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US Bank NA v. First American Title Insurance Co.

United States District Court, D. Maine

November 18, 2019



          John H. Rich III United States Magistrate Judge.

         Defendant First American Title Insurance Company (“First American”) moves for sanctions against plaintiff U.S. Bank NA as Legal Title Trustee for Truman 2013 SC3 Title Trust (“US Bank”) for its failure to send a representative with full settlement authority to a scheduled judicial settlement conference. See ECF No. 59 (oral motion for sanctions); First American's Motion for Sanctions for Failure to Attend Judicial Settlement Conference (ECF No. 65) (either or both, “Motion”). U.S. Bank objects to the imposition of sanctions or, in the alternative, requests that any sanctions be limited to the cost of the appearance of First American's representative. See Plaintiff's Objection to Defendant's Motion for Sanctions (“Objection”) (ECF No. 71) at 2-5. For the reasons that follow, I grant First American's motion for sanctions and order U.S. Bank to reimburse First American the sum of $14, 318.82, as requested.[1]

         I. Applicable Legal Standard

         “Federal courts possess certain inherent powers, not conferred by rule or statute, to manage their own affairs so as to achieve the orderly and expeditious disposition of cases.” Goodyear Tire & Rubber Co. v. Haeger, 137 S.Ct. 1178, 1186 (2017) (citation and internal quotation marks omitted). “That authority includes the ability to fashion an appropriate sanction for conduct which abuses the judicial process.” Id. (citation and internal quotation marks omitted). “[O]ne permissible sanction” is an order “instructing a party that has acted in bad faith to reimburse legal fees and costs incurred by the other side.” Id. “[S]uch a sanction, when imposed pursuant to civil procedures, must be compensatory rather than punitive in nature.” Id. “In other words, the fee award may go no further than to redress the wronged party for losses sustained; it may not impose an additional amount as punishment for the sanctioned party's misbehavior.” Id. (citation and internal quotation marks omitted).

         Additionally, under Federal Rule of Civil Procedure 16(f), a court may issue “any just orders, ” including sanctions pursuant to Federal Rule of Civil Procedure 37, “if a party or its attorney . . . fails to appear at a scheduling or other pretrial conference” or “fails to obey a scheduling or other pretrial order.” Fed.R.Civ.P. 16(f)(1)(A), (C). Rule 16(f) further provides:

Instead of or in addition to any other sanction, the court must order the party, its attorney, or both to pay the reasonable expenses - including attorney's fees - incurred because of any noncompliance with this rule, unless the noncompliance was substantially justified or other circumstances make an award of expenses unjust.

Fed. R. Civ. P. 16(f)(2). “Sanctions may be awarded under Rule 16(f) without a finding of bad faith.” Vicente v. Ljubica Contractors LLC, No. 18-CV-0419 (VSB) (OTW), 2019 WL 2137001, at *4 (S.D.N.Y. May 16, 2019).

         The conduct for which courts have imposed sanctions includes failure to comply with court orders regarding settlement conferences. See, e.g., Negron v. Woodhull Hosp., 173 Fed.Appx. 77, 79 n.1 (2d Cir. 2006) (“Although a court cannot force litigants to settle an action, it is well established that a court can require parties to appear for a settlement conference, and impose sanctions pursuant to Rule 16(f) if a party fails to do so.”) (citations and internal quotation marks omitted); Lucas Auto. Eng'g, Inc. v. Bridgestone/Firestone, Inc., 275 F.3d 762, 769 (9th Cir. 2001) (upholding sanctions award against president of vintage tire company pursuant to Rule 16(f) for failure to appear at mediation session when, although tire company claimed his nonappearance was due to an incapacitating headache and not intentional, he did not notify the parties beforehand that he could not appear).

         For purposes of the instant motion, I proceed pursuant to Rule 16(f). See, e.g., Vicente, 2019 WL 2137001, at *4 (imposing sanctions for failure to attend three court conferences pursuant to Rule 16(f) rather than, inter alia, the court's inherent authority when “sanctions under Rule 16(f) provide[d] a sufficient remedy”).

         II. Background

         At the request of both parties, I issued an order dated May 23, 2019, scheduling this matter for a settlement conference in my chambers at 10:00 a.m. on July 11, 2019. See Procedural Order Setting Case for Settlement Conference (“Order”) (ECF No. 53). I ordered that “counsel appear with their clients at such time and place, fully authorized to accomplish settlement of the case and prepared to engage in effective settlement negotiations.” Id. I further ordered the parties' counsel to “file with the court, on or before July 3, 2019, a written in camera statement, not to exceed 5 pages, setting forth in detail the settlement position of the respective party and stating in concise detail the reasons for each aspect of that settlement position.” Id. I directed that each such statement contain “a clear and concise rationale in support of that party's settlement position[.]” Id.

         First American timely supplied an in camera statement complying with the foregoing directives. On July 9, 2019, six days past its deadline, U.S. Bank submitted its in camera statement. First American appeared for the settlement conference through Vincent Ferro, its Vice President and Senior Regional Claims Counsel, who had traveled from Long Island, New York, and had full authority to settle this matter for any reasonable amount. Approximately an hour and a half prior to the scheduled settlement conference, U.S. Bank informed the court that it would not have a representative present. Instead, it arranged for a representative, Roberto Montoya, to participate by telephone. I noted that this raised a serious issue of noncompliance with the court's order. Mr. Montoya indicated that it had been a mistake not to have a representative present, and that there had been a scheduling error. First American's counsel orally moved for sanctions based on the non-appearance. See ECF No. 59.

         The conference proceeded, adjourning after three-and-a-half hours when a proposed settlement range exceeded Mr. Montoya's authority. I convened a hearing afterward during which counsel for First American renewed its oral motion for sanctions, and I set a schedule to brief that motion, see ECF Nos. 59, 60, 63, pursuant to which First American filed its written motion for sanctions on July 24, 2019, see Motion. First American also separately filed an itemized bill of fees and costs, totaling $14, 318.82, incurred in preparing for and attending the July 11, 2019, settlement conference and briefing the motion for sanctions. See First American's Bill of Fees and Costs Related to Settlement Conference (“Bill of Costs”) (ECF No. 66).

         III. ...

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