COLONY INSURANCE COMPANY v. KWASNIK, KANOWITZ & ASSOCIATES, P.C. et al

Filing 77

ORDER ADOPTING REPORT AND RECOMMENDATIONS for 68 Motion for Sanctions. ORDERED that Defendant's Answer and Counterclaim is STRICKEN; ORDERED that Plaintiff's request for entry of default judgment is DENIED WITHOUT PREJUDICE; ORDERED that Plaintiff's request that Defendant be held in civil contempt is DISMISSED AS MOOT; ORDERED that the Clerk of the Court shall enter default against Defendant Michael Kwasnik. Signed by Judge Noel L. Hillman on 9/12/2013. (tf, n.m.)

Case 1:12-cv-00722-NLH-AMD Document 76 FiIed 08123
113 Page 1 of 20 PageD: 942

[Doc. No.

68]

IN THE UNITED STATES DISTRICT COUR
T
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

COLONY INSURANCE COMPANY,

Civil No.

12-722

(NLH/AMD)

Plaintiff,
v.
KWASNIK, KANOWITZ &
ASSOCIATES, P.C., et al.,
Defendants.

REPORT AND RECOMMENDATION
This

[Doc.

No.

matter

68]

(hereinafter,
(hereinafter,

comes

of

before

the

Court

Plaintiff

“Colony”)

Colony

to

by

Defendant

“Defendant”)

strike

way

of

Insurance
Michael

motion

Company
Kwasnik’s

answer and remaining counterclaim for

breach of contract’ and enter default
judgment against him on the
claims
civil

asserted
contempt,

Plaintiff’s
appropriate
comply,

and

in

Colony’s

to

order

counsel’s
monetary
to

award

complaint,

him

to

fees

appear

in

office
penalty

to

New

in

and

the
costs

hold

for

Jersey,

event
in

a

Defendant

in

deposition

at

to

Defendant

connection

impose

an

fails

to

with

this

By way of Orde

r and Opinion dated December 5, 2012
, the
District Court dismissed all of Defe
ndant’s counterclaims

against Plaintiff except Defendant’s
counterclaim for breach of
contract. (Opinion [Doc, No. 40], 16,
Dec. 5, 2012,)

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08123113 Page 2 of 20 PagelD: 943

motion.

(P1.

Colony

Ins.

Co.’s

Br.

in

Supp.

of

Mot.

for

Sanctions against Defendant Michael Kwasnik and to hold him in
Civil

Contempt

11.)

This

[Doc.

68—1]

will

motion

No.

be

Recommendation basis
(C)

(hereinafter,
determined

pursuant

to

28

“P1.’s

on

U.S.C.

a

Br.”),

Report

because of the dispositive nature of the request.

has

considered

Plaintiff’s

submissions

opposition has been filed.

and

For the reasons

and

636(b) (1) (B)

§

and

The Court

notes
set

2,

that

no

forth herein,

the Court recommends that Plaintiff’s motion be granted in part,
denied without prejudice in part, and dismissed as moot in part.
The background of this case has been set forth in the
District Court’s Opinion dated December 5,
Order

dated

May

7,

(Opinion

[Doc. No.

2013.)

Rather,

relevant

to

the

2013

40]
the

and

Dec.

5,

Court

shall

2012 and this Court’s

not

2012; Order
shall

current motion.

set

be

repeated

[Doc. No.

forth

of

Defendant.

granting

(Order

Plaintiff’s

[Doc.

No.

motion,

63] May 7,

only

the

By Order dated May

this Court granted Plaintiff’s motion to compel

the

63]

10,
Court

May

herein.

facts

7,

2013,

the deposition
7,

ordered

2013.)

In

that

the

deposition of Defendant occur no later than May 25, 2013.
The

May

schedule

2

7,

2013

the

Order

noted

deposition

of

Plaintiff’s
2
Defendant,

repeated
and

2

attempts

directed

The May 7, 2013 Order provided, in relevant part:

(Id.)
to

that,

Case 1:12-cv-00722-NLH-AMD Document 76 F:iIed 08/23/13 Page 3 of 20 PagelD: 944

“failure
contempt

to
of

sanctions.”

