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Glenn T. Jones, Sr.; Marsha Jones, His Wife v. Penny Foreclosures

May 2, 2011

GLENN T. JONES, SR.; MARSHA JONES, HIS WIFE, PLAINTIFFS
v.
PENNY FORECLOSURES, LLC; PENNY
FORECLOSURES, II, LLC; DOME PROPERTIES, LLC; CARLOS DE OLIVEIRA AND WENDY DE OLIVEIRA, HIS WIFE, DEFENDANTS



The opinion of the court was delivered by: Chief Magistrate Judge Lisa Pupo Lenihan

ECF No. 47

OPINION

Lenihan, M.J.

The Court here addresses a Motion for Sanctions [ECF. No. 47] made pursuant to Fed. R. Civ. P. 11 by Defendants Carlos and Wendy DeOliveira, Penny Foreclosures, LLC, and Penny Foreclosures II, LLC (collectively, "the Defendants").*fn1 The Motion will be denied.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The dispute underlying this diversity matter is outlined in an Amended Complaint [ECF No. 15] set out in four counts: 1) breach of contract; 2) unjust enrichment; 3) violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("CPL"); and 4) fraud. There, the Plaintiffs, Colorado residents, Glenn and Marsha Jones ("the Joneses" or "the Plaintiffs") alleged that Michael Ragans ("Ragans"), who was employed by the Defendants, fraudulently induced the Plaintiffs to buy Western Pennsylvania properties that were or could readily be made suitable for rental as Section Eight housing. After executing integrated contracts to buy these properties, the Joneses allegedly learned that the housing was "uninhabitable, had little or no rental value [and was] in such a state of disrepair" that demolition "was the only solution." [ECF No. 15 at ¶¶ 16-20]. In an Opinion [ECF No. 32] evaluating these Defendants‟ Motion to Dismiss the Amended Complaint, the Court dismissed the claim for breach of contract "[b]ecause the Plaintiff[s] conflate[d] a remedy available to a victim of fraud with a claim for breach of contract." [ECF No. 32 at 7]. It dismissed the fraud allegations as "wholly conclusory, lacking any of the detail mandated by [Fed. R. Civ. P.] 9(b)," and deferred consideration of the Defendants‟ argument that the fraud claims were barred by the controlling statute of limitations. [Id. at 8]. The claim made under the CPL survived the Motion to Dismiss because at least one district court has found that the specificity requirements of Fed. R. Civ. P. 9(b) do not apply to claims under the CPL. See Caciolo v. Masco Contractor Serv. E., Inc., Civ. A. No. 04-962, 2004 WL 2677170 at *5 n.2 (E.D. Pa. Nov. 22, 2004). Last, the Court concluded that the Plaintiffs‟ unjust enrichment claim survived the Motion to Dismiss because each of the elements of claim had been alleged, and the Defendants did not challenge it in their opposition to the Motion. [ECF No. 32 at 9 n.6; ECF No. 35]. *fn2

Discovery was stayed pending the outcome of a settlement conference, and on May 3, 2010, the Court issued a case management Order establishing a closing date for discovery, and setting December 14, 2010 as the date for responding to any motion for summary judgment. [ECF No. 41]. On May 17, 2010, Marsha Jones, one of the Plaintiffs, died. On July 26, 2010, the Court, "having been advised that the plaintiff is going to be filing a dismissal of this action," entered an Order canceling a settlement conference set for July 27, 2010. No dismissal was filed. As a result, the Court, in an Order dated September 22, 2010, set a status conference for November 2, 2010, directing that the Plaintiff, Glenn Jones, and his attorney "appear in person to advise the Court why the case should not be dismissed based on previous representations." Due to the death of Judge Hay, the status conference was held before Judge Lisa Pupo Lenihan. The Plaintiff did not appear as instructed, and his attorney advised the Court that he had been unable to communicate with his client, but had notified him that the case could be dismissed if he did not appear. The Defendants asked that the case be dismissed for failure to prosecute. The Court entered an Order [ECF No. 45] dismissing the case without prejudice, and inviting the Plaintiff to file a motion for reconsideration of the Order no later than November 23, 2010. In the same Order, the Court explained to the Plaintiff that if he did not file a motion for reconsideration, his case would be dismissed with prejudice. The Plaintiff failed to file a response, and on December 6, 2010, the Court entered an Order [ECF No. 46] dismissing the case with prejudice. The pending Motion for Sanctions followed.

II. THE STANDARD GOVERNING RULE 11 MOTIONS FOR SANCTIONS

Courts are mandated to give the Federal Rules of Civil Procedure their plain meaning. Bus. Guides v. Chromatic Commc‟n Enters., Inc., 498 U.S. 533, 541 (1991) (internal citations omitted). Federal Rule of Civil Procedure 11 sets out the standard that counsel and unrepresented parties must satisfy when filing pleadings, motions, or other documents. Whenever an attorney makes such a filing, he or she is certifying to the best of his or her knowledge, information, and belief, formed after reasonable inquiry under the circumstances, that:

(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary or needless increase in the cost of litigation;

(2) the claims, defenses and other legal contentions therein are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(3) the allegations and other factual contentions have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence, or if specifically so identified, are reasonably based on a lack of information or belief.

Acevedo v. Monsignor Donovan High Sch., Civ. No. 05-5169, 2006 WL 2594877 at *2 (D.N.J . Sept. 11, 2006) ...


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