Ingenieria Estrella, S.A. v. Morisseau et al

Filing 39

MEMORANDUM & ORDER ADOPTING REPORT AND RECOMMENDATION; Judge Shield's R&R (Docket Entry 34) is ADOPTED in part and MODIFIED in part. Judge Shield's R&R is MODIFIED only to the extent that Plaintiff is granted permission to submit a letter motion detailing the reasonable expenses it contends should be paid by Defendants' prior counsel. If Plaintiff chooses to do so, Plaintiff is directed to serve a copy of his letter motion on Defendants' prior counsel, together with a copy of this Order, and file proof of service on the docket. The balance of Judge Shield's R&R is ADOPTED. So Ordered by Judge Joanna Seybert on 9/30/2015. (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------X
INGENIERIA ESTERELLA, S.A.,
Plaintiff,
-against-

MEMORANDUM & ORDER
14-CV-1463(JS)(AYS)

PATRICK MORISSEAU and
LETRANSPORTEUR LLC,

Defendants.
-------------------------------------X
APPEARANCES
For Plaintiff:
Bertrand Rolf Madsen, Esq.
Madsen Law P.C.
1115 Broadway, 11th Floor
New York, NY 10010
For Defendants:

Christopher Rocco Nolan, Esq.
Kathryn Blythe Daly, Esq.
Tiana Melisse Stephens, Esq.
Holland & Knight LLP
195 Broadway
New York, NY 10007

SEYBERT, District Judge:
Pending

before

the

Court

is

plaintiff’s

motion

for

sanctions (Docket Entry 17), Magistrate Judge Ann Y. Shields’
Report and Recommendation (“R&R”) recommending that the motion be
denied

(Docket

Entry

34),

and

plaintiff

Ingenieria

Estrella,

S.A.’s (“Plaintiff”) objections to Judge Shields’ R&R (Docket
Entry 35).

For the following reasons, the Court MODIFIES Judge

Shields’ R&R in part and ADOPTS it in part.

BACKGROUND1
Plaintiff

is

an

international

engineering

and

construction company headquartered in the Dominican Republic.
(See Compl. ¶¶ 1, 7.)

Defendant Patrick Morisseau (“Morisseau”)

and defendant Letransporteur LLC (“Letransporteur” and together
with Morisseau, “Defendants”) are the owners and operators of the
website

www.touthaiti.com

(the

“Website”),

which

publishes

information directed to Haitians living in Haiti and abroad.
(Compl. ¶ 8.)

Plaintiff claims in the Complaint that Defendants

published an article on January 16, 2014 containing defamatory
information about Plaintiff’s business dealings in Haiti.

(Compl.

¶¶ 9, 11.)
The parties agreed to a discovery schedule on July 3,
2014.

It is undisputed that Defendants did not comply with the

schedule

and

obligations.

were
(See

dilatory
Mason

with

Decl.,

respect
Docket

to

their

Entry

19,

discovery
¶¶

1-6.)

Specifically, Defendants did not serve their initial disclosures
and

did

not

respond

interrogatories.

to

Plaintiff’s

(Mason Decl. ¶¶ 1-6.)

document

requests

or

Defendants then violated

a Court order requiring them to serve their outstanding discovery
disclosures and responses on or before October 20, 2014.

(Mason

The following facts are taken both from the Complaint and from
documents submitted in connection with Plaintiff’s motion for
sanctions. The facts contained within the Complaint are presumed
to be true for purposes of this Order.

1

2

Decl. ¶¶ 7-8.)

During this time, Defendants’ counsel did not

respond to Plaintiff’s counsel’s numerous phone calls and emails.
(Mason Decl. ¶¶ 9-10.)
On

October

29,

2014,

Plaintiff

filed

a

motion

for

sanctions, seeking to strike Defendants’ Answer and enter a default
judgment.

(Docket

Entry

undersigned

referred

17.)

On

Plaintiff’s

February

motion

to

27,

2015,

Magistrate

the

Judge

Shields for an R&R on whether the motion should be granted.
(Docket Entry 25.)

To date, it appears Defendants still have not

provided any discovery. In March 2015, however, Defendants engaged
new pro bono counsel who filed an opposition to Plaintiff’s motion
and claim they are ready and willing to provide discovery and
participate in this case going forward.
blame

much

attorney.

of

Defendants’

(Defs.’

