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Murphy v. Housing Authority and Urban Redevelopment Agency of the City of Atlantic City

August 27, 2001

TODD MURPHY, AND ROSEANN MURPHY, PLAINTIFFS
v.
HOUSING AUTHORITY AND URBAN REDEVELOPMENT AGENCY OF THE CITY OF ATLANTIC CITY, A NEW JERSEY MUNICIPAL CORPORATION; JOHN GLOWACKI; JOHN J. MCAVADDY, JR., JOHN P. WHITTINGTON, AND JOHN DOES 1 THROUGH 15, DEFENDANTS



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

As amended September 13, 2001.

TODD MURPHY, AND ROSEANN MURPHY, PLAINTIFFS
v.
HOUSING AUTHORITY AND URBAN REDEVELOPMENT AGENCY OF THE CITY OF ATLANTIC CITY, A NEW JERSEY MUNICIPAL CORPORATION; JOHN GLOWACKI; JOHN J. MCAVADDY, JR., JOHN P. WHITTINGTON, AND JOHN DOES 1 THROUGH 15, DEFENDANTS

Appearances: Clifford L. Van Syoc, Esq. Van Syoc Law Offices, Chartered 535 Route 38 East, Suite 501 Cuthbert Boulevard and Route 38 Cherry Hill, NJ 08002 Attorney for Plaintiffs, Todd Murphy and Roseann Murphy Charles A. Ercole, Esq. Klehr, Harrison, Harvey, Branzburg & Ellers, Llp 457 Haddonfield Road Suite 510 Cherry Hill, NJ 08002-6603 Attorneys for Defendants, Housing Authority and Urban Redevelopment Agency of the City of Atlantic City, John Glowacki, John J. McAvaddy, Jr., and John P. Whittington

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

FOR PUBLICATION

 OPINION

I. INTRODUCTION

Once again, this Court is confronted with the spectacle of an attorney who has callously disregarded his professional obligations to this Court, his adversary, and his clients. In this case, Plaintiffs' counsel, Clifford L. Van Syoc, Esquire, has in bad faith turned a blind eye to the facts and law and has unreasonably and vexatiously multiplied the proceedings in this case. The record reveals that Mr. Van Syoc continued to pursue this lawsuit even when it became clear that there was no basis in law or fact upon which his clients could prevail. While the Rules of Professional Conduct impose a duty upon attorneys to represent their clients' interests zealously, Mr. Van Syoc's zeal in this case had more to do with the recovery of his counsel fees than the merits of his clients' claims. While Rambo may be a success at the box office, lawyers who appear in this Court and adopt Rambo as a role model do so at their peril. For the reasons set forth below, pursuant to 28 U.S.C. § 1927, I shall assess counsel fees of $56,885 and costs of $2330.60 against Mr. Van Syoc personally. Mr. Van Syoc shall make payment to the Defendants within thirty days of the date of this Opinion.

II. BACKGROUND AND PROCEDURAL HISTORY

Plaintiff, Todd Murphy ("Murphy"), filed a Complaint in this Court on March 27, 1997, alleging that he was the victim of "reverse discrimination" on the basis of his race and sex, by his employer, the Housing Authority and Urban Redevelopment Agency of the City of Atlantic City ("the Authority") and several of its employees (collectively, "Defendants"). Subsequently, on December 31, 1997, Murphy amended his complaint to allege the following: (1) Count I, unlawful reverse employment discrimination based on race and sex; (2) Count II, unlawful reverse employment discrimination in violation of the New Jersey Law Against Discrimination, N.J. Stat. Ann. § 10:5-1 et seq.; (3) Count III, a per quod cause of action by Roseann Murphy, his spouse, for loss of companionship, society, comfort, care, service and consortium; and (4) Count IV, unlawful reverse employment discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"). See Amended Complaint (filed Dec. 31, 1997).

On August 17, 1998, Defendants moved for summary judgment, contending that Plaintiffs had failed to establish a prima facie case of reverse employment discrimination, and that per quod damages are not recoverable in employment discrimination cases. Plaintiffs opposed the motion, contending that genuine issues of material fact precluded the granting of summary judgment.

On January 27, 1999, this Court filed an Opinion and Order granting Defendants' motion for summary judgment on all counts of the Amended Complaint, holding as follows:

I shall grant the Defendants' motion for summary judgment on Counts I, II and IV of the Amended Complaint because Murphy cannot establish a prima facie case of unlawful reverse employment discrimination in violation of Title VII or the New Jersey Law Against Discrimination ("NJLAD"), and, alternatively, because Murphy has failed to produce even a scintilla of evidence tending to show that the Defendants' proffered nondiscriminatory reasons for the adverse employment decisions were merely a pretext for invidious discrimination. In addition, I shall grant the Defendants' motion for summary judgment on Count III of the Amended Complaint, because per quod claims are not cognizable in cases involving claims of employment discrimination in violation of Title VII and the NJLAD, and because as a derivative claim, a per quod claim cannot survive if the underlying claim fails. Murphy v. Housing Authority and Urban Redevelopment Agency of the City of Atlantic City, 32 F. Supp. 2d 753, 755 (D.N.J. 1999) (Orlofsky, J.) (emphasis added).

