IN RE: STEPHEN THOMAS YELVERTON
MEMORANDUM OPINION AND ORDER re: Appellant's 10 MOTION to Impose Sanctions, MOTION for Attorney Fees per 28 U.S.C. 1927 and the District Court's Inherent Power, Appellant's 17 MOTION for Reconsideration re 13 Order and Appellant& #039;s 18 MOTION for leave to present new information for hearing on June 27, 2014; it is hereby ORDERED that Appellants 10 Motion for Sanctions is denied. It is further ORDERED that Appellants 17 Motion for Reconsideration is denied. It is fu rther ORDERED that Appellants 18 Motion for Leave to Present New Information is granted. It is further ORDERED that Appellant shall seek leave of this Court before filing any new civil action in this Court by filing a separate motion for leave to f ile, not to exceed three pages. In seeking leave to file any new complaint, the plaintiff must explain what new matters are raised to warrant the filing of a new complaint. It is further ORDERED that Appellant is hereby enjoined from filing further s ubmissions in his bankruptcy appeals pending before this Court without leave of Court. The Appellant must include a separate motion for leave to file, no more than three pages, explaining why the filing is necessary, not duplicative, and timely to th e extent it seeks to supplement his arguments or factual assertions in his appellate briefs. All factual assertions in such a motion must be supported by documentary evidence in the form of exhibits. Signed by Judge Christopher R. Cooper on 8/6/2014. (tcr)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
IN RE: STEPHEN THOMAS
STEPHEN THOMAS YELVERTON,
Case No. 1:13-cv-1544 (CRC)
WENDELL W. WEBSTER, PHYLLIS
EDMUNDSON, DEBORAH MARM,
Bankruptcy No. 09-00414
OPINION AND ORDER
Stephen Thomas Yelverton is no stranger to the courts. Since entering bankruptcy in 2009,
he has filed over 40 lawsuits, adversary bankruptcy proceedings, or appeals of the bankruptcy
court’s rulings. This particular matter involves appeals of three orders of the bankruptcy court
denying various motions to reconsider the court’s order approving the Trustee’s settlement
agreement. 1 Yelverton has also moved for sanctions against counsel for appellees—his sisters
Phyllis Edmundson and Deborah Marm—which the Court will deny. In response to the sanctions
motion, counsel for Edmundson and Marm request that the Court issue a pre-filing injunction
against Yelverton for repeated instances of abusive and frivolous filings. The Court ordered the
parties to submit briefs and record evidence regarding whether Yelverton’s actions in this and other
courts warrant a pre-filing injunction and held a hearing on June 27, 2014. Because of the
astounding scope of Yelverton’s abusive and frivolous filings in this and other courts, the Court
concludes that a pre-filing injunction is warranted.
Yelverton’s appeal of the order approving the bankruptcy settlement agreement is a separate case
before the Court, In re Yelverton, 12-1539 (D.D.C.).
The circumstances of Yelverton’s bankruptcy are well documented elsewhere. See, e.g.,
Memorandum Opinion, Yelverton v. Senyi de Nagy-Unyom, 13-74, at 11 (D.D.C. Nov. 27, 2013).
For purposes of this opinion, the Court will provide a brief recitation of only the most relevant
facts. Yelverton filed for bankruptcy in 2009. His scheduled assets included land in North
Carolina, a 2006 Mercedez Benz, and litigation claims against the owners of Yelverton Farms, Ltd.,
a closely-held corporation that operates a pig farm in North Carolina. Bankruptcy Schedules, In re
Yelverton, 9-414, Dkts. 22 (Bankr. D.C. May 19, 2009), 30 (May 29, 2009). Yelverton Farms is
operated by Yelverton’s two sisters, Phyllis Edmundson and Deborah Marm; Yelverton is a
minority stock owner. Webster v. Yelverton Farms, Ltd., 9-331, Dkt 3 (E.D.N.C. July 29, 2009).
