Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
4-17-2009
Holsworth v. Berg
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-4033
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Recommended Citation
"Holsworth v. Berg" (2009). 2009 Decisions. Paper 1526.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-4033
_____________
RICHARD HOLSWORTH; ELIZABETH HOLSWORTH
v.
PHILIP J. BERG; CARPENTERS HEALTH AND WELFARE FUND OF
PHILADELPHIA AND VICINITY; CARPENTERS PENSION AND
ANNUITY FUND OF PHILADELPHIA AND VICINITY; CARPENTERS
SAVINGS FUND OF PHILADELPHIA AND VICINITY;
CARPENTERS
JOINT APPRENTICE COMMITTEE; NATIONAL APPRENTICESHIP AND
HEALTH AND SAFETY FUND; METROPOLITAN REGIONAL COUNSEL
OF CARPENTERS, EASTERN FUND; UNITED BROTHERHOOD OF
CARPENTERS; CARPENTERS POLITICAL ACTION COMMITTEE OF
PHILADELPHIA AND VICINITY
Philip J. Berg,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 05-CV-01116
District Judge: The Honorable J. Curtis Joyner
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
April 17, 2009
Before: McKEE, SMITH, and VAN ANTWERPEN, Circuit Judges
(Filed: April 17, 2009)
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OPINION
SMITH, Circuit Judge.
Philip J. Berg appeals from an order of the United States District Court for the
Eastern District of Pennsylvania denying his motion for reconsideration of the sanctions
it imposed pursuant to Federal Rule of Civil Procedure 11.1 For the reasons set forth
below, we will affirm.
Berg, a Pennsylvania attorney, represented Richard Holsworth, who was a
defendant in a civil action brought by the Appellees (hereafter referred to as “Carpenters
Funds”) in 2001 to collect amounts due under ERISA. After default judgment was
entered in favor of the Carpenters Funds and against Holsworth in 2002, Holsworth sued
Berg in state court in 2004, alleging legal malpractice. In response, Berg filed not only an
answer to Holsworth’s complaint, but also a third-party complaint against the Carpenters
Funds that alleged that they had collected more than their due in the ERISA action and
had perpetrated a “fraud upon the Court . . . .” The Carpenters Funds immediately
1
The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. Although the
underlying civil action was remanded to the Philadelphia Court of Common Pleas, the
District Court retained jurisdiction to resolve the motion for sanctions under Rule 11. See
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 394–95 (1990). We have jurisdiction
under 28 U.S.C. § 1291. Although this appeal was subsequently stayed pursuant to 11
U.S.C. § 362 as a result of Berg’s filing of a voluntary petition under Chapter 13 of the
Bankruptcy Code, we may proceed as the stay of this appeal was lifted by an order of the
United States Bankruptcy Court for the Eastern District of Pennsylvania dated February 7,
2008.
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notified Berg by letter that his third-party complaint was baseless and that the Carpenters
Funds would seek sanctions if the third-party complaint was not dismissed.
Berg did not respond. The Carpenters Funds removed the matter to the District
Court, filed a motion for summary judgment, and sought leave to file a motion for
sanctions under Rule 11. Berg did not oppose the motion. The District Court granted
summary judgment in favor of the Carpenters Funds, as well as leave to file a motion for
sanctions. The motion for sanctions was promptly filed, seeking $10,668.78 in attorneys’
fees and cost incurred in the third-party action. The Court granted a request from Berg’s
office for an extension of time, but Berg failed to file any opposition to the motion. In a
thorough memorandum, the District Court explained that Berg’s third-party complaint
was frivolous on several grounds. The Court imposed sanctions against Berg, which
directed, inter alia, that Berg pay the requested attorneys’ fees and costs and that he
complete six hours of continuing legal education (CLE) in ethics.
Berg filed a timely motion for reconsideration. He did not dispute the District
Court’s determination that the third-party complaint was frivolous on several grounds.
Instead, Berg urged the Court, in the interest of justice, to reconsider the monetary
assessment and the CLE requirement because of extenuating circumstances. Berg
asserted that such reconsideration was appropriate where a Court’s decision is based on
untimely responses. The District Court rejected Berg’s invitation to reconsider the
sanctions it had imposed. It explained that Berg’s untimely responses had no bearing on
the determination that his third-party complaint was frivolous. It concluded there was no
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basis to grant the relief Berg requested because the applicable law had not changed and
the facts that Berg raised were known before the motion for sanctions had been filed.
This timely appeal followed. On appeal, Berg does not take issue with the District
Court’s determination that the filing of the third-party complaint was frivolous and
warranted the imposition of sanctions. Instead, he asserts that the sanctions imposed were
excessive, that he has completed the mandated CLE hours, and that the monetary sanction
should be forgiven or reduced. In an attempt to mitigate the sanctions imposed, Berg
again cites to the extenuating circumstances he brought to the District Court’s attention in
his motion for reconsideration.
Although Berg did not identify whether his motion for reconsideration was
pursuant to Rule 59(e) or Rule 60(b), we view such a motion “as the ‘functional
equivalent’ of a Rule 59(e) motion to alter or amend a judgment.” Fed. Kemper Ins. Co.
v. Rauscher, 807 F.2d 345, 348 (3d Cir. 1986) (internal citation omitted). “A proper
motion to alter or amend judgment must rely on one of three major grounds: (1) an
intervening change in controlling law; (2) the availability of new evidence not available
previously; or (3) the need to correct clear error of law or prevent manifest injustice.” N.
River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995) (internal
quotation marks, brackets and citation omitted). We review the denial of a motion for
reconsideration for an abuse of discretion. Id.
Berg’s contention that reconsideration should have been granted in light of the
extenuating circumstances he brought to the attention of the District Court is not
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persuasive. Most of the circumstances on which Berg relies existed before the Carpenters
Funds even filed their motion for sanctions. As a result, these circumstances did not
constitute new evidence in favor of reconsideration. For that reason, we conclude that the
District Court did not abuse its discretion in denying the motion for reconsideration.
Because Berg’s appeal of the denial of his motion for reconsideration was timely,
it “brings up the underlying judgment for review.” Fed. Kemper, 807 F.2d at 348 (internal
citation and quotation marks omitted). Berg does not challenge the determination to
impose sanctions. Rather, he challenges the severity of the sanction, contending that the
amount assessed was excessive. We cannot ignore, however, that despite notice of the
amount sought, Berg never challenged the severity of the sanctions imposed. In the
motion for reconsideration, Berg sought to excuse what he perceived as the reason for the
sanctions, but he did not contend that the sanctions were excessive. In Newark Morning
Ledger Co. v. United States, 539 F.2d 929 (3d Cir. 1976), we observed that we “generally
refuse to consider issues that are raised for the first time on appeal.” Id. at 932. “This
general rule applies with added force where the timely raising of the issue would have
permitted the parties to develop a factual record.” In re Am. Biomaterials Corp., 954 F.2d
919, 927–28 (3d Cir. 1992) (citing Newark Morning Ledger, 539 F.2d at 932–33).
Accordingly, we will not disturb the sanctions imposed by the District Court.
5