Grochocinski v. Mayer Brown Rowe & Maw LLP et al
Filing
177
MEMORANDUM by Ronald B Given, Mayer Brown Rowe & Maw LLP in support of motion for sanctions 176 (Novack, Stephen)
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION
DAVID GROCHOCINSKI, not individually
but solely in his capacity as the Chapter 7
Trustee for the bankruptcy estate of
CMGT, INC.,
Plaintiff,
v.
MAYER BROWN ROWE & MAW LLP and
RONALD B. GIVEN,
Defendants.
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No. 06 C 5486
Judge Virginia M. Kendall
DEFENDANTS’ MEMORANDUM IN
SUPPORT OF THEIR MOTION FOR SANCTIONS
Stephen Novack
Mitchell L. Marinello
Steven J. Ciszewski
NOVACK AND MACEY LLP
100 N. Riverside Plaza
Chicago, IL 60606
(312) 419-6900
349051
Defendants, by their attorneys, Novack and Macey LLP, submit this Memorandum in
support of their Motion for Sanctions against Plaintiff, David Grochocinski (“Grochocinski”),
and his attorneys, Edward T. Joyce and Associates (“Joyce”), pursuant to: (a) the Court’s
inherent authority to enter sanctions; and/or (b) as to Joyce, 28 U.S.C. § 1927.
I. SUMMARY OF MOTION
From the beginning, there was something very wrong with this lawsuit. The Complaint
alleged that Defendants committed legal malpractice by failing to defend CMGT in an
underlying lawsuit (the “California Action”) filed by Spehar Capital (“SC”) that resulted in a $17
million default judgment against CMGT (the “Default Judgment”).
To recover on this
malpractice claim, Grochocinski would have to prove that the California Action was meritless
and that, but for Defendants’ alleged malpractice, SC would have recovered nothing in the
California Action. But, if Grochocinski proved this, he would be obligated to turn around and
hand over almost all the money to SC -- the very party whom he would have just proved was not
entitled to anything. Because of the perverse nature of this case and many questions about
Grochocinski’s actions in pursuing it, Defendants raised their unclean hands, absurd result and
fraud on the court defenses (the “Defenses”) in their motion to dismiss.
The Court acknowledged that the Defenses were “very persuasive” and that there was “a
question lurking” about why Grochocinski handled this case the way he did. However, because
all the relevant facts were not then known, the Court denied Defendants’ motion to dismiss and
motion to reconsider. The Court allowed discovery to proceed on the Defenses, noting that
Defendants had leave to later seek summary judgment, if appropriate. Because Grochocinski did
not then withdraw his claims, Defendants had to engage in this discovery. Once that discovery
was completed, Defendants re-asserted the Defenses in their summary judgment motion. Even
then, Grochocinski still did not withdraw his claim.
Ultimately, in its March 31, 2010
Memorandum Opinion and Order (the “Opinion” or “Op. at ___”), the Court granted
Defendants’ summary judgment motion and entered judgment in favor of Defendants on the
basis of the Defenses.
In so doing, the Court found this lawsuit to be part of “a deliberate manipulation of the
judicial system designed to benefit only one individual” -- i.e., SC’s owner, Gerard Spehar
(“Spehar”). (Op. at 31.) Specifically, the Court concluded that SC was attempting to “pervert
the legal process” by using the bankruptcy process and this Court to collect on its Default
Judgment -- which the Court found to be based upon obvious misrepresentations made by Spehar
to the judge in the California Action. (Id. at 31-32, 20-21.) The Court also concluded that
Grochocinski had abandoned his responsibilities to the Court and the CMGT bankruptcy estate
as a whole to instead pursue the debt and personal grudge of SC and Spehar. As the Court
found, “Spehar was the puppetmaster and Grochocinski his puppet.” (Id. at 24.)
In the end, the Court held that Grochocinski had no factual or legal basis for this lawsuit
and never should have filed it. Although SC stood to gain the most financially, the fact remains
that SC’s scheme never could have gotten out of the starting block without Grochocinski.
Indeed, Grochocinski could have stopped this whole scam in its tracks had he simply moved to
vacate the Default Judgment -- something that the California judge as much as invited and that
Grochocinski himself admitted would have been in the best interest of the bankruptcy estate.
