Akl v. Va. Hosp. Ctr.

• Citation: 471 B.R. 1
• Decision Date: 25 May 2012
• Docket Number: Civil Action No. 11–1449 (ABJ).
• Parties: Ziad AKL, Appellant, v. VIRGINIA HOSPITAL CENTER, Appellee.
• Court: U.S. District Court — District of Columbia

471 B.R. 1

Ziad AKL, Appellant,

v.VIRGINIA HOSPITAL CENTER, Appellee.

Civil Action No. 11–1449 (ABJ).

United States District Court, District of Columbia.

May 25, 2012.

Michael Alexander Troy, Law Office of Michael Alexander Troy, Washington, DC, for Appellant.

Deborah Brand Baum, Patrick J. Potter, Pillsbury Winthrop Shaw Pittman, LLP, Washington, DC, for Appellee.

MEMORANDUM OPINION

AMY BERMAN JACKSON, District Judge.

Appellant Dr. Ziad Akl brings this appeal from a final judgment in the United States Bankruptcy Court for the District of Columbia. Akl has filed twelve unsuccessful actions against appellee Virginia Hospital Center (“VHC,” “hospital”), and individuals associated with it, in state and federal courts in Virginia, Maryland, and Washington, D.C. stemming from his loss of medical privileges at the hospital. In three of those cases, which were consolidated before the Arlington Circuit Court, the court awarded VHC costs and attorneys' fees. Part 1 of Bankr.Record (“BR I”) [Dkt. # 2] at 558–81. Akl subsequently filed for Chapter 7 bankruptcy, and VHC filed an action in the bankruptcy court alleging that the fee award constituted an award of sanctions that should not be automatically discharged in Akl's bankruptcy proceedings under the United States Bankruptcy Code. The bankruptcy court denied VHC's motion for summary judgment on its complaint, and VHC subsequently moved to voluntarily dismiss its action. However, shortly after the court dismissed the case, Akl filed a motion in the bankruptcy court requesting sanctions against the hospital and its attorneys for filing the complaint and the motion for summary judgment in the first place. After granting in part and denying in part a motion to “dismiss, strike, or otherwise deny” the sanctions motion, the bankruptcy court ultimately granted summary judgment for the hospital as to sanctions and denied the sanctions motion in full. Part 4 of Bankr.Record (“BR IV”) [Dkt. # 2–3] at 975.

Akl now appeals the bankruptcy court's orders granting summary judgment and denying the motion for sanctions. He also appeals a separate order of the bankruptcy court granting appellee's motion for protective order and denying Akl's motion to compel discovery in connection with the sanctions motion. Because the Court finds that the bankruptcy court did not abuse its discretion in determining that appellee's conduct did not warrant sanctions and in denying discovery, the Court will deny Akl's appeal.

BACKGROUND

Appellant Ziad Akl was a physician at VHC until 2004, when his medical staff appointment was revoked. Appellant's Brief (“Appellant's Br.”) at 2. Since that time, Akl has filed twelve actions against the hospital, and individuals associated with the hospital, as well as judges and court staff who played roles in those cases. See Appellee's Brief (“Appellee's Br.”) at 4–5, 5 n. 4. The motion underlying this appeal arose out of the resolution of three of those cases, which Akl refers to as “ Akl I–III.” See Appellant's Br. at 3–4; accord Appellee's Br. at 4–5. These cases were all filed in the Arlington Circuit Court and consolidated before Judge Alfred Swersky, and later Judge Benjamin Kendrick. See BR I at 250–51. The complaint in Akl I named as defendants VHC, its CEO, and six physicians involved in the hospital's peer review process, and it alleged denial of due process, breach of contract, tortious interference with economic relationships, defamation and civil conspiracy arising from the termination of his hospital privileges. Id. at 189–206. The complaint in Akl II named as defendants two nurses who had filed complaints against Akl that led to the termination of his hospital privileges, and it alleged defamation, tortious interference with economic relationships, and civil conspiracy. Id. at 211–26. The complaint in Akl III named as a defendant the president of the firm with which Akl was previously employed, and it alleged similar claims. Id. at 231–45.

