J-A18010-18
2018 PA Super 325
RUTH WALLACE, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
STATE FARM MUTUAL AUTOMOBILE :
INSURANCE COMPANY, :
:
Appellee : No. 2465 EDA 2017
Appeal from the Order Entered June 30, 2017
in the Court of Common Pleas of Philadelphia County
Civil Division at No(s): September Term, 2008 No. 01840
BEFORE: STABILE, J., STEVENS, P.J.E.* and STRASSBURGER, J.**
OPINION BY STRASSBURGER, J.: Filed: November 30, 2018
Ruth Wallace appeals from the order entered June 30, 2017, wherein
the trial court confirmed the arbitration award of January 19, 2015, and
entered judgment in favor of State Farm Mutual Automobile Insurance
Company (State Farm). We affirm the trial court’s order, but remand for the
imposition of attorneys’ fees and costs pursuant to Pa.R.A.P. 2744.
The record reveals the following facts. In 2002, while insured by State
Farm, Wallace was injured in an automobile collision with a vehicle driven by
an underinsured motorist. Wallace’s State Farm policy contained an
arbitration clause (Arbitration Clause). The Arbitration Clause required the
parties to submit disputes over coverage to an arbitration panel composed of
an arbitrator appointed by State Farm, an arbitrator appointed by Wallace,
and a “competent and impartial third arbitrator” to be selected by mutual
* Former Justice specially assigned to the Superior Court.
** Retired Senior Judge assigned to the Superior Court.
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agreement or judicial decision.1 January 19, 2015 Arbitration Exhibit SF-5.
Specifically, the Arbitration Clause empowered the arbitrators to decide
whether Wallace was legally entitled to collect compensatory damages from
the owner or driver of an underinsured motor vehicle and the amount of
damages. Id. Per the policy, the Pennsylvania Arbitration Act of 1927
governed the arbitration, and the “written decision of any two arbitrators
shall be binding on each party.” Id.
In 2008, Wallace filed a petition to appoint a neutral arbitrator and to
compel arbitration, averring that State Farm failed to pay all the proceeds to
which she was entitled under the policy, and the parties could not agree on a
third arbitrator.2,3 In support of her claim, Wallace averred that she had
already appointed her arbitrator, but she did not name the arbitrator in the
petition. Petition to Appoint Third/Neutral Arbitrator and to Compel
Arbitration, 9/12/2008, at ¶ 22. After State Farm filed an answer to
Wallace’s petition, the trial court appointed Shawn Ward, Esquire, as the
1 There are references to a second insurance policy in the record. It is not
clear whether only one or both of these policies apply. Nevertheless, the
second policy contains a clause that is identical to the Arbitration Clause, so
we shall refer only to the Arbitration Clause in the first policy for ease of
reference.
2 Wallace was represented by Jeffry S. Pearson, Esquire at this time. At
some point prior to 2013, Elliot Tolan, Esquire began representing Wallace in
place of Attorney Pearson.
3The record does not reveal the reason for the gap in time between 2002
and 2008 or details about Wallace’s claim to State Farm.
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neutral arbitrator, and ordered an arbitration hearing to occur within 60 days
of its February 20, 2009 order. Order, 2/20/2009, at 1.
On July 19, 2013, State Farm filed a petition requesting that the trial
court appoint a different neutral arbitrator in place of Ward, averring that
Ward had never responded to the parties’ correspondence. State Farm
contended that an arbitrator was especially needed to decide a dispute
between the parties regarding State Farm’s motion to obtain medical
records, work records, and an examination of Wallace under oath. In its
petition, State Farm provided the name of its arbitrator, and averred that
Wallace still had not named her arbitrator. Wallace filed an answer,
agreeing that Ward should be replaced. Other than stating that her
arbitrator was from Philadelphia, she still did not identify her arbitrator. Via
an August 26, 2013 order, the trial court removed Ward as the neutral
arbitrator, appointed Marc Rickles, Esquire in his place, and ordered that
arbitration commence within 90 days of its order. Order, 8/26/2013, at 1.
