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Novoselsky v. Zvunca

United States District Court, E.D. Wisconsin

July 17, 2017

DAVID ALAN NOVOSELSKY, Plaintiff,
v.
CRISTINA ZVUNCA, as Supervised Administrator of the Estate of Claudia Zvunca, JEANINE L. STEVENS, and F. JOHN CUSHING, III, Defendants.

          ORDER

          J.P. Stadtmueller U.S. District Judge

         In this action, Plaintiff, David Alan Novoselsky (“Novoselsky”), seeks this Court's guidance on who should be paid sanctions awards entered against him in Illinois state court in favor of Defendants Jeanine L. Stevens (“Stevens”) and F. John Cushing, III (“Cushing”). He also raises a breach-of-contract claim against Defendant Cristina Zvunca, in her capacity as supervised administrator of the estate of her deceased mother, Claudia Zvunca (the “Estate”). Because of bedrock limitations on the jurisdiction of federal district courts, the Court is without authority to address the merits of either claim. Defendants have moved to dismiss the complaint, and for the reasons stated below, their motions will be granted.

         1. BACKGROUND

         The morass of litigation that precedes the matter before the Court is daunting but is largely irrelevant to the disposition of this case. Stated briefly, Claudia Zvunca was killed in 2002 when she was struck by a Greyhound bus. Zvunca ex rel. Klein v. Greyhound Lines, Inc., 530 F. App'x 672, 672 (10th Cir. 2013). Her eight-year-old daughter, Cristina, witnessed her death. Id.

         An onslaught of litigation, and litigation on that litigation, followed Claudia's death. The Appellate Court of Illinois summarized this legal quagmire, stating that “from the tragic, but relatively straightforward, facts regarding Claudia Zvunca's death, arose at least 13 lawsuits in various state and federal courts. Among these were legal malpractice suits and two wrongful death actions, proceeding simultaneously in Illinois and Colorado.” Cushing v. Greyhound Lines, Inc., 991 N.E.2d 28, 33 (Ill. Ct. App. 2013). Given the plethora of simultaneously pending actions and the number of parties involved, “the question of ‘who represented whom' was an issue” throughout all the proceedings. Cushing v. Greyhound Lines, Inc., No. 1-10-3176, 2013 WL 2404044, at *9 (Ill. Ct. App. May 30, 2013). Novoselsky was the primary instigator of the chaos, often backed by Claudia Zvunca's widow, Tiberiu Klein. See id.

         For purposes of this lawsuit, only one portion of the long history of these proceedings is relevant. Cushing and Stevens, both attorneys, represented Cristina and the Estate in the wrongful death matter in Illinois. Novoselsky, looking to usurp their position, filed a lawsuit against them in Illinois state court alleging legal malpractice and fraud. Eventually, Novoselsky succeeded in taking over the reins of the wrongful death case, but his victory and the settlement he secured were invalidated on appeal. See Cushing, 991 N.E.2d at 99.

         Cushing and Stevens then filed motions for sanctions against Novoselsky under Illinois Supreme Court Rule 137, the Illinois equivalent to Federal Rule of Civil Procedure 11, based on Novoselsky's allegations in the malpractice case. Cristina and the Estate were not permitted to intervene in the sanctions proceedings. The judge presiding over them, Judge Lorna Propes, found that Novoselsky had repeatedly violated Rule 137 through his filings in the malpractice action, in which he manufactured false accusations against Stevens and Cushing for the purpose of ousting them from the wrongful death case. Judge Propes awarded sanctions to Cushing and Stevens as follows:

A monetary sanction in the amount of $25, 000 is imposed on Novoselsky in favor of John Cushing. A further sanction in the amount of $75, 000 is imposed in favor of Jeanine Stevens. The total of $100, 000 will be paid to the Estate of Claudia Zvunca and held in an account for the estate, to be opened and maintained by an attorney to be named under separate order of this court. The funds will remain in the account until the ultimate disposition of the wrongful death case. At such time, should there be no recovery in the wrongful death case, the funds plus interest, shall be distributed to the movants in their proportionate share. Should there be a recovery in the wrongful death case, the funds plus interest, shall be applied to the movants' claims of fees and costs only.

(Docket #1-1 at 20). The judge later modified her order to require deposit of the sanctions amounts on a date certain with the Clerk of Court instead of an attorney. Id. at 21.

         Novoselsky appealed both of these orders. Before the appeals were resolved, however, he filed for bankruptcy protection in this District in In re Novoselsky, Case No. 14-bk-29136-GMH (Bankr. E.D. Wis.). Cushing and Stevens filed proofs of claim in the bankruptcy relating to their sanctions awards, but Novoselsky contested them, arguing that the awards were payable only to the Estate, not to Cushing or Stevens personally. Bankruptcy Judge Halfenger disagreed and lifted the automatic stay to allow the sanctions proceedings, including Novoselsky's appeal, to proceed in Illinois state court. (Case No. 14-ap-2572-GMH (Bankr. E.D. Wis.), Docket #18 at 2-3).

         Novoselsky eventually dismissed his appeal of the sanctions order. He then filed an adversary proceeding in his bankruptcy case, seeking an order that the awards were due the Estate and that the Estate was not entitled to payment because it had not filed a proof of claim. That adversary proceeding remains pending, and Judge Halfenger has also permitted litigation of the sanctions issues in Illinois state court, where Judge Propes was assigned to the case on remand. See (Case No. 16-ap-2224-GMH (Bankr. E.D. Wis.), Docket #11 at 1).

         Novoselsky filed the instant action in March 2017. In his complaint, he alleges that although Judge Propes ordered him to pay $100, 000, she left the actual payee to be determined at a later date during resolution of the wrongful death action. That case was settled in early 2016, and Novoselsky now requests several declarations of rights. First, he asks for a declaration that he owes the sanctions awards to the Estate, not Cushing or Stevens. Second, he requests a declaration that the amount he owes has been satisfied and is no longer due. He reasons that two separate actions, one federal and one in Illinois state court, were filed by the Estate against him, and in each the Estate sought to recover the $100, 000 total award resulting from Judge Propes' sanctions order. He alleges that the actions were dismissed with prejudice and therefore have extinguished his liability for the sanctions awards.

         Finally, Novoselsky joins a separate breach of contract claim against the Estate for unpaid attorney's fees which were allegedly awarded to him by an Illinois court for his work in connection with the wrongful death action.

         2. ...


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