Teno v. Iwanski
| Decision Date | 01 June 2020 |
| Docket Number | No. 3:18-CV-159,3:18-CV-159 |
| Citation | 464 F.Supp.3d 924 |
| Parties | Doyle Thornton TENO, III, Plaintiff, v. Myron IWANSKI, Steve Mead, Leslie Mead, and Steve Emert, Defendants. |
| Court | U.S. District Court — Eastern District of Tennessee |
Hugh B. Ward, Jr., Mindy L. Nower, Young Williams Law Firm PC, Knoxville, TN, for Plaintiff.
Arthur F. Knight, III, Taylor & Knight, GP, Knoxville, TN, for Defendant Myron Iwanski.
Brian C. Quist, Ann P. Kapsimalis, Quist, Fitzpatrick & Jarrard, PLLC, Knoxville, TN, for Defendants Steve Mead, Leslie Mead.
Timothy A. Housholder, Hagood Moody Hodge PLC, Knoxville, TN, for Defendant Steve Emert.
Before the Court is a motion by Defendants Steven Mead and Leslie Mead (the "Meads") for the imposition of sanctions under Rule 11 of the Federal Rules of Civil Procedure against Plaintiff, Doyle Thornton Teno, III, Plaintiff's counsel, Hugh B. Ward and Mindy L. Nower, and Plaintiff's counsel's law firm, Young Williams & Ward, PC. (Doc. 99.) The Meads seek an award of $11,613, representing the attorney fees they incurred in this matter beginning on January 31, 2019. (Id. at 1.) Plaintiff responded in opposition (Doc. 104), and the Meads replied (Doc. 107).
Also before the Court is a motion by the Meads to alter or amend the judgment under Rule 59(e) of the Federal Rules of Civil Procedure to allow the imposition of the sanctions they seek. (Doc. 97.) Plaintiff responded in opposition (Doc. 105), and the Meads replied (Doc. 106).
For the reasons which follow, the Court will GRANT the Meads' motion for sanctions (Doc. 99) and DENY their motion to alter or amend the judgment (Doc. 97). Plaintiff, his counsel, and his counsel's law firm will be ORDERED to pay a sanction of $11,613 as a deterrent to the Meads allocated as follows: $2,000 by Plaintiff; $4,806.50 by Plaintiff's counsel's law firm; $3,204.50 by Plaintiff's lead counsel; and $1,602 by Plaintiff's secondary counsel.
This dispute arises out of the 2018 mayoral primary campaign in Anderson County, Tennessee. Defendant Steve Emert ran an unsuccessful campaign against the incumbent mayor, Terry Frank, who is not a party to this action. The other three Defendants each supported Emert's candidacy: Myron Iwanski, the Trustee of Anderson County and the Chairman of the Anderson County Finance Committee; Steven Mead ("Steve Mead"), a member of the Anderson County Board of Commissioners; and Leslie Mead, Steve Mead's spouse. Plaintiff was the Delinquent Tax Attorney and Deputy Trustee for Anderson County. He either was politically affiliated with the incumbent mayor or was identified by Defendants as being so affiliated.
For years, Steve Mead had been creating a document titled "Things You Need to Know About Mayor Terry Frank" (the "Campaign Document"). (Doc. 67-2 at 8–9 [Steve Mead. Dep. at 18–19]; Doc. 68 at 2 [Steve Mead 1st Aff. ¶ 7].) The version of the Campaign Document at issue in this lawsuit is eleven pages long and contains fifty-three numbered paragraphs criticizing Mayor Frank and her administration. (Doc. 68-1.) Criticisms covered such subjects as county finances, personnel matters, cybersecurity, litigation and other legal matters, Mayor Frank's interpersonal style, and allegedly false statements about Steve Mead by Mayor Frank. (Id. )
On November 21, 2017, Steve Mead sent an email to Iwanski, stating "I would love to see the numbers showing how much our Delinquent Tax Atorny [sic] is getting in total pay and how much would have come to the County General Fund if Jay would have been appointed instead." (Doc. 72-7 at 19.) Iwanski responded with a lengthy email on December 8, 2017, including statements that Plaintiff "is paid a salary of $35,000 with full time employee benefits in the Trustee's office," and Plaintiff "has earned $76,800 in compensation from the ‘title search’ fees." (Id. at 18–19.) Iwanski and Steve Mead may also have had oral communications regarding Plaintiff and his compensation. (See Doc. 72-21 at 12–13 [Iwanski Dep. at 48–49].)
In or around February 2018, Iwanski received copies of Plaintiff's Internal Revenue Service ("IRS") Forms 1099 for 2016 and 2017 from the Anderson County Clerk and Master, Harold P. Cousins, whose office had prepared the forms. (Doc. 72-21 at 11–12 [Iwanski Dep. at 43–46]; Doc. 72-2 at 1–2 [Cousins Aff. ¶¶ 4, 5, 7].) No one else asked for or received a copy of Plaintiff's 1099s from Cousins's office. (Doc. 72-2 at 2 [Cousins Aff. ¶ 9].) Iwanski also asked for and received information about what was on Plaintiff's IRS Forms W-2, but he did not see or receive copies of those forms.1 (Doc. 72-21 at 11 [Iwanski Dep. at 42–43].) Iwanski denies that Steve Mead ever asked to see Plaintiff's 1099s or W-2s. (Doc. 72-21 at 12–13 [Iwanski Dep. at 48–49].) Steve Mead also denies ever having seen those forms. (Doc. 67-2 at 17 [Steve Mead. Dep. at 41].)
