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concluding that litigant's conduct in pursuing action previously barred on res judicata grounds was objectively unreasonable under Rule 11
Summary of this case from Deyo v. PallitoOpinion
No. 07-1736-cv.
October 26, 2009.
Appeal from the United States District Court for the Western District of New York (John T. Elfvin and William M. Skretny, Judges).
UPON DUE CONSIDERATION IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgments entered on January 25, 2006, March 26, 2007, and April 22, 2008, are AFFIRMED.
George Eagan Ginther, pro se, Buffalo, NY.
Patrick W. Begos, Begos Horgan Brown LLP, Westport, CT, for Appellee.
SUMMARY ORDER
George Eagan Ginther, pro se, appeals from (1) the dismissal of his complaint, and (2) post-judgment orders denying his motion to correct or amend the judgment and imposing sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure. This Court reviews de novo an order of dismissal. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). We "apply an abuse-of-discretion standard in reviewing all aspects of a district court's Rule 11 determination." Cooler Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). We assume the parties' familiarity with the facts and the record of prior proceedings, which we reference only as necessary to explain our decision to affirm.
1. Dismissal of the Complaint
Ginther's challenge to the dismissal of his complaint seeking, inter alia, reinstatement of benefits under a terminated disability insurance policy or, in the alternative, a refund of all insurance premiums paid to defendant, is without merit. In 2002, this court affirmed a district court judgment entered after trial that Ginther was not entitled to any benefits under the policy at issue. See Provident Life Cos. Ins. Co. v. Ginther, 51 Fed.Appx. 72 (2d Cir. 2002) (" Ginther I"). To the extent Ginther now seeks to raise new arguments supporting entitlement to benefits under the policy, his claims are barred by res judicata. Under this doctrine, "a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." ATSI Commc'n, Inc. v. Shaar Fund, Ltd., 547 F.3d 109, 112 n. 2 (2d Cir. 2008) (internal quotation marks omitted). The parties are bound "not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose." Harborside Refrigerated Servs., Inc. v. Vogel, 959 F.2d 368, 372 (2d Cir. 1992) (internal quotation marks omitted). Accordingly, Ginther's claims for reinstatement of benefits were properly dismissed.
As to Ginther's claims for a refund of premiums and damages, we agree with the district court that they were compulsory counterclaims in Ginther I and are barred under Fed.R.Civ.P. 13(a). A claim is compulsory if "a logical relationship exists between the claim and the counterclaim and [if] the essential facts of the claims are so logically connected that considerations of judicial economy and fairness dictate that all the issues be resolved in one lawsuit." Critical-Vac Filtration Corp. v. Minuteman Int'l Inc., 233 F.3d 697, 699 (2d Cir. 2000) (internal quotation marks omitted). Furthermore, "[i]f a party has a compulsory counterclaim and fails to plead it, the claim cannot be raised in a subsequent lawsuit." Id., As the district court correctly concluded, Ginther's claims seeking a refund of premiums or damages pertain directly to the insurance policy at issue in Ginther I and therefore "arise[] out of the transaction or occurrence that [was] the subject matter of the opposing party's claim" in that litigation. Fed.R.Civ.P. 13(a)(1)(A); see also Adam v. Jacobs, 950 F.2d 89, 92 (2d Cir. 1991) ("[U]nder Second Circuit case law, claims for rescission and enforcement arise out of the same transaction or occurrence.").
Ginther's argument that his claims would have been permissive rather than compulsory counterclaims under New York law warrants no different conclusion because Ginther I, commenced and litigated entirely in federal court, was subject to the Federal Rules of Civil Procedure. See Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 549 F.3d 137, 142-43 (2d Cir. 2008). Accordingly, we conclude that the district court properly dismissed Ginther's claims.
2. Sanctions
Finally, we identify no abuse of discretion in the district court's imposition of Rule 11 sanctions, which are permitted against a litigant who submits a pleading "to harass, cause unnecessary delay, or needlessly increase the cost of litigation." Fed.R.Civ.P. 11(b)(1). The standard for triggering the award of fees under Rule 11 is "objective unreasonableness." Salovaara v. Eckert, 222 F.3d 19, 34 (2d Cir. 2000). Here, having already lost Ginther I both in the district court and in this Court, having been correctly informed in the present case that his claims in this action were barred by res judicata or should have been raised as compulsory counter-claims, and having already been sanctioned by a state court for raising baseless misconduct allegations against Provident's then-attorney, Ginther nevertheless renewed the same substantive claims in a dilatory motion and imported frivolous misconduct allegations from his state case into this federal litigation. On this record, even giving due consideration to Ginther's pro se status, we conclude that the district court reasonably determined that Ginther sought to harass Provident and its counsel, delay the conclusion of this case, and needlessly increase the cost of litigation, and that such conduct was objectively unreasonable under Rule 11.
See Ginther v. Provident Life Cas. Ins. Co., No. 05-CV-0238E, 2007 WL 925751, at *3 n. 3 (W.D.N.Y. Mar.26, 2007) (noting state court sanctions).
We have considered Ginther's other arguments on appeal and find them to be without merit. Accordingly, the judgment of the district court is AFFIRMED.