United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
Y. Wang United States Magistrate Judge.
matter comes before this court for recommendation on pro
Plaintiff Tiffany Grays's (“Plaintiff” or
“Ms. Grays”) Motion for Sanctions Pursuant to
Fed.R.Civ.P. 11 and 28 U.S.C. § 1927 (the “Motion
for Sanctions” or “Motion”), filed July 7,
2019. [#68]. The undersigned considers the Motion pursuant to
28 U.S.C. § 636(b), Rule 72 of the Federal Rules of
Civil Procedure, and the Memorandum dated July 24, 2019
[#75]. This court concludes that oral argument will not
materially assist in the resolution of this matter, nor is an
evidentiary hearing necessary given the types of issues
presented by Ms. Grays. See Eisenberg v. Univ. of New
Mexico, 936 F.2d 1131, 1135 (10th Cir. 1991) (explaining
that due process does not require oral or evidentiary
hearings on motions for sanctions when the Parties fully
brief the issue). Accordingly, having reviewed the Motion and
associated briefing, the applicable case law, and the entire
docket, this court respectfully RECOMMENDS
that the Motion for Sanctions be
court discussed the background of this matter in its prior
Order, see [#49], and thus this court discusses it
here only as it pertains to the instant Motion for Sanctions.
Plaintiff initiated this action by filing her Complaint on
July 10, 2018. See [#1]. The Honorable Gordon P.
Gallagher granted Plaintiff leave to proceed in forma
pauperis and directed Plaintiff to file an Amended
Complaint. See [#4]. Plaintiff filed an Amended
Complaint and has since filed a Second Amended Complaint, the
operative pleading in this matter. See [#16].
Second Amended Complaint raises a host of claims against
Defendants Auto Mart USA, LLC, Jorge Pacheco, Auto Mart USA2,
Daniel Ramirez, JB Ovalle, Donnie Mcelroy, Marco Sandoval,
Auto Mart, Jay Barber (collectively,
“Defendants”), including violations of state and
federal credit and consumer laws as well as various common
law claims pursuant to Colorado law. See [#16; #49
at 4-7 (detailing Ms. Grays's 20 claims)]. All of
Plaintiff's claims arise from her attempt to purchase an
automobile from Defendants. Specifically, on or about March
17, 2018, Plaintiff purportedly purchased a Dodge Journey
from Defendants, but had to return the vehicle three days
later when Defendants informed Ms. Grays that they could not
secure financing for the vehicle-this being despite
Defendants' “Credit Approval Guaranteed”
assurance. See [#49 at 2, 3]. According to Ms.
Grays, a lender approved Ms. Grays for a loan on the Dodge
Journey but Defendants refused to complete the necessary loan
paperwork, allegedly in discrimination to Ms. Grays's
race. See [id. at 4]. Defendants stated
they did not submit Ms. Grays's credit application to
lenders, but Ms. Grays began receiving letters from lenders
indicating Defendants had sought credit on Ms. Grays's
behalf. Ms. Grays further contends Defendants sought
“hard checks” of her creditworthiness, despite
agreeing to run “soft checks, ” which
detrimentally affected her credit score. See
[id. at 4]; see also [#16].
October 31, 2018, Defendants moved to compel arbitration of
Ms. Grays's claims based on the sales agreement entered
between Plaintiff and Defendants for the purchase of the
Dodge Journey. See [#24]. The presiding judge, the
Honorable Marcia S. Krieger, granted the Motion to Compel
Arbitration in part, bifurcating Ms. Grays's claims, and
compelling arbitration as to claims based on:
(i) false promises by Auto Mart of “guaranteed credit
acceptance” or the like, (ii) the failure of Auto Mart
to assign the Sale Contract to a lender, and (iii) any claims
that involve Auto Mart's failure to make disclosures or
provide documents (including Ms. Grays'[s] Claim 8) that
were required to be provided as part of the transaction
represented by the Sale Contract.
[#49 at 13-14]. Ms. Grays's remaining claims alleging
violations of the Fair Credit Reporting Act (Count 1),
violations of the Truth in Lending Act (Count 2), fraudulent
misrepresentation (Count 7), violation of Colo. Rev. Stat.
§ 4-5-109(a), fraud and forgery (Count 16), and
violations of 15 U.S.C. § 1638(a)(1),
(b)(1)(B) “Credit Transaction” (Count
20) remain pending before the court. See
[id. at 14].
on April 18, 2019, the Parties appeared before the
undersigned Magistrate Judge for a Scheduling Conference.
See [#47]. Relevant here, the Scheduling Order sets
the discovery deadline for October 18, 2019 and the
dispositive motion deadline for November 18, 2019.
See [#48 at 10]. The Parties have proceeded with
discovery and have neither sought nor received any
modifications to the Scheduling Order.
Grays filed the instant Motion for Sanctions on July 7,
2019. [#68]. She argues that the court should
impose sanctions on Defendants and defense counsel for
numerous instances of alleged misconduct, including (1)
failing to abide by court Orders, (2) advancing defenses
known to be unsupported by evidence, (3) failing to confer
with and respond to Plaintiff, (4) proffering false
information and unauthentic evidence to the court, (5) filing
an improper Motion to Compel Arbitration and Reply in support
thereof, (6) failing to confer with Plaintiff regarding the
Proposed Scheduling Order, (7) raising Plaintiff's lack
of service on Defendants JB Ovalle and Daniel Ramirez at the
Scheduling Conference, (8) filing an Answer that does not
comply with “Court Rules” and denies undisputed
facts, (9) failing to confirm Defendants “actually
registered the arbitration clause” at issue in the
Motion to Compel Arbitration, (10) serving initial
disclosures based on fraudulent evidence, and (11) initiating
“unreasonabl[e] and vexatious multipl[e]
proceedings.” See generally [id.].
Ms. Grays seeks a variety of relief: reasonable litigation
costs and fees; an injunction against any future delays by
Defendants and “certified documentation to substantiate
any future requests for extensions of time by
Defendants”; striking of Defendants' Answer and
entry of default against Defendants; an Order requiring
Defendants' counsel to respond to Plaintiff within 24
hours of all communications; and monetary sanctions for any
future violations of the contemplated injunctions.
[Id. at 12-13]. Defendants oppose the Motion,
arguing Ms. Grays fails to support her assertions that
Defendants engaged in sanctionable conduct and thus the
Motion is groundless and frivolous. See
[#74]. Ms. Grays has since filed her Reply [#78],
and the Motion for Sanctions is now ripe for recommendation.
I consider the Parties' arguments below.
Rule 11 of the Federal Rules of Civil Procedure
11(b) of the Federal Rules of Civil Procedure provides:
(b) Representations to the Court. By 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 ...