Opinion ID: 3010427
Heading Depth: 4
Heading Rank: 2

Heading: Actions Giving Rise to Sanctions Against

Text: Goldman Antonetti Goldman Antonetti is correct in pointing out that the district court did not identify with specificity many of the acts that caused it to infer that Esso and Goldman Antonetti were engaged in a pattern of delay. The court did, however, make extensive findings as to the Agrelot memorandum and the anomaly investigation. With respect to both of those matters, the district court's findings were not unreasonable. The undisputed fact is that the Agrelot memorandum did not surface until well after discovery had begun and until well after parties to the litigation had made repeated requests that clearly covered the document. Goldman Antonetti advances a plausible explanation for why the Agrelot memorandum was produced so late in the litigation. It is certainly possible that no attorney from Goldman Antonetti knew of the Agrelot memorandum until it was found in October 1993, notwithstanding testimony to the contrary; it is equally possible that the Agrelot memorandum was misfiled by both Soil Tech and by Goldman Antonetti. That is not to say, however, that the court's findings, which are based on an inference that Goldman Antonetti intentionally withheld the Agrelot memorandum, are unreasonable. There is evidence in the record that Goldman Antonetti attorneys knew of the memorandum's existence. Those same attorneys responded to the discovery requests covering such memorandum, and yet the document was not produced. _________________________________________________________________ 24. We are aware of only one case decided after the 1993 amendment to Rule 11 that disallowed such an award; however, the opinion did not cite the amendment and uncritically applied prior circuit precedent. See Zimmerman, 25 F.3d at 790 (citing Lockary). 39 With respect to the anomaly investigation, our analysis is similar. Goldman Antonetti relies on a report by a magistrate judge concluding that the firm's actions during the investigation amounted to nothing more than zealous advocacy in representation of its clients and therefore did not warrant sanctions. The firm submits that the district court had no basis to disagree with the magistrate judge's conclusions. However, the district court in that instance did not owe the magistrate judge any deference. Further, the undisputed evidence makes it clear that it was not unreasonable for the district court to conclude that the delays in the investigation were willful and in bad faith. The investigation began late, was aborted prematurely because of the failure of the parties to arrive with appropriate equipment, and was not completed for many months. Goldman Antonetti's next argument -- that the failure to produce the Agrelot memorandum caused no harm to the other parties in the litigation -- suffers the same fate. The firm here stresses that it produced the entire ETC report, of which the Agrelot memorandum was merely a summary. If, Goldman Antonetti questions, a full report has been produced, how can the failure to produce a summary of the report cause any harm to a party that can easily summarize the report for itself? The firm has a good point, but it does not mean that the district court's conclusion was contrary to reason. The ETC report was both complex and voluminous. Examining it required significant costs. A summary prepared by an expert would have reduced these costs and identified the problems that could only have been discovered by imposing a considerable burden on those examining the report for the first time. We concede, as did the district court, that the summary, timely produced, might have provided the parties to the litigation with less assistance than they claim. Still, it would have provided assistance, and that is the crux of the harm caused by the failure of Esso and Goldman Antonetti to produce the Agrelot memorandum. c. Was Goldman Antonetti Released from Sanctions? Goldman Antonetti also argues that three of the parties seeking sanctions from it -- Four Winds, Laga, and Western 40 Auto Supply -- have already released the firm from liability. Goldman Antonetti bases this argument on the settlement agreement reached between Esso and these parties in which the parties settled the underlying litigation and released Esso and their . . . attorneys from liability. Because Goldman Antonetti served as Esso's attorneys, it follows, Goldman Antonetti reasons, that the settlement agreement eliminates the possibility that these parties can collect a sanctions award from Goldman Antonetti. The district court disagreed. Because the interpretation of contractual language to discern contractual intent is a question of fact, our review is limited to a determination whether the district court's findings are clearly erroneous. Painewebber Inc. v. Hartmann, 921 F.2d 507, 510 (3d Cir. 1990). The issue, then, is whether the parties intended the term attorneys in the settlement agreement to refer only to counsel representing Esso at the time of the signing of the agreement, or also to refer to counsel who had represented Esso previously. The district court held that the release -- a contract -- does not cover Goldman Antonetti for two reasons. First, by the time the settlement agreement came into force, Esso had already severed its relationship with Goldman Antonetti. Because the term attorneys plainly refers only to counsel representing Esso at the time of the settlement agreement, the term must not encompass Goldman Antonetti. Second, even assuming that the examination of extrinsic evidence is appropriate here either to explain the term attorneys or to show that the parties attached some special meaning to attorneys, there is no extrinsic evidence that the parties to the settlement intended it to cover Goldman Antonetti. Goldman Antonetti offers and our review of the record suggests nothing-- save the language of the settlement agreement, which does not, by its terms, cover Goldman Antonetti -- that would lead us to conclude that the district court's findings were clearly erroneous under any legal standard governing interpretation of a contractual term. In sum, we are satisfied that the district court did not abuse its discretion in concluding that Goldman Antonetti is subject to some form of sanction and that $120,000 was an appropriate sanction. 41