After the bankruptcy court converted Yelverton’s proceedings to a Chapter 7 liquidation, the
appointed trustee negotiated a global settlement of Yelverton’s estate, which the bankruptcy court
approved. Order, In re Yelverton, 9-414, Dkt 447 (March 20, 2012). In this appeal, Yelverton
challenges three bankruptcy court orders that denied successive motions: one for relief from the
order approving settlement; a second to vacate the order denying relief from the order approving
settlement; and a third to vacate the order denying his motion to vacate. The substance of
Yelverton’s appeal of these nesting-doll orders will be addressed in a separate opinion by the Court.
Yelverton’s Sanctions Motion
Yelverton has moved for sanctions against counsel for Edmundson and Marm pursuant to
28 U.S.C. § 1927, which provides that “[a]ny attorney . . . who so multiplies the proceedings in any
case unreasonably and vexatiously may be required by the court to satisfy personally the excess
costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” The purpose of
Section 1927 is to “allow the court to assess attorneys’ fees against an attorney who frustrates the
progress of judicial proceedings.” United States v. Wallace, 964 F.2d 1214, 1217 (D.C. Cir. 1992).
Not only are Yelverton’s accusations in his motion for sanctions plainly without merit, the
filing itself is abusive and vexatious. He asserts that counsel for Edmundson and Marm
misrepresented to the bankruptcy court that Wade H. Atkinson, a former business associate of
Yelverton’s, owned Yelverton’s stock in Yelverton Farms. Appellant’s Mot. for Sanctions at 9–10.
Yelverton has made this same accusation repeatedly to the bankruptcy court and others, and it has
been rejected as baseless each time. See Mem. Decision, In re Yelverton, 9-414, Dkt. No. 681, at 6
(Bankr. D.C. Aug. 8, 2014) (finding that Edmundson and Marm had not misrepresented who owned
Yelverton Farms and that no confusion existed at the time of the settlement agreement); Mem.
Decision, In re Yelverton, 9-414, Dkt. No. 695, at 1–5 (Bankr. D.C. Aug 27, 2014) (finding that
Yelverton did not have grounds to file an untimely motion for reconsideration based on the same
fraud allegations the bankruptcy court had recently rejected); Pre-Filing Injunction, Yelverton v.
Edmundson, et al., 13-1543, at 2 n.1 (N.C. Sup. Ct, Wayne Cnty. Apr. 4, 2014) (finding it “most
troubling” that Yelverton had made the same baseless allegations of fraud before the North Carolina
Superior Court the day after the same claim had been rejected by the bankruptcy court).
As Yelverton aknowledged at the hearing before the Court, he assigned his stock in
Yelverton Farms to Atkinson as collateral on a loan of $300,000, but later sent Atkinson a letter
revoking the stock assignment. In light of the assigment, the record is clear that Edmundson and
Marm raised a legitimate concern in the bankruptcy proceeding about whether Yelverton owned the
stock outright and wanted the issue resolved before negotiating with the bankruptcy trustee over
Yelverton’s shares. None of the records Yelverton cites show that Edmundson or Marm ever
claimed that Atkinson owned the 1,333 shares. For instance, Yelverton points to Edmundson and
Marm’s Opposition to a Motion for a New Judgment by Yelverton in his core bankruptcy
proceeding, In re Yelverton, Case No. 9-414 (Bankr. D.C. Sep. 15, 2010). That motion, however,
begins by identifying Yelverton as “a minority shareholder in Yelverton Farms” and acknowledges
that “Atkinson now appears to have repudiated his ownership interest in the shares[.]” Id. at 2, 4.
