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Redding v. Prosight Specialty Management Co. Inc.

United States District Court, D. Montana, Helena Division

November 17, 2017

BILLIE L. REDDING, Plaintiff,
v.
PROSIGHT SPECIALTY MANAGEMENT COMPANY, INC. aka MUTUAL MARINE OFFICE, INC. PROSIGHT SPECIALTY INSURANCE GROUP, INC. aka NYMAGIC, INC. and NEW YORK MARINE AND GENERAL INSURANCE COMPANY, Defendants.

          ORDER IN RESPONSE TO NINTH CIRCUIT REMAND INSTRUCTIONS

          Charles C. Lovell Judge

         In this case, on February 27, 2015, the district court granted summary judgment to Defendants New York Marine and General Insurance Company, et al., (“NYM”) and granted NYM's motion for fees and costs, imposing a $107, 867.54 sanction of fees and costs on Plaintiff's counsel, Linda Deola and Brian Miller, for their filing of a frivolous motion to disqualify opposing counsel and discovery violations and violation of the district court's order, which forced NYM to file a motion to compel discovery. (ECF No. 304.) NYM had requested $236, 316.94 in fees and costs, but the district court granted $107, 867.54.

         Linda Deola and Brian Miller are both partners in the law firm of Morrison, Sherwood, Wilson & Deola, PLLP (“MSWD”), and the Court will refer to them collectively as “MSWD.”

         Subsequently, on June 25, 2015, the district court granted NYM's second motion for fees and costs under the Court's inherent authority and 28 U.S.C. §1927, imposing a sanction of fees and costs against Plaintiff's legal team: Linda Deola, Brian Miller, Richard Layne, [1] and MSWD. (ECF No. 340.) NYM had requested fees and costs in the amount of $1, 473, 428.90 (excluding the fees and costs relating to the prior sanction), but the district court granted $515, 119.50 in fees and costs. Deola, Miller, Layne and MSWD appealed from the district court's imposition of the two sanctions.

         The appellate panel of the Ninth Circuit affirmed the district court's imposition of both sanctions on June 9, 2017. (ECF No. 347.) The panel found that ample evidence in the record supported the district court's finding that a frivolous motion had been filed and that discovery misconduct had been committed and that ample evidence supported the sanction against Deola and Miller of $107, 867.54.

         The panel found further that sufficient evidence in the record supported the finding that MSWD acted in ‘bad faith' or was ‘reckless' in the litigation of their client's claim against NYM, but that there was insufficient evidence in the record to support a finding of bad faith or recklessness as to Richard Layne. Redding v. Prosight Specialty Management Co., Inc., 692 Fed.Appx. 447 (Mem.) (June 9, 2017, 9th Cir.). As to the dollar amount of this second sanction, the panel said that “because the district court awarded sanctions of $515, 119.90 in attorneys' fees and costs based on Deola's, Miller's, and Layne's conduct, we remand to the district court to give it an opportunity to reassess the appropriate amount of sanctions.” Id. at 448, ¶6.

         The panel further clarified its remand instruction on August 16, 2017, when it denied the petition for rehearing and instructed as follows:

The Court instructs the district court on remand to reassess the sanctions amount in light of our decision and the Supreme Court's recent opinion in Goodyear Tire & Rubber Co. v. Haeger, 137 S.Ct. 1178 (2017).

(ECF No. 349.)

         This Court received the Mandate filed by the Ninth Circuit on August 24, 2017, returning jurisdiction to this district court to carry out its instructions. (ECF No. 351.) Just hours after the Mandate was filed, MSWD filed several motions and other documents. These motions and papers appeared to violate the Rule of Mandate first described by the U.S. Supreme Court in 1895. See In re Sanford Fork & Tool Co., 160 U.S. 247, 255 (1895).

         The “Combined Motion for Relief from Judgment and to Dismiss Sanctions as Satisfied and Moot” (ECF No. 352) represents MSWD's attempt to take another bite at the apple. They ask this Court to go beyond the remand instructions to consider its multiple arguments in favor of nullifying the entire sanction against MSWD, introducing argument available to MSWD prior to final judgment in this case.[2] In addition, MSWD has filed an “Alternative Motion for Discovery and an Evidentiary Hearing” (ECF No. 363), and a “Motion for Leave to File Under Seal” a settlement agreement from CV 14-33-BU-SEH (ECF No. 354).

         These motions by MSWD represent nothing more than a fishing expedition, a delay tactic, and a distraction. Instead, what this Court must focus on is what the Ninth Circuit has told this Court to do on remand: this Court must reassess the amount of the sanction in light of the reversal of the sanction against Richard Layne and the Haeger case. “The rule of mandate requires a lower court to act on the mandate of an appellate court, without variance or examination, only execution.” United States v. Garcia-Beltran, 443 F.3d 1126, 1130 (9th Cir. 2006) (quoting In re Sanford Fork & Tool Co., 160 U.S. 247, 255 (1895)). With clear remand instructions such as were received by this court in this case, “a district court is limited by [the Ninth Circuit's] remand in situations where the scope of the remand is clear.” United States v. Thrasher, 483 F.3d 977, 982 (9th Cir. 2007). Neither party has requested the Ninth Circuit to expand the scope of the remand.

         Therefore, first, the Court reconsiders the sanction in light of the fact that attorney Richard Layne must not be included among the sanctioned counsel. This is not a difficult task. Although Mr. Layne actively participated in Plaintiff Redding's underlying state court case, Mr. Layne never participated actively in the instant case other than to file his appearance pro hac vice. Mr. Layne's name does not appear on the First Amended Complaint filed in this case in state court and removed to this Court on October 19, 2012 (ECF No. 1-1), or on the Amended Complaint filed on October 25, 2012 (ECF No. 7). He never appeared at any hearing. He never filed a motion or a brief (except a brief in opposition to having sanctions imposed against him, which activity is after the relevant period of the sanction).

         The Court knows virtually nothing about Mr. Layne, except that he referred Ms. Redding's underlying claim to local counsel Ms. Deola, and together the two counsel litigated and then settled that claim in state court. Then he apparently served some background function in ...


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