Your document has been successfully saved!

Search through millions of court cases, regulations, statutes and more...

Search for
Boolean Connector Use Result
AND Sleep AND Fall Records with both “Slip” and “Fall”
OR Lee OR Grant Records with either “Lee” or “Grant”
NOT Transaction NOT Fee Records that contain “Transaction” but exclude “Fee”
( ) (Tree OR Shrub) AND Fall Records containing “Tree” or “Shrub”, and the word “Fall”
" " "Capital Punishment" Records containing the exact phrase “Capital Punishment”
* Affirm* Records containing variations of the root word (such as “Affirmed”, “Affirming”, “Affirmation”, and etc…)
? Connect?r Records that contain single letter variations (such as “Connector” and “Connecter”)
Jurisdiction: Alabama Southern District Court
Decision Date: 9/15/2017

STATES

                                                                                                                                                                                                                                                                                                                                                                                                                            FEDERAL

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Virgen v. U.S. Coatings Virgen v. U.S. Coatings, Inc. (S.D. Ala., 2017)

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        JULIO VIRGEN, on behalf of himself and other persons similarly situated, Plaintiff,
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        v.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        US COATINGS, INC Defendant.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        CIVIL ACTION NO. 17-00198-KD-N

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        September 15, 2017

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        JULIO VIRGEN, on behalf of himself and other persons similarly situated, Plaintiff, v. US COATINGS, INC Defendant.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        CIVIL ACTION NO. 17-00198-KD-N

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        September 15, 2017

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        REPORT AND RECOMMENDATIONS

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                This action is before the Court on the motion to voluntarily dismiss with prejudice under Federal Rule of Civil Procedure 41(a)(2) (Doc. 32) filed by Plaintiff Julio Virgen ("the Plaintiff"), and the timely filed response thereto (Doc. 35) of Defendant U.S. Coatings, Inc. ("USC"), which also moves for imposition of sanctions against the Plaintiff and his counsel. The Court has referred these matters to the undersigned Magistrate Judge for appropriate action under 28 U.S.C. § 636(b)(1), Federal Rule of Civil Procedure 72, and S. D. Ala. GenLR 72(a). See S. D. Ala. GenLR 72(b); (8/10/2017 electronic references).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        I. Analysis
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        a. Motion to Voluntarily Dismiss

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                "Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper. " Fed. R. Ci v. P. 41(a)(2). The Plaintiff requests that this Court "issue an order

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 2

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        dismissing all claims against Defendant US Coatings, Inc with prejudice, with the parties to bear their own costs. " (Doc. 32 at 1). USC agrees that "this entire case should be dismissed with prejudice" but argues that the Plaintiff should be made to bear at least some of USC's costs. (See Doc. 35 at 1, 5). USC further argues that the dismissal order should "include language addressing claims that Virgen may later attempt to assert under a fake identity, alias, or alternative name. " (Id. at 1). Indeed, USC's proposed order of dismissal indicates that it wishes this Court to "forever bar" Virgen from asserting any claims that "were asserted or could have been asserted in this action by Julio Virgen, or by any name, alias, and/or identity Julio Virgen allegedly used during any alleged employment with Defendant. . . " (Doc. 35-1 at 1).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 3

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Arias v. Cameron 776 F. 3d 1262, 1268-69 (11th Cir. 2015).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Here, USC has not identified any clear legal prejudice beyond "the mere prospect of a subsequent lawsuit" that would justify the sweeping dismissal it seeks of any and all claims the Plaintiff could have asserted against USC in this action. Moreover, the Plaintiff has agreed to the dismissal of the claims he asserts in this action with prejudice; the doctrine of res judicata therefore offers sufficient protection against any future lawsuits by the Plaintiff against USC. See Ragsdale v. Rubbermaid Inc 193 F. 3d 1235, 1238 (11th Cir. 1999) ("Res judicata bars the filing of claims which were raised or could have been raised in an earlier proceeding. "); Citibank N. A. v. Data Lease Fin. Corp 904 F.2d 1498 1501 (11th Cir. 1990) ("The phrases 'with prejudice' and 'on the merits' are synonymous terms, both of which invoke the doctrine of claim preclusion. The district court's order dismissing Data Lease's third-party complaint against the directors with prejudice, entered by stipulation of the parties pursuant to Rule 41(a), is a 'final judgment on the merits. ' "). However, the undersigned agrees to USC's proposal that the order of dismissal make clear that it applies to the claims of the person Plaintiff, regardless of what other names, identities, etc. he may go by. Additionally, the

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 4

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        undersigned finds that the Court should decline the Plaintiff's request that the parties be ordered to bear their own costs in conjunction with the dismissal and instead stay silent on the issue of costs when dismissing this action. To the extent USC believes it is entitled to costs pursuant to the dismissal, USC should seek them under the procedure in S. D. Ala. CivLR 54.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Accordingly, the undersigned finds that the Plaintiff's Rule 41(a)(2) motion to voluntarily dismiss is due to be GRANTED in part and DENIED in part such that all claims asserted in this action by the person Plaintiff, who has identified himself as Julio Virgen in this action but may go by other names, aliases, identities, etc be DISMISSED with prejudice without a contemporaneous determination as to costs.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        b. Rule 11 Sanctions

