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Slip Copy, 2009 WL 1421173 (E.D.Tex.)

(Cite as: 2009 WL 1421173 (E.D.Tex.))

ThermaFlo, Comair, Peter Howard and

Only the Westlaw citation is currently available. Steve Shamuom (collectively, “defen-
dants”).
United States District Court,
E.D. Texas, With regard to the two cases before this Court,
Marshall Division. Kuzmin II and Kuzmin III, it is undisputed that serv-
Gary KUZMIN, Plaintiff, ice was perfected against all the defendants, Peter
v. Howard, Thermaflo, Inc. (“Thermaflo”) and Comair
THERMAFLO, INC. et al., Defendant. Rotron, Inc. (“Comair”). Defendant Peter Howard
Gary Kuzmin, Plaintiff, was served personally, and service on Steve
v. Shamoun, Thermaflow and Comair was perfected by
Peter Howard, et al., Defendant. serving Venessa Silva, the executive assistant to the
chief executive officer of Comair. Further, both sides
agree that plaintiff's counsel David Schiller emailed
Civil Action Nos. 2:07-cv-00554-TJW, 2:08-cv-
defendants' counsel, David R. Shevitz with copies of
0031-TJW-CE.
the three complaints.FN2 Defendants however failed to
May 20, 2009.
timely respond due to what they contend was a mis-
understanding between the defendant parties and
David A. Schiller, John David Exline, The Schiller their attorneys.
Firm, Plano, TX, for Plaintiff.
FN2. Both parties agree that defendants'
Bonita L. Stone, Katten Muchin Rosenman LLP, counsel did not accept service on behalf of
Chicago, IL, Jack Baldwin, Baldwin & Baldwin, the defendants.
Marshall, TX, for Defendant.
Plaintiff filed Motions for Entry of Default in
MEMORANDUM OPINION AND ORDER Kuzmin II and Kuzmin III on July 11, 2008, and the
T. JOHN WARD, District Judge. clerk entered defaults in both these cases on July 14,
*1 On May 20, 2009, the Court held a hearing in 2008. At that time, there had been some progress in
this matter and sanctioned plaintiff's counsel, Mr. the Kuzmin I case. FN3 Plaintiff then filed Motions for
John Exline for his unethical conduct in pursuing Default Judgment (Kuzmin II, Dkt No. 8; Kuzmin III,
plaintiff's default judgment motion in the above ref- Dkt No. 10). The Court held a hearing on plaintiff's
erenced cases. This opinion discusses the reasons for motions for default judgment in both these cases on
the Court's decision. October 9, 2008. Plaintiff presented evidence of de-
fault in these cases at the hearing. Defendants did not
I. Discussion appear for the hearing. Defendants first appeared in
Plaintiff Gary Kuzmin has filed three different both these cases on October 20, 2008, filing motions
cases against related defendants in the Marshall Divi- to set aside default and their opposition to entry of
sion. These cases are styled Kuzmin v. Thermaflo, default judgment. (Kuzmin II, Dkt. No. 18; Kuzmin
Inc., 2:07-cv-00553-DF-CE (filed Dec. 19, 2007) III, Dkt. No. 17). Finding defendants' counsel's con-
(“Kuzmin I”); Kuzmin v. Thermaflo, Inc., 2:07-cv- duct unintentional, the Court granted defendants' mo-
00554-TJW (filed Dec. 19, 2007) (“Kuzmin II” ); tions to set aside default and denied plaintiff's mo-
and Kuzmin v. Howard, No. 2:08-cv-00031-TJW-CE tions for default judgment.FN4 (Mem. Op. & Order,
(filed Jan. 28, 2008) (“Kuzmin III” ). It is undisputed Kuzmin II, Dkt. No. 28; Kuzmin III, Dkt. No. 28). As
that the three cases filed by plaintiff are against re- part of that order, the Court also directed Plaintiff's
lated defendants,FN1 and all three cases arise out of counsel, Mr. John Exline, to show cause why he
Comair's purchase of Thermaflo. should not be sanctioned for the manner in which he
pursued plaintiff's motions for default judgment be-
FN1. Defendants in the three cases include fore this Court. The Court found that Mr. Exline had