After continued disputes regarding State Farm’s requests, see January
19, 2015 Arbitration Exhibits A-3–A-5, A-13, SF-1–SF-2, Arbitrator Rickles
eventually scheduled an arbitration hearing for November 24, 2014, and
requested that Wallace identify her arbitrator. January 19, 2015 Arbitration
Exhibit A-6 (September 22, 2014 letter from Arbitrator Rickles to Attorney
Tolan and Joseph Hankins, Esquire, State Farm’s counsel). On November
13, 2014, Arbitrator Rickles sent a letter to Attorney Tolan, which again
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reiterated the scheduled date for the hearing, as well as stating that
Arbitrator Rickles had not heard from Attorney Tolan or any arbitrator
appointed by Wallace. January 19, 2015 Arbitration Exhibit A-7. Attorney
Tolan replied to Arbitrator Rickles and requested that the hearing be
rescheduled due to a scheduling conflict and his intent to withdraw from
Wallace’s case.4 January 19, 2015 Arbitration Exhibit A-8. In response, via
a November 17, 2014 letter sent to Attorneys Tolan and Hankins, Arbitrator
Rickles notified the parties that he was rescheduling the hearing for Monday,
January 19, 2015, and provided a deadline for requesting a new date if
needed. January 19, 2015 Arbitration Exhibit A-9.
On January 16, 2015, the Friday before the scheduled arbitration
hearing, Wallace and Allen Feingold5 filed pro se a lawsuit against Arbitrator
4 Attorney Tolan never withdrew and still represents Wallace on appeal.
5 The complaint alleges that Feingold “for a substantial period of time
represented [Wallace] in these and other matters.” January 19, 2015
Arbitration Exhibit A-10 at ¶ 1a. At the time Feingold and Wallace pro se
filed the complaint, Feingold was disbarred from practicing law in this
Commonwealth. Specifically,
[i]n 2006, [Feingold] was suspended from the practice of law for
five years for several acts of misconduct which included:
allowing a client to give false testimony, filing frivolous claims
of fraud and civil conspiracy against opposing counsel, and
assaulting a judge who ruled against [Feingold’s] client in an
arbitration hearing. After [Feingold] failed to notify his clients of
this disciplinary action and continued practicing law while
suspended, [Feingold] was disbarred by our Supreme Court on
August 22, 2008. See Office of Disciplinary Counsel v.
(Footnote Continued Next Page)
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Rickles, State Farm, Attorney Hankins, the law firm of Attorney Hankins, and
the attorney and law firm representing the underinsured motorist in
Wallace’s third party tort action. See January 19, 2015 Arbitration Exhibit
A-10. The complaint raised claims of bad faith, breach of contract,
“negligent misrepresentation,” “abuse of process,” fraud, and civil
conspiracy, all of which purport to be related to the defendants’ conduct in
Wallace’s underinsured motorists’ arbitration matter and the third-party tort
matter. See id.
On Sunday, January 18, 2015, Feingold sent a fax to Arbitrator Rickles
and Attorney Hankins. See January 19, 2015 Arbitration Exhibit A-11. In
the fax, Feingold referenced the newly-filed lawsuit, requested that
(Footnote Continued) _______________________
Feingold, 93 DB 2003; 92 DB 2005; Nos. 1093 and 1161
Disciplinary Docket No. 3.
Feingold v. Hendrzak, 15 A.3d 937, 943 (Pa. Super. 2011) (emphasis
added); see also id. at 942-43 (reviewing Feingold’s pattern of filing
vexatious and frivolous litigation against opposing counsel and defendant
insurance companies).
We take judicial notice that the law license of Wallace’s original
attorney in this matter, Attorney Pearson, was suspended for 20 months on
June 28, 2011, for his assuming representation of Feingold’s former clients
after Feingold’s suspension, and then assisting Feingold in Feingold’s
unauthorized practice of law with respect to those clients. See Order,
6/28/2011, in the matter of Office of Disciplinary Counsel v. Pearson,
No. 88 DB 2008; Report and Recommendations of the Disciplinary Board of
the Supreme Court of Pennsylvania in the matter of Office of Disciplinary
Counsel v. Pearson, No. 88 DB 2008, January 26, 2011. Finally, we take
judicial notice that the Disciplinary Board of the Supreme Court of
Pennsylvania publicly reprimanded Wallace’s current counsel, Attorney
Tolan, for his association with Feingold. See Public Reprimand, Office of
Disciplinary Counsel v. Tolan, No. 200 DB 2015, 4/13/2016.
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Arbitrator Rickles withdraw from the arbitration matter, and threatened to
join State Farm’s arbitrator in the lawsuit as a defendant if he participated in
the arbitration matter further. Id. He also stated that
[o]ver the years, [he has] seen third arbitrators allow defense
counsel to obtain discovery that they should not have be [sic]
allowed to receive, but in this case, [Arbitrator] Rickles has
crossed far beyond the line of fairness or neutrality and allowed
the defense to obtain everything and anything they want
providing an unfairness to this mater [sic] that violates the law,
the case law, and shatters the discovery that is allowed in the
State Farm policy to prevent the plaintiff, injured party, claimant
from receiving a fair hearing, even before it starts.