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                When a party seeks sanctions under Federal Rule of Civil Procedure 11 by motion, that Rule requires the motion "be made separately from any other motion. . . " Fed. R. Ci v. P. 11(c)(2). Additionally, the Rule provides the following "safe harbor" provision for non-movants: "The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. " Id. USC's request for Rule 11 sanctions is embedded within a response to a motion and is one of several

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 5

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        requests for relief sought by USC in the response. Moreover, there is no indication that USC has complied with Rule 11(c)(2)'s "safe harbor" provision. For these reasons, the undersigned finds that that USC's request for Rule 11 sanctions is due to be DENIED.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        c. Sanctions under 28 U.S. C § 1927

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Peer v. Lewis 606 F. 3d 1306, 1314 (11th Cir. 2010).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                The record does not support a determination that the Plaintiff's counsel have unreasonably and vexatiously multiplied these proceedings. The complaint (Doc. 1) was filed on May 5, 2017; counsel promptly served USC on May 22, 2017, and filed notice of same with the Court. (See Doc. 12). Plaintiff's counsel complied with the Plaintiff's obligations under the preliminary scheduling order by timely filing responses to the Court's interrogatories (see Docs. 19, 21); timely filing a response to USC's motion for summary judgment, supported by evidence, without requesting an extension of time (see Doc. 22); and filing the Plaintiff's motion to voluntarily dismiss at 1: 55 p. m. (Central Standard Time) three days before the date of the evidentiary hearing.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 6

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                In requesting sanctions under § 1927, USC largely complains that the Plaintiff's counsel repeatedly rebuffed requests made by USC's counsel for evidence that the Plaintiff was employed by USC. While informal cooperation over such a seemingly simple point might have been a more prudent course, the Plaintiff did not act inappropriately under the Federal Rules of Civil Procedure in refusing to provide such evidence. USC has cited no Rule or other authority that would have required the Plaintiff to present evidence in support of his complaint at the outset of the case, and under Federal Rule of Civil Procedure 26(d)(1), generally a "party may not seek discovery from any source before the parties have conferred as required by Rule 26(f). . . " No such conference has ever occurred in this action. Additionally, the Court's preliminary scheduling order (Doc. 19), entered five days after USC filed its answer and motion for summary judgment, waived the initial disclosure requirements of Federal Rule of Civil Procedure 26(a)(1) and stayed all discovery in this action, with limited inapplicable exceptions. In light of these considerations, the undersigned cannot say that sanctions against the Plaintiff's counsel under § 1927 are justified in this case. Accordingly, the undersigned finds that USC's request for § 1927 sanctions is due to be DENIED.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        d. Sanctions under Court's Inherent Power

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 7

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Purchasing Power LLC v. Bluestem Brands Inc 851 F. 3d 1218, 1223, 1225 (11th Cir. 2017) (emphasis added).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                "The standard for inherent power sanctions. . . is a subjective standard with a narrow exception for conduct tantamount to bad faith. Furthermore, recklessness alone does not constitute conduct tantamount to bad faith. . . In the absence of direct evidence of subjective bad faith, this standard can be met if an attorney's conduct is so egregious that it could only be committed in bad faith. This is not the

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 8

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        same as simple recklessness, which can be a starting point but requires something more to constitute bad faith. " Id. at 1223-25 (citation omitted).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                In support of sanctions, USC claims:

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        (Doc. 35 at 1 - 2. See also Doc. 35-2). USC asserts this Court must conclude from the above that the Plaintiff and his counsel "perpetuated a fraud by insisting in numerous pleadings filed with the Court that 'Julio Virgen' was employed by USC. " (Id. at 4). As sanctions, USC demands the following: "(i) an admonishment to Virgen's counsel for their lack of candor and/or outright misrepresentations to the Court and USC's counsel concerning Virgen's identity, and (ii) the reimbursement of USC's reasonable attorney's fees and expenses incurred to prepare its Motion for Summary judgment and related briefing (Docs. 14, 28) and its Request for Relief from the Rule 16(b) Scheduling Order. (Doc. 29), " as well as "any other relief or sanctions the Court deems just and appropriate. " (Id. at 5).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 9

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                "If particularly egregious, the pursuit of a claim without reasonable inquiry into the underlying facts can be the basis for a finding of bad faith" to invoke the Court's inherent powers. Barnes v. Dalton 158 F. 3d 1212, 1214 (11th Cir. 1998). However, there is no direct evidence of subjective bad faith in the record, and the undersigned does not find that the conduct of either the Plaintiff or his counsel was "so egregious that it could only be committed in bad faith. " Both in his sworn responses to the Court's interrogatories (Doc. 21) and in his declaration in opposition to USC's motion for summary judgment (Doc. 22-1), the Plaintiff provided a number of non-conclusory factual assertions supporting his contention that he had been a USC employee, as well as a badge providing some indicia of involvement with USC (Doc. 22-2). USC insists that the Plaintiff should have provided something more in support of his claims of having been a USC employee - a W-2 form, a USC paycheck, etc. (see Doc. 28 at 2); however, " 'courts routinely and properly deny summary judgment on the basis of a party's sworn testimony even though it is self-serving. ' " Feliciano v. City of Miami Beach 707 F. 3d 1244, 1253 (11th Cir. 2013) (quoting Price v. Time Inc 416 F. 3d 1327, 1345 (11th Cir. 2005)).

