United States District Court, W.D. Missouri, Western Division
ORDER DENYING GREGORY LEYH'S MOTION TO DISMISS
MARTIN LEIGH'S MOTION FOR SANCTIONS
Kays, United States District Judge.
Plaintiff Gwendolyn Caranchini's fourth lawsuit
challenging the authority of her loan servicer and successor
trustee-in this lawsuit, Nationstar Mortgage, LLC,
(“Nationstar”) and Martin Leigh PC (“Martin
Leigh”), respectively-to foreclose on her home. After
the Court dismissed Martin Leigh because Plaintiff's
claims against it were precluded by the facts and law
established in her prior cases, Martin Leigh sought sanctions
under Missouri's procedural rules against Plaintiff and
her counsel, Gregory Leyh.
before the Court is Leyh's Motion to Dismiss Martin
Leigh's Motion for Sanctions (Doc. 48). Because the Court
has the authority to impose sanctions on lawyers who appear
before it, the motion is DENIED.
has filed three prior lawsuits contesting the enforcement of
the same promissory note and deed of trust. See
Caranchini v. Bank of America, N.A., 4:10-CV-00672-DGK
(removed to this Court on July 6, 2010; granting summary
judgment to defendants on September 26, 2013; affirmed by the
Eighth Circuit on September 12, 2014); Caranchini v.
Kozeny & McCubbin, LLC, 4:11-CV-0464-DGK (removed to
this Court on May 4, 2011; granting defendants summary
judgment on September 26, 2013; affirmed by Eighth Circuit on
September 12, 2014); and Caranchini v. Nationstar
Mortgage, LLC and Kozeny & McCubbin,
4:14-CV-00480-DGK (removed on May 30, 2014; dismissed on
September 23, 2014). Defendants prevailed in these cases
because Plaintiff's claims were without merit.
Nevertheless, in August 2017, Plaintiff and her counsel filed
this lawsuit against Nationstar and Martin Leigh, asserting
claims for negligent misrepresentation and violations of the
Missouri Merchandising Practices Act (“MMPA”).
originally filed the lawsuit in state circuit court.
Nationstar timely removed the case to federal court (Doc. 1),
alleging Plaintiff fraudulently joined Martin Leigh to avoid
diversity jurisdiction. The Court agreed and dismissed
Plaintiff's claims against Martin Leigh, finding the
claims were foreclosed based on the facts and law established
by her prior lawsuits (Doc. 24).
light of the Court's ruling, Martin Leigh served Leyh
with a motion for sanctions on October 5, 2018. A month
later, Martin Leigh filed a motion with the Court pursuant to
Missouri Rule of Civil Procedure 55.03, seeking sanctions
against Plaintiff and Leyh for fraudulently joining Martin
Leigh “by asserting baseless claims” in the
complaint. (Doc. 40 at 1). Leyh subsequently withdrew as
Plaintiff's counsel so he could fully respond to the
motion for sanctions without a conflict of interest (Doc.
42). Instead of responding to the motion for sanctions, Leyh
filed the instant motion, alleging the Court is without the
authority to sanction him.
Order does not analyze or determine if sanctions against Leyh
and his former client are warranted. Rather, it addresses
only the narrow issue of whether the Court has the authority
to impose sanctions in this case. The Court finds that it
The Court has inherent authority to sanction attorneys who
appear before it.
does not argue the Court is without subject matter
jurisdiction to hear the underlying merits of Plaintiff's
case. Rather, he argues this Court is divested of
jurisdiction solely over this motion because he and Martin
Leigh are not diverse. That argument is unavailing.
this Court has already determined that Martin Leigh was
fraudulently joined to defeat diversity jurisdiction, and,
therefore, its citizenship is irrelevant (Doc. 24). Leyh
cites no authority that by filing the motion for sanctions,
Martin Leigh's citizenship should now be considered.
Likewise, Leyh provides no authority suggesting the motion
for sanctions has somehow made him a party to this lawsuit.
Nor could he. “[A]n attorney representing others is not
a party to the lawsuit, and sanctioning an attorney
personally for misconduct does not transform the attorney
into a ‘party.'” See Trackwell v. B &
J P'ship, No. 4:05-CV-3171, 2011 WL 41882, at *3 (D.
Neb. Jan. 2, 2011).
even if the Court did not have subject matter jurisdiction,
district courts retain the inherent authority to impose
sanctions on attorneys appearing before them in the case
regardless of whether there is jurisdiction over the
underlying claim. Harlan v. Lewis, 982 F.2d 1255,
1259 (8th Cir. 1993); Chambers v. NASCO, Inc., 501
U.S. 32, 43 (1991). In other words, a federal court must have
subject matter jurisdiction to rule on the merits of a case,
but the same is not required to impose sanctions on attorneys
who have appeared before the court in the case. See
Perkins v. General Motors Corp., 965 F.2d 597, 599 (8th
Cir. 1992) (holding sanctions are collateral to the merits
and may be considered by the district court even when it was
divested of jurisdiction over the case itself). Leyh does not
dispute that he has appeared before the Court. Thus, the
Court has the inherent authority to impose sanctions against
him if warranted.
The Court has the authority to impose sanctions pursuant ...