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Phillips v. Jpmorgan Chase Bank, N.A.

United States District Court, W.D. Texas, Austin Division

May 17, 2019

TRAVIS R. PHILLIPS
v.
JPMORGAN CHASE BANK, N.A., et al.

          FINAL ORDER ON SANCTIONS

          ANDREW W. AUSTIN, UNITED STATES MAGISTRATE JUDGE.

         Before the Court are Defendant's Supplemental Brief in Support of Its Motion for Sanctions against Attorneys George Slade and Robert Barnstone (Dkt. Nos. 5 & 19); George B. Slade's Response (Dkt. No. 20); Robert Barnstone's Response (Dkt. No. 21); Plaintiff's Objections to the Magistrate's Order (Dkt. No. 22); and Defendant's Reply (Dkt. No. 23). The District Court referred the Motion for Sanctions to the undersigned for resolution pursuant to 28 U.S.C. §636(b), Federal Rule of Civil Procedure 72 and Rule 1(c) of Appendix C of the Local Court Rules.

         I. GENERAL BACKGROUND

         This is the seventh lawsuit filed by Travis R. Phillips to prevent the foreclosure of real property located in Austin, Texas (“the Property”). Phillips and his spouse purchased the Property in 1988 with a mortgage currently assigned to JPMorgan Chase Bank, N.A. (“JPMorgan”). Phillips eventually defaulted on his payments, and was unable to obtain a modification of the loan. JPMorgan subsequently initiated foreclosure of the Property, and, as referenced above, Phillips has filed numerous lawsuits to prevent such efforts. The District Court has dismissed all of Phillips' prior lawsuits. See Phillips v. JPMorgan Chase Bank, NA., No. 1:12-CV-905-SS (W.D. Tex. Nov. 5, 2012) (First Suit) (dismissed with prejudice); Phillips v. JPMorgan Chase Bank, NA., No. 1:14-CV054-SS (W.D. Tex. Mar. 4, 2014) (Second Suit) (dismissed with prejudice); Phillips v. JPMorgan Chase Bank, NA., No. 1:14-CV-544-SS (W.D. Tex. Jul. 15, 2014) (Third Suit) (dismissed with prejudice); Phillips v. JPMorgan Chase Bank, NA., No. 1:15-CV-790-SS (W.D. Tex. Jan. 15, 2016) (Fourth Suit) (summary judgment granted in favor of defendant); Phillips v. JPMorgan Chase Bank, NA., No. 1:16-CV-287-SS (W.D. Tex. May 13, 2016) (Fifth Suit) (dismissed with prejudice); and Phillips v. JPMorgan Chase Bank, NA., No. 1:17-CV-1074-SS (W.D. Tex. Nov. 14, 2017) (Sixth Suit) (dismissed with prejudice).

         In addition, the District Court has warned Phillips on two previous occasions that any further court filings by Phillips challenging the foreclosure would result in “severe monetary sanctions.” For example, in the Order dismissing his Fifth Suit with prejudice, after finding that Phillips' claims were barred by res judicata, the District Court stated the following:

Phillips has-now for the fourth time-failed to state any claim upon which relief can be granted, and has not showed himself entitled to any relief in either law or equity. The dilatory tactics must end. The Court finds any further amendment would be futile and dismisses Phillips' claims with prejudice.
Additionally, the Court hereby expressly warns Phillips and his counsel to read and review Federal Rule of Civil Procedure 11 before filing any other lawsuits related to these issues. Any further filing of such lawsuits will result in severe monetary sanctions, including but not limited to reasonable attorney's fees related to JPMorgan's defense of claims brought by Phillips beginning July 16, 2014.

Phillips v. JPMorgan Chase Bank, N.A., 2016 WL 8711408, at *4 (W.D. Tex. May 13, 2016) (Fifth Suit) (emphasis added), aff'd, 673 F App'x 449, 450 (5th Cir. 2017). Similarly, in its Order dismissing Phillips Sixth Suit with prejudice, after finding that JPMorgan was entitled to dismissal of all of Phillips' claims and any amendment of his complaint would be futile, the Court again warned Phillips what would happen if he filed any future lawsuits attacking the foreclosure:

JPMorgan initiated its foreclosure efforts of the Property in 2012. Since then, Phillips has repeatedly sought court intervention to prevent foreclosure. He has successfully delayed foreclosure for years with meritless legal actions. These actions continue to waste time and resources. Thus, the Court repeats its earlier warning to Phillips and his counsel: continued dilatory tactics through the court system will result in severe monetary sanctions.

