The Law Offices of Marcia E. Kusnetz v. JR Pension Services ( 2019 )

18-3511(L)
The Law Offices of Marcia E. Kusnetz, et al. v. JR Pension Services, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 8th day of November, two thousand sixteen.
PRESENT: JOSÉ A. CABRANES,
REENA RAGGI,
Circuit Judges,
EDWARD R. KORMAN,
District Judge*
THE LAW OFFICES OF MARCIA E. KUSNETZ, P.C.; THE LAW OFFICE OF MARCIA E. KUSNETZ
DEFINED BENEFIT PLAN; AND MARCIA KUSNETZ, INDIVIDUALLY AND AS ADMINISTRATOR OF THE
LAW OFFICE OF MARCIA E. KUSNETZ DEFINED BENEFIT PLAN,
Plaintiffs-Appellants-Cross-Appellees, 18-3511-cv, 18-3560-cv
v.
JEFFREY RICHGAT; JR PENSION SERVICES, INC.,
Defendants-Appellees-Cross-Appellants,
MATTHEW GAGLIO; JOHANNA GAGLIO-BODEN; JEFFREY RICHGAT; JR PENSION SERVICES, INC.;
INTEGRITY ADVISORS PENSION CONSULTANTS, INC.; NY ROSBRUCH/HARNIK, INC. D/B/A
*
Judge Edward R. Korman, of the United States District Court for the Eastern District of New
York, sitting by designation.
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STRATEGIES FOR WEALTH; PARK AVENUE SECURITIES, LLC; GUARDIAN LIFE INSURANCE; AND
FELY CIEZA,
Defendants.
FOR PLAINTIFFS-APPELLANTS-CROSS-APPELLEES: MICHAEL D. ASSAF, Assaf &
Siegal PLLC, Albany, NY.
FOR DEFENDANTS-APPELLEES-CROSS-APPELLANTS: MATTHEW P. COHEN, Adam
R. Schwartz, McElroy,
Deutsch, Mulvaney &
Carpenter, LLP, New York,
NY.
Appeal from judgments entered on July 17, 2018 and October 25, 2018 in the United States
District Court for the Southern District of New York (Deborah A. Batts, Judge).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgments of the District Court be and hereby are
AFFIRMED.
Plaintiffs-Appellants-Cross-Appellees (“MEK”) challenge two judgments of the District
Court, the first, dismissing with prejudice for failure to prosecute their claims against Defendants-
Appellees-Cross-Appellants (“JR”) and the second, denying their Motion for Reconsideration of that
earlier dismissal. At the same time, JR cross-appeals the District Court’s denial of their Motion for
Attorney’s Fees.
We assume the parties’ familiarity with the underlying facts, the procedural history of the
case, and the issues on appeal.
I: Dismissal for Failure to Prosecute
“We review a dismissal for failure to prosecute for abuse of discretion.” Lewis v. Rawson, 564
F.3d 569, 575 (2d Cir. 2009). “We have acknowledged that dismissal with prejudice is a harsh
remedy to be utilized only in extreme situations. Nonetheless, the authority to invoke it for failure to
prosecute is vital to the efficient administration of judicial affairs.” Lyell Theatre Corp. v. Loews Corp.,
682 F.2d 37, 42 (2d Cir. 1982) (internal citations and quotation marks omitted).
“The correctness of a [dismissal for failure to prosecute] is determined in light of five
factors. They are: (1) the duration of the plaintiff's failure to comply with the court order, (2)
whether plaintiff was on notice that failure to comply would result in dismissal, (3) whether the
defendants are likely to be prejudiced by further delay in the proceedings, (4) a balancing of the
court’s interest in managing its docket with the plaintiff’s interest in receiving a fair chance to be
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heard, and (5) whether the judge has adequately considered a sanction less drastic than dismissal.”
Lucas v. Miles, 84 F.3d 532, 535 (2d Cir. 1996).