Instead, Grochocinski blindly followed Spehar’s command and, in so doing, ignored his own
obligations as a bankruptcy trustee and officer of the Court. He accepted as true everything
Spehar told him -- no matter how implausible -- and ignored common sense and the numerous
CMGT shareholders telling him a much different story. He conducted no fact investigation of
2
his own and did not even bother to determine if there was any basis for the allegations in his own
Complaint. As the Court concluded, Grochocinski conspired in this deliberate manipulation of
the judicial system “through his lack of diligence and myopic devotion to Spehar’s plan.” (Id. at
31.)
As a result of Grochocinski’s unwavering devotion to Spehar, this Court was forced to
spend significant resources deciding three substantive motions relating to the Defenses, as well
as a very time-consuming motion relating to privilege that was heard first by Magistrate Judge
Denlow and then on appeal by this Court. Defendants were forced to incur significant fees and
expenses to bring those motions and pursue the discovery that ultimately resulted in the Court’s
Opinion. None of this should have happened. Grochocinski was the one and only person who
always had it in his power to stop it from happening. But he never did. Accordingly, for the
reasons discussed more fully below, the Court should grant this Motion and sanction
Grochocinski and his attorneys by ordering them to reimburse Defendants for the attorneys’ fees
and expenses they were forced to incur herein. Should the Court grant this Motion, Defendants
will submit proof of the attorneys’ fees and expenses incurred (and paid) by them.
II. THE OPINION1
The Opinion makes three things abundantly clear: (A) Spehar launched an effort to
pervert the judicial process first by securing the Default Judgment through misrepresentations to
the court in the California Action, and then by treating the bankruptcy process as his own
personal debt collection service; (B) Grochocinski joined Spehar in this effort by not seeking to
vacate the Default Judgment and, instead, enabling this lawsuit, blindly following Spehar’s
1
The Court is intimately familiar with the full procedural history in this case,
which was summarized on pages 13-15 of the Opinion. Accordingly, a full discussion of the
procedural history leading up to the Opinion is not included herein.
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instructions, and abandoning his responsibilities as a trustee and officer of the Court; and (C)
under the circumstances, judicial estoppel should be applied to protect the integrity of the
judicial system.
The details of each of these findings are summarized in the following quotations from the
Opinion:
A.
Spehar Launched An Effort To Pervert The Judicial Process
•
•
“Nevertheless, based on the misrepresentations Spehar
made at the hearing, the judge entered the $17 million
default judgment against CMGT.” (Id. at 7.)
•
“On August 25, 2004, Spehar filed a single creditor
involuntary bankruptcy petition against CMGT in the
United States Bankruptcy Court for the Northern District of
Illinois []. Spehar admits that the bankruptcy action was
filed for the express purpose of collecting the $17 million
default judgment from Mayer Brown through a legal
malpractice action.” (Id. (citation omitted).)
•
B.
“To represent to the California judge that Spehar would
obtain stock and compensation of over $16 million three
years down the road from this entity that was unable to
keep its head above water, and which he single-handedly
prevented from obtain[ing] the much-needed capital that
might give it a gasp of air, was a direct misrepresentation to
the California court of the stability of the company and his
likelihood of recovery from it in the future. ‘No fraud is
more odious than an attempt to subvert the administration
of justice.’” (Op. at 21 (citation omitted).)
“Spehar told Grochocinski that he wanted him to collect on
the legal malpractice claim so SC, in turn, could collect the
default judgment.” (Id. at 8.)
Grochocinski Joined In Spehar’s Effort To Pervert The Judicial Process
•
“Although Grochocinski recognized that it was in the
interest of the estate to vacate the default judgment so the
other creditors could share whatever assets CMGT may
have held, he accepted the funds [from Spehar], the
lawyer[] [that Spehar ‘hand-picked’], and Spehar’s theory
without question, without investigation, and without regard
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to his obligations to any other creditors or the estate.
Indeed, it was his fiduciary duty to maximize the value of
CMGT’s estate for the benefit of all the creditors. Before
filing this lawsuit, however, Grochocinski made no attempt
to vacate the $17 million default judgment entered against
CMGT. More importantly, he put forth no effort to
investigate whether it was possible to vacate the default
judgment. Grochocinski spent a mere one-half hour on the
matter, and his ‘research’ was limited to a brief review of
the California statute addressing default judgments. He did
not consult caselaw or treatises, speak to a California
attorney, nor did he review a transcript of the hearing at
which the default judgment was entered. Had he done so,
he would have seen the factually unsupportable foundation
on which the $17 million judgment was based.” (Id. at 20
(citation omitted).)
•
“Before filing this malpractice action, Grochocinski did not
consult any of the relevant parties except Spehar in spite of
the efforts of many individuals who attempted to contact
him to provide him with information in conflict with the
information Spehar had provided him.
