PRESIDENTIAL LAKES FIRE AND RESCUE SQUAD INC. et al v. DOHERTY et al

Filing 43

OPINION. Signed by Judge Renee Marie Bumb on 1/29/2014. (tf, )

[Docket Nos. 17, 28 and 38]

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

PRESIDENTIAL LAKE FIRE AND
RESCUE SQUAD, INC. and JAMES
C. ANDERSON and ROBERT PALFY
and ROBERT STRING and THOMAS
MAAHS, JOSEPH R. BRANDER, JR.
and Others Similarly Situated,
Plaintiffs,

Civil No. 12-cv-05621
(RMB/AMD)
OPINION

v.
WILLIAM DOHERTY, individually
and as Fire Director of
Pemberton Township and
PEMBERTON TOWNSHIP VOLUNTEER
FIRE DEPARTMENT and PEMBERTON
TOWNSHIP and/or JOHN DOE 1-10,
individually, jointly, and
severally,
Defendants.

Appearances:
MARK J. MOLZ, Esquire
1400 Route 38 East
P.O. Box 577
Hainesport, New Jersey 08036
Plaintiffs’ Former Attorney
Tracy Riley, Esquire
Law Offices of Riley & Riley
100 High Street, Suite 302
Mount Holly, New Jersey 08060
Plaintiffs’ Attorney
1

John C. Gillespie, Esquire
Parker McCay, PA
Three Greentree Centre
7001 Lincoln Drive West
P.O. Box 974
Marlton, New Jersey 08053
Defendants’ Attorney
BUMB, United States District Judge
This matter comes before the Court upon several motions for
attorneys’ fees and costs against the former attorney for the
plaintiffs, Mark J. Molz, Esq. [Docket Nos. 17, 28 and 38].1
Plaintiffs Presidential Lakes Fire and Rescue Squad, Inc.,
James C. Anderson, Robert Palfy, Robert String, Thomas Maahs
(“Plaintiffs”) initially filed an Action in Lieu of Prerogative
Writ in the Superior Court of New Jersey, Burlington County.
Defendants Pemberton Township Volunteer Fire Department and
Pemberton Township (“Defendants”) removed the action to this
Court based upon Plaintiffs’ allegations relating to various
constitutional violations.

Plaintiffs filed a Second Amended

Complaint adding Plaintiff Joseph R. Brander, Jr., alleging
violations of the Law Against Discrimination and the Americans
With Disabilities Act.

1

Two prior motions, Docket Nos. 17 and 28, were previously
administratively terminated pending the conclusion of this case.
It is not clear what the status of this case is, although it
appears the case has been resolved. See infra.
2

On November 9, 2012, Defendants moved to dismiss the Second
Amended Complaint.

The Amended Complaint was confusing;

Plaintiffs’ allegations were unclear.

In moving to dismiss the

Complaint in its entirety, Defendants sought the dismissal of
Plaintiffs’ claims as they understood them.2
Defendants moved to dismiss:

Specifically,

(1) Plaintiffs’ state tort claims

for failure to comply with the New Jersey Tort Claims Act; (2)
the Pemberton Township Volunteer Fire Department because it was
not a “person” amenable to suit under 42 U.S.C. § 1983; (3) the
punitive damage claims against the Township of Pemberton; (4)
the procedural due process claim because Plaintiffs were
volunteers and had no protectable interest as a matter of law;
and (5) Plaintiff Brander’s claim because it failed on the
merits.

Plaintiffs filed a brief in opposition that failed to

respond to several of the arguments made by Defendants. [Docket
No. 9].

The Court conducted oral argument during which Mr. Molz

conceded many of Defendants’ arguments.

Accordingly, the Court

dismissed Plaintiffs’ alleged tort claims, substantive due
process claims, 42 U.S.C. § 1983 claims against Pemberton
Township Volunteer Fire Department, and all requests for
2

Subsequent to the filing of the Motion to Dismiss, the
Court implemented its Individual Rules and Procedures to address
this type of fact pattern. A pre-motion conference would have
fleshed out many of the improper claims, just as the oral
argument on the Motion to Dismiss did, and avoided such
unnecessary litigation.
3

punitive damages against Pemberton Township and William Doherty
(in his official capacity as fire director of Pemberton
Township). [Docket No. 16].

