Center for Individual Rights v. Chevaldina

Filing 58

ORDER denying 46 Defendant's Motion for Sanctions. Signed by Magistrate Judge Edwin G. Torres on 7/11/2017. (js02)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-20905-Civ-KING/TORRES
CENTER FOR INDIVIDUAL RIGHTS,
Plaintiff,
v.
IRINA CHEVALDINA.
Defendant.
________________________________/
ORDER DENYING DEFENDANT’S MOTION FOR SANCTIONS
This matter is before the Court on Irina Chevaldina’s1 (“Defendant”) Motion
for Sanctions (“Motion”) against the Center for Individual Rights (“Plaintiff” or
“CIR”). [D.E. 46]. Plaintiff responded on June 26, 2017 [D.E. 52] and Defendant
replied on July 6, 2017.
disposition.

[D.E. 55]. Therefore, Defendant’s Motion is now ripe for

After careful consideration of the Motion, response, reply, and relevant

authority, and for the reasons discussed below, Defendant’s Motion is DENIED.

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Defendant is representing herself pro se in this matter.
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I.

BACKGROUND

This is an action for breach of contract.

The Complaint – filed on March 11,

2016 [D.E. 1] – alleges that Plaintiff successfully represented Defendant pro bono in
an appeal before the 11th Circuit in Katz v. Google, Appeal No. 14-14525, in which
the Eleventh Circuit affirmed summary judgment in favor of Defendant in a copy
infringement action.2 See Katz v. Google, Inc., 802 F.3d 1178 (11th Cir. 2015), aff’g,
Katz v. Chevaldina, 12-cv-22211, 2014 WL 5385690 (S.D. Fla. Sept. 5, 2014).
Plaintiff alleges that Defendant had few financial obligations under the retainer
agreement in that case and that Plaintiff paid the out of pocket expenses of the suit.
Plaintiff contends that she only asked Defendant for (1) reasonable attorney fees and
expenses as permitted under law, and (2) that Defendant provide Plaintiff with any
fees or expenses that were attributable to Plaintiff’s expenditures and/or the work of
its attorneys.

If Defendant decided to settle the case, Plaintiff alleges that

Defendant was also obligated to provide Plaintiff with a reasonable amount of
attorney fees and expenses.
In December 2015 – while being represented by another attorney – Defendant
settled all the remaining claims in the Katz case. In the settlement, Plaintiff claims
that Defendant obtained only $10,000 in attorney fees for the work of Plaintiff’s
attorneys as well as both taxable and non-taxable costs. Shortly thereafter, Plaintiff
sought to challenge the fee award in the Eleventh Circuit, but Defendant allegedly
Plaintiff is a public interest law firm organized under the laws of the District
of Columbia.
2
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instructed Plaintiff to withdraw its motion and Plaintiff reluctantly complied.
Therefore, Plaintiff suggests that Defendant did not obtain a reasonable amount in
attorney fees for the work of Plaintiff’s attorneys and that Defendant breached the
retainer agreement.

In exchange for the low sum of $10,000 in attorney fees,

Plaintiff alleges that Defendant agreed with Katz to drop a substantial claim against
Defendant in excess of $100,000 for attorney fees. Because Plaintiff alleges that it
has been deprived of a reasonable attorney fee award, Plaintiff seeks judgment
against Defendant in an amount of no less than $105,000 – including reasonable
costs and expenses in accordance with 28 U.S.C. § 1920.
II.
A.

ANALYSIS

Rule 11 Standard

ARule 11 is intended to deter claims with no factual or legal basis at all;
creative claims, coupled even with ambiguous or inconsequential facts, may merit
dismissal, but not punishment.”
(emphasis in original).

Davis v. Carl, 9106 F.2d 533, 538 (11th Cir. 1990)

Rule 11 sanctions are proper A(1) when a party files a

pleading that has no reasonable factual basis; (2) when the party files a pleading
that is based on legal theory that has no reasonable chance of success and that
cannot be advanced as a reasonable argument to change existing law; or (3) when
the party files a pleading in bad faith for an improper purpose.@

Worldwide

Primates, Inc. v. McGreal, 87 F.3d 1252, 1254 (11th Cir. 1996) (quoting Jones v.

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International Riding Helmets, Ltd., 49 F.3d 692, 694 (11th Cir. 1995)).

Federal

Rules of Civil Procedure 11(b)(1) and 11(b)(3) state:
By presenting to the court a pleading, written motion, or other
paperCwhether by signing, filing, submitting, or later advocating itCan
attorney or unrepresented party certifies that to the best of the person’s
knowledge, information, and belief, formed after an inquiry reasonable
under the circumstances: (1) it is not being presented for any improper
purpose, such as to harass, cause unnecessary delay, or needlessly
increase the cost of litigation . . . (3) the factual contentions have
evidentiary support or, if specifically so identified, will likely have
evidentiary support after a reasonable opportunity for further
investigation or discovery . . . . Fed. R. Civ. Pro. 11(b)(1), 11(b)(3).
Additionally, Federal Rule of Civil Procedure 11(c)(1) says:
If, after notice and a reasonable opportunity to respond, the court
determines that Rule 11(b) has been violated, the court may impose an
appropriate sanction on any attorney, law firm, or party that violated
the rule or is responsible for the violation. Fed. R. Civ. Pro. 11(c)(1).
AIn this circuit, a court confronted with a motion for Rule 11 sanctions first
determines whether the party’s claims are objectively frivolousCin view of the facts
or lawCand then, if they are, whether the person who signed the pleadings should
have been aware that they were frivolous; that is, whether he would=ve been aware
had he made a reasonable inquiry.