comply

with

this

Court’s

Order

court

and

may

result

in

(Order

Plaintiff
2013 Order,

IDoc. No.
asserts

Plaintiff’s

10, May 7,

63]
that

counsel

following

may

the

be

deemed

imposition

a
of

2013.)
the

Court’s

May

7,

“immediately served a Deposition

Plaintiff asserts that after the originally scheduled
deposition was postponed based on other Defendants’
requests, Plaintiff sought potential dates from
Kwasnik to reschedule the deposition.
(Id. at 1-2.)
Plaintiff asserts that it never received dates from
Kwasnik in response to this request and that Kwasnik
represented to the Court at a status conrerence on
September 7, 2012 that because of an ongoing criminal
investigation, Kwasnik would invoke his Fifth
Amendment privilege if deposed. (Id. at 2.)
Plaintiff
disputes the applicability of the Fifth Amendment
privilege, but asserts that Plaintiff initially agreed
to postpone Kwasnik’s deposition until after Kwasnik’s
criminal trial which was scheduled for early February
2013. (Id. at 2.) However, Plaintiff asserts that the
trial was adjourned and a plea agreement has since
been reached.
(Id. at 3.)
Following the adjournment,
Plaintiff noticed Kwasnik’s deposition for January 30,
2013. (Id. at 3.) Despite multiple attempts to confirm
the date of the deposition, Kwasnik failed to appear
at the January 30, 2013 deposition. (Id.) Plaintiff
asserts that in a letter sent by regular mail and
received by Plaintiff on January 30, 2013, Kwasnik
indicated his intention not to appear at the noticed
deposition and stated that he would appear for a
deposition between February 18 and February 28. (Id.)
Plaintiff then sought a court order directing Kwasnik
to appear at a February 19, 2013 deposition. (Id.)
However, at a February 14, 2013 telephone conference
with the Court, Kwasnik indicated that he would not
appear for a deposition in February because his
counsel in his criminal case advised him not to offer
any testimony until after his sentencing. (Id. at 3,)
(Order [Doc. No. 63], May 7, 2013 (citing P1.’s Br.
Supp. of its Not. to Compel [Doc. No. 56—1]),)

in

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08123113 Page 4 of 20 PagelD: 945

Notice

upon Kwasnik

May 17,
“Kwasnik

2013.”

requiring

(Pl.’s Br.

failed

to

him to appear

1.)

appear

on

Plaintiff further asserts that
the

at

May

deposition” and “never made any attempt
the scheduled deposition date

for deposition

—

17

court

Ordered

either before or after

—

to contact Colony’s

counsel to

offer an explanation as to why he did not appear at this Court
Ordered

deposition.”

(Id.

at

2.)

light

In

of

Defendant’s

—

äC iolat

the t’ s

Plaintiff now seeks
Civil Procedure.
The

Order

dar Maj 7,

sanctions pursuant to the

2013,

Federal Rules of

(Id. at 1-2.)

Federal Rules

of Civil

Procedure provide

for the

striking of a pleading and the rendering of default judgment if
a party fails to obey an order to provide or permit discovery.
See

FED.

R.

CIv.

P.

37(b)(2)(A)(iii),

(vi).

FED.

R.

Civ.

37(b) (2) (A) provides in relevant part:
If a party . . . fails to obey an order to provide or
permit discovery, including an order under Rule 26(f),
35, or 37(a), the court where the action is pending
may issue further just orders. They may include the
following:
(iii) striking pleadings in whole or in part;
(vi) rendering a default judgment against the
disobedient party; or
(vii) treating as contempt of court the failure to
obey any order except an order to submit to a physical
or mental examination.

4

P.

Case 1:12cv-00722-NLH-AMD Document 76 Piled 08123/13

R.

FED,

CIV.

P.

37(b) (2) (A).

However,

“‘[d)ismissals

prejudice or defaults are drastic sanctions,
the

Supreme

Court,

Mar.

31,

F.2d

863,

the

16,

right

appropriate,

Id.

the

08—4400,

867—68

“In

by

No.

to

be

2010) (quoting Poulis v.

(D.N.J. Apr.

of

are

Taylor,

Chiarulli v.

and

(3d

Cir.

reserved

‘extreme’

by

for

such

cases.”

2010 WL 1371944,

at *2

(D.N.J.

State Farm Fire

1984)),

adopted

whether

proceed

sanctions

with

or

defend

the Court considers the

Third

termed

with

& Cas.
2010

y,

Co.,

WL

747

1566316

2010)

deciding
to

Page 5 of 20 PagelD: 946

Circuit

in

Poulis

v.

that

‘deprive

against

a

a

party

claim’

are

following factors set forth
State

Farm

Fire

&

Cas.

Co.”

The factors set forth in Poulis are:
(i)
the extent of the party personal
s
T
responsibility;
(ii)
the prejudice to the adversary caused by the
failure to meet scheduling orders and respond to
discovery;
(iii)

a history of dilatoriness;

(iv)
whether the conduct of the party or the attorney
was willful or in bad faith;
(v)
the effectiveness of sanctions other than
dismissal, which entails an analysis of alternative
sanctions; and
(vi)
Poulis,
Court

the meritoriousness of the claim or defense.
747

F.2d

at

notes

that

“Poulis

balance

the

six

868.

factors

in

addressing

requires
and

does

the
not

the

six

District
set

one

factors,
Court

factor

the

only

to

forth

as

Case 1:12-cv-00722-NLH-AMD Document 76 Piled 08/23/13
Page 6 of 20 PagelD: 947

determinative.”
Poulis,
not be
v.

