Monday, September 26, 2011
The Austin Bankruptcy Court is housed in the Homer Thornberry Judicial Building. When the building was converted from a post office to a courthouse, the designers included an elegant entryway. Alas, this was before Oklahoma City and 9/11. Now the entryway is covered by a gate and a sign directing those with business in the building to the functional entrance, the one with the metal detector. While it is sad that the vision of the architect has been overshadowed, at least we are secure.
Sunday, September 25, 2011
You can find the announcement with links to related documents here.
You can find the link to the proposed model plan here.
Can you enforce civility by being… uncivil? That’s the question being raised, over and over again, by federal judges from Texas these days.
Act I: An Invitation to a Kindergarten Party
The series of highly unfortunate events began when non-parties to a civil action sought to quash deposition notices addressed to them. This prompted an order from Judge Sparks which included the following language:
Greetings and Salutations!
You are invited to a kindergarten party on THURSDAY, SEPTEMBER 1,2011, at 10:00 a.m. in Courtroom 2 of the United States Courthouse, 200 W. Eighth Street, Austin, Texas.
The party will feature many exciting and informative lessons, including:
• How to telephone and communicate with a lawyer
• How to enter into reasonable agreements about deposition dates
• How to limit depositions to reasonable subject matter
• Why it is neither cute nor clever to attempt to quash a subpoena for technical failures of service when notice is reasonably given; and
• An advanced seminar on not wasting the time of a busy federal judge and his staff because you are unable to practice law at the level of a first year law student.
Invitation to this exclusive event is not RSVP. Please remember to bring a sack lunch! The United States Marshals have beds available if necessary, so you may wish to bring a toothbrush in case the party runs late.
Act II: The Email Heard Round the District
Chief Judge Edith Jones of the Fifth Circuit Court of Appeals responded promptly, critiquing Judge Sparks for his "cute" orders.
It has not escaped my attention, or that of my colleagues or, I am told, nationally known blog sites that you have issued several ‘cute’ orders in the past few weeks. The order attached below is the most recent.
Frankly, this kind of rhetoric is not funny. In fact, it is so caustic, demeaning, and gratuitous that it casts more disrespect on the judiciary than on the now-besmirched reputation of the counsel. It suggests either that the judge is simply indulging himself at the expense of counsel or that he is fighting with counsel in what, as Judge Gee used to say, is surely not a fair contest. It suggests bias against counsel.
No doubt, none of us has been consistently above reproach in our professional communications with counsel. We are all prone to human error. But no judge who writes an order should allow such rhetoric to overcome common sense.
Ultimately, this kind of excess, as I noted, reflects badly on all of us. I urge you to think before you write.
Act III: Judge Dennis Gets a Talking To for Talking Too Much
MR. TURNER: I think the amount of drugs in that truck supports the intent to distribute. And the jury….
JUDGE DENNIS: Well, we’ve said over and over that the amount…. this court, no court has said that you can infer….
CHIEF JUDGE JONES: Judge Dennis….
JUDGE DENNIS: … just on the basis of the amount of drugs …
CHIEF JUDGE JONES: Judge Dennis!
JUDGE DENNIS: Can I, can I, can I ask a question?
CHIEF JUDGE JONES: You have monopolized, uh, uh, seven minutes….
JUDGE DENNIS: Well, I’m way behind on asking questions in this court. I have been quiet a lot of times, and I am involved in this case….
CHIEF JUDGE JONES slams her hand down on the table (loudly), stands halfway up out of her chair, and points toward the door.
CHIEF JUDGE JONES: Would you like to leave?
JUDGE DENNIS: Pardon? What did you say?
CHIEF JUDGE JONES: I want you to shut up long enough for me to suggest that perhaps….
JUDGE DENNIS: Don’t tell me to shut up….
CHIEF JUDGE JONES: … you should give some other judge a chance to ask a question …
JUDGE DENNIS: Listen, I have been in this courtroom many times and gotten closed out and not able to ask a question. I don’t think I’m being overbearing….
CHIEF JUDGE JONES: You’ve been asking questions for the entire seven minutes….
JUDGE DENNIS: Well, I happen to be through. I have no more questions.
CHIEF JUDGE JONES: I just want to offer any other judge an opportunity to ask a question. Some may support your position. If nobody else chooses to ask a question, then please go forward.
(I am relying on Above the Law's transcription. Please listen to the argument yourself to ensure the accuracy of the statements quoted).
Thursday, September 22, 2011
Under the Texas Rules of Civil Procedure, a party may serve discovery requests together with the petition. In this case, the Plaintiff included a request for admission which stated:
Request for Admission 2: As a proximate result of your breaching the contract made the basis of this suit, the Plaintiffs have suffered consequential damages in an amount not less than ten million dollars.
On appeal, the Court of Appeals (in an opinion written by Justice Henson and joined by Chief Justice Jones and Justice Goodwin) said not so fast.