Id. In closing, Feingold stated that he “lost [his] law license trying to
prevent injustice, but now, with no license, [he finds] that in a case where
[he has] claims and old clients, [he] can do more to right those wrongs.”
Id.
On the morning of the January 19, 2015 hearing,6 Wallace, Attorney
Tolan, and the arbitrator purportedly appointed by Wallace failed to appear.
Arbitrator Rickles attempted to reach out to Attorney Tolan multiple times.
See N.T., 1/19/2015, at 4-5; January 19, 2015 Arbitration Exhibit A-12.
After Arbitrator Rickles received no response, the arbitration hearing
proceeded without Wallace, Attorney Tolan, or Wallace’s arbitrator.
Arbitrator Rickles and State Farm’s arbitrator, William Thomson,
Esquire, began by addressing Wallace’s newly-filed lawsuit. They both
6 State Farm attached the transcript of and exhibits from the January 19,
2015 arbitration hearing to its Response to Petition to Strike, 3/10/2015, as
Exhibit A.
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concluded that the lawsuit did not require recusal because each believed he
could act impartially. N.T., 1/19/2015, at 41-44. Both declined to consider
Feingold’s faxed request for recusal because Feingold was neither Wallace’s
attorney nor a party in the case. Id. Thus, not only had Wallace failed to
move for recusal, the arbitrators agreed that it was her burden “to produce
evidence establishing bias, prejudice[,] or unfairness[,] which raises a
substantial doubt as to the … neutral party’s ability to preside impartially.”
Id. at 40, 43-44. The two arbitrators then entered an award on January 19,
2015, in favor of State Farm and against Wallace, noting that Wallace,
Wallace’s attorney, and Wallace’s arbitrator had failed to appear.
On February 18, 2015, Wallace, through Attorney Tolan, petitioned the
trial court to set aside the arbitration award. Wallace averred that the
neutral arbitrator had engaged in “bad faith antics” prior to the arbitration
and unbeknownst to her, proceeded with a “sham arbitration hearing,” years
after the August 26, 2013 order authorizing the arbitration, “with [Wallace’s]
arbitrator out of the country and half way around the world and without
[Wallace] or her counsel, all in spite of … conflicts of interest” based upon
the lawsuit filed by Wallace the business day before the scheduled
arbitration. Petition to Strike Arbitration Award, 2/18/2015, at ¶ 14.
The trial court initially granted Wallace’s request, see Trial Court
Order, 4/6/2015, at 1, but in response to State Farm’s timely-filed motion
for reconsideration, the trial court vacated the April 6, 2015 order pending
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reargument. Trial Court Order, 4/13/2015, at 1. Following briefing and a
rule-to-show-cause hearing on June 30, 2017, the trial court granted State
Farm’s motion for reconsideration, vacated its April 6, 2015 order granting
Wallace’s petition to strike the arbitration award, confirmed the January 19,
2015 arbitration award, and entered judgment in favor of State Farm.7 Trial
Court Order, 6/30/2017, at 1. Wallace timely filed a notice of appeal. Both
Wallace and the trial court complied with Pa.R.A.P. 1925.
On appeal, Wallace sets forth three arguments in support of her
contention that the trial court erred in dismissing her petition to strike the
arbitration award. First, she baldly asserts that Arbitrator Rickles improperly
allowed State Farm to access Wallace’s medical and third-party files,
permitted State Farm to engage in “serial, repetitive improper discovery,”
and banished Wallace’s arbitrator from participating in the process.
Wallace’s Brief at 10. As a result, she claims she was denied due process
and a “full and fair hearing.” Id. Second, Wallace claims that Arbitrators
Rickles and Thomson banished her arbitrator from participating in the
hearing, panel deliberations, and fashioning of the award, and such
banishment constitutes an “irregularity” that requires the trial court to strike
the award. Id. at 11-13. Third, she argues that the award should be set
aside based upon Arbitrator Rickles’s failure to recuse himself. Id. at 14-15.
7 The trial court attributed this lengthy delay to an erroneous administrative
closure of the matter prior to the rule-to-show-cause hearing. Trial Court
Opinion, 11/5/2017, at 2.
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As discussed on page 2, supra, the parties agreed to statutory
arbitration pursuant to the Arbitration Act of 1927. In 1980, the legislature
repealed and replaced the Arbitration Act of 1927 with the Uniform
Arbitration Act, 42 Pa. C. S. §§ 7301–7362. However, parties remain free to
agree to proceed according to the 1927 Act. Nationwide Mut. Ins. Co. v.