Neither
Grochocinski nor his legal counsel discussed this
malpractice case with Franco [CMGT’s former President,
Chairman and CEO] or any other CMGT officers,
employees, or shareholders. They also did not consult
Trautner or anyone at Mayer Brown.” (Id. at 9 (citation
omitted).)
•
“Spehar encouraged Grochocinski to file the lawsuit
without investigation. Specifically, in a July 28, 2006
email, he told Grochocinski that ‘it is simply too late now
to get all of this properly done by the filing deadline . . . let
alone investigate, depose and file before the filing
deadline.’
Spehar stated that Joyce [Grochocinski’s
attorney] ‘should become more comfortable’ after he
conducted a ‘proper investigation.’” (Id. at 11 (citation
omitted; alteration in original).)
•
“Grochocinski received specific direction from Spehar
regarding the prosecution of [the] malpractice suit at issue
here.
In a July 28, 2006 email from Spehar to
Grochocinski, Spehar stated that they needed ‘real fear on
[their] side in dealing with [Franco, Wong and Baliga]’ and
recommended that they make clear to these witnesses that
they were serious about ‘going after them’ in the suit.
Following this direction, Grochocinski’s attorneys wrote to
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Wong and Franco and told them that they would be named
as defendants in this case if they did not agree to sign a
tolling agreement. Grochocinski did not investigate either
Wong’s or Franco’s actions, nor is he aware of anything
either of them did wrong in connection with CMGT.” (Id.
at 13 (citation omitted; second alteration in original).)
•
“Grochocinski agreed to proceed with the action to not only
collect the unsupported judgment but also to accuse
attorneys who were in no way involved in the action to be
held responsible for the artificially inflated judgment.
Aside from showing no interest in vacating the default
judgment as his fiduciary duty required him to do,
Grochocinski failed to investigate any potential malpractice
before filing this lawsuit.
*
*
*
Instead of taking control of the case as an independent
reviewer of the matter, Grochocinski merely took Spehar’s
orders and followed them.”
(Id. at 22-23 (citation
omitted).)
•
“After reviewing the evidence that is now in the record,
however, it is clear that Grochocinski is representing the
interests of SC, not CMGT’s estate.” (Id. at 18 n.7.)
•
“Grochocinski acted at all times as a proxy for the real
party in this case, SC.” (Id. at 19.)
•
“Although Grochocinski’s attorney served more as a bully
during the deposition than a professional, his attempts to
thwart the answers from being given cannot hide the truth
that his client had conducted no independent review of the
case and was incapable of explaining his actions in
bringing this matter. The deposition testimony makes clear
that Spehar was the puppetmaster and Grochocinski his
puppet.” (Id. at 24.)
•
“Grochocinski’s alignment with SC’s interests in this case
is particularly jarring because Grochocinski was required to
represent the interests of the estate in this litigation, not one
creditor.
*
*
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*
Grochocinski did not bring this lawsuit on [all of the
creditors’] behalf; he instead served as Spehar’s puppet and
brought the suit to benefit solely Spehar.” (Id. at 24-25.)
•
•
“The email communications presented to the Court further
support that Grochocinski served solely to bring a case to
fuel Spehar’s personal feud with [Defendants] and CMGT
and to collect on a judgment that was obtained by
misrepresentation. The Court cannot allow Grochocinski to
act as SC’s personal debt-collector or to bring personal
actions on Spehar’s behalf in order to fulfill his personal
business grudge.” (Id. (citation omitted).)
•
C.
“Here, while Grochocinski’s suit against Defendants is
couched as a professional malpractice claim brought on
behalf of CMGT’s estate for the ultimate benefit of all the
creditors, Grochocinski is really bringing SC’s personal
claim against Defendants.” (Id. at 25.)
“Grochocinski filed this malpractice suit against
Defendants at the behest of Spehar, without doing any
research into the claims, speaking with any of the relevant
parties except Spehar, or determining whether it was the
best course of action for the estate. Most damning to
Grochocinski is his admission that he does not know the
factual basis for most of the material claims in the
Complaint. As trustee, Grochocinski is an officer of the
Court and he must be held to a higher standard than a mere
creditor.” (Id. at 26.)
The Integrity Of The Court System Must Be Protected
•
“The Court finds that to protect the integrity of the judicial
system, judicial estoppel must be applied here.” (Id. at 1.)