Opp.

nonfeasance

Strike,

Docket

Both parties’ counsel
on

Defendants’

Entry

28,

at

former
1;

see

her

R&R

generally Madsen Decl., Docket Entry 19.)
On

April

15,

2015,

Judge

Shields

issued

recommending that the Court deny Plaintiff’s motion for sanctions
(Docket Entry 34.)

Judge Shields reasoned that, instead of

striking Defendants’ Answer, it would be “more desirable to allow
new counsel to represent Defendants and [to] allow this case to be
determine on the merits.”

(R&R at 4.)

recommend

or

that

Defendants

their

Judge Shields did not

former

counsel

reimburse

Plaintiff for any expenses incurred in connection with Defendants’
3

actions or the sanctions motion.
Plaintiff filed objections to Judge Shields’ R&R on
April 28, 2015.

(Objections, Docket Entry 35.)

Plaintiff argues:

(1) that Judge Shields erred by not considering lesser sanctions
or

awarding

reasonable

expenses

for

Defendants’

discovery

violations, and (2) that the R&R contains both factual and legal
errors. (Objections at 3-7.)
DISCUSSION
The Court will first address the standard of review
before turning to Plaintiff’s objections specifically.
I.

Standard of Review
“When evaluating the report and recommendation of a

magistrate judge, the district court may adopt those portions of
the report to which no objections have been made and which are not
facially erroneous.”

Walker v. Vaughan, 216 F. Supp. 2d 290, 291

(S.D.N.Y. 2002) (citation omitted).

A party may serve and file

specific, written objections to a magistrate judge’s report and
recommendation within fourteen days of receiving the recommended
disposition.

See FED. R. CIV. P. 72(b)(2).

Upon receiving any

timely objections to the magistrate judge’s recommendation, the
district “court may accept, reject, or modify, in whole or in part,
the findings or recommendations made by the magistrate judge.”
U.S.C. § 636(b)(1)(C); see also FED. R. CIV. P. 72(b)(3).

28

A party

that objects to a report and recommendation must point out the
4

specific portions of the report and recommendation to which they
object.

See Barratt v. Joie, No. 96-CV-0324, 2002 WL 335014, at

*1 (S.D.N.Y. Mar. 4, 2002) (citations omitted).
When a party raises an objection to a magistrate judge’s
report, the Court must conduct a de novo review of any contested
sections of the report.

See Pizarro v. Bartlett, 776 F. Supp.

815, 817 (S.D.N.Y. 1991).
or

general

objections,

But if a party “makes only conclusory
or

simply

reiterates

his

original

arguments, the Court reviews the Report and Recommendation only
for clear error.”

Pall Corp. v. Entegris, Inc., 249 F.R.D. 48, 51

(E.D.N.Y. 2008) (internal quotation marks and citation omitted).
Furthermore, even in a de novo review of a party’s specific
objections, the Court ordinarily will not consider “arguments,
case law and/or evidentiary material which could have been, but
[were]

not,

instance.”

presented

to

the

magistrate

judge

in

the

first

Kennedy v. Adamo, No. 02-CV-1776, 2006 WL 3704784, at

*1 (E.D.N.Y. Sept. 1, 2006) (internal quotation marks and citation
omitted).
II.

Rule 37 Sanctions
Plaintiff argues that Judge Shields erred by (1) not

considering whether lesser sanctions were appropriate and (2)
failed to award Plaintiff reasonable expenses under Federal Rule
of Civil Procedure 37(b)(2)(C).

(Objections at 4.)

5

A.

Lesser Sanctions
Judge

Shields’

reasoned

that

neither

a

default

judgment--nor any other sanction--was called for here because
Defendants’ new attorneys are ready and willing to litigate this
dispute within the deadlines imposed by the Court.

(R&R at 4.)

judge’s decision to award sanctions is discretionary.

A

Mahoney v.

Keyspan Corp., No. 04-CV-0554, 2007 WL 1651853, at *1 (E.D.N.Y.
June 6, 2007) (“the Second Circuit has viewed the imposition of
sanctions

as

discretionary”).