On February 10, 1999, Defendants filed an application for counsel fees and associated expenses. See Defs.'Application for Counsel Fees, Case No. 97-1558 (Docket Entry No. 31). On February 26, 1999, Plaintiffs filed a Notice of Appeal of this Court's decision of January 27, 1999. See Notice of Appeal, Case No. 97-1558 (Docket Entry No. 32). On January 31, 2000, in an unpublished opinion, a three-judge panel of the United States Court of Appeals for the Third Circuit affirmed this Court's decision granting summary judgment to Defendants on all counts of Plaintiff's complaint. See Murphy v. Housing Authority and Urban Redevelopment Agency of the City of Atlantic City, No. 99-5133, slip op. (3d Cir. January 31, 2000).

By letter dated February 1, 2000, this Court invited counsel for both parties to file supplemental briefs on Defendants' pending Application for Counsel Fees and Associated Expenses in light of the Third Circuit's Opinion. Both parties responded by filing Supplemental Memoranda with the Court on February 14, 2000. On February 13, 2001, Defendants filed a Second Supplemental Application for Attorneys' Fees and Related Expenses, requesting attorneys' fees and associated expenses "relating to the defense of Plaintiffs' frivolous appeal" to the Third Circuit. See Defs.' Second Suppl. App. at 1-2.

On February 16, 2001, this Court heard oral argument on Defendants' Applications for Attorneys' Fees. The Court reserved decision on Defendants' Applications and requested a supplemental brief from counsel for the Plaintiffs, Clifford L. Van Syoc, Esq., on the question of whether Defendants' attorneys' fees should be assessed against Mr. Van Syoc personally pursuant to 28 U.S.C. § 1927. This Opinion addresses not only the issues raised by Defendants' original Application for Attorneys' Fees and Related Expenses, filed February 10, 1999, but also the arguments raised in Defendants' Supplemental Application, filed February 14, 2000, and Defendants' Second Supplemental Application, filed February 13, 2001.

III. DEFENDANTS' APPLICATION AND SUPPLEMENTAL APPLICATIONS FOR COUNSEL FEES AND RELATED EXPENSES

Pursuant to the so-called "American Rule" for payment of attorneys' fees, the "prevailing litigant is ordinarily not entitled to collect a reasonable attorneys' fee from the loser." Brytus v. Spang & Co., 203 F.3d 238, 241 (3d Cir. 2000) (citing Alyeska Pipeline Service Co. v. Wilderness Soc., 421 U.S. 240, 247 (1975)). There are several statutory exceptions to this rule, two of which are relevant to the Applications now before this Court. They are: (1) 42 U.S.C. § 1988, which allows the prevailing party in civil rights litigation to recover counsel fees; and (2) 28 U.S.C. § 1927, which provides that any attorney who vexatiously and unreasonably multiplies the proceedings in any case may be required by the court to satisfy the excess costs incurred because of such conduct personally.

A. 42 U.S.C. § 1988

This statute authorizes the court to award attorneys' fees to a prevailing party in a civil rights action brought pursuant to federal civil rights statutes. *fn1 The purpose of this provision is "to ensure effective access to the judicial process for persons with civil rights claims, and to encourage litigation to enforce the provisions of the civil rights acts and constitutional civil rights provisions." Hernandez v. Kalinowski, 146 F.3d 196, 199 (3d Cir. 1998). This provision, however, applies to a prevailing defendant as well as a prevailing plaintiff. Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)(holding that prevailing defendant in Title VII action may be entitled to attorneys' fees if "plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith"); Hughes v. Rowe, 449 U.S. 5 (1980) (applying same standard in application by prevailing defendant in § 1983 claim for attorneys' fees).

The Third Circuit has held, however, as have most other Circuits which have considered the question, that "§ 1988 does not authorize the award of attorneys' fees against plaintiff's attorney." Brown v. Borough of Chambersburg, 903 F.2d 274, 277 (3d Cir. 1990); see also Smith v. Detroit Fed'n of Teachers, Local 231, 829 F.2d 1370, 1374 n. 1 (6th Cir.1987); Hamer v. County of Lake, 819 F.2d 1362 (7th Cir.1987) (remanded to allow district court to consider other theories of liability); Oliveri v. Thompson, 803 F.2d 1265, 1272 (2d Cir.1986) (dictum), cert. denied sub nom., Suffolk County v. Graysek, 480 U.S. 918 (1987); Durrett v. Jenkins Brickyard, Inc., 678 F.2d 911, 915 (11th Cir. 1982) (while reversing district court's failure to assess fees against counsel under court's inherent power, court observed that district court correctly determined that 42 U.S.C. §§ 2000e-5(k) of Title VII of the Civil Rights Act of 1964 did not authorize fees against counsel).