•
“Although not commonly invoked, judicial estoppel is
reserved for those cases where considerations of equity
persuade the court that the integrity of the judicial system
must be protected, and in those instances, a court should
not shy from its duty to preserve that integrity. The
circumstances presented in this case reveal a deliberate
manipulation of the judicial system designed to benefit only
one individual. Sadly, that individual had the complicit
agreement of a bankruptcy trustee whose obligation to the
court and to others was paramount to his dealings with this
individual ‘creditor’ and that trustee continued the
manipulation through his lack of diligence and myopic
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devotion to Spehar’s plan. Judicial estoppel is appropriate
in this case.” (Id. at 31.)
•
“This Court will not allow SC to pervert the legal process
in this way.” (Id. at 31-32.)
•
“It is persuasive that SC was both the cause of CMGT’s
bankruptcy and would be its principal beneficiary.” (Id. at
29.)
III. ARGUMENT
The foregoing findings in the Opinion, in and of themselves, are enough to: (A) assess
sanctions against Grochocinski and Joyce pursuant to the Court’s inherent authority; and/or (B)
assess sanctions against Joyce pursuant to 28 U.S.C. § 1927. Each of these bases for the
assessment of sanctions is discussed below.
A.
This Court Should Use Its Inherent Authority To Assess Sanctions
The United States Supreme Court left no doubt that all federal courts have the inherent
authority to assess sanctions -- including the assessment of attorneys’ fees and costs.
In
Chambers v. Nasco, Inc., 501 U.S. 32 (1991), the Court affirmed the assessment of a sanction in
the amount of defendant’s attorneys’ fees and costs against the plaintiff, whose “entire course of
conduct throughout the lawsuit evidenced bad faith and an attempt to perpetrate a fraud on the
court.” Id. at 51. In so doing, the Court reasoned as follows:
It has long been understood that certain implied powers must
necessarily result to our Courts of justice from the nature of their
institution, powers which cannot be dispensed with in a Court,
because they are necessary to the exercise of all others. For this
reason, Courts of justice are universally acknowledged to be
vested, by their very creation, with power to impose silence,
respect, and decorum, in their presence, and submission to their
lawful mandates. These powers are governed not by rule or statute
but by the control necessarily vested in courts to manage their own
affairs so as to achieve the orderly and expeditious disposition of
cases. Id. at 43 (internal quotations, alterations and citation
omitted).
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*
*
*
[A] court may assess attorney’s fees when a party has acted in bad
faith, vexatiously, wantonly, or for oppressive reasons. In this
regard, if a court finds that fraud has been practiced upon it, or that
the very temple of justice has been defiled, it may assess attorney’s
fees against the responsible party, as it may when a party shows
bad faith by delaying or disrupting the litigation or by hampering
enforcement of a court order. The imposition of sanctions in this
instance transcends a court’s equitable power concerning relations
between the parties and reaches a court’s inherent power to police
itself, thus serving the dual purpose of vindicating judicial
authority without resort to the more drastic sanctions available for
contempt of court and making the prevailing party whole for
expenses caused by his opponent’s obstinancy.
Id. at 45-46 (internal quotations and citation omitted; emphasis added). See also, U.S. ex rel.
Treat Bros. Co. v. Fidelity & Deposit Co. of Md., 986 F.2d 1110, 1120 (7th Cir. 1993) (citing
Chambers, and affirming the assessment of attorneys’ fees and costs for litigation brought in bad
faith); REP MCR Realty, L.L.C. v. Lynch, 363 F. Supp. 2d 984, 998 (N.D. Ill. 2005) (“it is
settled that federal courts have inherent powers to sanction litigants for bad-faith and fraudulent
conduct related to federal cases”), aff’d 200 Fed. Appx. 592 (7th Cir. 2006) (affirming sanction
requiring payment of attorneys’ fees).
Here, the Opinion makes all the findings required to assess sanctions pursuant to the
Court’s inherent authority to do so.
Most importantly, the Opinion reaches the clear and
unambiguous conclusion that this entire lawsuit was an attack on the integrity of the judicial
system -- “to protect the integrity of the judicial process, judicial estoppel must be applied here”
-- and an attempt to “pervert the legal process.” (Op. at 1, 32.) That finding alone would justify
the assessment of sanctions. But there is more.
The Opinion also found that this case was not filed in good faith by a bankruptcy trustee,
who is required to fulfill his legitimate role as trustee by pursuing the interests of the entire
estate. Indeed, Grochocinski failed to take the one action -- i.e., moving to vacate the Default
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Judgment -- that even he acknowledged would have been in the best interest of the entire estate.