Far from proving that counsel for Edmundson and Marm maintained that Atkinson owned the
stock, their filing directly refutes Yelverton’s assertions. 2 Yelverton’s motion for sanctions is
The constitutional right of access to the courts “is neither absolute nor unconditional.” In re
Green, 669 F.2d 779, 785 (D.C. Cir. 1981). In response to a litigant who seeks to flood the courts
with meritless claims and filings, the Court “has an obligation to protect and preserve the sound and
orderly administration of justice.” Urban v. United Nations, 768 F.2d 1497, 1500 (D.C. Cir. 1985)
(internal citations omitted). “[I]n fashioning a remedy to stem the flow of frivolous actions, a court
must take great care not to ‘unduly impair . . . [a litigant's] constitutional right of access to the
courts.’” Id. (internal citations omitted). By the same token, if a litigant continues to abuse the
judicial process by filing frivolous, duplicative, and harassing lawsuits, “a Court may employ
injunctive remedies to protect the integrity of the courts and the orderly and expeditious
administration of justice.” 768 F.2d at 1500.
In determining whether sanctions are appropriate for abusive filings, this Court considers
the “number and content” of the filings and their effect on parties and the courts. In re Powell, 851
F.2d 427, 433–34 (D.C. Cir. 1988); accord Butler v. DOJ, 492 F.3d 440 (D.C. Cir. 2007). Before
barring a pro se litigant from future filings, the district court must provide an opportunity for a
hearing, develop a factual record, and “make substantive findings as to the frivolousness of
numerous actions” and “any pattern constituting harassment.” Powell, 851 F.2d at 431. The
Yelverton also claims that counsel for Edmundson and Marm fraudulently maintained that
Yelverton Farms was worthless, but he provides no support for this accusation. Even if taken as
true, Yelverton’s assertions amount to nothing more than a disagreement between the parties over
the value of the company.
district court may only consider pending cases “for the limited purpose of determining whether the
litigant has filed similar claims or for analyzing the prospective effect of the claims[.]” Id.
The Court notified the parties by order on May 21, 2014, to submit briefing on whether a
pre-filing injunction was warranted. All parties to the case filed memoranda and exhibits in
response to the Court’s order, and a hearing with all parties was held June 27, 2014. Based upon
the hearing, the parties’ filings and the public record in Yelverton’s many cases, a pre-filing
injunction against Yelverton for abusive and frivolous filings is more than justified.
The number of Yelverton’s filings clearly indicates his penchant for unduly burdening the
court system. In another of Yelverton’s cases filed before this Court, Judge Wilkins denied
Yelverton leave to file his appeal of bankruptcy court orders in forma pauperis, finding he was an
abusive litigant. Judge Wilkins catalogued 38 cases or appeals—excluding his core bankruptcy
proceeding—filed by Yelverton from 2009 to 2013. Memorandum Opinion, Yelverton v. Senyi de
Nagy-Unyom, 13-cv-74, at 11 (D.D.C. Nov. 27, 2013). Since then, Yelverton has filed at least two
additional cases in this Court and the Eastern District of North Carolina, along with two new
adversary proceedings in bankruptcy court. Twelve of his cases have been dismissed for lack of
standing and he has not succeeded in any of his appeals of bankruptcy and district court orders
against him. Id. at 13–15. In these 40-plus cases, Yelverton has filed over 150 motions, including
over 50 motions to reconsider, vacate, amend, or obtain relief from a judgment or order. In this
Court alone, Yelverton has filed or intervened in 18 cases since 2010 and has filed approximately
72 motions. A particularly striking example of his penchant for abusive filings is Yelverton v. Fox,
13-314 (D.D.C.), where Yelverton sued the counsel for the District of Columbia Court of Appeals
who had sat on the Hearing Committee that heard ethics charges against him. In that case,
Yelverton filed, among other papers, eleven motions to amend or supplement his filings, four
motions for preliminary injunctive relief, and seven motions or supplements to motions to
reconsider the Court’s order dismissing the case. This Court has imposed pre-filing injunctions
against plaintiffs who have filed a similar number or fewer frivolous filings. See Caldwell v.