747

Chiarulli,

F.2d at

868-70).

satisfied for the

Rodale Press,

Inc.,

.

extent of the parties’

appear

Defendant
at

his

WL

1371944,

Additionally,

.

Poulis

221

factor,

to be personally

(3d Cir.

Plaintiff

Philadelphia

attached

address

confirmations
Nay 7,

to

for the

2013 Order,

for

asserts

via

address

Robert Walsh

in

B,

Court

on

The

Biscayne

Defendant’s

and

Supp.

of

his

Florida

Pl.’s

his

that

the Court
failure

a

to

Deposition

hand-delivery

cover

and

(Pl.’s Br.

declaration
letter,

first notes

that

address.

Not.

Blvd.

address

of a

considers the

2013 Order were sent to

counsel’s

deliveries

Ware

3.)

delivery
the

Court’s

and the Deposition Notice sent to Defendan
t’s

Philadelphia

3
C.)

factor need

Here,

Defendant’s Florida address via Federal
Express.
Plaintiff

(citing

2003)

the Court

responsible

Notice and a copy of this Court’s May 7,
Defendant’s

“[e]ach

personal responsibility.

deposition.

*4

at

court to dismiss a claim.”

.

322 F.3d 218,

Under the first

finds

2010

in
as

[Doc.

Defendant’s

Aventura,
set

forth

No.

Florida
on

the

(Declaration
68-2]

¶91

Florida

4-5

The

Ex.

address

corresponds

docket.

of

to

Court

Plaintiff’s counsel states that the init
ial Federal Express
package sent to Derentanc at ns Fcorita
autress ant aeciverea
on May 8, 2013
addressed to Michael
(Walsh
Declaration ¶ 5,) Plaintiff’s counsel furth
er states that on Nay
8, 2013, he caused another copy of the cove
r letter, Court
Order, and Deposition Notice to be sent
to Michael Kwasnik at
his Florida address by Federal Express.
(Id.) The delivery
confirmation provides that the Federal Expr
ess package sent to
Michael Kwasnik was delivered on May 9, 2013.
(Id. ¶ 5, Ex. C.)
was

Kanowitz.

6

Case 1:12-cv-00722-NLH-AMD Document 76
Piled 08/23/13 Page 7 of 20 PagelD: 948

further

notes

Plaintiff’s
brief
(See

motion

containing
Def.’s

Michael
3,
to

the

Opp’n

letter
Court

sent

an

Ex.

A.)

with

Not.

to
In

A to

that

Consequently,

the

addition,
which

Plaintiff’s

opposition

Deposition

Defendant’s

10,

2013

Defendant’s

(Letter from Plaintiff

the

Court

address.
of

June

Plaintiff provided

June

includes

an

opposed

Florida

Compel

counsel,

address as the return address
.
64],

deposition

61].)

envelope

Defendant

Defendant’s

Plaintiff’s

Exhibit

2013

with

Pl.’s
No.

2,

his

heading
to

to

April

compel

[Doc.

as

in

on

to
a

Kwasnik

2013

was

that

finds

that

letter,
Florida

[Doc.

No.

Defendant

is

personally responsible for his
failure to appear.
The
and was
se
See,
2011

notes

that

does

not

e.g.

shield

Shandex

WL

comply

at
se

with

litigant

Indus.

6132439,
a

a

Inc.

*4

litigant,

court

orders

Hoxworth

v.

F.2d

(3d Cir.

1992)

912,

defendants

920

“had

personal

v.

from

is

Dec.

proceeding

However,

pro

responsibility.

Corp.,

No.

2011)

8,

se

proceeding pro

personal

Vent Right

(D.N.J.

explanation);

LL

Defendant

formerly a practicing attorney.

defendant,
to

Court

(holding

09-4148,
the

personally responsible for fail
ure
and

Blinder,

failure

to

Robinson

(noting that,

responsibility

for

&

as
the

appear
Co.,

without

Inc.,

980

se litigants,
conduct

of

the

LLJi

Defendant

filed

a

petition

Southern District of Florida on
June 3,

for
2013,

bankruptcy

in

the

which petition was

Case 1:12-cv-00722-NLH-AMD Document 76
Piled 08123/13 Page 8 of 20 PagelD: 949

dismissed
Case

by

for

No.

66]

Order

Failure

dated

of

Ex.

the

Court

June

2013

Debtor

A.)

informed
10,

pendency
Order
[Doc.
19,

of

of

By

65]

2013,

its

Jun.

18,

Order

deposition
Defendant’s
filed

(Order
was

petition.

