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Garth O. Green Enterprises, Inc. v. Harward

United States District Court, D. Utah, Central Division

March 17, 2017

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

          Evelyn J. Furse Magistrate Judge.

          MEMORANDUM DECISION AND ORDER DENYING MOTION TO STAY ENFORCEMENT OF SANCTIONS

          David Nuffer United States District Judge.

         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 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 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. 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 trouble complying with the sanctions order, that is not a ...


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