United States District Court, D. Colorado
OPINION AND ORDER ADOPTING RECOMMENDATION DENYING
MOTION FOR SANCTIONS; AND DENYING SECOND MOTION FOR
SANCTIONS
Marcia
S. Krieger, Senior United States District Judge.
THIS
MATTER comes before the Court pursuant to the
September 25, 2019 Recommendation of the Magistrate Judge
(# 90) that Plaintiff Tiffany Grays'
(hereafter, “Ms. Grays”) Motion for Sanctions
Pursuant to Fed.R.Civ.P. 11 and 28 U.S.C. § 1927
(# 68) be denied. No. objections to the
Recommendation were filed.
Also
pending is Ms. Grays' second Motion for Sanctions
Pursuant to Fed.R.Civ.P. 37 and 28 U.S.C. § 1927
(# 81), the Defendants Auto Mart USA, Jorge
Pacheco, Auto Mart USA 2, Daniel Ramirez, Donnie McElroy,
Marco Sandoval, Auto Mart, and Jay Barber's (hereafter,
“the Defendants”) response (#
82), and Ms. Grays' reply (#
84).
FACTS
The
Court assumes the reader's familiarity with the claims
and underlying proceedings in this case. According to Ms.
Gray's pro se[1] Second Amended Complaint (#
16), on or about March 17, 2018, Ms. Grays went to
Defendant Auto Mart, a used car dealer, to purchase a
vehicle. However, despite the fact that Ms. Grays agreed to
purchase a 2013 Dodge Journey and the parties executed both
an Invoice/Purchase Agreement and a Sale Contract, the sale
did not go through. (# 49 at 2-3). On March
20, 2018, Donnie McElroy, Auto Mart's Assistant Sales
Manager, contacted Ms. Grays and advised her that Auto Mart
was unable to obtain financing for her and instructed her to
immediately return the Dodge Journey. (# 16 at
14). Ms. Grays returned the vehicle and filed the
instant lawsuit.
On
April 29, 2019, the Court issued an Order granting in part
and denying in part the Defendants' Motion to Compel
Arbitration and Stay Proceedings (# 49). The
Court ordered that Ms. Grays' claims against Defendant
Auto Mart involving: (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 as part of
the transaction represented by the Sale Contract will be
resolved in arbitration. (# 49 at 13-14).
The following claims, however, remain pending before this
Court: (i) violations of the Fair Credit Reporting Act, (ii)
violations of the Truth in Lending Act, (iii) fraudulent
misrepresentation, (iv) violation of Colo. Rev. Stat. §
4-5-109(a), (v) fraud and forgery, and (vi) violation of 15
U.S.C. § 1638(a)(1), (b)(1)(B). (# 16, #
49).
On July
7, 2019, Ms. Grays filed a Motion for Sanctions (#
68), which was referred to the Magistrate Judge.
Then, on July 24, 2019, Ms. Grays filed a second Motion for
Sanctions (# 81), which was not referred to
the Magistrate Judge and remains pending before the Court.
Thus, this Opinion addresses both motions.
ANALYSIS
I.
Ms. Grays' Initial Motion for Sanctions (# 68)
Ms.
Grays moves for sanctions against the Defendants pursuant to
Rule 11 and 28 U.S.C. § 1927 for numerous instances of
misconduct including: (i) failing to follow court orders,
(ii) advancing unsupported facts and arguments, (iii)
submitting false information to the Court, (iv) filing
improper motions, (v) failing to confer with Ms. Grays and
timely respond to her requests, and (vi) generally acting
unreasonably and vexatious. (# 68 at 5-12).
Ms. Grays seeks reasonable costs and fees; an injunction
against any future delays by Defendants; the striking of
Defendants' Answer and entry of default against the
Defendants; an order requiring defense counsel to respond to
Ms. Grays' inquires within 24 hours; and various monetary
sanctions. (#68 at 12-13). In response, the
Defendants contend that the motion is groundless, frivolous,
and devoid of any factual support that they engaged in
sanctionable conduct. (# 74). This motion
was referred to the Magistrate Judge by Memorandum dated July
24, 2019 (# 75) pursuant to 28 U.S.C. §
636(b) and Rule 72.
On
September 25, 2019, the Magistrate Judge issued a
Recommendation that Ms. Grays' initial Motion for
Sanctions be denied for failure to both comply with Rule
11(c)(2)'s safe harbor provision and put forth a
sufficient factual basis that the Defendants engaged in
sanctionable conduct under either Rule 11 or 28 U.S.C. §
1927. (# 90 at 7-8). No. objections to the
Recommendation were filed.
Under
Rule 72, written objections are due within fourteen (14) days
after service of a copy of the Recommendation. Here, no
objections were filed to the Recommendation, thus, the Court
is vested with discretion to review the Recommendation
“under any standard it deems appropriate.”
Summers v. Utah, 927 F.2d 1165, 1167 (10th Cir.
1991); see also Thomas v. Arn, 474 U.S. 140, 150
(1985) (stating that “[i]t does not appear that
Congress intended to require district court review of a
magistrate's factual or legal conclusions, under a de
novo or any other standard, when neither party objects
to those findings”). Nonetheless, though not required
to do so, the Court reviews the Recommendation to
“satisfy itself that there is no clear error on the
face of the record . . . .” Fed.R.Civ.P. 72(b) Advisory
Committee Notes. Upon such review, the Court agrees entirely
with both the findings and reasoning of the Magistrate Judge.
A.
Sanctions Pursuant to Rule 11
To be
entitled to sanctions under Rule 11(b), Ms. Grays must show
that the Defendants' pleadings submitted to the Court:
(i) were intended “to harass, cause unnecessary delay,
or needlessly increase the cost of litigation”; (2)
contained legal positions that were not “warranted by
existing law”; (iii) lacked evidentiary support; and
(iv) contained denials of factual contentions not supported
by the evidence. Fed. R. Civ. 11(b)(1)-(4). Rule 11 obligates
Defendants' counsel to conduct an “inquiry
reasonable under the circumstances” before filing any
such pleading. That inquiry is judged by an objective
standard-inquiring what a reasonable attorney would have
...