Heintz, 804 A.2d 1209 (Pa. Super. 2002). Under these circumstances, the
trial court must adhere to 42 Pa.C.S. § 7302(d)(2) in reviewing the
arbitration panel’s award. Id. at 1214. Section 7302(d)(2) provides as
follows:
(2) Where this paragraph is applicable a court in reviewing an
arbitration award pursuant to this subchapter shall,
notwithstanding any other provision of this subchapter, modify
or correct the award where the award is contrary to law and is
such that had it been a verdict of a jury the court would have
entered a different judgment or a judgment notwithstanding the
verdict.
42 Pa.C.S. § 7302(d)(2). When the Arbitration Act of 1927 is applicable, we
review the affirmance of an arbitration award using the following standard.
“This Court may reverse a trial court’s decision to affirm … an arbitration
award arising from an insurance contract only if the trial court abused its
discretion or committed an error of law.” Pantelis v. Erie Ins. Exch., 890
A.2d 1063, 1065 (Pa. Super. 2006).
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Before we address the merits of Wallace’s issues, we must address her
failure to comply with our rules of appellate procedure.8 Wallace’s brief does
not contain a single citation to the record, in violation of Rules 2117 and
2119. See Pa.R.A.P. 2117(a)(4) (requiring a narrative statement of “all the
facts which are necessary to be known in order to determine the points in
controversy, with an appropriate reference in each instance to the place in
the record where the evidence substantiating the fact relied on may be
found”); Pa.R.A.P. 2119(c) (requiring the argument in a brief to be
accompanied by a reference to the place in the record where the matter
referred appears). “We shall not … scour the record to find evidence to
support an argument; instead, we will deem [the] issue to be waived.”
Milby v. Pote, 189 A.3d 1065, 1079 (Pa. Super. 2018). Wallace also failed
to compile a reproduced record that complies with Pa.R.A.P. 2152–2154.
Compliance with the rules regarding the contents of reproduced records on
appeal is mandatory, not directory. Rosselli v. Rosselli, 750 A.2d 355,
357 (Pa. Super. 2000).
Even after State Farm pointed out Wallace’s failure to file a reproduced
record or to cite to the record in any fashion, Wallace’s response was to file
a reply brief with a section entitled “True History, Facts[,] and Improprieties
Committed by [State Farm]” with 29 divided paragraphs that still failed to
8 While we refer to Wallace because she is the party, we recognize that in
reality, it is Wallace’s counsel, Attorney Tolan, who has failed to follow our
rules.
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comply with our rules of appellate procedure. See Wallace’s Reply Brief at
1-4.
Wallace’s failure to abide by the rules of appellate procedure is all the
more egregious given her broad and sweeping accusations of impropriety by
Arbitrators Rickles and Thomson. Wallace’s counsel, Attorney Tolan,
represented to this Court at oral argument that Wallace has had the same
arbitrator throughout the case. However, despite Wallace’s argument that
the other arbitrators banished Wallace’s arbitrator from the proceedings, the
record contains no indication that Wallace ever named an arbitrator. In fact,
the record is replete with documentation of unsuccessful efforts by the
neutral arbitrator and State Farm’s attorney to ascertain the name of
Wallace’s arbitrator.9
9 See Exhibit B to Response to Petition to Appoint Neutral Arbitrator and to
Compel Arbitration, 10/31/2008, at 1 (September 20, 2008 letter from State
Farm’s counsel to Wallace’s counsel requesting that Wallace provide the
name, address, and phone number of the arbitrator Wallace alleges she has
appointed in paragraph 21 of her petition); Exhibit F to Petition to Change
Arbitrator, 7/19/2013, at 1 (February 13, 2009 letter from State Farm’s
counsel to Arbitrator Ward indicating that to its knowledge, Wallace had not
appointed an arbitrator); Exhibit H to Petition to Change Arbitrator,
7/19/2013, at 1 (February 20, 2009 letter from State Farm’s counsel to
Wallace’s counsel and Arbitrator Ward requesting that Wallace provide the
name of her arbitrator); Exhibit J to Petition to Change Arbitrator,
7/19/2013, at 1 (April 23, 2013 letter from State Farm’s counsel to
Arbitrator Ward indicating that to its knowledge, Wallace still had not
appointed an arbitrator); January 19, 2015 Arbitration Exhibit A-11
(September 22, 2014 letter from Arbitrator Rickles to Attorneys Tolan and
Hankins requesting the name of Wallace’s arbitrator).