The

Court

finds

Plaintiff’s

argument that Judge Shields did not consider lesser sanctions,
beyond the issuance of a default judgment, is merely an attempt
re-litigate the primary issue Judge Shields analyzed and opined
upon in her R&R.

Judge Shields’ determination regarding whether

to award sanctions is well-reasoned and free from clear error.

If

a party “makes only conclusory or general objections, or simply
reiterates his original arguments, the Court reviews the Report
and Recommendation only for clear error.”

Pall Corp. v. Entegris,

Inc., 249 F.R.D. 48, 51 (E.D.N.Y. 2008) (internal quotation marks
and citation omitted).

Thus, Plaintiff’s objection that Judge

Shields failed to consider lesser sanctions is OVERRULED.
B.

Reasonable Expenses
Federal Rule of Civil Procedure 37(b)(2)(A) allows a

court to impose sanctions on a party that disobeys discovery
orders.

The Court may, in its discretion, impose one of seven
6

sanctions outlined in Rule 37(b)(2)(A) upon a disobedient party.
In addition, Federal Rule of Civil Procedure 37(b)(2)(C) provides
that instead of or in addition to imposing sanctions for a party’s
failure to comply with a court order, “the court must order the
disobedient party, the attorney advising that party, or both to
pay the reasonable expenses, including attorney’s fees, caused by
the failure, unless the failure was substantially justified or
other circumstances make an award of expenses unjust.”
CIV. P. 37(b)(2)(C) (emphasis added).

FED. R.

Although the Second Circuit

has never explicitly held that the payment of expenses pursuant to
Rule 37(b)(2)(C) is mandatory, the burden is on the violator to
show that there was a substantial justification for the violation,
or that circumstances would make it unjust to award reasonable
expenses to the moving party.

See Novak v. Wolpoff & Abramson

LLP, 536 F.3d 175, 178 (2d Cir. 2008) (“The use of the word ‘shall’
certainly suggests that an award of expenses is mandatory unless
one of the two exceptions--substantial justification or other
circumstance--applies.”);

Commodity

Futures

Trading

Comm’n

v.

Royal Bank of Canada, No. 12-CV-2497, 2014 WL 1259773, at *1
(S.D.N.Y. Mar. 28, 2014) (explaining that the court is not required
to consider “the willfulness of [the disobedient party’s] conduct”
when awarding expenses under Rule 37(b)(2)(C)).
Although, the R&R lists Defendants’ various discovery
failures, including Defendants’ failure to comply with a Court
7

Order, the R&R is silent about awarding reasonable expenses to the
Plaintiff.

Defendants argue that the R&R awarding any money to

Plaintiff would be inappropriate because “Defendants were not
willfully or even knowingly shirking their discovery obligations.”
(Defs.’ Response Br., Docket Entry 37, at 5.) However, Defendants’
mental state is irrelevant.

Defendants have not shown that their

discovery failures were either substantially justified, or that
circumstances would make an award of expenses unjust.

See Bowne

of N.Y. City, Inc. v. AmBase Corp., 161 F.R.D. 258, 265 (S.D.N.Y.
1995) (“When a dispute involves differing interpretations of the
governing law, opposition is substantially justified unless it
involves an unreasonable, frivolous or completely unsupportable
reading of the law.”)

This case has been pending for more than a

year and a half, and in all that time Defendants have not provided
any discovery.

Defendants have not provided any excuse for this

conduct, beyond their claim that their lawyer was ineffective.
Nevertheless, both parties agree that Defendants’ prior
counsel was primarily to blame for neglecting this case and failing
to respond to discovery requests.

Defendants’ prior attorney,

rather than Defendants, should therefore be held accountable for
the reasonable expenses incurred as a result of his failure to
defend this case.

See World Wide Polymers, Inc. v. Shinkong

Synthetic Fibers Corp., 694 F.3d 155, 160 (2d Cir. 2012) (“When an
attorney’s misconduct or failing does not involve an attempt to
8

place the other side at an unfair disadvantage, any sanction should
ordinarily be directed against the attorney rather than the party,
absent strong justification.”); In re Men’s Sportswear, Inc., 834
F.2d 1134, 1139 (2d Cir. 1987) (explaining that it would be
appropriate to levy sanctions against a party’s prior counsel when
it is clear that the party “was an innocent victim whose case was
being mishandled by counsel”); Mahoney v. Yamaha Motor Corp.
U.S.A.,

290

F.R.D.