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                It should also be noted that, in support of its motion for summary judgment, USC initially submitted only a declaration of its president, who claimed to have reviewed personnel and payroll records from the time periods alleged in the complaint and found no indication a person named Julio Virgen had been employed with USC during that time. (See Docs. 14-1, 28-1, 28-2). In response, the Plaintiff submitted his own declaration asserting that he had been employed with USC

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 10

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        during the relevant period. (Doc. 22-1). To the extent the testimony of USC's president was inconsistent with the Plaintiff's, "the contradiction presents a classic swearing match, which is the stuff of which jury trials are made. " Feliciano 707 F. 3d at 1253. However, after USC submitted more detailed job site records and payroll records with its reply to further refute the Plaintiff's assertions of employment, and after the Court, on USC's motion, set a hearing on the issue, the Plaintiff chose to voluntarily dismiss his case rather than proceed with the hearing.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Given the brevity of this case, the undersigned is hesitant to accept USC's records as irrefutable proof that the Plaintiff was misrepresenting his employment status with USC all along, since this action never reached the commencement of formal discovery that would have allowed those records to be subject to a more probing inquiry by the parties. While the records may indeed be true and accurate, it is also not unheard of for employers to engage in sloppy record keeping, to employ individuals "off the books, " etc. Moreover, there appears to be the possibility that the Plaintiff was employed with USC under an alias.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                While USC has admittedly produced strong evidence contradicting the Plaintiff's allegations that he was USC's employee, there is no "smoking gun" proof in the record that these allegations are demonstrably false. Absent such definitive proof, resolving conflicting evidence is generally the province of the trier of fact. See Combs v. Plantation Patterns 106 F. 3d 1519, 1530 (11th Cir. 1997) ("issues of fact and sufficiency of evidence are properly reserved for the jury" (quotation

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 11

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        omitted)). While the Plaintiff and/or his counsel may have been careless in failing to raise and investigate the Plaintiff's possible use of an alias sooner, this is at most "simple recklessness" insufficient for a finding of bad faith, without more. Indeed, the record shows that, when faced with the strength of USC's evidence produced at summary judgment, and after the matter was set for an evidentiary hearing (which the Plaintiff and/or his counsel could have reasonably interpreted as the Court signaling doubts on the sufficiency of the Plaintiff's evidence), rather than continue to pursue his claims, the Plaintiff instead voluntarily moved to dismiss his claims, with prejudice no less. This cannot be said to be a "particularly egregious. . . pursuit of a claim without reasonable inquiry into the underlying facts" that would justify a finding of bad faith. Barnes 158 F. 3d at 1214.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Accordingly, the undersigned finds that USC's request for sanctions under the Court's inherent power is due to be DENIED.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        II. Conclusion

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                In accordance with the foregoing analysis, the undersigned RECOMMENDS that USC's various requests for sanctions (Doc. 35) be DENIED that USC's request to dismiss or strike the complaint as frivolous under S. D. Ala. CivLR 41(d) (Doc. 35) and its pending motion for summary judgment (Doc. 14) both be DENIED as moot and that the Plaintiff's Rule 41(a)(2) motion to voluntarily dismiss (Doc. 32) be GRANTED in part and DENIED in part such that all claims asserted in this action by the natural person Plaintiff, who has identified himself as Julio Virgen in

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Page 12

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        this action but may go by other names, aliases, identities, etc be DISMISSED with prejudice without a contemporaneous determination as to costs.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        NOTICE OF RIGHT TO FILE OBJECTIONS

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                A copy of this report and recommendation shall be served on all parties in the manner provided by law. Any party who objects to this recommendation or anything in it must, within fourteen (14) days of the date of service of this document, file specific written objections with the Clerk of this Court. See 28 U.S.C. § 636(b)(1); Fed. R. Ci v. P. 72(b); S. D. Ala. GenLR 72(c). The parties should note that under Eleventh Circuit Rule 3-1, "a party failing to object to a magistrate judge's findings or recommendations contained in a report and recommendation in accordance with the provisions of 28 U.S.C. § 636(b)(1) waives the right to challenge on appeal the district court's order based on unobjected-to factual and legal conclusions if the party was informed of the time period for objecting and the consequences on appeal for failing to object. In the absence of a proper objection, however, the court may review on appeal for plain error if necessary in the interests of justice. " 11th Cir. R. 3-1. In order to be specific, an objection must identify the specific finding or recommendation to which objection is made, state the basis for the objection, and specify the place in the Magistrate Judge's report and recommendation where the disputed determination is found. An objection that merely incorporates by reference or refers to the briefing before the Magistrate Judge is not specific.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                DONE this the 15 day of September 2017.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                /s/ Katherine P. Nelson

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Cited By
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Cites
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Negative Treatment
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Notes

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Please, select a date range