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Thabico Co. v. Kiewit Offshore Services, Ltd.

United States District Court, S.D. Texas, Corpus Christi Division

January 16, 2018




         Before the Court is Thabico's Motion for Allocation of Sanctions (D.E. 52). For the reasons set out below, the Court GRANTS partial relief requested by the motion (D.E. 52) and GRANTS Attorneys Michael A. Lee and Eric Fryar's Corrected Motion to Withdraw (D.E. 36).


         Kiewit's partial judgment. The Court entered partial final judgment (D.E. 28), pursuant to Federal Rule of Civil Procedure 54(b), dismissing all claims against Defendants Kiewit Offshore Services, Ltd. and CMF Leasing Co. (jointly Kiewit) on June 12, 2017, having found that the claims had no merit. Plaintiff Thabico Company (Thabico) did not appeal that judgment and the time for doing so has passed.[1] Fed. R. App. P. 4(a)(1).

         Kiewit's motion for sanctions. On June 13, 2017, Kiewit filed its motion for sanctions (D.E. 29), seeking attorneys' fees for defending this case against Thabico. Kiewit did not seek sanctions against Thabico's attorneys. Pursuant to Federal Rule of Civil Procedure 54(d)(2), a claim for attorney's fees is to be made by motion no later than fourteen (14) days after the entry of judgment. Kiewit timely filed its motion a day after the partial final judgment pertaining to the claims against it and before final judgment in the case. The adversarial proceedings on the motion were governed by Rules 43(c) (allowing evidence on affidavits), Rule 78 (allowing submissions on briefs), and Rule 52(a) (providing for findings of fact and conclusions of law in nonjury matters). Fed.R.Civ.P. 54(d)(2).

         Lee/Fryar motion to withdraw. On July 11, 2017, after filing responses to the motion for sanctions ostensibly on behalf of Thabico, its attorneys, Michael A. Lee and Eric Fryar, sought to withdraw from their representation of Thabico. D.E. 32, 33, 34. The corrected motion to withdraw (D.E. 36) remains under advisement.

         Evidence and determination of sanctions. In the meantime, Thabico's corrected response to the sanctions motion represented that Thabico and its representatives had supplied sworn testimony and documentary support for the allegations in this case, which this Court found frivolous. D.E. 33, p. 15. This was evident in the state court petition accusing Kiewit of conversion, which was verified by Thabico's agent. D.E. 29-1. On August 7, 2017, the Court issued its Order Granting Sanctions (D.E. 39). The Order held that Thabico's conduct exhibited a bad faith, vexatious, wanton, or oppressive escalation and prolonging of frivolous litigation.

         Pursuant to the Court's inherent power and Federal Rule of Civil Procedure 11, the Court granted sanctions and directed Kiewit to submit evidence regarding attorney's fees incurred. Upon review of that evidence (D.E. 40, 41), the Court issued its Order Awarding Sanctions (D.E. 48) on September 26, 2017, awarding $63, 881.09 in sanctions against Thabico, representing 75% responsibility for the conduct triggering the sanctions award.


         Motion to allocate. On October 9, 2017, Thabico appeared by new counsel and filed its motion for allocation of sanctions (D.E. 52). The motion does not seek reconsideration of the Court's determination that sanctions are appropriate or the Court's findings regarding the amount of sanctions that could be awarded. Neither does Thabico's motion seek affirmative recovery from its attorneys. The only issue presented is whether the sanctions were properly awarded against Thabico.

         In briefing its motion, Thabico suggests that any sanctions should have been awarded against its attorneys, Lee and Fryar, who represented Thabico during the sanctioned conduct. However, Kiewit's motion that triggered the sanctions inquiry did not seek to recover against the attorneys. And Kiewit has not sought to add any request for relief against the attorneys at this time. As a practical matter, Thabico's motion-if successful-can achieve only one result: reducing or eliminating Thabico's liability for sanctions.

         The motion to allocate was filed well within twenty-eight (28) days of the entry of the order awarding sanctions (D.E. 48). Thus, assuming that the order awarding sanctions constitutes a judgment, the motion was timely under Federal Rule of Civil Procedure 59.[2] That Rule allows the Court to take additional evidence and make new findings of fact and conclusions of law. Fed.R.Civ.P. 59(a)(2). Thabico filed affidavits with its motion. D.E. 52. Kiewit filed a response (D.E. 55), offering no new evidence. And Thabico replied (D.E. 56). The Court then ordered counsel Michael Lee and Eric Fryar to file their response and they have done so, together with their declarations and other evidence. D.E. 57, 58, 59, 61.

         A. Objections

         Keiwit objects to considering Thabico's motion, first, because it is an improper motion to reconsider. The Court disagrees. “The court has the power and duty to order a new trial whenever, in its judgment, this action is required in order to prevent injustice.” 11 Charles Alan Wright, Arthur ...

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