigators testified at the open hearing and been subject to
cross-examination).

17

Appeal: 15-1153

Doc: 43

And

Filed: 05/23/2016

if

cannot succeed.
showing

of

afford . . .

Leonard

Pg: 18 of 23

cannot

is

no

prejudice,

his

argument

Where a sanctioned party “has not made any

any

possible

notice

and

prejudice[,] . . .

hearing

sanction [i]s harmless error.”
there

show

indication

that

before

failure

imposition

of

Ford, 785 F.2d at 840.
a

show

cause

hearing,

to
the
Here,

Leonard’s

attendance at the October 11 hearing, or any additional notice
and hearing would have had any effect on the district court’s
decision to enter default judgment.

Rather, the essential facts

are undisputed: Leonard willfully defied the initial sanctions
order, knowing that default judgment would result.
flouts such orders does so at his peril.”

“A party who

Update Art, Inc. v.

Modiin Pub., Ltd., 843 F.2d 67, 73 (2d Cir. 1988).

And no

matter what Leonard would say in an additional hearing, it is
beyond dispute that he willfully flouted a court order of which
he

was

well

aware.

He

is

not

entitled

to

relief

from

the

consequences of that choice.
III.
We

turn

next

to

the

award

of

damages.

Leonard

contends that the damages verdict must be vacated because the
district

court

erred

when

instructing

disagree.

18

the

jury.

Again,

we

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 19 of 23

A.
“We review a district court’s ‘decision to give (or
not

give)

a

jury

instruction

and

the

content

instruction . . . for abuse of discretion.’”

of

an

United States ex

rel. Drakeford v. Tuomey, 792 F.3d 364, 382 (4th Cir. 2015)
(alteration in original) (quoting United States v. Russell, 971
F.2d 1098, 1107 (4th Cir. 1992)).
when

the

requested

instruction

Reversal is appropriate “only
(1)

was

correct;

(2)

was

not

substantially covered by the court’s charge to the jury; and (3)
dealt with some point in the trial so important, that failure to
give the requested instruction seriously impaired that party’s
ability to make its case.”

Id. (quoting Noel v. Artson, 641

F.3d 580, 586 (4th Cir. 2011)).
B.
Reversal

is

not

appropriate

here

because

Leonard’s

proposed instruction was not relevant to the issue submitted to
the

jury.

Irrelevant

instructions

do

not,

by

definition,

“deal[] with some point in the trial so important, that failure
to give [them] seriously impair[s] [a] party’s ability to make
its

case.”

Tuomey,

792

F.3d

(quoting Noel, 641 F.3d at 586).

at

382

(alterations

supplied)

Rather, “no valid objection”

lies when a court refuses instructions that are “irrelevant and
immaterial . . . to the ground upon which the case was placed

19

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

before the jury.”

Pg: 20 of 23

Brown v. Tarkington, 70 U.S. (3 Wall.) 377,

381 (1865).
Leonard asked the district court to instruct the jury
that damages must be “limited to the amount of money, property,
services, or credit obtained by [Leonard] from [RDLG] by means
of [Leonard]’s fraudulent misrepresentations.”

J.A. 243.

This

instruction was apparently adapted from In re Rountree, 478 F.3d
215 (4th Cir. 2007), an opinion in which we decided whether a
tort

judgment

bankruptcy
Rountree

by

was
11

dealt

limitation

set

excepted

U.S.C.

from

discharge

§ 523(a)(2)(A).

entirely

with

forth

Leonard’s

in

federal

See

in
id.

bankruptcy

proposed

Chapter
at

219-23.

law.

jury

7

The

instruction

describes his interpretation of a limitation to the reach of the
fraud exception provided in the bankruptcy code.
No

issue

of

federal

submitted to Leonard’s jury.

bankruptcy

law,

however,

was

Rather, the jury was tasked with

deciding the extent to which he was liable to RDLG pursuant to
the state law causes of action alleged in this diversity suit.
And

while

Rountree

is

“the
“a

issue

of

matter

of

nondischargeability”
federal

law

governed

addressed
by

in

the . . .

Bankruptcy Code,” the question whether a valid debt exists “is
determined by rules of state law.”

Grogan v. Garner, 498 U.S.

279,

presented

283-84

(1991).

The

question

to

the

jury

--

whether and how much Leonard is indebted to RDLG pursuant to
20

Appeal: 15-1153

North

Doc: 43

Filed: 05/23/2016

Carolina

law

--

thus

Pg: 21 of 23

remains

a

question

of

despite Leonard’s collateral bankruptcy proceedings.
his

proposed

instruction

about

the

federal

state

law

Therefore,

dischargeability

question was simply irrelevant.
The

question

whether

Leonard’s

judgment

debt

is

dischargeable is properly directed to the court overseeing his
bankruptcy.

Indeed, Leonard did present his Rountree argument

there, and it was rejected.

See In re Leonard, No. 15-5452,

2016 WL 1178649, at *7 (6th Cir. Mar. 28, 2016) (unpublished).
That

decision

Circuit.

was

See id.

appealed

to

(and

affirmed

by)

the

Sixth

It cannot be challenged again here.
IV.

The

district

court’s

decision

to

enter

default

judgment as a sanction did not violate Leonard’s right to due
process, and Leonard’s proposed jury instruction was properly
refused.

Accordingly, the judgment of the district court is
AFFIRMED.

21

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 22 of 23

DAVIS, Senior Circuit Judge, concurring in the judgment:
This case is a closer call for me than it is for my friends
in the majority.

I am somewhat puzzled by the manner in which

the district court sought to vindicate the court’s interest in
maintaining

appropriate

workflow

the

in

busy

supervision
United

States

and

control

District

over

Court

the

for

the

Western District of North Carolina.
In addition to ordering that Leonard and his counsel pay
the plaintiff’s attorney’s fees in preparing for and attending
the pretrial conference, the court further sanctioned Leonard
and

his

counsel

for

failing

to

prepare

for

the

pre-trial

conference by imposing a monetary penalty payable to the court.
Thereafter, with its crosshairs fixed on Leonard’s counsel, the
district court convened a hearing concerning the imposition of
further sanctions on Leonard’s counsel under Federal Rule of
Civil Procedure 11, which Leonard himself was not specifically
ordered to attend.

Then, in Leonard’s absence, and in partial

reliance on the statements of his erstwhile counsel (coupled
with

Leonard’s

failure

to

timely

pay

the

fine

previously

imposed), the court switched its focus and entered an order of
default against Leonard.

Ultimately, after a jury considered

solely damages evidence (but not evidence bearing on liability),
it returned a verdict in excess of half a million dollars in
favor

of

the

plaintiff

against
22

Leonard.

In

my

view,

these

Appeal: 15-1153

Doc: 43

Filed: 05/23/2016

Pg: 23 of 23

procedural machinations skirt the border of due process, even
for

a

litigant

as

disreputable

as

Leonard,

who

clearly

manipulated his own counsel, his adversary and its counsel, and
the district court, alike.
Manifestly, the district court would have been wise to have
built a more convincing record to explicate the appropriateness
of

the

ultimate

sanction

of

default

by

affording

Leonard

an

opportunity to explain or justify his failure to pay the fine
and

why

something

short

of

default

would

have

been

a

more

appropriate sanction.

Indeed, the usual course of action in

such

to

circumstances

constrained,
circumstances

is

hold

nonetheless,
shown

by

the

a

show

under
record,

affirming the district court.

23

the
to

cause

hearing.

totality
join

in

the

I

of

am
the

judgment