On April 5, 2018, the Meads distributed the Campaign Document at a campaign event. According to their deposition testimony, each of the Meads distributed one or two copies of the Campaign Document at the event. (Doc. 67-1 at 5–6 [Leslie Mead Dep. at 10–11]; Doc. 67-2 at 9, 11 [Steve Mead Dep. at 19, 33].) Richard Burroughs, who reported directly to Mayor Frank, picked up eight or nine copies of the Campaign Document at the event. Steve Mead distributed one other copy of the Campaign Document after the event to Lou Jones, his own campaign treasurer. (Doc. 67-2 at 12–13 [Steve Mead Dep. at 35–36].)
As of its distribution on April 5, 2018, Paragraph 25 of the Campaign Document discussed Plaintiff's compensation, his IRS Form 1099, and his IRS Form W-2, as follows:
New Delinquent Tax attorney [Plaintiff Teno] has used a full-time county job with county benefits and other full-time county employees to do this work that he gets paid for independently by the Clerk and Master. (see 1099s to Doyle Teno) Before Myron Iwanski was appointed Trustee, Mr. Teno was the highest paid county worker by the hour. Unfortunately, no one really knew how many hours he worked since he mostly worked at home and had the Trustee's staff do his work and mailings. 1099 for last year was $120,000 (from Clerk and Master) & also got W-2 for about $40-50,000 and received full county benefits. And now he is demanding 10% commission on collected late taxes instead of the commission-approved 1%. He also refuses to turn over any of the Title Reviews he has charged for ... and wants them automatically assessed and charged before they are ever done to everyone paying late taxes.
(Doc. 68-1 ¶ 25 ().)
The Meads testified at their depositions that they themselves never saw Plaintiff's tax documents, that the reported income numbers in the Campaign Document did not come from Plaintiff's tax documents, and that Plaintiff's tax documents were not attached to the Campaign Document. (Doc. 67-1 at 7 [Leslie Mead Dep. at 16]; Doc. 67-2 at 14–17 [Steve Mead. Dep. at 38–41].) Steve Mead explained during his deposition that he used the terms "1099" and "W-2" in the Campaign Document not because he got information from those documents, but rather to describe the types of income he was discussing, because he has a background in financial services and he was accustomed to using those terms as a descriptor of income types. (Doc. 67-2 at 14–15, 17–18 [Steve Mead Dep. at 38–39, 41–42].)
Plaintiff filed this action on April 23, 2018 (Doc. 1), just over a week before the May 1, 2018, primary election. Plaintiff's original complaint asserted a cause of action against Defendants for inspecting and disclosing Plaintiff's confidential tax information in violation of 26 U.S.C. §§ 6103 and 7431. (Id. ¶¶ 29–32.) In his Second Amended Complaint, Plaintiff added a cause of action for invasion of privacy and unreasonable intrusion into private affairs under Tennessee common law, based on the same underlying factual allegations. (Doc. 27 ¶¶ 36–42.) Plaintiff alleged the Campaign Document implied that his Forms 1099 and W-2 were attached to and distributed with the Campaign Document. (Id. ¶ 25.) Plaintiff further alleged the Meads were "acting as agents of Defendant Iwanski" when they "obtained, inspected, disclosed and used Plaintiff's confidential Tax Return and Return Information," including his W-2 and 1099. (Id. ¶ 31.)
The Meads filed a motion to dismiss arguing, among other things, that they were not persons against whom suit could be brought under 26 U.S.C. §§ 6103 and 7431. (Doc. 29.) The Meads also filed a motion for summary judgment reiterating this argument and asserting discovery had revealed no evidence to support Plaintiff's action against them. (Doc. 65.) Plaintiff responded in opposition to the Meads' motion for summary judgment on January 31, 2019. (Doc. 72.) It is from this date that the Meads start their request for attorney fees as a sanction under Rule 11.
On February 6, 2019, after receiving Plaintiff's response to their motion for summary judgment, the Meads' counsel served Plaintiff's counsel with copies of a draft motion and brief for sanctions under Rule 11.2 (Doc. 100 [Quist Decl.] ¶ 4; Doc. 100-1.) The Meads' counsel asked that Plaintiff dismiss his claims against them, arguing the response to the motion for summary judgment showed the action had no basis. (Doc. 100-1.) Specifically, the Meads asserted Plaintiff's response gave no proof the Meads were acting as Iwanski's agents or ever saw Plaintiff's tax forms. (Id. ) The Meads also asserted Plaintiff's compensation was public information, the publication of which could not support the state-law cause of action in Count Two. (Id. ) Plaintiff did not dismiss his action against the Meads, either within twenty-one days of February 6, 2019, or thereafter.
On March 29, 2019, the Court granted the Meads' and the other Defendants' motions to dismiss and entered judgment in favor of all Defendants. (Doc. 93.)...
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