No.

scheduled

to

to

Therefore,

June

[Doc.

on

the

Court

(Pl.’s
66] .)

67]

the

(Pl.’s

Counsel’s

18,

dismissal

of

the

an

(Order

dismissal
June

to
for

of
2013

the Court

and

reopened

The disputed

the

filing

sanctions

Defendant’s

the bankruptcy case has

19,

2013,

2013.)

motion

of

the

by letter dated June

prior

The

to

entered

2013.

termination
24,

Due

Court

On June 24,

occur

petition.

Plaintiff

Counsel’s

Jun.

[Doc.

2013,

64] .)

the
June

Dismissing

Deficiency

10,

No.

Thereafter,

administrative

[Doc.

bankruptcy

subsequent

No.

Filing

proceeding,

case.

(Order

bankruptcy.

Court

informed

of

Correct

termination

[Doc.

2013.

dated

2013.)

bankruptcy

this action.

the

bankruptcy

Letter to the Court
vacated

to

Plaintiff

Defendant’s

to

14,

Defendant’s

administrative

No.

June

letter

of

Letter
the

on

of
was

bankruptcy

no bearing on the

Court’s analysis under Poulis.

As set forth infra, filing a mo
tion to vacate an order
dismissing a bankruptcy procee
ding does not reinstate the
automatic stay, which terminated
once the bankruptcy case was
dismissed by Order dated June
14, 2013.
See In re Hill, 305
B.R. 100, 104, 108 (Bankr. .D.
Fla. Apr. 4, 2003) (noting that
an order of dismissal terminat
es “the automatic stay of
§ 362 of
the Bankruptcy Code” and that
a “motion to vacate the order of
dismissal does not stay the
effectiveness of the order
dismissing the case,”)

Case 1:12-cv-00722-NLH-AMD Document 76 Filed
08/23113 Page 9 of 20 PagelD: 950

As this Court noted in Chiarulli,
Poulis

factor,

the Court examines

caused

by

delay,

conduct
need

the

has

to

resulted

file

behavior

of

the

(3d

*3

at

Cir.),

in

Pa.

denied,

complete

trial

1371944,

at *3

222

Cir.

(3d

several

546

to

cancellation of the
other

Defendants,

2012,

to

Kwasnik

Plaintiff

asserts

Kwasnik

have

defiance
ability

been

which has
to

Plaintiff

is

bring

abusive

2010

2005),
1076

A.

WL

the

1371944,

No.

02-7955,

aff’d,

139

take

impeded.”

forth

supra,

Defendant’s

Plaintiff

sought,

Defendant

never
that

the

by

2012.

App’x

party may

Chiarulli,
Inc.,

efforts

with

case

further contends

444

322

any

delay,

to

that,

a

deposition
Br.

decose

has

made
the

request by
August
for

2.)

a

2,

date

However,

dates,

(Id.)

Defendant

Michael

obstruction

and

outright

and prejudiced Colony’s

conclusion.”

without

WL

F.3d 218,

After

dated

available

to

2010

Plaintiff

letter

(P1.’s

indefinitely delayed
this

2005 WL

F.

deposition.

Kwasnik’s

provided

“met

*3

at

“A

(2005)).

Rodale Press,

set

mid-September

Defendant

to

initial deposition date due to a

reschedule
through

As

.

response

the

‘ability to prepare effectively a full

strategy’

2003))

party’s
and

Civ.

U.S.

(citing Ware v.

attempts

certain

26,

the

delays,

party.’”

Jan.

whether

repeated

in

City of Phila.,

also be prejudiced if its
and

costs,

motions

responsible

(E.D.

cert.

the prejudice to other parties

considering

‘extra

additional

(quoting Huertas v.
226149,

including

“[u]nder the second

(Pl.’s

Br.

7.)

Defendant’s deposition,

Case 1:12-cv-00722-NLH-AMD Document 76 Piled 08/23/13 Page 10 of 20 PagelD: 951

Plaintiff’s
trial

strategy’”

1371944,
222

“‘ability to prepare effectively a full and complete

*3

at

(3d

caused

[substantially]

(citing Ware v.

Cir.

Defendant’s

is

2003))

failure

Plaintiff

to

Rodale Press,

Additionally,

.

to

appear

incur

at

the

has

failure

to

appear

the

his

at

Court

notes

court-ordered

Therefore,
the

2010 WL

322 F.3d 218,

iflO.,

additional

with the filing of this motion.
Defendant’s

impeded.” Chiarulli,

expenses

that

deposition
associated

the Court finds that

court-ordered

deposition

substantially prejudiced Plaintiff’s ability to proceed with

its case.
“Under
whether

there

repeated

the

is

delay

third

a

Poulis

pattern

or

of

factor,

such

interrogatories,

or consistent tardiness

Trs.