(Id. at 20.)
Instead, Grochocinski blindly devoted himself to Spehar’s scheme, followed
Spehar’s orders without question and filed this case as if he were Spehar’s personal debt
collector so that Spehar could pursue his personal grudge against Defendants.
Further, Grochocinski conducted no pre-filing investigation and does not even know the
bases for the allegations in his Complaint. For example, the Opinion highlighted an email from
Spehar to Grochocinski encouraging him to file this lawsuit despite it being “too late now to get
all of this properly done by the filing deadline . . . let alone investigate, depose and file before the
filing deadline.” (Id. at 11 (alteration in original).) And, further showing that Grochocinski was
merely Spehar’s mouthpiece, the Court concluded that “[m]ost damning to Grochocinski is his
admission that he does not know the factual basis for most of the material claims in the
Complaint.” (Id. at 26.) For any one or more of these reasons, under the standard set forth in
Chambers, this is exactly the type of case in which the Court should exercise its inherent
authority and assess sanctions against Grochocinski and his lawyers.
Finally, Grochocinski is not shielded from sanctions personally just because he is a
trustee. In Maxwell v. KPMG LLP, 520 F.3d 713, 718-19 (7th Cir. 2008), the Seventh Circuit
held that sanctions would be appropriate when a bankruptcy trustee files a frivolous lawsuit. The
court noted that, if such sanctions were assessed, they would “of course [] be paid by the trustee
personally, not by the bankrupt estate.” Indeed, as the Opinion notes (at 26 n.12), a bankruptcy
trustee exposes himself to personal liability if he breaches his fiduciary duty. Here, the Opinion
found that Grochocinski had a fiduciary duty to try to vacate the Default Judgment because,
among other things -- and as even he admits -- it would have been in the best interest of the
estate to have done so. (Id. at 20.) Yet, Grochocinski did not even try to vacate the Default
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Judgment and made only a token effort to determine if it were even possible. (Id.) And, as
alluded to in the Opinion, (id. at 26 n.12), Grochocinski also breached his fiduciary duty by
pursuing this meritless malpractice claim and thereby acting as a necessary part of an attack on
the integrity of the judicial system.
In short, if there were ever a case when a bankruptcy trustee and counsel had the duty to
step in to stop a fraud, this was that case. Not only did they fail to do so, they willingly allowed
Grochocinski’s office to become the vehicle for the fraud. Accordingly, pursuant to its inherent
authority, the Court should enter sanctions against Grochocinski and Joyce.
B.
The Court Should Assess Sanctions Against Joyce Pursuant To 28 U.S.C. § 1927
There is still another basis -- 28 U.S.C. § 1927 -- to require Joyce to pay Defendants’
attorneys’ fees and costs. Section 1927 provides as follows:
Counsel’s liability for excessive costs
Any attorney or other person admitted to conduct cases in any
court of the United States or any Territory thereof 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.
In Walter v. Fiorenzo, 840 F.2d 427, 433-34 (7th Cir. 1988) (citations, alterations and
quotation marks omitted), the Seventh Circuit explained the standard for the imposition of fees
and costs under Section 1927 as follows:
A court may impose sanctions under 28 U.S.C. § 1927, against an
attorney where that attorney has acted in an objectively
unreasonable manner by engaging in a serious and studied
disregard for the orderly process of justice, or where a claim is
without a plausible legal or factual basis and lacking in
justification. In determining whether an attorney’s actions were
objectively unreasonable a court may infer intent from a total lack
of factual or legal basis for a suit.
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If a lawyer pursues a path that a reasonably careful attorney would
have known, after appropriate inquiry, to be unsound, the conduct
is objectively unreasonable and vexatious.
In Kotsilieris v. Chalmers, 966 F.2d 1181, 1184-85 (7th Cir. 1992), the Seventh Circuit
also provided the following examples of when this standard is met:
[C]ases in which this court has upheld section 1927 sanctions have
involved situations in which counsel acted recklessly, counsel
raised baseless claims despite notice of the frivolous nature of
these claims, or counsel otherwise showed indifference to statutes,
rules, or court orders.
All these standards fit this case perfectly. First, there was never a factual basis for this
lawsuit. As the Opinion makes clear, almost no pre-filing investigation was done and the factual
bases for even the most fundamental allegations in the Complaint could not be identified. (Op. at
26.) As a result, this Court found that the Complaint “accuse[s] attorneys who were in no way
involved in the action to be held responsible for the artificially inflated judgment.” (Id. at 22.)