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violated both the local rules of this Court as well the failed to clearly denote on that sheet which case was
Texas Supreme Court's Creed on Professionalism. related to Kuzmin II, simply stating that there was a
Mr. Exline presented various arguments both in his “separate case among same parties being filed at the
response to the Court's order as well as at the hearing same time.” FN7 See Response, Kuzmin II, Dkt. No.
held in this matter. (Kuzmin II, Dkt. No. 30; Kuzmin 30, Ex. 1. Without a valid related case number on the
III, Dkt. No. 29). The Court, however, finds these civil cover sheet, the clerk's office was unable mark
arguments unpersuasive. the case docket as having a related case. It was coun-
sel's responsibility to make sure that the proper civil
FN3. Plaintiff filed a Motion for Temporary cover sheets were filed to the proper dockets and the
Restraining Order in Kuzmin I on March 3, docket reflected the cases accurately. Counsel cannot
2008. Dkt. No. 4. Defendants made an ap- find fault with the clerk's office for attempting to help
pearance and filed a response to the motion. him fulfill his duties. As to Kuzmin III, Mr. Exline
Dkt. No. 6. The Magistrate Judge, Honor- concedes he did not attach a civil cover sheet in that
able Chad Everingham held a conference, case and did not indicate in any way on the docket
which defendants' counsel attended on that it was related to two other cases. Counsel blames
March 7, 2008. Defendants also filed other this on the negligence of his legal assistant. The
motions in that case. Dkt. Nos. 7, 9. Court, therefore, finds that Mr. Exline violated the
Court's local rules.
FN4. The Court has presently stayed both of
these cases pending resolution of arbitration. FN6. As a preliminary matter, the Court
notes that counsel's brief is poorly written,
A. Violation of Local Rules replete with improper spelling and bad for-
*2 This district's local rules impose a duty upon matting. By submitting a poorly written
every party to “notify the court and opposing counsel brief, the attorney fails the Court as well as
of any collateral proceeding .” Local Rule CV-42. the client. See High v. Rhay, 519 F.2d 109,
The Court found that Plaintiff's counsel did not indi- 113 (9th Cir.1975) (finding that poor writing
cate at any time-from the time he filed his complaints style makes a brief “worthless”); see also
to the day he appeared for the hearing-in the briefs Foster v. Westinghouse Elevator Co., 1997
filed in these cases or otherwise, that there was a WL 360948 (Tex.App.-Amarillo June 27,
third related case which had been timely answered.FN5 1997) (denying a motion for leave to file an
amended brief that was “replete with format-
ting mistakes and typographical errors”).
FN5. Mr. Exline himself admitted at the
hearing that all three complaints involved
the same facts and arose from the same FN7. Plaintiff's counsel suggests that it was
transaction. See Transcript, Kuzmin II, Dkt. this civil cover sheet that informed the Court
No. 14. of the related active case prior to the default
judgment hearing. This is incorrect. It was
the Honorable Chad Everingham, who is the
It is the attorney's duty to file a civil cover sheet Magistrate Judge on two of the three Kuzmin
with each complaint. See Local Rule CV-4 (“At the cases, and who had previously conducted a
commencement of the action, counsel shall prepare hearing in Kuzmin I, who, upon learning of
and file the civil cover sheet, Form JS 44, along with the default being sought in these two cases,
the complaint.”). Plaintiff's counsel inexcusably alerted the Court to the related case.
failed to include such civil cover sheets along with
each of the cases before this Court. In his re-
sponse,FN6 Mr. Exline contends that he attached civil B. Violation of the Texas Lawyers Creed-A Man-
cover sheets at least in Kuzmin I & II. This, however, date for Professionalism
is incorrect. The Court finds no civil cover sheet at- The Texas Supreme Court has adopted the Texas
tached to the complaint in Kuzmin I. As to Kuzmin II, Lawyers Creed on Professionalism. See Texas Law-
the clerk's office alerted counsel of the deficiency and yers Creed-A Mandate for Professionalism, available
required him to provide a sheet for that case. See Re- at http://www.texasbar.com. In relevant part, the
sponse, Kuzmin II, Dkt. No. 30, Ex. 3. Even then, he Creed provides that a lawyer will “not take advan-