363,

368-69

(E.D.N.Y.

2013)

(sanctioning

plaintiff’s counsel for failing to comply with multiple court
orders regarding discovery).

Here, although Defendants are not

entirely without fault, they eventually fired their prior attorney
and successfully secured pro bono counsel, who appear willing to
participate in the discovery process.

Therefore, Plaintiff’s

counsel may submit a short letter motion seeking reimbursement of
reasonable expenses from Defendants’ prior counsel.
shall

attach

Plaintiffs

as

exhibits

incurred

attorney’s misconduct.

that

documents
resulted

detailing
from

The motion

the

expenses

Defendants’

prior

The Court will then make a determination

as to the reasonableness of the expenses.2

Defendants’ prior attorney, Andre Ramon Soleil, had both notice
of Plaintiff’s sanctions motion and an opportunity to be heard on
the motion. See United Auto., Aerospace & Agric. Implement Workers
of Am., Local 33 v. R.E. Dietz Co., 996 F.2d 592, 598 (2d Cir.
1993). Plaintiff’s motion to strike, (Docket Entry 17), was filed
on October 29, 2014, four months before Mr. Soleil was relieved as
counsel; yet he never responded to the motion. Nevertheless, if
Plaintiff chooses to seek expenses from Mr. Soleil, Plaintiff must
2

9

III. Claimed Factual and Legal Errors
Plaintiff asserts that the R&R is legally and factually
flawed because: (1) Judge Shields stated in the R&R that Defendants
only violated “one court order,” when in fact they violated more
than one, and (2) the R&R did not follow the principle of law that
the

client

is

responsible

(Objections at 6-7.)

for

the

actions

of

his

attorney

Both of Plaintiff’s arguments must be

rejected.
Judge Shields reasoned in her R&R that the sanction of
dismissal was too harsh because:
although Defendants have delayed this case by
failing to respond to one court order . . .
Defendants have not repeatedly violated this
Court’s orders and any order earlier violated
was under the representation of counsel who
are no longer involved in this case. New
counsel represents that they are ready,
willing and able to actively participate in
this case. It is certainly more desirable to
allow new counsel to represent Defendants and
allow this case to be determined on the
merits, then to allow Plaintiffs to obtain a
default judgment . . . .
(R&R at 4.)

Plaintiffs claim that Defendants violated multiple

court orders and specifically cite to a list of Federal Rules of
Civil Procedure, along with a scheduling order, that were not
adhered to.

(Objections at 6.) However, Judge Shields’ R&R

serve him with both this Court’s Order and the supplemental motion
seeking expenses.
10

provides a summary of all of Defendants’ bad conduct within the
procedural history section of her R&R. It is thus clear that Judge
Shields considered the fact that Defendants disregarded numerous
Federal Rules of Civil Procedure and the Court’s orders.
Plaintiff
recommendation

not

also
to

asserts

award

sanctions

that
runs

Judge
contrary

Shields’
to

the

generally accepted legal principle that a client must be held
responsible for the actions of his attorney. (Objections at 7.)
While it is true that an attorney is the client’s agent, and the
court has the power to sanction the client for its attorney’s bad
conduct, there are exceptions.

In fact, Federal Rule of Civil

Procedure 37(b)(2)(C) explicitly allows the court to punish a
disobedient party’s attorney for discovery violations by making
him pay the reasonable expenses caused by those violations.
Plaintiff’s objections concerning alleged factual and
legal errors in the R&R are therefore OVERRULED.

[BOTTOM OF PAGE INTENTIONALLY LEFT BLANK]

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CONCLUSION
Judge Shield’s R&R (Docket Entry 34) is ADOPTED in part
and MODIFIED in Part.

Judge Shield’s R&R is MODIFIED only to the

extent that Plaintiff is granted permission to submit a letter
motion detailing the reasonable expenses it contends should be
paid by Defendants’ prior counsel.

If Plaintiff chooses to do so,

Plaintiff is directed to serve a copy of his letter motion on
Defendants’ prior counsel, together with a copy of this Order, and
file proof of service on the docket. The balance of Judge Shield’s
R&R is ADOPTED.

SO ORDERED.

/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

September
30 , 2015
Central Islip, New York

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