Claybar et al v. Huffman et al
Order granting 60 Supplemental Motion for A. Clay Rankin, III & John L. Jernigan, III to Withdraw as Attorney for defendants. For Huffman's willful disobedience of court orders compelling his attendance at the PTC, the Court imposes the san ction of DEFAULT. Plaintiff's brief regarding damages is due by 11/12/2015. Huffman's response is due by 11/25/2015. Plaintiff is ordered to file a status report regarding Huffman Construction's bankruptcy proceedings by the 10th day of each month. Signed by Chief Judge William H. Steele on 10/23/2015. Copy mailed to Michael Huffman. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
WARREN CLAYBAR, et al.,
MICHAEL R. HUFFMAN, et al.,
CIVIL ACTION 14-0205-WS-C
This matter came before the Court for a Final Pretrial Conference on October 21, 2015.
The stated purposes of the conference were not only to make final preparations for the November
2015 non-jury trial setting of plaintiffs’ claims against defendant Michael R. Huffman,1 but also
to resolve certain representation issues raised by defendants’ counsel of record’s Renewed
Motion to Withdraw (doc. 60), which set forth in detail defendants’ history of nonresponsiveness and failure to pay invoices of both counsel and third-party vendors (such as court
reporters and videographers).
In order to resolve all of these issues fairly and efficiently without disrupting the current
trial setting, the Court concluded that Michael Huffman’s presence at the Final Pretrial
Conference was necessary, along with one or both of his lawyers. Through a series of court
orders, Huffman was directed to attend the conference personally. On October 1, 2015,
Magistrate Judge Cassady entered an Order stating as follows: “[T]he Court ORDERS
MICHAEL R. HUFFMAN to attend the final pretrial conference scheduled before Chief Judge
Steele on October 13, 2015, at 9:30 a.m., in Mobile, Alabama to participate in the discussion
Plaintiffs also assert claims in this action against another defendant, Huffman
Construction, Inc.; however, those claims were stayed by Order (doc. 37) entered on March 6,
2015, upon notice that Huffman Construction had filed a Chapter 11 bankruptcy petition in the
U.S. Bankruptcy Court for the Northern District of Indiana. All indications before the Court are
that the automatic stay remains in effect as to plaintiffs’ claims against Huffman Construction at
of the issues highlighted in this Order.” (Doc. 56, at 4.) On October 2, 2015, the undersigned
entered an Order resetting the Final Pretrial Conference for October 21, 2015 at 2:00 p.m., to
accommodate scheduling conflicts with the undersigned’s criminal trial docket. The October 2
Order specifically noted that Huffman had been ordered to attend the Final Pretrial Conference,
and directed the Clerk of Court to mail a copy of such Order to him to ensure his awareness of
the new setting. (See doc. 57.) On October 14, 2015, the undersigned entered another Order
carrying defendants’ counsel’s Renewed Motion to Withdraw to the pretrial conference and
explaining as follows:
“[The Final Pretrial Conference] remains set for October 21, 2015 at 2:00 p.m.
Both defendant Michael R. Huffman and at least one of his counsel of record are
ordered to attend such conference, at which time the undersigned will hear from
counsel and client alike regarding the representation issues described in the
Renewed Motion and … will forge a pathway forward to trial, which remains set
for the November 2015 civil term.”
(Doc. 61, at 1-2.) Again, the Clerk of Court mailed a copy of the October 14 Order to Huffman
at his address of record.
Michael Huffman did not contact court personnel concerning these orders until the
morning of October 20, 2015 (the eve of the pretrial conference), when he personally called
chambers and asked to speak with the undersigned. Chambers staff correctly informed Huffman
that no such direct communication was permissible under applicable rules. Staff further
explained that if Huffman sought any relief or wanted to submit any information or requests to
the Court, he must do so via written filing made through the Clerk’s Office. At no time during
this brief telephone call did Huffman reveal any facts or circumstances that might justify his nonattendance at the Final Pretrial Conference, much less warrant a continuance of same. To be
clear, Huffman did not intimate during the call that he was requesting a continuance or asking to
be relieved of the obligation to attend the Final Pretrial Conference.
On the morning of October 21, 2015 (less than five hours before the Final Pretrial
Conference), Huffman filed a short, one-paragraph email message with the assistance of his
estranged counsel of record. In its entirety, the body of that email consisted of the following text
(typographical errors in original):
“Please excuse my absence from the pre trail today. I am on a project in
Louisiana and cannot leave. I’m aware of john and clay filing another motion to
withdraw from this case. I simply cannot afford to continue to pay them. We
have payed in excess of $250,000.00 in attorney fees. I will either
havetoreprrsent myself or file personal bankruptcy. I’m doing my best to get this
all worked out but I order to do so I must work. Sorry if this an enconvieniance
(Doc. 63.) Neither the undersigned’s staff nor Clerk’s Office personnel have had further contact
or interactions with Huffman following his submission of that email. At no point did the
undersigned rule – much less any court official notify Huffman – that he was excused from
attending the Final Pretrial Conference.