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tage, by causing any default or dismissal to be ren- FN8. Following the Court's show cause or-
dered, when [he or she knows] the identity of an op- der, defendants provided the Court with
posing counsel, without first inquiring about that even more emails that were exchanged be-
counsel's intention to proceed.” See id., par. III, no. tween plaintiff's counsel and defendants'
11. H counsel in April and May of 2008, discuss-
ing settlement and mediation of the disputes
Mr. Exline appeared before the Court and argued between the parties. See Kuzmin II, Docket
plaintiff's motions on October 9, 2008. See Tran- 33, Ex. A, B.
script, Kuzmin II, Dkt. No. 14. When the Court raised
to counsel the existence of Kuzmin I at the hearing, Mr. Exline previously argued that all communi-
Mr. Exline represented to the Court that he had cations with defendants' counsel related only to re-
“communicated [with defendants] about these cases” solving the dispute in Kuzmin I, and that defendants
and it was “somewhat inexplicable about why they had communicated to him that they were not inter-
would answer in one law suit and not the other.” Mr. ested in defending claims from the other two cases.
Exline then proceeded to represent to the Court that The Court found these arguments to be unreasonable.
he had not given any type of indication of the default The Court found that Mr. Exline knew the identity of
or a hearing to the opposing counsel that he had pre- “an opposing counsel” but proceeded unethically to
viously communicated with because: “We don't know obtain default judgment without giving the slightest
that that counsel for sure will be representing them in of notice to defendants' counsel. See Owens v. Neely,
the litigation. We don't know for sure who would be 866 S.W.2d 716, 720 & n. 2 (Tex.App.-Hous. 14
representing them in this litigation. It's certainly pos- Dist.] 1993, no writ) (finding that counsel acted un-
sible that the same counsel would be representing ethically under the Texas Lawyers Creed, when “he
them, but we don't know that for a fact.” When the deliberately sought a default judgment against parties
Court indicated that law existed which imposed a he knew were represented by an attorney and who
duty to notify a known opposing counsel of such a had filed an answer under the wrong cause number
hearing, Mr. Exline argued that such duty only ex- by mistake.”).
isted when an attorney had made an appearance rep-
resenting the party in the matter. In his response, Mr. Exline continues his illogi-
cal line of arguments. He argues that there is indeed a
*3 In its show cause order, the Court found this “possible explanation” for his view that the defen-
conduct to have been deceitful not only toward the dants made a “conscious decision” not to pursue a
defendants, but also to the Court. The Court found defense in two of the cases while deciding to defend
that plaintiff's counsel David Schiller knew who de- Kuzmin I. Mr. Exline argues that because Comair and
fendants' counsel would be from the very beginning Thermaflo went into receivership in July 2008, they
of this dispute, and had emailed defendants' counsel likely lost the ability to pay counsel to defend them in
David R. Shevitz copies of the three complaints. On two of the three cases. Mr. Exline fails to see the irra-
March 4, 2008, Mr. Exline himself sent defendants' tionality of his argument. Almost identical com-
counsel a copy of the TRO application in Kuzmin I. plaints were filed by the plaintiff in Kuzmin I and
Further, plaintiff's counsel was in continuous com- Kuzmin II against the same two defendants on the
munications with defendants' counsel during the same day. According to Mr. Exline, defendants an-
months following service upon defendants, attempt- swered, filing motions, appearing for hearings and
ing to resolve plaintiff's claims. In April 2008, the pursuing settlement-all long before the defendants
parties discussed the possibility of mediation towards went into receivership-in one case, but did not have
a settlement. Emails between the two parties in May the money to do so in a second case in which plaintiff
2008 relate to scheduling of the mediation.FN8 How- had asserted identical claims arising out of the same
ever, in July 2008, plaintiff filed motions for entry of set of facts.
default in Kuzmin II and Kuzmin III . Defendants'
counsel Shevitz avers that in August 2008, he made At the show cause hearing, Mr. Exline repre-
two phone calls to plaintiffs' counsel but was never sented to the Court that when he spoke to defendant
informed of the default pending in these two cases. Steve Shamoun following the default judgment hear-
ing, Shamoun indicated that he had not hired an at-