Sixth Suit, Dkt. No. 21.

         Despite these warnings, Phillips filed his seventh lawsuit in state court against JPMorgan, First National Bank, Grover Geiselman III, John Hoffman and H. Dalton Wallace, once again attempting to stop a foreclosure sale of the home. Phillips Petition sought a temporary restraining order and injunction to prevent the foreclosure arguing that JPMorgan has “failed to provide a payoff amount and frustrated Plaintiff's good-faith efforts to discharge his obligations under the note.” Dkt. No. 1-1 at p. 14. Plaintiff's Petition did not mention that Phillips had filed six previous unsuccessful lawsuits challenging the foreclosure. Because the state court was most likely unaware of Phillips' litigation history, on June 4, 2018, the state court granted a temporary restraining order to prevent the foreclosure and set the matter for a hearing on June 19, 2018, to consider the application for temporary injunction. Dkt. No. 1-1 at p. 36.

         On June 14, 2018, JPMorgan removed the case to federal court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. On June 25, 2018, it filed a motion for summary judgment arguing that all of his claims are barred by res judicata, premature or asserted without standing, and are not supported by the law or the facts. Dkt. No. 6. On July 13, 2018, Phillips filed a motion seeking to dismiss his claims against JPMorgan, contending that it is no longer a necessary party, Dkt. No. 9. On February 28, 2019, the District Court denied Phillips' Motion to Dismiss and granted JPMorgan's Motion for Summary Judgment in favor of JPMorgan on all of Phillips' claims. See Dkt. No. 25.

         JPMorgan has also filed a Motion for Sanctions, which was referred to the undersigned, arguing that it is entitled to sanctions in this case because the filing of this lawsuit was merely another attempt to delay the foreclosure of the Property. In addition, JPMorgan argued that all of the claims in this lawsuit are barred by res judicata and violate the Court's previous warnings not to file any further lawsuits related to the foreclosure. Accordingly, JPMorgan sought to recover its reasonable attorneys' fees and expenses incurred related to the defense of Suits Four, Five, Six and Seven from the period of July 16, 2014, through June 20, 2018. Because Phillips originally filed this lawsuit in Texas state court, JPMorgan moved for sanctions under Chapter 10 of the Texas Civil Practice and Remedies Code and Texas Rule of Civil Procedure 13. JPMorgan sought attorneys' fees and expenses it incurred related to the defense of Suits Four through Seven, totaling $52, 084.01. JPMorgan further requested that the fees and expenses incurred in Suits Six and Seven be imposed jointly and severally with attorney George Slade, who has been Phillips' counsel in both those suits, and as to Suit Seven, jointly and severally with attorney Anatole Barnstone, who is also counsel in this case.

         On November 30, 2018, after determining that it would be appropriate to award sanctions in this case under its inherent powers “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), the Court determined that JPMorgan is entitled to an award of reasonable attorneys' fees and expenses. See Dkt. No. 18. The Court found that “[G]iven Phillips' delay tactics and his willful violation of two Court Orders, sanctions are appropriate.” Id. at p. 6. Accordingly, the Court ordered Plaintiff to pay JPMorgan reasonable and necessary attorneys' fees and expenses related to the defense of claims brought by Plaintiff beginning July 16, 2014, through June 20, 2018 in the amount of $52, 084.01, plus any additional reasonable and necessary fees and expenses incurred by JPMorgan after June 20, 2018. Id. at p.8. However, the Court withheld ruling on JPMorgan's request that the sanctions be imposed jointly and severally on Phillips' attorneys until it received further briefing on the issue. Id. The Court has now received all of the supplemental briefing on the matter and is ready to rule on whether Phillips' attorneys should be held jointly and severally liable for the sanctions. JPMorgan has also submitted evidence demonstrating that it incurred $11, 854 in reasonable attorneys' fees and $48.29 in expenses since June 20, 2018. See Dkt. No. 19-1. Thus, JPMorgan now seeks a total amount of $63, 986.30 in attorneys' fees and expenses as a sanction in this case.

         II. ...


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