Chiarulli,

of N.J.

2010

consistent

WL

Brewery Emps.’

1994) (citing Poulis,

asserts

that

scheduled
court

deposition

ontervention

respond

to

outstanding
from

Colony’s
for

Plaintiff

and
to

[Doc,

747

that

No.

months.”

*3

at

(quoting

refused

requests

36] (noting

of
to

Here,

.

to

after
7;

Plaintiff’s

had

874

at

a

to

seek

Kwasnik

“to

they
see

v.

Plaintiff

appear

Mzobaei

Br,

Adams

29 F.3d 863,

previously

Defendant

(Pl,’s

or

in complying with court

Plaintiff

document

history

non-response

F.2d at 868))

previously

compei

several

a

Pension Trust Fund,

(3d Cir.

Defendant

1371944,

examines

‘Extensive

constitutes

dilatoriness,

”
T
orders.

Court

dilatoriness.

delinquency
as

the

had

also

been
Letter

difficulties

in

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08/23113 Page 11 of 20 PagelD: 952

getting

discovery

Defendant

failed

5
conference.

responses
to

from

appear

(Minute

at

Entry

Defendant).)
the

[Doc.

July
No.

9,

71]

Additionally,
2013

telephone

July

10,

2013.)

Therefore,

the Court finds there to be a history of dilatoriness

and

that

finds

the

third

Poulis

factor

weighs

in

favor

of

striking Defendant’s answer and counterclaim.
WThe

fourth

factor

set

forth

in

Poulis

is

whether

—

ndt’s]
context

of

dduct
discovery

is

willful

sanctions,

or

in

bad

willfulness

faith.
and

In
bad

the

faith

At the July 9, 2013 conference, David DeClement, Esquire,
appeared by telephone.
Plaintiff’s counsel stated on the record
that he provided Mr. DeClement notice of the conference becaus
e
Plaintiff believed Mr. DeClement to be representing Defend
ant
Kwasnik, Kanowitz, & Associates, P.C.
However, Mr. DeClement
stated on the record that he did not presently represent, nor
intended to represent, any party in the case.
Despite not
representing any party in the case, Mr. DeClement stated
to the
Court that Defendant Michael Kwasnik filed a motion to reinsta
te
his bankruptcy, which petition had previously been dismissed
on
June 14, 2013. Mr. DeClement further indicated that Defendant
Michael ICwasnik believed that the bankruptcy stay was still
in
effect as a result of his motion and that Defendant Micha
el
Kwasnik believed the stay excused his attendance at the
conference.
Plaintiff asserted that despite Defendant’s belief
regarding the bankruptcy stay, this Court scheduled the
conference and Defendant was required to appear.
Plaintiff also
noted that by passing this information to Mr. DeClement,
Defendant demonstrated that he had knowledge of the confer
ence
and willfully decided not to appear. The Court granted Plainti
ff
leave to make an application following Defendant’s failure
to
appear. The Court notes that filing a motion to vacate an order
dismissing a bankruptcy proceeding does not reinstate the
automatic stay.
See In re Hill, 305 B.R. 100, 104, 108 (Bankr.
M.D. Fla. Apr. 4, 2003) (noting that an order of dismissal
terminates “the automatic stay of § 362 of the Bankruptcy Code”
and that a “motion to vacate the order of dismissal does not
stay the effectiveness of the order dismissing the case.”).
11

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08/23/13 Page 12 of 20 PagelD: 953

‘involve[

intentional

]

‘negligent behavior’
even

if

or

or

bad

(quoting Adams,
as

to

29

self-serving behavior.’

‘failure to move with

‘inexcusable’

willfulness

unclear

or

will

—

faith.”
F.3d at

whether

not

a party acted

party’s]

Poulis
No.

actions

factor.’”

10—4520,

willful

for

Hunt-Rublev.

2012

2012) (adopting

WL

and

recommendation) (citing

Martino

No.

1959226,

04—6324,

2007

Plaintiff asserts
7,

2013

Order,

WL
that

ordered

2013.

(Pl.’s

before

May

supra,

Plaintiff

submitted

to

notice

deposition

the

(Declaration
68-2]
has

of

4-5,

¶I
been

Robert

Ex.

and

court

Plaintiff

also

in
in

Br.

and
in

Plaintiff

in

ocher

one

case

for

order

to

avoid

contends

that

is

consistent

Health

further
for

Defendant’s

Corp.,

29,

2007)

Court’s May

as

with

7,

to

conduct

No.

Defendant
appear
a

(Pl.’s
in

Order.

[Doc.

that

failing

forth

respect

2013

Mot.

remove

occur

set

asserts

deposition.