The Arlington Circuit Court dismissed all of Akl's claims except for breach of contract and defamation. After a period of discovery during which Akl took nineteen depositions and obtained extensive document production, Appellant's Br. at 5, and after several unfavorable rulings, Akl voluntarily dismissed the remaining claims. Id. at 5; accord Appellee's Br. at 5; BR I at 139–41.¹

The defendants in those cases subsequently filed a motion to recover the legal fees and costs incurred in the defense of the actions and certain others that Akl had filed arising from the same series of events. BR I at 67–68. The motion advanced two grounds for VHC's entitlement to fees: (1) Virginia Code 8.01–271.1—which authorizes the imposition of sanctions for frivolous submissions to the court made with an improper purpose; and (2) the terms of the contract between Dr. Akl and the hospital. At an oral hearing on the motion, Judge Kendrick of the Arlington Circuit Court stated on the record:

The contract that Dr. Akl entered into with Virginia Hospital Center is a legal and sufficient basis for the attorneys to seek sanctions against the doctor. Virginia Code [8.01–271.1], which was designed to protect litigants from the mental anguish and the expense of frivolous assertions of unfounded factual and legal claims[,] against the assertions of claims for improper purposes, and to protect courts against those who would abuse the judicial process, is also a legal and sufficient and legitimate basis to award sanctions against this litigant [Akl]. The Court finds after an exhaust[ive] review of this record that he [Akl], in fact, has violated the very nature and basis for which this code section was designed and implemented....

BR I at 70–71. However, the written order signed by the court made no mention of Virginia Code 8.01–271.1 or sanctions, and it stated that defendants' motion for costs and reasonable attorney's fees was granted “pursuant to the contract entered into between Plaintiff and Defendant Virginia Hospital Center–Arlington.” BR I at 34–35, 133–35.²

Approximately seven months after the Arlington court issued this Order, Akl filed a Chapter 7 bankruptcy petition with the United States Bankruptcy Court for the District of Columbia. VHC proceeded to file a complaint with the bankruptcy court pursuant to section 523(a)(6) of the U.S. Bankruptcy Code, 11 U.S.C. § 101 et seq., seeking to prevent Akl from receiving an automatic discharge of the fees and costs award. The hospital moved for summary judgment, arguing that the Arlington Circuit Court's award constituted a sanctions judgment, that the bankruptcy court should apply collateral estoppel to the judgment to prevent re-litigation of the issues giving rise to it, and that the bankruptcy court should except the judgment from Akl's bankruptcy discharge under the bankruptcy code and applicable case law. See BR I at 178–86.

The bankruptcy court denied the hospital's motion for summary judgment. BR IV at 912. It found that notwithstanding the Judge Kendrick's comments on the record, the fee award was based on Akl's contract, and therefore, it was not an award of sanctions. Id. at 64–65. It therefore declined to find that the hospital was entitled to judgment as a matter of law. Id. at 67. The hospital then filed a motion to voluntarily dismiss its action, which the bankruptcy court granted.³Part 2 of Bankr.Record (“BR II”) [Dkt. # 2–1] at 541. That was the end of the hospital's participation in the bankruptcy proceeding.

Shortly after the bankruptcy court dismissed the hospital's action, Akl filed a motion for sanctions invoking 28 U.S.C. section 1927 and the court's inherent power to sanction the hospital and its counsel.⁴Id. at 545. Akl argued that the nondischargeability action and the motions filed in furtherance of it were without merit and intended to harass him. Id. at 1–2. He asserted that the filing of the complaint, motion for summary judgment, and motion to quash were each sanctionable conduct by the hospital and its attorneys. Id.

VHC filed a motion to “strike, dismiss, and otherwise deny” the motion, BR II at 869, which the court granted as to one attorney for the hospital, but denied as to the hospital and its other attorneys. Part 3 of Bankr.Record (“BR III”) [Dkt. # 2–2] at 182–95.⁵ The court also ordered the hospital to file an opposition to Akl's motion for sanctions. Id. at 194. While the hospital did eventually file an opposition, id. at 297–311, it first filed a motion to partially reconsider, alter, amend, and alternatively clarify the Court's memorandum decision and order. Id. at 196–218.

The bankruptcy court granted the motion for reconsideration in part and denied it in part. BR III at 586–606. It modified its original order to dismiss the claims against another of the hospital's attorneys, dismiss Akl's section 1927 claim for the filing of the complaint, and dismiss Akl's section 1927 and inherent authority sanctions claims for the motion to quash. Id. at 604–05. It identified the remaining issues as:

(1) sanctions under the court's inherent authority for the filing of the complaint against Potter [VHC's attorney] and Virginia Hospital; (2) sanctions under § 1927 against Potter for the filing of the motion for summary judgment, except to the extent Akl argues the motion is sanctionable merely because it was in furtherance of the adversary proceeding; and (3) sanctions under the court's inherent authority against Potter and Virginia Hospital for the filing of the motion for summary judgment.

Id. at 605.

While the motion for reconsideration was pending, Akl attempted to initiate discovery. BR III at 401–02. In response, VHC moved for a protective order preventing Akl from conducting discovery pending further order of the court. Id. at 398–454. Akl opposed VHC's motion and filed a motion to compel discovery. Id. at 472. The bankruptcy court granted the motion for protective order and denied Akl's motion to compel discovery. Id. at 950–51; BR IV...