Obama, 2013 WL 6094237, at *11–12 (D.D.C. Nov. 20, 2013) (five cases involving over 100 court
filings regarding the identical frivolous allegations); Kaufman v. IRS, 787 F. Supp. 2d 27, 29–30
(D.D.C. 2011) (15 pro se cases filed in federal courts over a ten year period, almost all of which
had been dismissed); Anderson v. District of Columbia Pub. Defender Serv., 881 F. Supp. 663, 665
(D.D.C. 1995) (33 complaints “against a variety of prosecutors, defense counsel (including the
Public Defender), judges, [and] the Bar Counsel of the District of Columbia Bar”); Stich v. United
States, 773 F. Supp. 469 (D.D.C. 1991) (15 cases in the District Court for the District of Columbia
over a five year period).
The volume of filings alone would not be determinative if his arguments and assertions were
generally colorable, but Yelverton repeatedly makes the same arguments before various courts,
despite prior resolution against him. The fraud allegations in the motion for sanctions at issue here
are a prime example. The bankruptcy court determined that neither Edmundson and Marm nor their
counsel made any misrepresentations to the bankruptcy court or the trustee regarding whether
Atkinson owned Yelverton Farms stock. Yet Yelverton made the same allegation in the North
Carolina Superior Court, which again rejected it. Undeterred by the prior resolution of this issue,
he repeats the same allegation before this Court in both his motion for sanctions and other filings.
This Court, as have others before, has reviewed the substance of his allegations and finds them
completely lacking in merit, as discussed above.
Likewise, Yelverton has filed numerous lawsuits in an attempt to claw-back his stock in
Yelverton Farms from bankruptcy. He has filed six suits in the Eastern District of North Carolina,
the United States Bankruptcy Court for the District of Columbia, and the Superior Court of Wayne
County, North Carolina, all claiming breaches of fiduciary duties by Edmundson and Marm and
seeking to force a transfer of stock or distributions. Yelverton v. Yelverton Farms, Ltd., 9-331
(E.D.N.C.); Yelverton v. Yelverton Farms, 14-365 (E.D.N.C.); Yelverton v. Edmundson, 10-10003
(Bankr. D.C.); Yelverton v. Edmundson, 10-10004 (Bankr. D.C.); Yelverton v. Marm, 14-10024
(Bankr. D.C.); Yelverton v. Edmundson, 13-1543 (N.C. Sup. Ct, Wayne Cnty.). Three of five the
current appeals pending before this Court involve various orders by the bankruptcy court regarding
this same property. In re Yelverton, 12-1539 (D.D.C.); In re Yelverton, 13-454 (D.D.C.); In re
Yelverton, 13-1544 (D.D.C.).
Yelverton has also filed cases and motions for no other apparent purpose than harassment.
Exhibit A is the sanctions motion in this case, which seeks sanctions against counsel for
Edmundson and Marm, including counsel not even involved in the case, based on fanciful
allegations of fraud that have been rejected repeatedly by this and other courts. Yelverton filed a
case in bankruptcy court claiming fraud and breach of fiduciary duties by the bankruptcy trustee
and counsel for Edmundson and Marm based on these same or similar frivolous allegations. Ex rel.
Yelverton, 14-10014 (Bankr. D.C.). As stated above, he sued counsel for the D.C. Court of
Appeals for determining that Yelverton’s abusive conduct warranted disciplinary measures. Filings
such as these, aimed at nothing more than harassing the individuals involved in cases with
Yelverton, are appropriate grounds for a pre-filing injunction. See Caldwell, 2013 WL 6094237, at
*11–12 (issuing pre-filing injunction against plaintiff for making “repetitive filings of meritless
claims against federal officials, federal judges and private parties” who issue rulings against him or
are opposing parties or counsel).
This is not the first time that a court has issued a pre-filing injunction against Yelverton.
The bankruptcy court sanctioned Yelverton by relieving other parties from the obligation to respond
to his filings unless so ordered by the court. Mem. Decision, In re Yelverton, 9-414 (Bankr. D.C.