19,
and

deposition

May

to

Inc.,

June

June

Pl.’s

attempting

fourth

Systems

confirmations

of

the

of this

Court’s

renders

report

Moreover,

Supp.

a

*3

record

(D.N.J.

(D.N.J.

8.)

cases

at

Richter,

&

Defendant’s

the

of

Court’s

*5

delivery

Walsh

B.)

sanctioned

deposition
federal

of

*5

Solaris

that

a

—

establish

1371944,

faith,

Worrell

at

at

to

purposes

this

v.

dispatch’

.

where the

Defendant had notice

which

25,

Lord,

restating

contrast,

‘at the very least,

the

2340418,

WL

in bad

failure to obey orders of the court,
[a

2010

“However,

.

.

suffice

Chiarulli,
875)

.

By

for

case
Br,

this

to
8.)

case

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08/23/13 Page 13 of 20 PagelD: 954

was

willful

this

case

and

is

obstruction

in

bad

just

faith

one

that

and

chapter

Kwasnik

that

in

has

Defendant’s

larger

a

played

story

out

in

“conduct
of

numerous

throughout the State of New Jersey for several years.”
Defendant has
comply

with

contains
Court’s
During
in

no

the

case

from

finds

participate
Richter,

in

Inc.,

WL

failure

to

his

that

receive

of

actively
(See

Ex.

64]

failure

a

2012

WL

at

*5

*3

(D.N.J.

May

22,

2006)

order

and

as

his
must

faith.”))

Defendant’s

failure

.

In

refusal

be

offer

construed

light
to

to

of this

appear

at

result
failure

Adams,

Court’s

to

the

Lord,

v.

the

Opp’n

No.

v.

Inc.

well

participated

the

Hewitt,

with

the

[Doc.

willful

2340418,

also

Therefore,

not

Hunt-Ruble

to

Deposition.

Def.’s

A.)

‘is

constitutes

noncompliance

defendant’s bad

No.

litigation.”

at

failing

to

Notice

has

cases

docket

Jackson

comply
as

for

The

failed

address.

[Doc.

10—4520,

1457989,

obligations,

finds

No.

2012) (citing

Defendant

and

(Id.)

Deposition of Michael Kwasnik

rather

this

Order.

Plaintiff’s

Defendant’s

but

2013

Florida

the

justification

Defendant

or

period,
that

that

7,

that

Order

to Compel

negligence,

for

2013

May

Letter from Plaintiff

Court

2006

7,

relevant

Pl.’s Not,

19,

Court’s

indication

May

this

61];

the

provided no

delay

in

No.

his

Jun.

04—3610,

discovery

explanations
evidence

conduct,
the

&

(“Defendant’s

any
as

to

Worrell

(D.N.J.

of

of

the Court

deposition

is

Case 1:12-cv-00722-NLH-AMD Document 76 Piled 08/23/13 Page 14 of 20 PagelD
: 955

not

attributable

to

negligence,

but

instead

rises

to

the

level

the

Court

ineffective.

Here,

of willful and intentional conduct.
With
finds

that

Plaintiff
is

respect

to

alternative

asserts

that

the

fifth

sanctions
Defendant

unemployed and without

Poulis

would
has

factor,

be

repeatedly

resources.

(Pl.’s

stated

Br.

9.)

that

he

Moreover,

Defendant has demonstrated a pattern of impermissible conduc
t in
this

case,

failure

including

to

refusing

respond

intervention.

to

to

appear

discovery

Furthermore,

the

at

depositions

responses
notes

Court

absent

Defendant

that

not responded to Plaintiff’s motion for sanctions,
an

intention

to

do

so.

Therefore

monetary sanctions would be
Defendant’s
See

Williams

(D.N.J.
25,

May

2011),

that,

(E.D.

20,

2011),
506

be

his

discovery

complete

has

nor indicated

Court

finds

that

the

by,

appropriate

2011

2011

WL

WL

(3d

Cir.

would

not

prompt

obligations

2119095,

2112301

156

2012)

given

remedy.
at

(D.N.J.

May

(concluding

[p]laintiff
his

*8

refusal

to
to

far even after being placed on notice that sanctions

Beam
Pa,

is

08—1210,

App’x

sanctions

Imposed.”);

v.

No.

adopted
F.

the

Court

ineffective and that the striking of

counterclaim

Sullivan,

aff’d,

with

comply thus

Inc.

v.

and

“alternative

comply

may

answer

and

Mgmt.,

Apr.
neglect

see

also

LLC,

9,

2008)

of

its

No.

Genesis
07—1843,
(defendant

obligations

Eldercare
2008
“has
as

a

WL

Rehab,

Servs,,

1376526,

at

demonstrated
litigant

in

*2
its

this

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08/23/13 Page 15 of 20 PagelD: 956

matter.

Given

believe

that

case.

.

would

.

