Cozzens et al v. Lincoln Park, City of

Filing 268

ORDER Adopting in Part and Rejecting in Part 229 Report and Recommendation re 72 Motion for Sanctions, filed by Lincoln Park, City of, HDV-Lincoln Park, LLC Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JAMES COZZENS and I-75 OUTER
DRIVE ADULT BOOK STORE,
Plaintiffs,
Case No. 08-11778
v.
Hon. John Corbett O’Meara
CITY OF LINCOLN PARK,
a municipal corporation,
Defendant,
and
PAPALAS DRIVE DEVELOPMENT, LLC,
and HDV – LINCOLN PARK LLC,
Intervenors.
__________________________________/
ORDER ADOPTING IN PART AND REJECTING IN PART
MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION
Before the court is Magistrate Judge Michael Hluchaniuk’s report and
recommendation regarding Defendant and Intervenors’ joint motion for sanctions
against Marion Bednarski and his attorneys, Cindy Victor and Lynn Geist. The
report recommends sanctions against Bednarski and Geist, but not Victor. Geist
has filed objections as well as a motion to supplement the record. Defendant and
Intervenors have also filed objections and seek additional discovery.

With respect to reports and recommendations from magistrate judges, this
court “shall make a de novo determination of those portions of the report or
specified proposed findings or recommendations to which objection is made.” 28
U.S.C. § 636(b)(1)(C). The court “may accept, reject or modify, in whole or in
part, the findings or recommendations made by the magistrate.” Id.
The magistrate judge conducted ten days of evidentiary hearings in this
matter and developed an extensive record. Indeed, the record on sanctions in this
matter is significantly more extensive than the record on the merits, which were
decided on summary judgment. It is unfortunate that the issue of sanctions appears
to have taken on a life of its own. The court will not, as requested by the parties,
allow additional discovery or supplementation of the record. Rather, the court will
bring this matter, which begs for finality, to a close.
Having reviewed the record and the parties’ objections, the court agrees with
the magistrate’s findings and conclusions, except for his determination that
attorney Cindy Victor should not be sanctioned along with Lynn Geist. Both
Victor and Geist were attorneys of record representing Marion Bednarski. The
magistrate judge concluded that Geist should be sanctioned because she filed a
motion for a protective order and objections to certain depositions “primarily
intended to block” discovery of Bednarski’s interest in the bookstore project. See R
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& R at 58. He determined that Victor should not be sanctioned because she was
not “directly involved in the meeting where the plan to delay the depositions of
Cozzens, Seagraves and Bednarski was made nor was she involved in the
execution of that plan by filing the motion for a protective order and the objections
to the subpoena duces tecum.” Id. at 61.
Under the circumstances, this court does not believe that the roles of these
two attorneys can be so cleanly separated. The evidence shows that Victor and
Geist worked together, with both attorneys filing and signing various papers with
the court. They worked in the same small firm, The Victor Firm, PLLC. In the
court’s experience, it is not possible that Victor and Geist could work on this
matter, representing the same client, in two separate impermeable bubbles without
knowledge of what the other was doing. Indeed, Victor was actively involved,
including in discovery, as evidenced by her filings with the court. See, e.g.,
Docket Nos. 4, 16, 17, 21, 83, 112. Thus, even if, in the unlikely event that Victor
was unaware of Geist’s obstruction of discovery, she should have known. See
BDT Prods. Inc. v. Lexmark Int’l, Inc., 602 F.3d 742, 752 (6th Cir. 2010) (in order
to impose sanctions under court’s inherent powers, court must find “(1) that the
claims advanced were meritless, (2) that counsel knew or should have known this,
and (3) that the motive for filing the suit was for an improper purpose such as
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harassment”) (citations omitted); Issa v. Provident Funding Group, Inc., 2010 WL
3245408 (E.D. Mich. Aug. 17, 2010 ) (discussing court’s inherent power to
sanction lawyer and law firm). The court finds Geist and Victor to be equally
culpable and will impose sanctions pursuant to its inherent power accordingly.1
The magistrate judge bifurcated this matter and determined liability without
addressing the amount of sanctions. Given the amount of litigation invested here,
the court has no doubt that Defendant and Intervenors have incurred significant
attorney’s fees. The court believes that compensating Defendant and Intervenors
fully for their attorney’s fees would result in an unduly harsh punishment which
would be substantially beyond the amount required to deter future sanctionable
conduct. Therefore, rather than remand this matter to the magistrate for a factual
finding regarding the amount of sanctions, the court will withdraw the reference
and determine the matter itself. The court finds that sanctions in the amount of
$20,000 for Cindy Victor and Lynn Geist, jointly and severally, and $10,000 for
Marion Bednarski, payable to Defendant and Intervenors equally as partial
compensation for attorney’s fees incurred, reflects the seriousness of this matter

1

Defendant and Intervenors also state that the magistrate erred in not
sanctioning The Victor Firm. This issue was not fleshed out as a factual or legal
matter before the magistrate and the court finds that the magistrate did not err in
not addressing it.
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and is an appropriate deterrent.
ORDER
IT IS HEREBY ORDERED that Magistrate Judge Hluchaniuk’s report and
recommendation is ADOPTED IN PART and REJECTED IN PART, consistent
with this opinion and order.
IT IS FURTHER ORDERED that Defendant’s and Intervenors’ joint
objections are OVERRULED IN PART and SUSTAINED IN PART, consistent
with this opinion and order.
IT IS FURTHER ORDERED that Lynn Geist’s motion for
expansion/supplementation of the record is DENIED.
IT IS FURTHER ORDERED that Lynn Geist’s objections are
OVERRULED.
IT IS FURTHER ORDERED that Lynn Geist and Cindy Victor, jointly and
severally, shall pay $20,000 in sanctions to Defendant and Intervenors.
IT IS FURTHER ORDERED that Marion Bednarski shall pay $10,000 in
sanctions to Defendant and Intervenors.
s/John Corbett O’Meara
United States District Judge

Date: June 10, 2014
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I hereby certify that a copy of the foregoing document was served upon the
parties of record on this date, June 10, 2014, using the ECF system and/or ordinary
mail.

s/William Barkholz
Case Manager

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