United States District Court, E.D. Pennsylvania
J. PAPPERT, J.
an unfortunate and all too predictable end to a lawsuit that
should have never been filed, much less taken all the way to
the Supreme Court of the United States. Mary Lou Doherty,
joined later by her co-counsel, Joseph Mirarchi, sued
Allstate claiming that it had to compensate her for the
neglect and squalid conditions that led Radnor Township to
revoke the rental licenses for two of her rental properties.
After Allstate endured years of meritless, inherently
contradictory and ever-changing allegations, the Court
granted summary judgment in Allstate’s favor on all
Doherty’s claims. See (Mem. Granting Summ. J.,
ECF No. 175). Doherty and Mirarchi appealed the Court’s
decision, which the Third Circuit Court of Appeals affirmed
in all respects. See Doherty v. Allstate Indem. Co.,
734 Fed.App’x 817 (3d Cir.) (unpublished), cert.
denied 139 S.Ct. 594 (2018). Believing that the Supreme
Court would want to delve into the interpretation of a
standard Landlords’ Package Insurance Policy, the duo
petitioned for a writ of certiorari, which the Court
denied. See 139 S.Ct. 594 (2018). Allstate now moves
for sanctions against Doherty and Mirarchi under Federal Rule
of Civil Procedure 11 and 28 U.S.C. § 1927. The Court
grants the Motion in part and denies it in part for the
reasons that follow.
Court has already exhaustively detailed this case’s
factual and procedural history, see (Mem. Granting
Summ. J. 2–27), and need not do so again. For present
purposes, Doherty is a self-described “slumlord”
who over the past forty-five years has owned at least eight
and perhaps as many as twenty rental properties at a time,
managed roughly forty tenants per year and purchased numerous
insurance policies. (Doherty Dep. 241:1–5, ECF No.
132-85); see (Tr. of Sanctions Hr’g
45:24–25, 47:12–14, 48:7–17). She has also
clashed repeatedly with Radnor Township officials over the
conditions of some of her properties. See, e.g.,
(Radnor Suit Against Doherty, ECF No. 93-5); (Notice of Code
Violations, ECF No. 184-27).
is more than a sophisticated, experienced landlord-she is a
highly educated professional. She received a Bachelor of
Science in Economics from the University of Pennsylvania, a
Master of Business Administration from the Wharton School and
a law degree from the University of Virginia School of Law.
See (Mem. Granting Summ. J. 19 n.21). Since being
admitted to the Pennsylvania bar in 1974, Doherty has
maintained an active law license and a law office.
See (Tr. of Rule 16 Conference 2:20, ECF No. 19);
(Doherty Pa. Bar Records, ECF No. 184-4). In this case, she
formally appeared as attorney on behalf of herself and her
sons. See (Notice of Doherty’s Appearance, ECF
No. 9). And though she withdrew as counsel for her sons,
Doherty remains as counsel of record and still represents
herself. See (Notice of Doherty’s Partial
Withdrawal, ECF 91).
legally and otherwise, Doherty’s lawsuit was meritless
ab initio. Her Allstate insurance policy covered
“sudden and accidental direct physical loss to
property.” (Insurance Policy 7, ECF No. 184-57). It did
not cover vandalism or damage caused by tenants or, as her
favorite theory went, by a rogue Radnor Township inspector.
See (id. at 9); (Tr. of Rule 16 Conference
13:11–24). Yet in Doherty’s complaint, the two
alleged “dates of loss” were the dates on which
(1) a Radnor inspector notified Doherty of the code
violations at her properties, and (2) Doherty learned that
the Township locked her out of the properties because of the
code violations. See (Mem. Granting Summ. J. 20).
This case never had anything to do with Allstate; it was
about Doherty’s feud with Radnor Township. See,
e.g., (Tr. of Rule 16 Conference 11:9–13:21,
18:19–24); (Tr. of Sanctions Hr’g
nine months into the case, Mirarchi, a purportedly
experienced insurance litigator, signed on as Doherty’s
co-counsel. See (id.
58:18–23); (Notice of Mirarchi’s Appearance, ECF
No. 36). By that time, Allstate had already sent Doherty
several letters asking her to withdraw the lawsuit and
threatening to move for sanctions. See, e.g., (Apr.
4, 2016, Letter to Doherty, ECF No. 184-17). The Court also
had warned Doherty during its first interaction with her
that, so far as the Court could understand it, her suit
lacked a legal or factual basis. See (Tr. of Rule 16
Conference 30:22–31:6). Nevertheless, Mirarchi took the
case and turned it into an “unmanageable mess.”
(Tr. of Mar. 7, 2017, Hr’g 53:52–54:1, ECF No.
prevailing at every level, Allstate moved for sanctions.
Doherty and Mirarchi each responded to the Motion,
see (ECF Nos. 191, 192-1); Doherty added a
supplemental response, see (ECF No. 201). The Court
then held a hearing on the Motion, during which Doherty and
Mirarchi had ample opportunity to address Allstate’s
allegations and the Court’s concerns. See (ECF
Rule 11, attorneys must certify that their representations to
a court are made for a proper purpose and have factual and
legal bases. See Fed. R. Civ. P. 11(b). If a court
finds that an attorney violated Rule 11(b), it may
“impose an appropriate sanction on any attorney, law
firm, or party that violated the rule or is responsible for
the violation.” Id. 11(c)(1). Under the
“supervisory rule, ” a Rule 11 motion filed after
the district court entered final judgment is untimely.
See Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90,
92 (3d Cir. 1988). A court may not sua sponte impose
Rule 11 sanctions after final judgment; it must
“resolve any Rule 11 issues prior to or concurrent with
its resolution of the merits of the case.”
Simmerman v. Corino, 27 F.3d 58, 63 (3d Cir. 1994).
supervisory rule renders Allstate’s Motion for Rule 11
sanctions untimely. Allstate filed its Motion almost two
years after the Court entered final judgment. See
(Order, ECF No. 176); (Allstate’s Mot. for Sanctions).
That the Court had dismissed without prejudice
Allstate’s earlier motion for sanctions is immaterial.
Cf. Gary v. Braddock Cemetery, 517 F.3d 195,
203–04 & n.7 (3d Cir. 2008) (remanding for district
court to rule on Rule 11 motion that had been dismissed
without prejudice but was renewed and pending when the court
entered final judgment).