[defendant’s]
a

nothing

to

non—compliance,

sanction

would

such

the

sanction

[A]

.

do

monetary

willful

as

suddenly

prompt

be

we

sufficient

award

do

not

this

attorney

of

in

fees

[defendant’s]

compliance

with the Court’s orders.”)
The
Defendant’s

final
defenses

meritoriousness
allegations
support

of

of

and

a

the

recovery

defense.”

Poulis

is

the

meritoriousness

counterclaims.

pleading,

courts

In

if

established

plaintiff

or

would

747

F.2d at 869-70.

required to “balance both parties’

addressing

consider

pleadings,

by

Poulis,

factor

trial,

constitute

A court,

a

922.

from
and

Thus,

the

(3d Cir.

“both

pleadings,”

the

dispositive”

not

Bedwell

where

in

Sons,

&

Inc.

v.

sides’

Int’l

1988) (noting that

positions

Poulis
Fid.

however,

“[t]here

appear[]
factor”

analysis.

Ins.

Co.,

Defendant’s
allegations,
contains

the

is

not

answer
contains
one

controlling.”)
denies

the

eighteen

remaining

is

See

843

980

F.2d

“neutral
Curtis

F.2d
.

683,
.

.

T.
696
that

factor supporting dismissal

in Poulis the defense must be compelling and,
factor

is not

reasonable

is no indication

in order to meet the meritoriousness

Poulis

would

claims and defenses” or “have

“meritoriousness
the

“the

complete

a mini-trial before it can impose a default.” Hoxworth,
at

the

whether

at

of

.

at all events,

The

majority
affirmative

counterclaim

Court
of

notes

that

Plaintiff’s

defenses,

for breach

one

of

and

contract.

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08/23/13 Page 16 of 20 PagelD: 957

(Answer,

Cross claim,

Counter claim,

third party claim on behalf

of defendants Michael Kwasnik and named law firms

[Doc.

No.

9].)

The Court finds this factor to be neutral and not dispositive in
the Poulis analysis.
require
that,

district

“unless

claim),

courts

the

balance

Williams,

the

pleading

factors

2011
*4)

at

balance,

the

WL

(declining to

“a mini-trial[,]”

asserted

dispositive

a

and noting
defense

(or

and

Poulis requires the District Court

no

2119095,
Thus,

.

Poulis

and counterclaim.

one

in

this

factors

failure

circumstances

factor

*8

at

was

rendering

is

(citing

case,

warrant

In addition,

Defendant’s

other

conduct

to

set forth supra,

1371944,

that

980 F.2d at 922

the issue of meritoriousness would be neutral.”).
As

to

See Hoxworth,

the

determinative.
Chiarulli,

Court

striking

finds

See

2010

WL

that,

on

Defendant’s

answer

there being no basis to conclude
substantially
an

award

of

justified

expenses

and

unjust,

no
the

Court finds that Plaintiff shall be awarded reasonable expenses,
including

attorneys’

Procedure

37 (b)

the

respectfully

Court

counterclaim,

pursuant

Therefore,

.

Plaintiff’s motion
and

fees,

to
and

for

recommends
strike
that

to

the

Federal

reasons

that

the

set

of

forth

District

Defendant Michael

Plaintiff be

Rule

supra,

Court

Kwasnik’s

awarded

Civil

grant
answer

reasonable

fees

judgment

“in

pursuant to Federal Rule of Civil Procedure 37 (b)
Plaintiff
favor

of

plaintiff

additionally
Colony

seeks

Insurance

default
Company

on

all

of

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08/23/13 Page 17 of 20 PagelD: 958

plaintiff’s

claims.”

Plaintiff’s

complaint

compensatory damages,
just,

fitting,

(Proposed

and

and

seeks
other

proper.c

Order

declaratory
such

(Compl.

No.

EDoc.

68—3].)

relief,

relief

as

[Doc.

fees,

the

deems

No.

1]

Court
at

19-20.)

However, the Court notes that Plaintiff’s complaint demands
relief in its favor:
a.

Under Count I, declaring that the Policy, Policy
No. E0406308, is rescinded ab initio on the basis
of fraud, and, as such, Colony has no duty to
defend or indemnify [Kwasnik, Kanowitz &
Associates, P.C.] or any other insured or alleged
insured under the Policy, with respect to any
Underlying Action or with respect to any past,
present or future “claim” made under the Policy;

b.

Under Count I, awarding Colony an amount equal to
(a) the amount expended by Colony to defend
Kanowitz and Keltos against the Underlying
Actions, less (b) the amount of the premium paid
by KKA to Colony for the Policy;

c.

Under Count II, awarding judgment based on the
violation of N.J.S.A. section 17:33A-4(a), and
awarding compensatory damages pursuant to
N.J.S,A. section l7:33A-7(a), including, but not
limited to, Colony’s reasonable investigation
expenses, costs of suit and attorneys fees, and
treble damages;

d.