Mr. Molz requested the opportunity

to amend the Complaint and, in particular, to further examine
the procedural due process claim.

The Court permitted

Plaintiffs to re-plead the Complaint within 60 days.

The Court,

however, requested Mr. Molz to advise the Court if his schedule
opened up so that he could file the pleading earlier than 60
days.

[Docket No. 16].

Two weeks later, Defendants moved for

attorneys’ fees against Mr. Molz under Rule 11 of the Federal
Rules of Civil Procedure.3 [Docket No. 17].

Defendants also

moved for attorneys’ fees and costs against the individual
Plaintiffs under 42 U.S.C. § 1988.

This latter motion has

apparently been withdrawn.
First Motion for Rule 11 Fees [Docket No. 17].
Defendants seek a sanction against Plaintiffs’ former
counsel in the form of attorneys’ fees amounting to $26,944.37.4
Defendants contend that because Plaintiffs’ counsel brought a
multi-count Complaint “based on allegations that [were]

3

The Court administratively terminated the motion pending
conclusion of the litigation. [Docket No. 22]. Defendants seek
to re-instate this motion now, which the Court denies for the
within reasons.
4

Defendants charged a lower fee to their client, but seek
a lodestar fee here.
4

knowingly false and/or procedurally barred,” sanctions under
Rule 11 are warranted. [Docket No. 17-3].
Federal Rule of Civil Procedure 11 is intended to redress
abusive litigation practices, and recognizes that a person
signing and submitting a document to the court has a
“nondelegable responsibility to the court.” Fed. R. Civ. P. 11,
advisory committee’s note. See generally Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 393 (1990). Under Rule 11(b),
[b]y presenting to the court a pleading, written
motion, or other paper--whether by signing, filing,
submitting, or later advocating it--an 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:
. . .
(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 . . . .
Should the Court determine, after notice and an opportunity to
respond, that an attorney has violated Rule 11(b), it has the
authority to impose an “appropriate sanction.” Fed. R. Civ. P.
11(c)(1).
In evaluating an attorney’s conduct, “a court must apply an
objective standard of ‘reasonableness under the circumstances.’”
In re Cendant Corp. Deriv. Action Litig., 96 F.Supp.2d 403, 405
(D.N.J. 2000) (quoting Ford Motor Co. v. Summit Motor Prods.
Inc., 930 F.2d 277, 289 (3d Cir. 1991)). “Thus, this Court must
5

determine whether a competent attorney who conducted a
reasonable investigation into the facts and law pertinent to the
case would have determined that the allegations presented
against defendants were well grounded in law and fact.” Watson
v. City of Salem, 934 F. Supp. 643, 663 (D.N.J. 1995).
Furthermore, the court assesses reasonableness as of the time
the motion was submitted to the court. New Life Homecare, Inc.
v. Blue Cross of Ne. Pa., No. 06-2485, 2008 WL 534472, at *2
(M.D. Pa. Feb. 20, 2008). Sanctions may be imposed in the
absence of subjective bad faith on the part of the attorney, and
Rule 11 “does not recognize a ‘pure heart and empty head’
defense.” In re Cendant Corp., 96 F. Supp. 2d at 405 (citations
omitted).
Finally, “[a]lthough a subjective test is not used in
deciding initially whether sanctions should be imposed, it may
be relevant in determining the form and amount of punishment or
compensation . . . .

[I]n considering the nature and severity

of the sanctions to be imposed, the court should take account of
the state of the attorney’s . . . actual or presumed knowledge
when the pleading . . . was signed.”

Lieb v. Topstone

Industries, Inc., 788 F.2d 151, 158 (3d Cir. 1986).
The Court finds that sanctions in the form of attorneys’
fees and costs are not warranted.

