Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-00188/USCOURTS-azd-2_07-cv-00188-1/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1332 Diversity-Breach of Contract

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 1Plaintiff Katherine N. Brosnahan is Defendant Jon R. Pozgay’s former sister-inlaw, i.e. Mr. Pozgay was married to Plaintiff’s sister Michele (Pozgay) Brosnahan.

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On August 29, 2007, after Mr. Pozgay was forced to file the Motion to Dismiss

for failure to join an indispensable party, despite the finding of the District Court for the

Southern District of California and the motion for sanctions against Ms. Brosnahan and

her attorney, Plaintiff filed an Amended Complaint adding her sister Michele (Pozgay)

Brosnahan as a co-defendant 

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Katherine N. Brosnahan

Plaintiff, 

vs.

Jon R. Pozgay, et al., 

Defendants. 

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No. CV 07-188-PHX-SMM

 ORDER

Currently pending before the Court is the Motion for Sanctions filed by Defendant Jon

R. Pozgay, pursuant to Rule 11, Fed.R.Civ.P. (Doc. 16).

Background

This case arises out of a debt collection matter between family members Plaintiff

Katherine N. Brosnahan (Ms. Brosnahan), Defendant Jon R. Pozgay (Mr. Pozgay), and CoDefendant Michele T. Brosnahan.1

 While the Co-defendants2 were married, Plaintiff and her

husband lent them money on three separate occasions, totaling $345,000. In her Complaint,

Plaintiff alleges that she is owed money on three separate promissory notes dated June 15,

Case 2:07-cv-00188-SMM Document 33 Filed 10/29/07 Page 1 of 4
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 3A final order was entered in the Dissolution on February 2, 2007, confirming that

Michele is solely responsible for any amounts found due on the subject notes.

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1999, June 28, 1999, and October 12, 1999. At the time the money was paid and the notes

were executed, the co-defendants were married to each other. For the entirety of their 26

year marriage, the co-defendants resided in Arizona, a community property state. In 2003,

Michele initiated an action for the dissolution of her marriage to Mr. Pozgay. As a result of

the dissolution action, the defendants entered into a stipulation for the entry of an order

making Michele solely responsible for any debt to Plaintiff in exchange for Mr. Pozgay’s

quitclaim of his interest in the community residence.3

Despite the foregoing, prior to initiating the instant suit, Ms. Brosnahan brought an

essentially identical action against only Mr. Pozgay, in the United States District Court for

the Southern District of California. In the opinion, the Court explained:

...given the community nature of the debt, it appears Michele assumed the sole

responsibility for the debt in exchange for sole ownership of the couple’s

residence. The facts, therefore, suggest complete relief is unavailable in

Michele’s absence. See Nike, Inc. v. Commercial Iberica de Exclusivas

Desportivas, S.A., 20 F.3d 987, 991 (9th Cir. 1994) (joint obligees are

indispensable in an action to enforce obligation). In addition, Michele is a

necessary party because she has a legally protected interest that Defendant

cannot adequately represent...accordingly, Michele has a legally protected

interest in the suit and should be joined under Rule19(a).

(Doc. 11, Exhibit 4).

The Court concluded that “in ‘equity and good conscience,’ the action should be dismissed

for failure to join an indispensable party, and that the public interest would be better served

by adjudicating the action in Arizona.”

Discussion

In his moving papers, Mr. Pozgay contends that by failing to include Michele as a

co-defendant in her original Complaint filed with this Court, Ms. Brosnahan is in clear

violation of Rule 11 of the Federal Rules of Civil Procedure for filing pleadings “for an

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improper purpose, such as to harass to cause unnecessary delay or needles increase in the

cost of litigation.” (Doc. 17). 

Ms. Brosnahan contends that it is Mr. Pozgay who is seeking to harass and delay by

unnecessarily expanding the proceedings and “filing and unfounded Motion to Dismiss.”

(Doc. 18). The Court disagrees. Despite the outcome of the suit filed in the Southern

District of California, Ms. Brosnahan asserts that she had a good faith basis for her belief

that only Mr. Pozgay needed to be named as a party. This Court is unable to decipher that

good faith basis. Furthermore, Ms. Brosnahan clearly interprets the opinion of the District

Court of the Southern District of California in such a way that she only applies a portion of

the Court’s conclusion to the current pending motion. In fact, Ms. Brosnahan not only fails

to address a critical portion of the Court’s opinion and resulting conclusion which addresses

the crux of the case, whether Michele Pozgay Brosnahan is an necessary and indispensable

party. (Doc. 11, Ex. 4); but she also affirmatively represents to this Court that the District

Court of the Southern District of California did not decide the issue of whether Michele was

a necessary and indispensable party. In actuality, it was the conclusion of the District Court

of the Southern District of California that Michele Pozgay was a necessary and

indispensable party, “Michele is a necessary party because she has a legally protected

interest that Defendant cannot adequately represent...” The Court then concluded that the

case should be dismissed “for failure to join an indispensable party” (Doc. 11, Ex. 11). The

fact that District Court of the Southern District of California found that it lacked personal

jurisdiction over Ms. Pozgay does not permit Plaintiff’s counsel to re-litigate the same issue

and completely ignore its findings. Thus the Court notes that Plaintiff’s counsel should be

cautious when making representations to this Court, ensuring that those representations are

not made with the intent to mislead the Court or misstate the outcome of a case.

Accordingly,

IT IS HEREBY ORDERED that Defendant Jon R. Pozgay’s Motion for Sanctions

is GRANTED. 

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IT IS FURTHER ORDERED that Mr. Pozgay will be awarded the costs incurred

in filing this motion, as well the costs incurred in filing the motion to dismiss for failure to

join a necessary and indispensable party pursuant to Rule 19, Fed.R.Civ.P.

DATED this 29th day of October, 2007.

Case 2:07-cv-00188-SMM Document 33 Filed 10/29/07 Page 4 of 4