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September 27, 1999


The opinion of the court was delivered by: Cooper, District Judge.


This matter comes before the Court on the application by plaintiff for attorneys' fees under the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. ("ADA") and 42 U.S.C. § 1988, and the cross-motion by defendant for attorneys' fees pursuant to Federal Rule of Civil Procedure 11 ("Rule 11") and Local Civil Rules 54.2 and 11.3. The Court ordered a hearing to determine the factual issues presented by the motions. After considering the evidence, the Court finds that plaintiff is not a prevailing party under the relevant legal principles. Accordingly, we will deny plaintiff's application for counsel fees on that basis. We also will deny defendant's motion for attorneys' fees under Rule 11.


This action began with the filing of a Complaint on July 1, 1996 by plaintiff Bennett Ritter against defendant "The Clinton House Restaurant," alleging discrimination in violation of the ADA and New Jersey law with respect to the architecture of the restaurant facilities. Plaintiff is a disabled individual who utilizes a wheelchair. The attorneys of record throughout this case are Anthony J. Brady, Jr. for plaintiff and Donald E. Souders, Jr. for defendant. The Answer (filed on behalf of "The Clinton House") stated that the Complaint failed to properly name and identify the defendant, and that the named defendant does not exist. In addition to general denials of liability, the Answer contained various affirmative defenses including an allegation that the Complaint was filed in contravention of Rule 11.

The court docket entries reflect that over the ensuing eighteen months, the only interactions of the parties with the Court consisted of the initial in-person scheduling conference with the Magistrate Judge on October 9, 1996, followed by six periodic telephone scheduling conferences initiated by the Magistrate Judge between October 30, 1996 and September 3, 1997. By letter dated January 23, 1998, an attorney writing from the law office of counsel for plaintiff requested that the Magistrate Judge cancel the Pretrial Conference scheduled for January 28, 1998, stating as follows:

    This letter is to inform Your Honor that the
  plaintiff and the defendant have reached a settlement
  in regard to the equitable relief sought in this
  matter. Consequently, the remaining issue in this
  case is the matter of attorneys fees. Mr. Souders and
  I have agreed that the issue of attorneys fees should
  be resolved by a motion to be filed by Mr. Brady.
  Therefore, I respectfully request that, in light of
  these developments, the Pretrial conference be

(P-28.)*fn1 At that point the Pretrial Conference was canceled by the Magistrate Judge and no further proceedings were scheduled. An administrative dismissal order was then entered by the Court, which was later vacated.*fn2

Counsel for plaintiff filed a motion the following month, on February 24, 1998, seeking attorneys' fees as prevailing party, and moving to add certain persons who were allegedly the owners of The Clinton House Restaurant ("Clinton House") as additional defendants. Defendant cross-moved for attorneys' fees under Rule 11. After listening to oral argument on the cross-motions, we issued an Order entered April 7, 1998 in which we denied the attorneys' fee motions without prejudice and ordered an evidentiary hearing on the contested issues of fact.*fn3 That hearing was conducted on December 4, 1998, February 25, 1999 and May 20, 1999. The parties reserved the opportunity to provide written closing arguments, and the supplemental submissions were completed in July, 1999.

The persons who testified at the hearing were plaintiff Bennett Ritter; plaintiff's counsel Anthony J. Brady, Jr.; plaintiff's expert witness James V. Williams; defendant's former architect Lewis Salamone; defendant's former restaurant design consultant Chris Stegemann (by deposition de bene esse); and defendant's witness Pandelis Gialias. Hearing exhibits were marked into evidence. We have also reviewed relevant materials in the form of affidavits, certifications, briefs and court files.*fn4 Although many of the historical facts are undisputed, the parties hotly contest the ultimate factual issue of whether plaintiff was the prevailing party, for purposes of obtaining an award of fees and costs. They are equally opposed on the issue of whether the conduct of plaintiff's counsel warrants Rule 11 sanctions.


The facts set forth in this section are the undisputed historical facts established in the record. The disputed issues of fact are addressed in the Discussion section, infra.