MEK argues that, because the District Court failed to consider every one of the factors on
the record, and because it gave undue weight to those factors that it did consider, the dismissal with
prejudice constituted error amounting to an abuse of discretion. We disagree.
When determining whether to dismiss an action for failure to prosecute, a district court is
not required to consider each of the five identified factors on the record. Id. In any event, the
District Court specifically addressed three of the five factors, and reasonably concluded that they all
weighed in favor of dismissal.
First, the District Court reasonably concluded that MEK consistently engaged in dilatory
practices, most recently by failing timely to respond to the Order to Show Cause. MEK offered no
clear excuse for its delays, even though the Order to Show Cause stated a precise deadline.
Second, the District Court reasonably concluded that the Order to Show Cause gave MEK
sufficient notice that their claims would be dismissed if they missed the deadline for responding.
There was no ambiguity in the District Court’s message, and MEK does not argue otherwise.
Indeed, counsel below for MEK acknowledged that he was “aware that the Court entered an Order
to Show Cause directing the plaintiff to address whether this matter should be dismissed for non-
prosecution.” Pl. App’x 135.
Third, the District Court reasonably concluded that other sanctions for MEK’s conduct
would be inadequate. In denying MEK’s motion for reconsideration, the District Court stated that it
had considered two other sanctions before dismissing the action: granting JR leave to move (1)
against the entire complaint or (2) for fees. The former would hardly “sanction” MEK because JR
did not need court leave to file a dispositive motion. And while a fees award would operate as a
sanction, we do not identify an abuse of discretion in the District Court’s determination that it was
inadequate in the circumstances of this case.
Accordingly, we conclude that the District Court did not abuse its discretion in dismissing
MEK’s claims with prejudice. We further note that, even if MEK is correct that the fault for delay
primarily lies with their counsel below, MEK’s remedy for such behavior is in an action for
malpractice against their counsel. See Link v. Wabash R.R. Co., 370 U.S. 626, 634 n.10 (1962).
II: Motion for Reconsideration
“Denials of motions for reconsideration are reviewed only for abuse of discretion.” Analytical
Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012). A motion for reconsideration “will
generally be denied unless the moving party can point to controlling decisions or data that the court
overlooked—matters, in other words, that might reasonably be expected to alter the conclusion
reached by the court.” Schrader v. CSX Transp. Inc., 70 F.3d 255, 257 (2d Cir. 1995).
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MEK did not point to any controlling decisions or data that the District Court overlooked.
Instead, the Motion for Reconsideration was an attempt “to relitigate an issue already decided.” Id.
Denying it was not an abuse of discretion.
II: Attorney’s Fees
We review the denial of a Motion for Attorney’s Fees under the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., for abuse of discretion. See e.g.,
Paese v. Hartford Life & Acc. Ins. Co., 449 F.3d 435, 450 (2d Cir. 2006). ERISA’s fee-shifting provision
states that “the court in its discretion may allow a reasonable attorney’s fee and costs of action to
either party.” 29 U.S.C. § 1132(g)(1).
To warrant an award under § 1132(g)(1), a party “must show some degree of success on the
merits,” a requirement that cannot be satisfied by demonstrating only “trivial success on the merits
or a purely procedural victor[y].” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255 (2010)
(citations and internal quotation marks omitted). A party demonstrates the requisite success on the
merits “if the court can fairly call the outcome of the litigation some success on the merits without
conducting a lengthy inquir[y] into the question whether a particular party’s success was substantial
or occurred on a central issue.” Id. (citations and internal quotation marks omitted).
Here, the District Court concluded that it could not, at such an “early stage” in the action,
state with certainty that JR succeeded on the merits. Pl. App’x 206–07. To so state would require a
“lengthy inquiry” that the District Court was not positioned to conduct.
The District Court’s conclusion was reasonable and well within the boundaries of its
discretion under the statute. Accordingly, the District Court did not abuse its discretion in denying
attorney’s fees.
CONCLUSION
For the foregoing reasons, we AFFIRM the July 17, 2018 and the October 25, 2018
judgments of the District Court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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