First, although the Second

Amended Complaint was poorly drafted and contained a hodgepodge
6

of allegations, to say the least, Mr. Molz candidly conceded
that such claims, as understood by Defendants in their Motion to
Dismiss, were barred and should be dismissed from the case.

It

is unfortunate that Defendants were forced to file a Motion to
Dismiss to seek the dismissal of claims that both sides agreed
were clearly barred as a matter of law, but this Court cannot
find that Mr. Molz’s conduct warrants the imposition of fees.
When pressed by the Court, Mr. Molz conceded that such claims
were barred.

Defendants maintain that these dismissed claims

should not have been alleged in the first instant.
true.

That is

But it is a sad reality that over and over again this

Court is presented with pleadings that allege claims that are
clearly barred by law, such as the type of claims here, e.g.,
official capacity/damage claims, punitive damages against a
municipality. The Court routinely grants motions to dismiss
these claims with hardly ever an accompanying motion for Rule 11
sanctions.

Here, Mr. Molz did not press these claims, and this

factors into the Court’s analysis.

Mr. Molz, however, is hereby

admonished that such claims shall not be included in future
filings.
As for the remaining claims that were dismissed without
prejudice, Mr. Molz asked for, and was given, the opportunity to
re-plead the claims.

He advised the Court and requested the

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time and opportunity to consider the opposing arguments made by
Defendants.
Finally, Defendants contend that all of Plaintiffs’
allegations were “patently false,” including that one or more
Plaintiffs were disciplined without the right to discovery or
counsel; that the hearing(s) was(were) constitutionally
inadequate; that one or more of the Plaintiffs were denied a
hearing; and Doherty’s reasons for discipline were pretextual.
Defendants attached exhibits to their motion to dismiss, asking
this Court to determine from these exhibits that even assuming
the existence of a property right, Plaintiffs were afforded
adequate constitutional protections contrary to the Complaint’s
allegations.
There has been no adjudication of the merits, and it would
be virtually impossible for this Court, on the record before it,
and without any discovery, to resolve the matter as to each
Plaintiff.

For example, although Defendants contend that

Plaintiffs were afforded hearings, Plaintiffs contend the
hearings were inadequate, and even though they had counsel,
counsel was deprived of the opportunity to be fully prepared,
and so on.
The Court declines to prolong this matter further, as to do
so would certainly require extensive fact finding.

In his last

filing with the Court, Mr. Molz, even though he is no longer
8

counsel, reiterates his good faith belief in Plaintiffs’
allegations - in particular, relating to their due process
claim.

He even goes so far as to assert that because of this

lawsuit Defendants revised their rules and regulations.

In

short, this Court cannot find, on the record before it, that the
Second Amended Complaint was so blatantly false or frivolous, as
Defendants contend, to warrant the imposition of attorneys’
fees.

Although the Complaint was far from a model of clarity,

Rule 11 is designed to deter baseless filings, not necessarily
hard-to-understand filings.
496 U.S. 384 (1990).

Cooter & Gell v. Hartmarx Corp.,

The Court declines to impose Rule 11

sanctions on this ground on the record before it.

The First

Motion for Attorneys’ Fees is therefore denied.
Second Motion for Attorneys’ Fees Under Rule 11
On April 22, 2013, Defendants filed a second motion for
attorneys’ fees.5

Defendants claim that Mr. Molz acted in bad

faith by not advising this Court that he no longer had a fiveweek trial that would prevent him from filing his Third Amended
Complaint before the 60 days the Court had given Plaintiffs.

As

set forth above, in its February 6, 2013, Order, the Court had
given Plaintiffs 60 days to file an amended complaint, but
requested that “[t]o the extent Plaintiffs’ counsel can file his
5

Defendants seek Rule 11 fees and costs against attorney
Molz only.
9

motion to amend earlier than the above date, he shall advise the
Court so that a new date may be set.”

[Docket No. 16, at 1].

