Jones v. Winnepesaukee Realty

• Decision Date: 02 February 1993
• Docket Number: No. 92-2151,92-2151
• Citation: 990 F.2d 1
• Parties: Catherine M. JONES, et al., Plaintiffs, Appellants, v. WINNEPESAUKEE REALTY, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1

990 F.2d 1

25 Fed.R.Serv.3d 740

Catherine M. JONES, et al., Plaintiffs, Appellants, v. WINNEPESAUKEE REALTY, et al., Defendants, Appellees.

No. 92-2151.

United States Court of Appeals First Circuit.

Heard Feb. 2, 1993.

Decided March 12, 1993.

David A. Jones, for appellants.

Before SELYA, Circuit Judge, COFFIN, Senior Circuit Judge, and BOUDIN, Circuit Judge.

SELYA, Circuit Judge.

In this appeal, a family of disappointed plaintiffs asks us to overturn the district court's entry of judgment on a counterclaim and to annul awards covering attorneys' fees and sanctions. Finding no cognizable error, we affirm.

I. BACKGROUND

In early 1989, Catherine M. Jones and her son, Alexander T. Jones, filed suit to recover amounts allegedly owed by Reid S. Littlefield in consequence of Littlefield's agreement to rent a vacation home in Gilford, New Hampshire. Littlefield, through counsel, answered the complaint and counterclaimed for breach of contract, assault, and trespass. ¹ In response to a pretrial order, the two original plaintiffs filed an amended complaint in which they joined David A. Jones, an owner of the property and a signatory to the lease, as a co-plaintiff. ² Soon thereafter, plaintiffs' attorney moved to withdraw from the case. On January 2, 1990, the magistrate-judge allowed the motion. From that point forward, David Jones served as his own counsel and at times represented his co-plaintiffs.

In April 1990, appellants withdrew most of the causes of action originally asserted against Littlefield. Buoyed by this concession, Littlefield moved to dismiss on the ground that there was no longer a sufficient amount in controversy. Although the court denied Littlefield's motion and gave appellants permission to supplement their pleadings, appellants made no effort to cure the perceived deficiency. ³ On August 27, 1990, the court dismissed their complaint.

Claiming that they had never received notice of the opportunity to amend their pleadings, and denying (despite a clear record to the contrary) that they had withdrawn their other causes of action, appellants sought and obtained the district court's agreement to reconsider. The court withheld entry of judgment and set a reconsideration hearing for January 7, 1991. The appellants did not attend. Instead, they notified the court a week beforehand that Catherine Jones's medical condition precluded travel from Pennsylvania to New Hampshire. The court continued the hearing until June 24, 1991. On that date, only David Jones appeared, claiming that a daughter's sudden illness prevented his wife's attendance. The court rescheduled the hearing for April 6, 1992, but warned appellants that their failure to attend on the new date would result in dismissal of the complaint and, possibly, additional sanctions.

Notwithstanding the court's admonition, no plaintiff appeared on April 6. Appellants did not communicate directly with the court but sent a facsimile transmittal to their former attorney explaining that illness supposedly prevented them from attending. Its patience exhausted, the district court acted on its earlier dismissal of the complaint and entered judgment. On May 5, 1992, the court denied appellants' motion for reconsideration and, at the same time, granted Littlefield's motion for entry of a default in respect to the counterclaim. The court fixed June 3, 1992 for a dual-purpose hearing (i) to determine damages on the counterclaim, see Fed.R.Civ.P. 55(b)(2), (d), and (ii) to consider the possible imposition of sanctions. Although appellants did not show up for the June 3 hearing, the court received evidence and reserved decision.

On September 8, 1992, the court awarded Littlefield $2,000 on the counterclaim's assault count, dismissed the remaining counts of the counterclaim (finding Littlefield's proof of damages inadequate), awarded Littlefield attorneys' fees in the amount of $6,338.80, and fined Mr. and Mrs. Jones $5,000 apiece for their consistent failure to attend pretrial hearings and their bad faith in conducting the litigation. This appeal followed.

II. DISCUSSION

Having studied the record, we conclude that none of appellants' contentions merit relief from the various orders entered below. In explaining why this is so, we comment briefly on four of appellants' principal points.

A. The Matter of Status.

Throughout most of this litigation, David Jones has characterized himself as an "involuntary plaintiff." On appeal, he maintains this characterization, arguing that, as such, he cannot be forced to pay sanctions. We do not think that Jones's point is properly preserved.