The primary purpose of requests for admissions is to “simplify trials by eliminating matters about which there is no real controversy.” (citation omitted). They were never intended to be used as a demand upon a plaintiff or defendant to admit that he had no cause of action or ground of defense. Id. Courts have cautioned that litigants should not be allowed to use requests for admissions as a tool to trap their opposition. (citation omitted). The rule regarding requests for admissions “was designed, not as a trap to prevent the presentation of the truth in a full hearing but as a tool for the fair disposition of litigation with a minimum of delay.” (citation omitted). When a party uses deemed admissions to try to preclude presentation of the merits of a case, however, due process concerns may arise. Therefore, overly broad, merits-preclusive requests for admissions are improper and may not result in deemed admissions. (citations omitted).
This is a good opinion, indeed a courageous opinion. I applaud the Austin Court of Appeals for their ruling.
Call me crazy & you are wrong - Lucas was served as it was proven by the process server in testimonial deposition, under oath and the opportunity to file for a trial after Travis County sent him a letter telling him he had a judgment against him. He fully acknowledged he received that notification. In addition, he had the opportunity to file for a Bill Of Review. The deemed admissions outlined some of the losses. They were actually over $50 million, with a personal invested cash loss of over $1,000,000 and another $1,300,000 loss in assets. Was the Plaintiff supposed to go to Lucas's home and beg him to accept service? As a former banker, Lucas knew very well he was served and what he had to do to avoid a judgment. The law suit came about by his purposely, with greedy malice afore thought, reneging on a contact, trying to run Clark into bankruptcy, so he could steal Clark's company for 10¢ on the dollar from a trustee. We found that long before the suit was filed, he set up a corporation to take over the company. I called 4 attorneys looking for one to assist me in filing garnishments - 3 of the 4 had sued Lucas. (If that tells you anything.) Not only did Judge Diane Henson not speak to the 3 issues raised by Lucas in his appeal, she had to go way, way out in left field to manufacturer a fuzzy reason to negate settled law on deemed admissions in order to overturn this judgment. No where in the judgment did it mention lost profits which she said was the reason for her decision. It appears she personally decided a person should not get $10 million on a default judgment and didn't give a damn about the law. If it had been $1,000,000 I 'm sure the outcome would have been different. She was way off base, dead wrong and has added insult to my grievous financial injury, caused by Lucas. My only hope now is if the good Republican Supreme Court does not listen to this liberal Democrat and her manufactured musings, overturns her and affirms "Deemed Admissions" as settled law.
Wednesday, September 21, 2011
On September 9, 2011, the Fifth Circuit directed the parties to submit
Technical Automation Services Corp. v. Liberty Surplus Insurance Corporation, No. 10-20640 (5th Cir. 9/9/11), Order, p. 2.letter briefs of not more than six pages addressing whether the reasoning of Stern applies to magistrate judges, which, like bankruptcy judges, are not Article III judges, and whether, under Stern, a magistrate judge can enter final judgment in a case tried to a magistrate judge by consent under 28 U.S.C. § 636(c) where jurisdiction is based on diversity of citizenship and state law provides the rule of decision.
Thus, it looks like there may be a circuit-level opinion on Stern v. Marshall sooner rather than later.
Hat Tip to Prof. Ken Klee.
You can read the order in full below.
While the twenty-two page opinion is worth reading in its entirety, I will leave you with the conclusion:
The court is certainly cognizant of the fact that the mortgage servicing industry does not always show itself to be the perfect, well-oiled machine that one would hope it to be. As more and more individuals have gone into default on their home mortgages and resorted to seeking bankruptcy protection, bankruptcy courts have seen certain problems that exist in the home mortgage servicing industry, particularly issues when it comes to chain of title and other documentation. Some of these cases may require bankruptcy courts to take action and issue appropriate orders to ensure that such practices do not continue; however, in this case, the court does not believe it to be a good exercise of discretion to do so.
Opinion, pp. 20-22.
The court would conclude by stating that Rule 11 seems to be the more appropriate tool to use when requesting sanctions or fee shifting, not only because it allows a party an opportunity to remedy any mistakes it may have made, but also because it seems to make parties engage in a dialogue which could ultimately facilitate settlement. The court found it very enlightening to read Debtor’s Exhibit G, which was a myriad of emails that were exchanged between Debtor’s Counsel and HWALLP over the approximately 3-year period that this matter was pending. From the court’s review of these emails, there was certainly no evidence of inappropriate behavior by HWALLP, AHMSI, or Citi. In fact, the overall tone of the emails was quite professional and courteous. If anything, this case appeared to be one primed for settlement, as there were significant discussions about a possible loan modification. However, settlement and/or a loan modification never happened. Instead, HWALLP filed the Citi Stay Lift Motion and the AHMSI Stay Lift Motions with certain chain of-custody gaps and documentation errors (first no indorsement; then ultimately an indorsement-in-blank supplied but not offered into evidence). While this was sloppy and bad form (which justified denying stay relief), this, in and of itself, did not rise to the level of bad faith or vexatious litigation that would legitimize fee shifting. (emphasis added).