341 F.3d 1220 (11th Cir. 2003), 02-10875, Schwartz v. Millon Air, Inc.

Docket Nº:02-10875
Citation:341 F.3d 1220
Party Name:Schwartz v. Millon Air, Inc.
Case Date:August 12, 2003
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

Page 1220

341 F.3d 1220 (11th Cir. 2003)

Newton B. SCHWARTZ, Sr., Benton Musslewhite, Sr., Plaintiffs-Appellants,

Geovanny Arauz Joza, individually and as Administrator and/or Personal Representative of the Estate of Sicyaenn Gregoria Burgos Mendoza, et al., Plaintiffs,v.

MILLON AIR, INC., Defendant-Appellee.

No. 02-10875.

United States Court of Appeals, Eleventh Circuit

August 12, 2003

[Copyrighted Material Omitted]

Page 1222

Newton B. Schwartz, Sr., Benton Musslewhite, Sr., Houston, TX, pro se.

Lisa M. Berlow-Lehner, J. Thompson Thornton, Thornton, Davis & Murray, Miami, FL, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before EDMONDSON, Chief Judge, DUBINA, Circuit Judge, and HODGES [*], District Judge.

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EDMONDSON, Chief Judge:

Appellants, Newton Schwartz, Sr. and Benton Musslewhite ("Appellants") appeal the district court's order imposing sanctions under 28 U.S.C. § 1927 and Fla. Stat. § 57.105. We reverse the district court's award of sanctions.


On 22 October 1996, a cargo plane owned and operated by Millon Air, a Florida corporation, crashed shortly after takeoff from Manta, Ecuador. In addition to killing the crew of the airplane, the crash killed, on the ground, approximately 30 residents of Ecuador living in the neighborhood of the crash site; and the crash injured many others. Following the plane crash, many Ecuadorian plaintiffs filed suit in state and federal courts in the United States for bodily injury, wrongful death, and property damage against Millon Air and against other defendants whom Plaintiffs claimed were responsible for the crash. 1

In April 1997, Appellants filed cases in the Southern District of Florida on behalf of Cecilia Guzman Cedeno, whose mother, Rita Patria Cedeno Vera, had died shortly after the crash, and on behalf of Luis Alberto Veliz Cevallos, a burn victim. Appellants received these cases (along with approximately 217 other claims resulting from the plane crash) from Richard Briones, a lawyer licensed to practice law in Ecuador. 2 Because Briones was located in Ecuador, Appellants relied upon Briones, as the referring attorney, to conduct the factual investigation into the claims. The files Appellants received from Briones included photographs and copies of their clients' medical records which were, for the most part, in Spanish.

Although Schwartz neither reads nor speaks Spanish, he--as well as a staffer who was fluent in Spanish--conducted a review of the files. In reviewing the photographs included in the files, Schwartz was struck by what appeared to be a remarkable recovery by Cevallos. Schwartz inquired of Briones whether the photographs were in fact of Cevallos. Briones assured Schwartz that the photographs were of Cevallos. Schwartz made no further investigation.

In December 1997, Musslewhite and Briones met in Ecuador with Rodrigo Jijon, one of Millon Air's Ecuadorian attorneys, and with other Millon Air representatives to discuss settlement possibilities for the approximately 219 claims Musslewhite and Briones represented from the accident. Jijon indicated to Musslewhite that some of the cases might have been totally lacking merit in that some of the claimants might not have been positioned close enough to the crash to have been injured and that some who were in the vicinity may not have been injured as claimed. Jijon, however, did not indicate which cases he believed included false claims. The parties do not dispute that Appellants asked Jijon to work with the Appellants' investigator, Raphael Jaque, to identify which claims Jijon believed to be meritless; Jijon did not do so.

All of the cases--33 cases--filed in the Southern District of Florida relating to the Millon Air accident were consolidated, and later Millon Air moved to dismiss under the doctrine of forum non conveniens. The district court granted the motion, and Cedeno and Cevallos appealed.

In 1999, while the appeal was pending, Millon Air discovered that Cedeno and

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Cevallos's claims were fraudulent. Millon Air then moved in district court to dismiss the claims. Millon Air also sought attorneys' fees and costs, pursuant to 28 U.S.C. § 1927 and Fla. Stat. § 57.105. Millon Air asserted that it originally did not investigate the claims because it had moved to dismiss for forum non conveniens. Millon Air stated that, when it investigated the claims to prepare for mediation, it discovered that the dates in the medical records of Cedeno and Cevallos had been altered to make it appear as though they had been victims of the plane crash. Cedeno actually had been admitted to the hospital two days before the crash, and Cevallos had received his burns more than a year before the crash.

Millon Air also filed a motion in this Court seeking to stay the appeal pending certification of the district court's inclination to grant Millon Air's motion to dismiss. We granted Millon Air's motion to stay the appeal.

Before the district court, Appellants responded to Millon Air's motion to dismiss and motion for sanctions. 3 Appellants did not oppose the motion to dismiss. Appellants noted that they did not question the authenticity of the evidence submitted by Millon Air. Appellants stated that they did not "countenance any fraud," and asserted that they had made reasonable inquiries into the claims before filing suit and had reasonably relied upon the investigation...

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