At the appointed hour of 2:00 p.m. on October 21, 2015, the undersigned convened the
Final Pretrial Conference in this matter as scheduled. Plaintiffs’ counsel of record (John P.
Kavanagh, Jr. and Brian McEwing) attended, the latter having flown in from out of state to
participate in the conference. One of Huffman’s attorneys of record (A. Clay Rankin, III) was
also present, albeit with the hope of being relieved of all further duties and responsibilities in this
matter at the earliest possible time. Huffman was nowhere to be seen, despite his actual
knowledge of both the Final Pretrial Conference and the Court’s unambiguous rulings mandating
his personal appearance. Via his unexcused absence, Huffman effectively prevented any
meaningful discussion from occurring at the conference with regard to final trial preparations.
The result is that, by electing not to comply with court orders, Huffman needlessly caused both
judicial and litigant resources to be squandered, and derailed a trial setting that was fixed back in
September 2014. In other words, Huffman’s disobedience reduced the Final Pretrial Conference
to a colossal waste of time for all concerned.
Insofar as Huffman intended for his October 21 email message to excuse his participation
in the Final Pretrial Conference, that submission is unsatisfactory. Again, three separate written
judicial directives had placed Huffman squarely on notice that he was ordered to attend the
conference himself. The Orders dated October 1, October 2 and October 14 were not phrased as
invitations for Huffman to attend, nor as conferring upon him a discretionary, aspirational option
to do so if it suited his fancy. These Orders were framed in unambiguous, mandatory terms.
And there is no question that Huffman was aware of those judicial directives; after all, both the
October 20 telephone call and the October 21 email evince Huffman’s subjective understanding
that he was expected to appear in court for the pretrial conference. Nonetheless, the gravamen of
his message was that Huffman had elected to stay at a job site in lieu of coming to court.
Nothing in the October 21 email suggested that Huffman was physically unable to leave his work
station, that doing so would expose him to severe financial or personal hardship, or that there
were emergencies or exigent circumstances in play. Instead, Huffman simply indicated that he
was going to stay at work and breezily concluded, “Sorry if this an enconvieniance for anyone.”
Mandatory court appearances are not a matter of convenience, to be waved off casually by one
who would rather be somewhere else. Rarely does this Court encounter a litigant who would not
prefer to be somewhere else carrying on his or her normal workaday affairs, rather than coming
to federal court in response to a court order. And yet, every single day, myriad case participants,
witnesses and others set aside their professional and personal obligations and come to court when
commanded to do so. The orderly, efficient administration of justice depends on it. Not
Huffman. For those who do not appear in court when ordered to do so, there are – and must be –
significant adverse consequences. This Order delineates those consequences.
In light of the foregoing, it is ordered as follows:
Based on the substantial showing that defendants have failed to communicate
with their retained counsel, have failed to pay substantial invoices now due and
owing to counsel and third-party vendors, and have otherwise failed to comply
with the terms of their engagement agreement, the Renewed Motion to Withdraw
as Counsel (doc. 60) is granted. Attorneys Rankin and Jernigan are hereby
deemed withdrawn from this matter and are relieved of any further obligation to
represent or appear on behalf of Huffman and Huffman Construction in these
proceedings. The Clerk of Court is directed to terminate Rankin and Jernigan as
counsel of record for defendants. Henceforth (or at least until such time as
substitute counsel appears), all court notices intended for Huffman or Huffman
Construction shall be served on those defendants directly at Michael Huffman’s
address of record, to-wit: 10149 S. 300 East, Warren, IN 46792. The same
applies to plaintiffs’ filings, which plaintiffs must serve on defendants.
For defendant Michael Huffman’s willful disobedience, without cause, of
multiple court orders compelling his attendance at the Final Pretrial Conference,
the Court hereby imposes the sanction of default.2 “A defendant, by his default,
“A court may impose sanctions for litigation misconduct under its inherent
power.” Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1306 (11th Cir.
2009). “The key to unlocking a court’s inherent power is a finding of bad faith.” Id. (ctation
omitted). “A party demonstrates bad faith by delaying or disrupting the litigation or hampering
admits the plaintiff’s well-pleaded allegations of fact, is concluded on those facts
by the judgment, and is barred from contesting on appeal the facts thus
established.” Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d
1298, 1307 (11th Cir. 2009) (citation and internal quotation marks omitted).
Notwithstanding Huffman’s default, the issue of damages remains unresolved.3
At the Final Pretrial Conference, plaintiffs’ counsel expressed their desire to
prove up damages via written submission, rather than a hearing. Accordingly,
enforcement of a court order.” In re Sunshine Jr. Stores, Inc., 456 F.3d 1291, 1304 (11th Cir.