Second, there was never any legal basis for this lawsuit because it was directly contrary
to everything that happened in the California Action. Indeed, as the Opinion confirms, to
succeed, Grochocinski would have had to show that SC had no right to any recovery in the
California Action. (Id. at 27-28.) But, if he did so, almost all of the money would go right to SC
-- who never had a right to anything in the first place. Accordingly, from the get-go, this case
was contrary to the law and common sense, and no reasonably careful attorney would have ever
pursued it.
Third, the fact that Joyce would pursue such a claim demonstrates a remarkable lack of
respect for this Court and recklessness or gross indifference to the integrity of the judicial system
as a whole. As the Opinion found, this case was an attack on the integrity of the judicial system
and the last step in a blatant attempt to pervert the judicial process. (Id. at 1, 31-32.) The fact
that Joyce -- as an officer of the Court -- was willing to go along with the scheme in the hopes of
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scoring a quick settlement from a “deep pocket” and earning a contingency fee is more than
enough to show recklessness or, at the very least, an utter indifference toward this Court and the
judicial system as a whole.
Fourth -- even assuming Joyce did not understand the full extent of the scam when the
Complaint was filed -- the fact remains that Joyce persisted in this lawsuit even after: (1)
Defendants initially brought the scam to light in their motion to dismiss; (2) the Court stated that
the Defenses were “very persuasive;” and (3) Defendants filed their summary judgment motion
with the evidence supporting the Defenses.
At any one of these points, any objectively
reasonable and careful attorney would have backed down -- realizing that he or she never should
have filed the case in the first place. Here, however, Joyce did just the opposite by contesting the
Defenses at every step of the way. Ultimately, this resulted in this Court having to deal with
three substantive motions directed at the Defenses. This Court and Magistrate Judge Denlow
also had to decide a lengthy discovery dispute. And Defendants were forced to litigate each of
those motions and conduct extensive discovery to answer the factual questions that were
outstanding at the pleadings stage.
Even worse, the Opinion highlights how Grochocinski’s lead attorney -- Edward Joyce -attempted (but failed) to conceal the truth through unprofessional and clearly improper tactics
during Grochocinski’s deposition. (Id. at 23-24.) Among other things, Mr. Joyce interjected
improper objections, resorted to name-calling and petty personal attacks, and issued
inappropriate challenges to Defendants’ attorneys. (Id.) And, Mr. Joyce again showed his utter
lack of respect for this Court by accusing Defendants of “taking advantage of the fact that the
Court is not a bankruptcy court.” (Id. at 24.) Mr. Joyce’s belligerent and combative conduct
during that deposition was a microcosm of his whole approach to this case -- attack, attack,
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attack with no regard for the lack of merit in the baseless and cynical malpractice claim that he
was advancing.
Mr. Joyce’s inappropriate tactics in the deposition failed, as did his tactics in this entire
case. At the end of the day, Mr. Joyce succeeded in doing only two things. He succeeded in
wasting this Court’s time with a ridiculous lawsuit that should never have been filed in the first
place. And he succeeded in wasting Defendants’ time and money in defeating his ridiculous
lawsuit. Section 1927 applies to these circumstances.
C.
The Sanction
For all the reasons set forth in the Opinion and herein, this lawsuit should never have
been filed in the first place. As a result, Defendants should not have been forced to defend
themselves in this Court. Grochocinski could have stopped it all from happening, but he failed to
do so. Joyce also could have refused to sponsor this case. Instead, Joyce encouraged and
prolonged it in hopes of scoring a quick settlement from a “deep pocket” and “earning” a
contingency fee. Accordingly, Grochocinski and Joyce should be sanctioned for the attorneys’
fees and costs that their actions caused Defendants to incur in defending themselves in this case.
IV. CONCLUSION
For the foregoing reasons, the Court should grant this Motion in its entirety and grant
Defendants such other and further relief as is appropriate.
Respectfully submitted,
MAYER BROWN LLP and RONALD B. GIVEN
By:
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/s/ Stephen Novack
One Of Their Attorneys
CERTIFICATE OF SERVICE
Stephen Novack, an attorney, hereby certifies that he caused a true and correct copy of
the foregoing Memorandum in Support of Defendants’ Motion for Sanctions to be served
through the ECF system upon the following:
Edward T. Joyce
Arthur W. Aufmann
Robert D. Carroll
Edward T. Joyce & Assoc., P.C.
11 South LaSalle Street
Chicago, IL 60603
on this 29th day of April, 2010.
/s/ Stephen Novack
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