If the attorney failed to make a reasonable

inquiry, then the court must impose sanctions despite the attorney=s good faith belief
that the claims were sound.

The reasonableness of the inquiry >may depend on

such factors as how much time for investigation was available to the signer; whether
he had to rely on a client for information as to the facts underlying the [violative
document]; . . . or whether he depended on forwarding counsel or another member of
the bar.@

Worldwide Primates, Inc., 87 F.3d at 695 (quoting Mike Ousley
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Productions, Inc. v. WJBF-TV, 952 F.2d 380, 382 (11th Cir. 1992)); see also Byrne v.
Nezhat, 261 F.3d 1075, 1105 (11th Cir. 2001).

AAlthough sanctions are warranted

when the claimant exhibits a ‘deliberate indifference to obvious facts,’ they are not
warranted when the claimant’s evidence is merely weak but appears sufficient, after
a reasonable inquiry, to support a claim under existing law.” Baker v. Adelman,
158 F.3d 561, 524 (11th Cir. 1998) (citations omitted).
B.

Rule 11 Sanctions

Defendant’s Motion requests sanctions on the basis that Plaintiff has failed to
provide the requisite factual support to establish several claims alleged in Plaintiff’s
complaint. Specifically, Defendant argues that Plaintiff’s complaint fails to provide
(1) the specific obligations under the contract that Defendant allegedly breached, (2)
the date of the alleged breach, (3) the link between the claim of breach to a specific
contractual provision, (4) the elements of a material breach, and (5) any support that
the contractual provisions underlying this action actually exist. Because Plaintiff
has allegedly attempted to litigate the same attorney’s fee claim, under different
legal theories, on multiple occasions and Plaintiff’s complaint is purportedly still
deficient for several reasons, Defendant argues that monetary sanctions are
appropriate given the facts presented.
Furthermore, with respect to Defendant’s allegations that Plaintiff has not
pled a material breach, Defendant argues that the complaint is devoid of any factual
support to support a claim beyond a speculative level. For example, Defendant
contends that Plaintiff merely asserted that “Chevaldina did not obtain a reasonable
amount in attorney’s fees for the work of CIR’s attorneys,” and that “[s]he breached
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the retainer contract with CIR, and as a result, CIR incurred damages.” [D.E. 1 at ¶
18]. Defendant also suggests that Plaintiff’s complaint does not provide a citation to
a specific contractual term that obligates Defendant to obtain a reasonable amount in
attorney’s fees because such a provision does not exist in the retainer agreement.
When coupled with the alleged fact that Plaintiff’s complaint fails to provide (1) the
specific obligations under the contract that Defendant allegedly breached with (2) the
date of the breach, and (3) the link to any specific contractual provision, the
complaint purportedly fails in such a way that sanctions must be imposed.3
As an initial matter, Defendant’s Motion is not clear as to which subsections of
Rule 11 apply. In relevant part, Rule 11(b) provides the following:
[A]n attorney or unrepresented party certifies that to the best of the
person’s knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances: (1) it is not being presented for any
improper purpose, such as to harass, cause unnecessary delay, or
needlessly increase the cost of litigation; (2) the claims, defenses, and
other legal contentions are warranted by existing law or by a
nonfrivolous argument for extending, modifying, or reversing existing
law or for establishing new law; (3) the factual contentions have
evidentiary support or, if specifically so identified, will likely have
evidentiary support after a reasonable opportunity for further
investigation or discovery . . . .
FED. R. CIV. P. 11(b). At times, Defendant appears to argue that the complaint is
factually frivolous because the contractual provisions that it relies upon simply do
not exist.