2006) (citation and internal marks omitted). Huffman has unquestionably delayed and disrupted
this litigation by disregarding multiple orders to appear at the Final Pretrial Conference, resulting
in a needless waste of judicial and litigant resources and effectively scuttling the November trial
setting of this case without good reason. Additionally, sanctions are appropriate under the
Federal Rules of Civil Procedure, which authorize the sanction of “rendering a default judgment
against the disobedient party” when that party “fails to appear at a scheduling or other pretrial
conference” or “fails to obey a scheduling or other pretrial order.” Rule 16(f)(1)(A) & (C),
Fed.R.Civ.P.; Rule 37(b)(2)(A)(vi), Fed.R.Civ.P. The Court understands, of course, that default
is a severe sanction, not to be cavalierly imposed. See, e.g., Rasmussen v. Central Florida
Council Boy Scouts of America, Inc., 412 Fed.Appx. 230, 232 (11th Cir. Feb. 2, 2011) (“[I]n
order to impose the severe sanction of a default judgment, the district court must make a finding
of willful or bad faith failure to comply. … The district court must also find that lesser sanctions
are not sufficient.”) (citations omitted). Here, however, the Court expressly finds that Huffman’s
disobedience was willful and in bad faith, and that lesser sanctions will not suffice. Again,
Huffman was notified on three different occasions by three different written orders (of which he
had actual notice) that he must personally attend the Final Pretrial Conference. In lieu of
attending, Huffman (whose trial testimony in related litigation in this District Court reveals him
to be an experienced, sophisticated businessman) simply fired off an e-mail on the morning of
the conference that announced his intention to remain at work and apologized if his decision
caused any inconvenience. Thus, Huffman knowingly and willfully refused to comply with
multiple court orders without good cause, all to the detriment of the orderly and efficient
administration of justice in this litigation. Under these circumstances, no lesser sanctions will
suffice, and default is the only appropriate sanction under both Rule 16(f)(1) and the inherent
powers of this Court.
See, e.g., PNCEF, LLC v. Hendricks Bldg. Supply LLC, 740 F. Supp.2d 1287,
1292 (S.D. Ala. 2010) (“While well-pleaded facts in the complaint are deemed admitted,
plaintiffs’ allegations relating to the amount of damages are not admitted by virtue of default;
rather, the court must determine both the amount and character of damages.”) (citation omitted).
Such a determination of damages may be made without a hearing “when the district court
already has a wealth of evidence … such that any additional evidence would be truly
unnecessary to a fully formed determination of damages.” Id. at 1292 n.9.
plaintiffs are ordered, on or before November 12, 2015, to file such affidavits,
exhibits and other materials, together with a legal memorandum, that they deem
sufficient both to document and to explain the amount and character of the
damages sought, so as to prevent the requested damages award from being either
uncertain or speculative. Plaintiffs must serve a complete copy of these filings on
Huffman at his address of record. Huffman will be allowed until November 25,
2015 to be heard (solely as to plaintiffs’ damages showing, inasmuch as the
default precludes him from contesting the merits of the claims against him), after
which the issue of damages will be taken under submission. Default judgment
will be entered against Michael Huffman at such time as damages determinations
have been made on the record thus established.
This action remains stayed as to defendant Huffman Construction, Inc., whose
bankruptcy proceedings are ongoing at this time. Given the withdrawal of
Huffman Construction’s counsel of record, the burden shifts to plaintiffs’ counsel
to file a written report on or before the 10th day of each month to apprise the Court
of the current status of the Huffman Construction bankruptcy proceedings and
whether the automatic stay remains in effect as to plaintiffs’ claims against that
entity. Upon the lifting of the automatic stay and any resumption of these
proceedings against Huffman Construction, that defendant will be required to
make arrangements to retain new counsel promptly, given the prohibition on
corporations appearing pro se in federal litigation.4
See, e.g., Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir. 1985) (“The
rule is well established that a corporation is an artificial entity that ... cannot appear pro se, and
must be represented by counsel.”); S.E.C. v. Merchant Capital, LLC, 2012 WL 3205543, *1 n.2
(11th Cir. Sept. 11, 2012) (“It is well established, however, that a business organization cannot
appear pro se and must be represented by counsel, not merely by a stockholder or officer.”)
(citation omitted). Simply put, Huffman Construction cannot represent itself, nor can its
managers, members, officers or employees file papers in this case on behalf of that entity unless
they are licensed attorneys acting in a representative capacity. For this reason, upon expiration
of the automatic stay in bankruptcy, Huffman Construction must retain substitute counsel if it
wishes to be heard or to defend in this action.
The Clerk of Court is directed to mail a copy of this Order to defendant Michael
Huffman at his address of record.
DONE and ORDERED this 23rd day of October, 2015.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
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