In the alternative,
the rights, duties,

under Count

f.

(Compl.

declaring

and obligations of the

parties under the law,

e.

III,

the Policy and the

Awarding Colony its costs and attorneys’

facts;

fees;

Granting such other ar further relief as this
d
1
Court deems just, fitting and proper.
[Doc, No, 1].)

Case 1:12-cv-00722-NLH-AMD Document 76 Filed 08/23/
13 Page 18 of 20 PagelD: 959

However,

Plaintiff’s

judgment

requested.

Plaintiff’s
prejudice

motion

not

for

default

Plaintiff’s

right

delineate

the

Therefore,

request

to

does

Court

the

recorm ends

judgment

be

refile

motion

to

a

specific

denied

that

without

for

default

judgment in accordance with Federal Rule
of Civil Procedure 55.
The
time.
held
the

in

civil

Court

Court’s

to

contempt

finds

further

for

that

failing

Plaintiff’s

answer

and

sanctions

Plaintiff’s

recommendation

Defendant’s
recommends

finds

respect

With

Court

that

request

to

request

to

the

request

that

appear
be

at

moot

District

counterclaim.

Plaintiff’s

unwarranted

this

Defendant

his
in

of

Court

Defendant

be

deposition,

light

Consequently,
that

at

strike

the
be

the

Court

held

in

civil contempt be dismissed as moot.
Any

objections

be

filed within fourteen

R.

72.1(c) (2)

Dated:

and

August 23,

FED.

2013

to
(14)

this

Report

and

Recommendation must

days of service pursuant to L. C:v.

R. Civ. P.

72(b) (2).

s/ Ann Marie Donio
ANN MARIE DONIO
UNITED STATES MAGISTRATE JUDGE

18

Case 1:12-cv-00722-NLH-AMD Document 76 Piled 08/23/13
Page 19 of 20 PagelD: 960
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

COLONY INSURANCE COMPANY,

Civil No.

12-722

(NLH/AMD)

Plaintiff,
V.

KWASNIK, KANOWITZ &
ASSOCIATES, P.C., et al.,

Defendants.

PROPOSED ORDER

THIS
[Doc,

No.

MATTER
68)

(hereinafter,

comes

of

the

Court

Plaintiff

Colony

to

“Colony”)

(hereinafter,

before

by

Defendant

“Defendant”)

strike

way

of

Insurance

Company

Michael

answer and remaining

motion

Kwasnik’s

counterclaim for

breach of contract and enter default judg
ment against him on the
claims

asserted

civil

in
to

contempt,

Plaintiff’s
appropriate
comply,
motion;

and

Colony’s
order

counsel’s
monetary
to

and

award

the

penalty
fees

Court

United

Magistrate

(1) (B;)

and

(C);

appear

in

New

in

and

by

to

to

the
costs

having

submitted

636(b

him

office

Recommendation
States

complaint,

hold

for

a

Jersey,

event
in

Defendant

in

deposition

at

to

impose

Defendant

connection

considered
Honorable

Ann

Judge,

pursuant

to

fails

to

with

this

Report

the

the

an

and

Marie
28

Donio,

U.S.C.

§

and the Court having considered the
papers

submitted by the p.arties;

and for good cause shown;

Case 1:12-cv-00722-NLH-AMD Docum
ent 76 Piled 08123/13 Page 20 of 20 Pag
eD: 961
IT IS on this

day
1
\ of

2013 hereby

ORDERED that the Report and
Recommendation is ADOPTED;
and it is further
ORDERED

be,

that

and is hereby,

STRICKEN;

ORDERED
judgment

Defendant’s Answer and Cou
nterclaim shall

that

shall be,

and it is further

Plaintiff’s

and

is

request

hereby,

for

entry

DENIED WITHOUT

of

default

PREJUDICE;

and

that

Defendant

be

hereby,

DISMISSED

AS

it is further
ORDERED

held

in

civil

that

Plaintiff’s

contempt

shall

be,

request
and

is

MOOT; and it is further
ORDERED

attorneys’

fees

that
in

Plaintiff

connection

shall

with

be

this

awarded
motion;

reasonable
and

it

is

further
ORDERED

fees

within

Defendant
twenty

twenty

may

(20)

that

file

Plaintiff

(20)
any

days

that

the

objection

days thereafter;

ORDERED

of

shall

the

to

submit
entry
such

an

of

affidavit

this

Order,

submission

for
and

within

and it is further
Clerk

of

the

Court

shall

enter

default against Defendant
Michael Kwasnik pursuant to
F. R. Civ
P. 5(a).

NOEL L. HILLMAN
UNITED STATES DISTRICT JUD
GE