Based on my review of the record before me, it is clear that the driving force in this litigation was not the Plaintiffs, but Plaintiffs' counsel, Clifford L. Van Syoc. I reach this conclusion based on Mr. Van Syoc's conduct during discovery and settlement negotiations. For example, at the initial scheduling conference in this case, held before Magistrate Judge Kugler on July 30, 1997, counsel for Plaintiffs demanded $650,000 to settle the case, based largely on plaintiffs' alleged right to recover punitive damages and attorneys' fees. See Defs.' App. at Exh. B (Affidavit of Charles A. Ercole, Esq.), ¶ 8. In a letter dated March 12, 1998, Mr. Van Syoc wrote to counsel for Defendants, Charles A. Ercole, Esq.

I recently had the pleasure of discussing with Mr. Ercole his request for a revised settlement demand, which I assume means one less than the $650,000 previously expressed. Given the fact that in the last two employment cases this office was involved in which were tried to a conclusion, our counsel fees alone were approximately $450,000 and $550,000, respectively, we believe that our initial demand is more than reasonable. Defs.' App. at Exh. D (Letter, Clifford L. Van Syoc to Charles A. Ercole, Esq., dated March 12, 1998).

By letter dated April 28, 1998, Mr. Ercole informed Mr. Van Syoc that Defendants rejected the settlement demand based on their belief that Mr. Murphy's claim was without merit. Defs.' App. at Exh. F (Letter, Charles A. Ercole, Esq. to Clifford L. Van Syoc, Esq., dated April 23, 1998). Mr. Ercole advised Mr. Van Syoc that defendants would forgo their right to recover attorneys' fees under § 1988 if Mr. Murphy would voluntarily dismiss his claim within 10 days, but noted that otherwise, "if you and Mr. Murphy continue to pursue this baseless action...defendants will seek every redress available under the law." Id.

Evidently unimpressed by Defendants' offer, Mr. Van Syoc, by letter dated May 5, 1998, responded to Mr. Ercole as follows: All posturing aside, it is crystal clear that plaintiff's claim has substantial merit, and your baseless threats are of no moment whatsoever...How you leapt to the conclusion that our demand is indicative of a lack of merit in Mr. Murphy's claim escapes us, and we are quite confident it will escape the court. In sum, if your clients wish to settle this case and avoid what will be a torrent of litigation by other disgruntled employees, feel free to respond, appropriately, to our demand by making a counteroffer. Defs.' App. at Exh. I (Letter, Clifford L. Van Syoc, Esq. to Charles A. Ercole, Esq., dated May 5, 1998).

Continuing in this vein, by letter dated July 6, 1998, Mr. Van Syoc advised Mr. Ercole that "it is our belief that this case can be resolved for a reasonable figure, although it cannot be resolved in the five figures, since Mr. Murphy's counsel fees already exceed that number[.]" Defs.' App. at Exh. C (Letter, Clifford L. Van Syoc to Charles A. Ercole, Esq., dated July 6, 1998). Finally, by letter dated August 24, 1998, Mr. Van Syoc informed Mr. Ercole that "I will be back from my vacation in Vermont on August 31, 1998, and am hopeful that you will be in a position to advise me as to whether there is a prospect for this case to be settled in a fair settlement range, which will be well into the six figures." Defs.' App. at Exh. D (Letter, Clifford L. Van Syoc, Esq. to Charles A. Ercole, Esq., dated August 24, 1998).

From the tenor of this correspondence, I conclude that Mr. Van Syoc's primary and possibly only interest in pursuing this litigation was in obtaining his attorneys' fees, as opposed to reaching an equitable result for his client. The "posturing" reflected in Mr. Van Syoc's correspondence had no basis in fact or law. This being the case, it would be manifestly unfair to burden Mr. Van Syoc's clients with the fees Defendants incurred as a result of Mr. Van Syoc's continued refusal to consider a reasonable settlement offer. I base my conclusion that Mr. Van Syoc's settlement demands were unreasonable on the fact that not only this Court, but also the Court of Appeals, found that Murphy's claims were not supported by even a "scintilla" of evidence. Murphy, 32 F. Supp. 2d at 756; Murphy, No. 99-5133, slip op. at 13 (3d Cir. January 31, 2000). Indeed, Mr. Murphy testified that: "I provided the facts pertaining to my claim to my attorney, Clifford L. Van Syoc, Esquire, and relied in good faith upon his legal advice as to whether those facts amounted to a valid claim." Murphy Cert. at ΒΆ 2 (emphasis added). Mr. Murphy should not be penalized for his reliance on the advice of an ...


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