Garth O. Green Enterprises et al v. Standard Plumbing Supply

Filing 248

MEMORANDUM DECISION AND ORDER denying 241 Motion to Stay Enforcement of Sanctions: Mr. Mumford must immediately pay $25,115.74 to Standard Plumbing. Signed by Judge David Nuffer on 3/17/17 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION

GARTH O. GREEN ENTERPRISES, INC., a
Utah corporation; GARTH O. GREEN, an
individual; and MICHAEL GREEN, an
individual,
Plaintiffs and Counterclaim
Defendants,

MEMORANDUM DECISION AND
ORDER DENYING MOTION TO STAY
ENFORCEMENT OF SANCTIONS

v.
RANDALL HARWARD, an individual;
RICHARD HARWARD, an individual;
HARWARD IRRIGATION SYSTEMS,
INC., a Utah corporation; GRASS VALLEY
HOLDINGS, L.P.; DOES 1-10; and ROE
CORPORATIONS 1-X;
Defendants,
RICHARD N. REESE, an individual;
STANDARD PLUMBING SUPPLY
COMPANY, INC., a Utah corporation,
Defendants and Counterclaimants.

Case No. 2:15-cv-00556-DN-EJF
Judge David Nuffer
Magistrate Judge Evelyn J. Furse

RICHARD REESE, an individual and
STANDARD PLUMBING SUPPLY
COMPANY, INC., a Utah corporation,
Cross-Claim Plaintiffs,
v.
HARWARD IRRIGATION SYSTEMS, INC.
AND GRASS VALLEY HOLDINGS, L.P.,
Cross-Claim Defendants.
RICHARD REESE, an individual and
STANDARD PLUMBING SUPPLY
COMPANY, INC., a Utah corporation,
Third-Party Plaintiffs,
v.
GW GREEN FAMILY LIMITED
PARTNERSHIP, a Utah limited partnership
and WENDY GREEN, an individual,
Third-Party Defendants.
Counsel for Garth O. Green Enterprises, Garth O. Green, and Michael Green
(collectively, “Greens”), Marcus Mumford, moves to stay (“Motion to Stay”) 1 enforcement of
the order granting Richard Reese and Standard Plumbing’s (“Standard”) motion for
determination of sanctions award (“Sanctions Award Order”). 2 Standard opposes the Motion to

1

Motion to Stay Enforcement or Otherwise Modify the Court’s Order Granting Standard’s Motion for
Determination of Sanctions Award [Dkt 204] (“Motion to Stay”), docket no. 241, filed Mar. 13, 2017.

2

Memorandum Decision and Order Granting Standard’s Motion for Determination of Sanctions Award (“Sanctions
Award Order”), docket no. 204, entered Feb. 13, 2017.

2

Stay (“Opposition”). 3 No reply was allowed. 4 For the reasons below, the Motion to Stay is
DENIED.
BACKGROUND
On January 18, 2017, an order was entered granting Standard’s motion for sanctions
against counsel for the Greens, Mr. Mumford (“Rule 11 Order”). 5 The order explained that the
Greens’ unfair competition claim was devoid of merit and frivolous and that the Greens’ counsel
was given an opportunity to withdraw the claim, but refused to do so. 6 The order explained that
because Mr. Mumford was the Greens’ counsel at the time of filing the Amended Complaint
containing the frivolous claim and had refused to withdraw it, and that there was “no indication
that the Greens made misrepresentations to their attorney or failed to disclose relevant facts,” Mr.
Mumford alone would be sanctioned. 7 The order requested that Standard file a motion for
determination of sanctions to determine the appropriate amount of sanctions. 8
On February 13, 2017, after full briefing on the determination motion, the Sanctions
Award Order was entered. Standard requested that the entire amount of $25,115.74 be paid
within 10 days. In opposing the determination motion, Mr. Mumford did not argue that a
hardship would be imposed by ordering him to pay within 10 days. Instead, he argued that the
amount of the award was too high and opposing counsel had engaged in questionable billing

3

Standard’s Memorandum in Opposition to Motion to Stay Enforcement or Otherwise Modify the Court’s Order
Granting Standard’s Motion for Determination of Sanctions Award [Dkt 204] (“Opposition”), docket no. 247, filed
Mar. 15, 2017.
4

Order Granting Motion for Leave to File Under Seal Marcus R. Mumford’s Motion to Stay Enforcement or
Otherwise Modify the Court’s Order Granting Standard’s Motion for Determination of Sanctions Award [Dkt 204]
at 2, docket no. 239, entered Mar. 13, 2017.

5

Memorandum Decision and Order Granting [57] Motion for Sanctions and Denying [81] Motion for Sanctions
(“Rule 11 Order”), docket no. 161, entered Jan. 18, 2017.

6

Rule 11 Order at 12.

7

Rule 11 Order at 15.

8

Rule 11 Order at 16.