A. The Setting

The Clinton House property consists of a large three and a half story colonial-style frame and stone building dating back approximately 200 years, occupying approximately one block of frontage on West Main Street in Clinton, New Jersey. (P-2, -17, -20, -25; Gialias Test.) In the modern era it has been operated as a restaurant, and was purchased by its present owners for that purpose on October 30, 1995.*fn5 The sellers were Oscar and Rosemarie Zierer and OsMar, L.L.C., who sold the real estate, fixtures, furniture, equipment, liquor license and goodwill for a combined price of $875,000, of which the real estate including the building cost $575,000. (Gialias Test.) The property was sold in an "as is" condition, and required several hundred thousand dollars worth of improvements. (Souders Aff. 5-18-98 ¶ 2.) The condition of the premises at that time included a need for handicap accessibility. When the Zierers sold it, the entrance, bar area, bathrooms and telephones were not handicap accessible, and there was no designated handicap parking with curb cuts. (Ritter Test; Gialias Test.)

The front of the building has four doors although the center door was and continues to be used as the main entrance door. (P-2, -3, -18 to -20; Gialias Test.; Williams Test.) There are approximately 14 parking spaces directly in front of the building, which are owned by the town and are located in the public thoroughfare. Additional parking is located down a path to the side of the building, and across the street. (Id.)

B. The Parties and Attorneys

Plaintiff Bennett Ritter ("Ritter") is a former Marine, confined to a wheelchair since 1988 as a paraplegic. He is a member of the Paralyzed Veterans of America. He is a licensed real estate broker, and his office is located directly across the street from Clinton House. Both before and after he became disabled he went to that restaurant, sometimes taking clients to lunch there. He was familiar with the restaurant under the Zierers, and under the new management after the Zierers sold in late 1995. He moved to Florida in June, 1997 (after this case was filed in July, 1996), and currently resides there. (Ritter Test.)

Attorney Anthony J. Brady, Jr. ("Brady") was admitted to the New Jersey bar in 1984. He is also admitted in Pennsylvania, South Carolina and Florida. He is a sole practitioner in Maple Shade, New Jersey, in shared office space adjacent to an organization named Advocates for Disabled Americans ("AFDA"). William Caruso, a disabled veteran who is not an attorney, manages the AFDA office. Brady uses the AFDA fax machine for his law practice. Brady and Caruso have filed approximately forty ADA cases together, with Caruso and AFDA as the plaintiffs and Brady as the attorney. One of those was the high-profile case of Caruso v. Blockbuster-Sony Music Entertainment Centre, 174 F.3d 166 (3d Cir. 1999), holding that a music pavilion violated ADA new construction requirements by failing to provide wheelchair access to the lawn seating area. Brady practices in the field of civil rights for the disabled. His practice is approximately 80-90% disability-related. His case filings include a pending action against Disney World in Florida. (Brady Test.)

Ritter met Brady at the Abilities Expo in Edison in April, 1995. That is an annual exhibition at which vendors show medical equipment for disabilities. Brady had a booth there as the Advocates for Disabled Americans. Ritter and Brady conversed, and Brady gave Ritter his business card. Ritter later contacted Brady to get his assistance with Clinton House, and the present case was filed. (Ritter Test.)

Defendant, "The Clinton House Restaurant," does not exist as a legal entity. (Answer; Souders Aff. 5-18-98 ¶ 2.) The restaurant is owned and managed as described supra, note 5. Pandelis "Pete" Gialias ("Gialias") testified on behalf of defendant at the hearing. He is one of the owners of the restaurant and conducts the day-to-day operations of the business. He and his co-owners had no connection with the restaurant before purchasing it in October, 1995. He is the chef, and also manages the business aspects. His wife Mary Ann does the "paperwork" but is not otherwise involved. Peter Giacoumopoulos is not involved in the management of the business. Gialias works approximately 90 hours per week at the restaurant, and has done so since they acquired it. (Gialias Test.) He speaks with a strong Greek accent.