Instead of filing an amended complaint on the sixtieth day, Mr.
Molz submitted a letter requesting a settlement conference.6
Defendants have taken great efforts to demonstrate to this
Court that the trial commitment, of which Mr. Molz had spoken to
the Court during oral argument, actually concluded a week later,
on February 13, 2013, when his client was severed from the
trial.

See Docket No. 26.

These efforts included contacting

the criminal court, making an OPRA request, reviewing the state
court’s website, and even travelling to the state court to
review and copy the urging.7

Defendants’ counsel even sent

correspondence to Mr. Molz pressing him to file an amended
complaint earlier.

Although Mr. Molz has not explained why he

6

Defendants argue that this case is closed. However, the
request for a settlement conference served to put a hold on the
time to file an amended complaint. See Court’s Order [Docket
No. 25](“In the event that this matter does not settle, I will
address the time by which an amended complaint should be
filed.”). This case remains on the Court’s active docket.
7

The time and expense incurred by Defendants appear to
have “needlessly increas[ed]” the costs of litigation, conduct
Rule 11 is intended to redress. A brief letter to the Court by
Defendants advising the Court of their belief that Mr. Molz’s
trial obligation had ended would have been sufficient for the
Court to address the matter with counsel with much less judicial
resources.
10

did not advise the Court upon the change in his schedule,8 the
Court declines to expend further judicial resources to
investigate whether Mr. Molz was in a position to file the
Amended Complaint much earlier as the Court had requested.
Although it is evident that the burdensome criminal trial
counsel had anticipated never came to fruition, it is not this
Court’s function, nor its desire, to further explore whether or
not Mr. Molz, a solo practitioner, was then in a suitable
position to file an amended pleading.

Perhaps other duties,

unexpected ones, demanded of a solo practitioner interfered.
The Court does not find an abuse of the judicial process and,
therefore, denies the motion for attorneys’ fees on this ground.
Defendants also seek fees in the amount of $400 for having
to attend a settlement conference that Mr. Molz requested, but
failed to attend.

[Docket No. 33].

It is not entirely clear

why Mr. Molz failed to attend, although it appears it was
because he inadvertently failed to calendar it.
pages 3-4].

[Docket No. 33,

(“Judge Donio’s Chambers reached out to Plaintiffs’

counsel to ascertain his whereabouts.

He was in his office.

He

stated that this settlement conference . . . was not on his
calendar.”)

There is no evidence that Mr. Molz had a pattern of

failing to appear for court proceedings.

8

Nor is there any

The Court had administratively terminated this motion
before a response was required.
11

evidence that his failure to appear was the result of
inexcusable neglect.

It does appear, however, that the

conference, at which Mr. Molz appeared telephonically, was
productive.

At the Court-ordered settlement conference, Judge

Donio sua sponte raised the issue that there may be a conflict
of interest - - that, in light of the various Rule 11 motions
pending against him, Mr. Molz may have a conflict of interest in
continuing to represent his clients.

Mr. Molz ultimately

determined that he could no longer represent Plaintiffs.

New

counsel for Plaintiffs, Tracy Riley, Esq., entered her
appearance.

[Docket No. 36].

Mr. Molz sent a letter to Judge Donio dated May 14, 2013,
in which he advised that the “conflict arises from the fact that
the Defendants are seeking attorneys’ fees from [him]
individually and also from the clients under a variety of
theories.

My client’s (sic) deserve to have disinterested

counsel represent them and I have sent them a copy of this
letter so that those arrangements can be made.”
3, Ex. F].

[Docket No. 38-

Counsel appeared to have copied “Presidential Lakes

Fire & Rescue” on the letter.
Defendants were not content with Mr. Molz’ letter and
immediately submitted a letter to Judge Donio challenging Mr.
Molz’s opinion that he should disqualify himself.
press their challenge here as well.
12

Defendants

This Court, however, will

not secondguess a lawyer’s decision that he cannot effectively
and zealously represent his client, nor should Defendants.

