Shnyra v. State Street Bank and Trust Co., Inc.

Background

The court had previously sanctioned the plaintiffs and their counsel for failing to comply with discovery obligations. The court ordered payment of State Street's reasonable costs and expenses rather than dismissing the action, which State Street had requested as a more severe sanction. In a later fee award order, the court calculated the compensable amount as $24,900 and held the plaintiffs jointly and severally liable for the full amount. Joint and several liability means that each liable person may be required to pay the entire amount, subject to any later allocation among those responsible.

The plaintiffs sought reconsideration of the fee award order. They did not dispute the $24,900 amount. Instead, they argued that the order appeared to absolve their former counsel, Mikhail Ratner, of responsibility. They asked the court to allocate portions of the award between them and Ratner or, alternatively, to restore joint and several liability for the plaintiffs and Ratner.

Legal standard

Under Local Rule 6.3, reconsideration is an extraordinary remedy generally available only when the moving party identifies an intervening change in controlling law, new evidence, a clear error, or a need to prevent serious unfairness.

Discussion

The court found that reconsideration was not justified as to the plaintiffs' responsibility for the full amount. The court had previously found that the individual plaintiffs contributed to the discovery failures and that Ratner bore substantial, but not sole, responsibility. The court stated that this was not a case involving entirely blameless clients who were responsible only for their lawyer's conduct.

The court nevertheless concluded that modification was appropriate because it had not intended to relieve Ratner of responsibility. The earlier order had placed the initial payment burden on the plaintiffs to ensure that State Street was reimbursed promptly and to avoid requiring State Street to pursue separate payment from the plaintiffs and Ratner. The court agreed that the earlier language could reasonably be read as exculpating Ratner and differed from the prior sanctions order.

The court therefore modified the fee award order to make the plaintiffs and Ratner jointly and severally liable for the $24,900 sanction. It ordered the full amount paid to State Street by April 29, 2022. The plaintiffs and Ratner could try to agree on how to divide the payment, but disagreement would not delay the payment deadline. The court stated that failure to pay the full amount when due would result in further sanctions.

The court also allowed the plaintiffs and Ratner to submit sworn financial affidavits if they claimed they could not pay all or part of the award. The submissions had to describe their assets, liabilities, income, and expenses and explain the sanction's effect on their finances. They were due by March 22, 2022.

Disposition

Judge Gregory H. Woods granted in part and denied in part the plaintiffs' motion for reconsideration. The Fee Award Order was modified as described above, and the clerk was directed to terminate the motion and mail a copy of the order to Mikhail Ratner.

Note on the amount

The opinion refers once in its discussion to an amount of $24,500, described as $8,116.67 per plaintiff. The operative ruling repeatedly states that the sanction is $24,900, and this summary uses the operative amount.