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torney to represent him in Kuzmin III. Mr. Exline line with this duty to zealously represent his client.
argued that this contradicts what Shamoun and de- Plaintiff's counsel urges the Court not to “draw the
fendants' counsel have stated in their sworn affida- line such that lawyers are reluctant to zealously rep-
vits. Mr. Exline contends that the Court should credit resent their clients in fear of sanction by a court who
his recollection and find that he had good reason to differs with their judgment.” The boundaries of ethi-
believe that defendants in Kuzmin II & III were not cal behavior should be abundantly clear to an experi-
represented by counsel. Even if the Court were to enced attorney such as Mr. Exline.FN9 “Zealous repre-
agree with Mr. Exline on his recollection of his sentation does not include skirting ethical obliga-
communication with defendant Shamoun, counsel tions.” U.S. v. De La Rosa, 171 F.3d 215, 220, n. 19
has no credible evidence to offer on why he believed (5th Cir.1999). The ABA's Model Code of Profes-
defendants Comair and Thermaflo would choose to sional Responsibility mandates that a client's repre-
defend only one of the two related cases brought sentation can only be within the “bounds of the law.”
against them. The Court, therefore, finds that plain- See MODEL RULES OF PROF'L RESPONSIBIL-
tiff's counsel had no good reason to believe that the ITY DR 7-102, EC 7-10 (“The duty of a lawyer to
same counsel would refuse to represent the defen- represent his client with zeal does not militate against
dants in these two cases. his concurrent obligation to treat with consideration
all persons involved in the legal process.”). Further-
*4 Similarly, Mr. Exline continues to pointlessly more, the ABA Model Rules of Professional Conduct
belabor what defendants' counsel did not do in these impose on the attorney, a duty of candor toward the
two cases up until the time that he sought default. tribunal. See MODEL RULES OF PROF'L CON-
The Court has already rejected his argument that de- DUCT R. 3.3(d) (“In an ex parte proceeding, a law-
fendants' counsel willfully ignored these two cases. yer shall inform the tribunal of all material facts
known to the lawyer that will enable the tribunal to
Another argument is that there was an insur- make an informed decision, whether or not the facts
mountable gap in the parties' settlement positions, are adverse.”). It is the attorney, rather than his client,
which in Mr. Exline's view was “the death knell for that the Court relies upon to ensure that the client's
settlement.” The Court fails to see how failure of case is presented in an ethical manner. The Court
settlement discussions could ever be a valid justifica- cannot endorse Mr. Exline's view that everything is
tion for unethical conduct. fair under the guise of zealous client representation.

Mr. Exline contends that the pertinent time for FN9. Mr. Exline represents that he has been
judging his conduct should be between July 11, 2008, a civil litigation lawyer for twenty eight
when he filed for entry of default, and October 9, years and has had an “AV Martindale-
2008, when he appeared for the default judgment Hubbell” rating for more than 15 years.
hearing. The Court disagrees. The duty to notify op-
posing counsel arose when plaintiff's counsel first *5 Mr. Exline is directed to report to the Court
learned of the existence of such counsel. Thereafter, a within six months of the date of this order as required
continuing ethical obligation existed on counsel's part by the sanctions issued against him.
to notify opposing counsel before seeking a default
judgment. Even considering the time frame that Mr. E.D.Tex.,2009.
Exline himself views as pertinent, he had almost Kuzmin v. Thermaflo, Inc.
three months from the entry of default to the hearing, Slip Copy, 2009 WL 1421173 (E.D.Tex.)
but failed in his duty to alert opposing counsel in any
way of the entry of default or the upcoming hearing. END OF DOCUMENT
It is not until the Court ordered Mr. Exline to contact
known opposing counsel, did he do so. It is notable
that the defendants answered both these cases within
days, filing their opposition to the default.

The last of Mr. Exline's arguments is just as

meritless. Mr. Exline argues that his conduct was in

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