3

practices. Those arguments were rejected and Mr. Mumford was required to “pay $25,115.74 to
Standard Plumbing within 28 days[,]” by March 13, 2017. 9
On March 10, 2017 at 5:27 p.m.—the Friday before the Monday on which the payment
was due—Mr. Mumford filed a motion to seal a forthcoming motion seeking a stay of
enforcement of the Sanctions Award Order. 10 After full briefing on the motion to seal, the
motion was granted and Mr. Mumford was ordered to file his motion to stay enforcement by
March 13, 2017 at 4:00 p.m. 11 At 8:34 p.m., Mr. Mumford filed the Motion to Stay. He did not
file the Motion to Stay under seal. Standard opposes the Motion to Stay.
DISCUSSION
Mr. Mumford’s Motion to Stay is based on hardship. 12 He argues that personal
circumstances and circumstances with his law practice do not allow him to “pay $25,115.74 to
Standard by the March 13, 2017 deadline.” 13 He proposes three alternatives: (1) stay
enforcement of the Sanctions Award Order until he can appeal the Rule 11 ruling; (2) stay
enforcement of the Sanctions Award Order until after trial or final judgment; or (3) allow him to
pay $2,500 monthly payments until the amount is paid in full. 14 None of these options is
acceptable, considering that Mr. Mumford had over a month to make arrangements to pay the
sanctions award and failed to assert hardship until one business day before the money was due.

9

Sanctions Award Order at 6.

10
Motion for Leave to File under Seal Marcus R. Mumford’s Motion to Stay Enforcement or Otherwise Modfiy the
Court’s Order Granting Standard’s Motion for Determination of Sanctions Award [Dkt 204], docket no. 236, filed
Mar. 10, 2017.
11
Order Granting Motion for Leave to File under Seal Marcus R. Mumford’s Motion to Stay Enforcement or
Otherwise Modify the Court’s Order Granting Standard’s Motion for Determination of Sanctions Award [Dkt 204],
entered Mar. 13, 2017.
12

Motion to Stay at 4.

13

Motion to Stay at 4.

14

Motion to Stay at 5-6.

4

And he was on notice since January 18, 2017 that sanctions were granted and since October 27,
2014 that sanctions were sought.
Mr. Mumford’s first suggested alternative is denied because this proposed course of
action would lack any deterrent effect. The Rule 11 Order does not end the litigation on the
merits and is therefore not immediately appealable. 15 Mr. Mumford’s request to stay
enforcement of the Sanctions Award Order until he can appeal the Rule 11 ruling may delay
fulfillment of the sanctions award for an unreasonable amount of time. Mr. Mumford’s second
and third proposed alternatives are denied on the same grounds.
“A sanction imposed under [Rule 11] must be limited to what suffices to deter repetition
of the conduct or comparable conduct by others similarly situated.” 16 This determination was
explained in the Sanctions Award Order.
By requiring Mr. Mumford to pay those fees and costs, Mr. Mumford and others
will be deterred from engaging in this kind of behavior in the future. The amount
is appropriate, and Mr. Mumford has not identified any hardship that would be
imposed by the requirement to pay this amount within 28 days. 17
There is no requirement that a sanctions award be tailored to the requests of the
sanctioned party. The purpose of the sanction is to deter future inappropriate conduct. Thus, the
sanction should impact the sanctioned party in a way that effectively deters improper behavior.
The time to pay the sanctions award was extended from 10 days that Standard requested
to 28 days. In all the briefing before the Sanctions Award Order was entered, Mr. Mumford had
not indicated any hardship. Yet the day before the payment was to be made, Mr. Mumford
unexpectedly raised his hardship objections. While it may be true that Mr. Mumford is having

15

Cunningham v. Hamilton Cty., Ohio, 527 U.S. 198, 204 (1999).

16

Fed. R. Civ. P. 11(c)(4); see Utah R. Civ. P. 11(c)(2).

17

Sanctions Award Order at 5-6.

5

trouble complying with the sanctions order, that is not a reason to modify the award. The award
should have a deterrent effect. If the award imposes no burden it loses its effect.
Mr. Mumford has stated several legitimate reasons this sanctions award imposes a burden
on him. Because those reasons are filed in a sealed document, they will not be enumerated here.
But thorough review shows Mr. Mumford has not exhausted all avenues to pay this sanctions
award. The record is devoid of any contact with opposing counsel on this subject.
While the award may be challenging for Mr. Mumford to pay, it does not impose an
undue burden on him and does not create manifest injustice. Rather, it accomplishes the purpose
of creating a deterrent effect. Mr. Mumford was put on notice on January 18, 2017 that he would
be solely responsible to pay sanctions. Thus, he has had nearly two months to prepare to pay. He
had 28 days’ notice of the exact amount of the sanctions award. But he has failed to assert
hardship until one business day before the money was due. This is unfortunately typical of his
disregard of obligations to the court. Mr. Mumford has not established good cause to deviate
from the requirements outlined in the Sanctions Award Order. Accordingly, Mr. Mumford’s
Motion to Stay will be denied.

6

ORDER
IT IS HEREBY ORDERED that the Motion to Stay 18 is DENIED. Mr. Mumford must
immediately pay $25,115.74 to Standard Plumbing.

Dated March 17, 2017.
BY THE COURT:
____________________________
David Nuffer
United States District Judge

18
Motion to Stay Enforcement or Otherwise Modify the Court’s Order Granting Standard’s Motion for
Determination of Sanctions Award [Dkt 204] (“Motion to Stay”), docket no. 241, filed Mar. 13, 2017.

7