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Novoselsky v. Zvunca

United States District Court, E.D. Wisconsin

December 29, 2017

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


          J.P. Stadtmueller, U.S. District Judge.

         On July 17, 2017, the Court issued an order dismissing this action for lack of subject-matter jurisdiction. Novoselsky v. Zvunca, No. 17-CV-427-JPS, 2017 WL 3025870, at *1 (E.D. Wis. July 17, 2017). A month later, Defendants Jeanine L. Stevens (“Stevens”) and F. John Cushing, III (“Cushing”) (collectively, “Movants”) filed a motion for sanctions against Plaintiff David Alan Novoselsky (“Novoselsky”). (Docket #35). Movants argue that Novoselsky's complaint was frivolous and is sanctionable under Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, and the Court's inherent authority. The motion is fully briefed and, for the reasons stated below, the Court will grant Movants their reasonable attorney's fees and expenses under Rule 11.

         1. BACKGROUND

         The history between these parties is long and troubled. For brevity's sake, the Court will confine itself to the facts necessary to the disposition of the present motion. The interested reader may consult the prior decisions of this and other courts for further background information. See generally Novoselsky, 2017 WL 3025870; Zvunca ex rel. Klein v. Greyhound Lines, Inc., 530 Fed.Appx. 672 (10th Cir. 2013); Cushing v. Greyhound Lines, Inc., 991 N.E.2d 28 (Ill. Ct. App. 2013).

         Novoselsky filed the complaint in this case on March 22, 2017. (Docket #1). The complaint concerned primarily a sanctions award entered against him by Judge Propes of the Circuit Court of Cook County, Illinois in favor of Movants-specifically, $75, 000 to Stevens and $25, 000 to Cushing. Id. He alleged that did not owe the sanctions either to Movants or the estate of Claudia Zvunca (the “Estate”), his former client. Id.[1]

         Movants filed a motion to dismiss May 22, 2017. (Docket #16). The motion raised the following grounds for dismissal:

a. the Declaratory Judgment Act does not confer jurisdiction, as Novoselsky had claimed;
b. there was no subject matter jurisdiction because the amount in controversy was not satisfied as to any defendant for purposes of diversity jurisdiction;
c. there was no subject-matter jurisdiction in the district court under the Rooker-Feldman doctrine;
d. personal jurisdiction did not exist over Cushing and Stevens; and
f. venue was improper in this District.

(Docket #17 at 8-19). After filing the motion, Movants' counsel sent Novoselsky a safe harbor letter on May 25, 2017 under Federal Rule of Civil Procedure 11(c)(2), outlining the alleged legal deficiencies in the complaint and asking him to withdraw the filing. (Docket #35-1).

         Novoselsky did not withdraw his complaint. Instead, he filed a brief in opposition to the motion to dismiss on June 12, 2017. (Docket #23). He variously argued that:

a. the Declaratory Judgment Act is a stand-alone basis for subject-matter jurisdiction;
b. the Complaint satisfied the amount in controversy requirement because the two sanctions awards could be aggregated;
c. the Rooker-Feldman doctrine did not deprive the district court of subject-matter jurisdiction because the relief sought was not a reversal of the state-court sanctions order;
d. personal jurisdiction existed over Cushing and Stevens because they filed adversary proceedings in this Court against Novoselsky in connection with his bankruptcy proceeding; and
e. venue is proper in this District because sufficient relevant events occurred here.

Id. at 4-11. Movants take issue with the merit of these arguments, but that will be addressed later on.

         While Movants' motion to dismiss was pending, Novoselsky filed two motions of his own. On June 29, 2017, he moved for leave to file a sur-reply. (Docket #31). The Court denied the motion in its dismissal order, describing the proposed sur-reply as “cit[ing] no law whatsoever; it consists of eight pages of Novoselsky's stream-of-consciousness musings. . .which adds nothing to the record and has no effect on the disposition of the case.” Novoselsky, 2017 WL 3025870, at *4 n.2. Next, on July 13, 2017, Novoselsky filed a motion asking the Court to stay consideration of the motion to dismiss because he planned to seek relief from another state-court order in the bankruptcy court. (Docket #32). The Court dismissed the case four days later, and Movants did not respond to the July 13 motion before the dismissal was entered.[2]

         The Court's dismissal order focused on the lack of subject-matter jurisdiction over Novoselsky's claims under the Rooker-Feldman doctrine. Novoselsky, 2017 WL 3025870, at *3-5. The Court did not opine on Movants' contentions that the amount-in-controversy requirement was not satisfied, that personal jurisdiction was lacking as to them, or that venue was improper in this District. Id. at 2 (“The Court will address only subject-matter jurisdiction, as it must be the first item of business for a federal court and review of the pertinent authorities demonstrates that subject-matter jurisdiction is lacking in this case.”).

         2. DISCUSSION

         Federal Rule of Civil Procedure 11 imposes a set of duties on those who file papers with the court. It also provides for an appropriate sanction to be imposed if those duties are violated. Rule 11(b) states, in pertinent part, that

[b]y presenting to the court a pleading, written motion, or other paper--whether by signing, filing, submitting, or later advocating it--an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law[.]

Fed. R. Civ. P. 11(b)(1)-(2). The Rule grants a court discretion to impose an appropriate sanction for violations of these obligations, which may include “nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable ...

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