Sep. 10, 2013). The Superior Court of Wayne County, North Carolina issued a “Gatekeeper Order”
restricting Yelverton from filing any additional documents with the court, Pre-Filing Injunction,
Yelverton v. Edmundson, et al., 13-1543, at 6 (N.C. Sup. Ct, Wayne Cnty. Apr. 4, 2014), and
noting the other pre-filing injunctions imposed upon Yelverton, including one in D.C. Family
Court. Id. at 2–5 & nn.2–3. And in this Court, Judge Wilkins issued a pre-filing injunction in one
of Yelverton’s bankruptcy appeals because Yelverton had filed numerous supplemental pleadings
after the appeal had been fully briefed. Order, In re Yelverton 12-1539 (D.D.C. Dec. 12. 2012)
(“Yelverton shall refrain from filing additional documents without first seeking leave of Court”).
Yelverton’s motions for reconsideration of that order were denied, as was his interlocutory appeal
to the D.C. Circuit. Mandate, In re Yelverton, 12-1539 (D.D.C. Oct. 16. 2013). After he proceeded
to violate the order repeatedly, the Court issued a second order “warn[ing him] that further abuses
may result in sanctions, including dismissal with prejudice.” Order, In re Yelverton, 12-1539, at 2
(D.D.C. Jan. 9. 2014). Undeterred, Yelverton proceeded to file five additional motions in that
case—all of which either sought reconsideration of the Court’s orders or presented additional
arguments in support of his bankruptcy appeal—in direct violation of the Court’s multiple orders.
After the Court struck his subsequent motions as being in violation of the prior orders, Minute
Order, In re Yelverton, 12-1539 (D.D.C. June 3. 2014), Yelverton proceeded to move for leave to
certify another interlocutory appeal and for reconsideration of all three orders.
Sadly, Yelverton’s history of abusive filing is not confined to his bankruptcy proceeding.
Yelverton was suspended from the practice of law before the D.C. Court of Appeals and the Federal
Court of Appeals for the D.C. Circuit for similar vexatious and frivolous filings. Order of
Suspension, In re Yelverton, 13-8520 (D.C. Cir. Feb. 19, 2014); Order, In re Yelverton, 13-844
(D.C. Ct. of App. Sept. 17, 2013). While representing an alleged victim in a criminal bench trial,
Yelverton moved for a mistrial after the Superior Court judge’s not guilty verdict, then moved to
vacate the denial of his motion, then moved to vacate the order disposing of that motion, then
moved for recusal, then appealed, and then moved for reconsideration when he lost the appeal.
Report and Recommendation, In re Yelverton, 11-069, at 2–5 (D.C. Bd. of Prof. Resp. July 30,
2013). In response to resulting ethics charges against him, Yelverton asserted ethical violations by
another lawyer in the case and the Assistant Bar Counsel. Id. at 5–6. The Board of Professional
Responsibility found that Yelverton’s frivolous filings had improperly burdened the court system.
Id. at 11–12.
In sum, the record amply demonstrates that a pre-filing injunction is warranted in light of
Yelverton’s long history of vexatious and harassing filings. He has clogged the court system with
frivolous filings and has abused the judicial process. This relief is therefore necessary to ensure
“the orderly and expeditious administration of justice.” Urban, 768 F.2d at 1500.
For the reasons stated above, it is hereby
ORDERED that Appellant’s  Motion for Sanctions is denied. It is further
ORDERED that Appellant’s  Motion for Reconsideration is denied. It is further
ORDERED that Appellant’s  Motion for Leave to Present New Information is granted.
It is further
ORDERED that Appellant shall seek leave of this Court before filing any new civil action
in this Court by filing a separate motion for leave to file, not to exceed three pages. In seeking
leave to file any new complaint, the plaintiff must explain what new matters are raised to warrant
the filing of a new complaint. It is further
ORDERED that Appellant is hereby enjoined from filing further submissions in his
bankruptcy appeals pending before this Court without leave of Court. The Appellant must include a
separate motion for leave to file, no more than three pages, explaining why the filing is necessary,
not duplicative, and timely to the extent it seeks to supplement his arguments or factual assertions
in his appellate briefs. All factual assertions in such a motion must be supported by documentary
evidence in the form of exhibits.
CHRISTOPHER R. COOPER
United States District Judge
August 6, 2014
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