At other times, Defendant suggests that the complaint suffers from

various pleading defects, such as the omission of specific obligations under the
3
Furthermore, Defendant takes issue with paragraph 17 of Plaintiff’s
complaint because it alleges that “Chevaldina instructed CIR to withdraw the motion
for fees and costs to the Eleventh Circuit, and CIR did so.” [D.E. 1 at ¶ 18].
Defendant suggests that the allegation is wholly conclusory and speculative because
the complaint is devoid of any facts to substantiate this claim.
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contract, the failure to plead a material breach, the omission of the date of the alleged
breach, and the lack of an express link with a breach to a contractual provision.
Without explaining how Plaintiff’s complaint specifically violates Rule 11,
Defendant’s Motion is somewhat incomplete because it puts the burden on the Court
to speculate as to how Defendant’s conduct warrants sanctions. Notwithstanding
the lack of clarity as to what part of Rule 11 applies, we will address the parties’
arguments in turn.
As for Defendant’s first argument, that Plaintiff failed to cite a relevant
provision of the retainer agreement that requires Defendant to procure a reasonable
amount in attorney’s fees, Defendant’s contention misses the mark. Paragraph 10
of Plaintiff’s complaint quotes verbatim the relevant language from the retainer
agreement: “Chevaldina ‘agrees to require a reasonable amount for CIR’s costs,
expenses, disbursements, and attorneys’ fees in any settlement.’” [D.E. 1 at ¶ 10].
By comparison, the language of section V of the retainer agreement states the
following:
The Client authorizes CIR to negotiate a reasonable repayment of some
or all of its costs, expenses, disbursements, and attorneys’ fees as part of
any settlement, and agrees to require a reasonable amount for CIR’s
costs, expenses, disbursements, and attorneys’ fees in any settlement.
[D.E 1-1].

As such, Defendant’s first argument lacks any merit and must be

DENIED because the complaint specifically references and quotes from the relevant
portion of the retainer agreement that supports Plaintiff’s allegations that Defendant
did not procure a reasonable amount in attorney’s fees.
Next, Defendant’s Motion argues that the complaint suffers from various
pleading defects because (1) the breach of contract claim did not cite any specific
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provisions of the retainer agreement that support the allegations made, and (2) the
date of the breach is not specified. The Court is not aware of any cases – and
Defendants cites none –that stand for the proposition that the specific provisions of a
contract must be cited by section or paragraph number, or that the date of a breach
must be specified in order to comply with Rule 8. Because Rule 8 only requires “a
short and plain statement of the claim showing that the pleader is entitled to relief,”
we find that Plaintiff’s Motion, as it relates, to these two contentions lack merit.
FED. R. CIV. P. 8. And even if the pleading rules that Defendant asserts did exist,
the complaint’s failure to follow them would not satisfy the standard set forth in Rule
11 and warrant the imposition of sanctions. Therefore, to this extent, Defendant’s
Motion must be DENIED.
Defendant’s third contention – that the complaint fails to allege a material
breach – is also unpersuasive.

Paragraph 10 of the complaint alleges that

Defendant was obligated to obtain a reasonable amount for attorneys’ fees in any
settlement, and paragraph 18 alleges that Defendant failed to do so. The complaint
also provides details in explaining that Plaintiff – in representing the Defendant –
sought more than $100,000 in fees and expenses.

Yet, Defendant purportedly

settled that claim for only $10,000 in order to obtain a personal benefit at the
detriment of her attorneys. As a result, the complaint sufficiently alleges facts to
satisfy the pleading requirements in Rule 8 and Ashcroft v. Iqbal, 556 U.S. 662
(2009), and states a valid cause of action for breach of contract.
Defendant’s Motion, on this basis, misses the mark and must be DENIED.

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As such,

Defendant’s final argument is equally misplaced. Defendant suggests that
the complaint is devoid of any facts to support the allegation that Defendant
instructed Plaintiff to withdraw a motion for fees in the Eleventh Circuit and
therefore violated Rule 11.

However, the Defendant’s alleged instructions to

withdraw a specific motion are not part of a legal element of a breach of contract
claim. Instead, it is simply a factual allegation. And as a factual allegation, the
complaint sets forth sufficient support that makes it plausible that Defendant
instructed CIR to withdraw the motion for fees, especially in light of the allegation
that the motion for fees and costs originally sought than $100,000. The reason for
the withdrawal, according to Plaintiff, is simple: Defendant purportedly settled for
only $10,000 and pocketed that recovery as a personal benefit. Because there are
more than enough facts to support that allegation that Defendant instructed Plaintiff
to withdraw a motion for fees and costs in the amount originally sought, Defendant’s
Motion, as it relates to the final argument, must also be DENIED.
III.

CONCLUSION

For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that
Defendant’s Rule 11 Motion [D.E. 46] is DENIED.4

Plaintiff’s request for sanctions is also DENIED. Plaintiff believes that
Defendant had no basis for asserting that the complaint was factually frivolous or, in
particular, that the breach of contract claim was legally frivolous. Plaintiff also took
issue with the fact that Defendant’s motion cited no case law identifying the pleading
defects and failed to address the allegations of the complaint that refuted her
arguments. While it is true that Rule 11 applies to pro se litigants, “the court must
take into account a plaintiff's pro se status when it determines whether the filing was
reasonable.” Harris v. Heinrich, 919 F.2d 1515, 1516 (11th Cir. 1990) (citation
omitted). And although Defendant’s Motion lacked any merit; it was not so
unreasonable as to violate Rule 11 especially in light of her status as a pro se party.
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DONE AND ORDERED in Chambers at Miami, Florida, this 11th day of
July, 2017.

/s/ Edwin G. Torres
EDWIN G. TORRES
United States Magistrate Judge

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