Attorney Donald E. Souders, Jr. ("Souders") was admitted to the New Jersey bar in 1991. He also is a sole practitioner, maintaining his office in Phillipsburg. He represented Gialias and his co-owners in the acquisition of the Clinton House real estate and business assets. When the instant suit was filed, he undertook the representation as defense counsel. (Souders Aff. 3-23-98 ¶¶ 1, 9.)

C. The Sequence of Events

We must begin with a chronological history of the litigation. Additional pertinent facts are set forth in the Discussion, infra. See Metropolitan Pittsburgh Crusade for Voters v. Pittsburgh, 964 F.2d 244, 245 (3d Cir. 1992) ("In deciding who is a prevailing party when extrajudicial relief renders legal claims moot, courts look to the chronology of events leading to resolution of the dispute."); Dunn v. United States, 842 F.2d 1420, 1422 (3d Cir. 1988) ("[T]his appeal presents challenges to the fee award that are inextricably linked with the history of the litigation. We will therefore set forth in some detail the course of the relevant underlying litigation and the results it is said to have achieved.").

The Clinton House was acquired by the present owners ("the owners") at the end of October, 1995. They immediately commenced a major redesign and renovation of the entire restaurant portion of the building, which occupies the first floor.*fn6 (Salamone Test.) The restaurant was closed to the public for a brief period during the early construction work, and resumed operations in early 1996, while the work was still in progress. (Ritter Test.; Gialias Test.)

Ritter had dined at Clinton House frequently when it was under the prior ownership, and had complained to the Zierers about its lack of handicap accessibility. They made no modifications before selling it. Ritter went there for lunch several times after it reopened under the new owners, during the period from approximately January through June, 1996. He observed that the newly-constructed bathrooms and bar/dining room areas, including the telephone height, had been made handicapped-accessible ("accessible") as the renovations progressed. He further observed, however, that the entrance to the restaurant had not yet been modified with a ramp and door modifications to make it accessible, and that there was inadequate disabled parking. Ritter, himself a realtor, went to the office of the Building Inspector in March, 1996, and looked at the construction plans then on file. He saw no plans submitted for any exterior modifications. Having met Brady previously, as described above, he contacted Brady about the situation. (Ritter Test.)

Brady states that he first visited the site on June 15, 1996, when Ritter, Brady, and a friend who also needed a wheelchair had dinner together at Clinton House. At that time Brady personally observed that there was no ramp in place. (Brady Test.) Brady certifies that on June 27, 1996, he went to the office of the Building Inspector and reviewed the plans then on file, finding no drawings of a ramp. (P-16; Brady Certif. (undated) attached to Pl.'s Main Br.) The Complaint in this case was received by the Clerk on June 25, 1996, and was entered on the docket as filed on July 1, 1996. (Docket entry 6-25-96.) At no time before filing suit did Brady communicate orally or in writing with the owners of Clinton House to make any inquiries or demands on behalf of Ritter.*fn7 Nor did Brady inspect the deed or other public documents to determine the identity of the owners of the property or the operators of the restaurant. (Brady Test.)

The arrangement by which Ritter retained Brady to file suit on his behalf was oral. (Brady Test.; Ritter Test.) Ritter did request to see the Complaint before it was filed.*fn8 Brady paid the filing fee of $120, and all subsequent disbursements in the case. (Brady Test.) Ritter at no time incurred any expense in connection with the case, until he traveled from Florida to testify at the evidentiary hearing which we convened to address the attorneys' fee issues. (Ritter Test.) No writing setting forth the terms of the retainer existed until April, 1998, after plaintiff's motion for attorneys' fees had been denied without prejudice and this Court had ordered the evidentiary hearing. (Id.; D-1, Ritter Certif. 4-25-98.)*fn9 Ritter at no time was asked by Brady to authorize the hiring of an expert witness or per diem attorney, until the evidentiary hearing was ordered. Ritter had no understanding as to how such persons would be paid, except that Brady would be paying them, under terms unknown to Ritter.*fn10 No bills for fees or disbursements were ever sent by Brady to Ritter. Brady did orally indicate to Ritter that when the case was terminated, Brady would get his ...

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