To be sure, Jones is an involuntary plaintiff in the sense that, on August 28, 1989, the magistrate-judge ordered the two original plaintiffs to join him. (Given his relationship to the property and the lease, he was a necessary, perhaps an indispensable, party, see Fed.R.Civ.P. 19.) However, subsequent to joinder, Jones made several personal appearances in the case and also made a number of written submissions. While he styled himself at various times as an "involuntary plaintiff," he never asked the district court to drop him as a party. That ends the matter. In this circuit, "it is a party's first obligation to seek any relief that might fairly have been thought available in the district court before seeking it on appeal." Beaulieu v. United States Internal Revenue Serv., 865 F.2d 1351, 1352 (1st Cir.1989); accord Dartmouth Rev. v. Dartmouth College, 889 F.2d 13, 22 (1st Cir.1989); Aoude v. Mobil Oil Corp., 862 F.2d 890, 896 (1st Cir.1988). Thus, here, neither the question of whether it was error for the magistrate-judge to direct that David Jones be joined as a plaintiff, nor the related question of whether Jones participated in the suit under unfair compulsion, is before us. ⁴

B. The Assessment of Damages.

We next consider Catherine Jones's contention that the district court improperly assessed damages against her in the sum of $2,000. The record discloses that, after entering a default on the counterclaims, the district court scheduled a proof-of-claim hearing for June 3, 1992, directed Littlefield to submit a full accounting of his damages in advance, and directed appellants to respond to this submission before the hearing. Littlefield filed a written statement of damages and a supporting memorandum. The appellants filed nothing. They also boycotted the June 3 hearing. In contrast, Littlefield appeared and testified. Based upon the evidence before it, the district court awarded Littlefield $2,000 in damages against Catherine Jones on the assault counterclaim.

Once the entry of a default establishes the fact of damage, the trial judge, sitting without a jury in a Rule 55 proceeding, has considerable latitude in determining the amount of damages. See Sony Corp. v. Elm State Elecs., Inc., 800 F.2d 317, 321 (2d Cir.1986) (reviewing assessment of damages following entry of default for abuse of discretion). This standard dictates the result in the present situation. The district judge determined that, notwithstanding the default, he should not rely merely on unverified allegations to determine an appropriate award of damages in a case not involving a liquidated amount, see, e.g., Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir.1983); Byrd v. Keene Corp., 104 F.R.D. 10, 12 (E.D.Pa.1984), and, therefore, convened an evidentiary hearing to establish the quantum of the award. See Al-Kazemi v. General Acceptance & Inv. Corp., 633 F.Supp. 540, 542 (D.D.C.1986); Systems Indus., Inc. v. Han, 105 F.R.D. 72, 74-75 (E.D.Pa.1985).

Absent a sum certain, the district court, in arriving at the award, could do no more than rely on the evidence before it. Through no fault of either the court or the counterclaimant, the evidence produced at the hearing consisted mainly of Littlefield's statement of damages and sworn testimony. Reviewing this evidence to the extent possible, ⁵ we perceive no abuse of discretion in a $2,000 award. Littlefield stated, by affidavit, that Catherine Jones's threats of violence caused him to experience fear of physical injury and mental distress. Non-economic damages for apprehension, emotional distress, and psychic injury are not easily computed and, therefore, determinations of this type are extremely fact-sensitive. See, e.g., Wagenmann v. Adams, 829 F.2d 196, 216 (1st Cir.1987) (observing that "there is no scientific formula or measuring device which can be applied to place a precise dollar value on matters such as ... fright, anxiety, ... or emotional scarring"). Bearing in mind the incomplete record, see supra note 5, the nature of the alleged damages, the modest amount of the award, the appellants' failure to submit any information whatever at or before the proof-of-claim hearing, ⁶ and the deferential standard of review, we are powerless to undo the award.

C. The Award of Counsel Fees.

It is beyond serious dispute that a federal court possesses inherent power to shift attorneys' fees when parties conduct litigation in bad faith. See Roadway Express, Inc. v. Piper, 447 U.S. 752, 765-66, 100 S.Ct. 2455, 2463-64, 65 L.Ed.2d 488 (1980) (recognizing "bad faith" exception to general rule that federal courts cannot ordinarily make fee-shifting awards); Stefan v. Laurenitis, 889 F.2d 363, 370 (1st Cir.1989) (discussing district court's inherent power under Roadway doctrine); Peltier v. Peltier, 548 F.2d 1083, 1084 (1st Cir.1977) (affirming award of attorneys' fees); see also Chambers v. NASCO, Inc., --- U.S. ----, ----, 111 S.Ct. 2123, 2133, 115 L.Ed.2d 27 (1991). This power should be used sparingly and reserved for egregious circumstances.

The district court, citing the "general non-cooperative and often contentious manner" in which appellants conducted the litigation, as well as offering numerous examples of untoward practice, ⁷ determined that the appellants had surpassed the threshold of egregiousness. The...