The

Court denies the motion for attorneys’ fees on this ground.
Third Motion for Attorneys’ Fees
Defendants filed yet a Third Motion for Attorneys’ Fees
[Docket No. 38].

In addition to seeking a ruling in its prior

Motions for fees, supra, Defendants seek the imposition of
attorneys’ fees because Mr. Molz was less than candid not just
to this Court, but to his clients.

With respect to his lack of

candor to the Court, Defendants assert that Mr. Molz falsely
informed Judge Donio at the settlement conference that (a) he
had his clients’ permission to settle the motions for attorneys’
fees and (b) he advised his clients that he had a conflict of
interest in continuing to represent them.9

With respect to his

lack of candor to his clients, Defendants assert that he failed
to advise (a) his clients of the pending motions for attorneys’
fees, (b) some of his clients about the conflict of interest
issue, and (c) all of his clients that the Complaint had been
dismissed.

To support their Motion, Defendants have again gone

to great lengths and submitted sworn certifications of the
individual Plaintiffs.

9

The Court does not have a transcript of the proceeding
before Judge Donio and, thus, relies upon Defendants’
representations as to what was communicated to the Court.
13

Rule 3.3(a)(1) of the Rules of Professional Conduct (“RPC”)
provides that “A lawyer shall not knowingly . . . make a false
statement of material fact or law to a tribunal.”

Rule 1.4 of

the RPC provides that:
(b)A lawyer shall keep a client reasonably
informed about the status of a matter and
promptly comply with reasonable requests for
information.
(c)A lawyer shall explain a matter to the
extent reasonably necessary to permit the
client to make informed decisions regarding
the representation.
The Court first turns to Defendants’ argument that
Plaintiffs were not aware that the “lawsuit” had been dismissed.
If what the Plaintiffs believe now - - which is not clear from
their certifications - - is that the entire Complaint was
dismissed with prejudice, such belief is ill-grounded.10

This

case remains on the Court’s active docket, and the Court has
never resolved the deadline for filing the Third Amended
Complaint.

As to the Plaintiffs’ “impression” that Mr. Molz had

filed an amended complaint and that he was trying to settle the
matter, it is also not clear how they formed that impression.
Presumably, it is because Mr. Molz had represented that he was

10

As mentioned, the status of this case is not at all clear
to the Court. Although it appears that the case has been
resolved between all Plaintiffs, [Docket No. 38-1, page 5], no
stipulations of dismissal have been filed. The parties will be
directed to update the Court as to the status of this
litigation.
14

in the process of filing an amended complaint.
conference was also held.

A settlement

The problem presented by these

certifications, however, is that Mr. Molz did not have authority
to resolve the pending motions for attorneys’ fees, as no
Plaintiff was ever made aware of such motions.

Thus, Mr. Molz’

statement to the Court that he had the authority to settle the
motions was improper.
Court.

RPC 3.3(a)(1) demands candor to the

Another problem is that it appears Mr. Molz did not keep

his clients informed as to the status of this litigation as they
were not made aware of the pending motions for attorneys’ fees
and costs.

RPC 1.4 requires an attorney to keep his client

reasonably informed.
The question is what sanction is appropriate for this
misconduct.

The Court has spent considerable resources in

addressing these papers.

There is clearly an adversarial,

perhaps inimical, relationship between counsel.

This Court has

never had a case where a motion for Rule 11 sanctions followed
almost each pleading, letter or representation to the Court by
an adversary.

It is unfortunate.

In its final analysis,

however, the Court finds that Rule 11 monetary sanctions are not
warranted.

To this Court’s knowledge, there have been no prior

instances where Mr. Molz was not candid with the Court or his
clients.

The Court will, however, by this Opinion admonish Mr.

15

Molz for his violations, as set forth above.

The Court finds

that this admonishment is a sufficient sanction under Rule 11.
An accompanying Order shall issue.

s/Renée Marie Bumb
RENÉE MARIE BUMB
United States District Judge
Dated: January 29, 2014

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