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Moreover, on appeal, Wallace repeatedly fails to identify where she
objected to the participation of Arbitrator Rickles in the arbitration. See
Wallace’s Brief at 14 (claiming that Wallace requested that Arbitrator Rickles
withdraw without citation to the record or any description of where the
request was made); Wallace’s Reply Brief at 8 (same). This violates our
rules of appellate procedure. Pa.R.A.P. 2117(c) (requiring a statement
regarding where the party preserved an issue in the trial court); 2119(e)
(same). Wallace was similarly vague in her motion to strike regarding her
alleged objection to the participation of Arbitrator Rickles. See Motion to
Strike, 2/18/2015, at ¶ 13 (claiming that “[Wallace’s] counsel requested that
the alleged neutral arbitrator not proceed with the arbitration…”).
Indeed, the record belies her repeated assertions that she objected to
the participation of Arbitrator Rickles. At hearing on the rule to show cause
regarding State Farm’s motion for reconsideration, Attorney Tolan admitted
to the trial court that he did not ask the trial court to appoint a new
arbitrator, request a continuance, or appear at the hearing to place an
objection on the record that the hearing was unfair. N.T., 6/30/2017, at 9-
10. The record reveals that Wallace never moved or objected to Arbitrator
Rickles’s continued service as an arbitrator. Feingold’s fax demanding
Arbitrator Rickles’s recusal simply does not constitute an objection by
Wallace, as Feingold was neither a party to the arbitration nor counsel for
Wallace.
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Wallace’s claim that she objected to Arbitrator Rickles’s failure to
recuse himself is particularly troubling given the fact that her counsel,
Attorney Tolan, also represented the appellant in State Farm Mutual Auto.
Ins. Co. v. Dill, 108 A.3d 882 (Pa. Super. 2015) (en banc). In Dill, this
Court plainly held that even if an arbitrator “had an independent obligation
to [disqualify himself voluntarily], such an obligation does not remove the
onus from [the claimant] to object to the composition of the panel.” Id. at
886. Failure to object to the composition of the panel results in a waiver on
appeal of a claim that an arbitrator was biased. Dill, 108 A.3d at 886.
Accord Sheehan v. Nationwide Ins. Co., 779 A.2d 582, 584–85 (Pa.
Super. 2001) (“[U]pon motion the arbitrator is the one to initially determine
if a recusal request has merit[; i]t is the burden of the party requesting
recusal to produce evidence establishing bias, prejudice or unfairness which
raises a substantial doubt as to the [arbitrator’s] ability to preside
impartially.”). Thus, Attorney Tolan is well aware that Wallace had to lodge
an objection in order to preserve her claim.
What is even more shocking is that it is Wallace who attempted to
create a basis for recusal in this matter. Not only did Wallace file a lawsuit
at the proverbial eleventh hour, she filed such a lawsuit along with Feingold,
a disbarred former attorney who lacked standing, and did not plead “a single
plausible cause of action that could possibly permit recovery under the law,”
and made repeated “factually[-]unsupported accusations against [the
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d]efendants,” which resulted in the complaint being dismissed as frivolous.10
Feingold v. State Farm Mut. Ins. Co., 2015 WL 5478217, at *4 (Pa. Com.
Pl. 2015), aff’d, 153 A.3d 1117 (Pa. Super. 2016) (unpublished), petition
for allowance of appeal denied, 160 A.3d 760 (Pa. 2016) (per curiam).
Based on the foregoing, we hold that Wallace11 has waived all issues
for appeal based both upon her failure to comply with our rules of appellate
procedure and her failure to preserve her objection to Arbitrator Rickles’s
participation in the first instance. Given Wallace’s failure to object to the
composition of the panel in accordance with Dill, we have no trouble
concluding that this appeal “has no basis in law and fact.” U.S. Claims,
Inc. v. Dougherty, 914 A.2d 874, 878 (Pa. Super. 2006). Accordingly, we
are compelled to impose sanctions sua sponte upon Attorney Tolan pursuant
to Pa.R.A.P. 274412 based upon his obdurate and vexatious prosecution of a
10 Attorney Tolan’s continued reliance on this lawsuit as the basis for
Arbitrator Rickles’s recusal is all the more concerning given Attorney Tolan’s
public reprimand by the Disciplinary Board of the Supreme Court of
Pennsylvania for associating with Feingold, as mentioned supra.
11 Like the trial judge who decided Feingold, we question to what extent
Wallace is aware of the conduct of Feingold and/or Attorney Tolan. See
Feingold, 2015 WL 5478217, at *3 n.3.
12 An imposition of costs and fees is permissible under Pa.R.A.P. 2744 when
this Court determines “that an appeal is frivolous or taken solely for delay or
that the conduct of the participant against whom costs are to be imposed is
dilatory, obdurate or vexatious.” Pa.R.A.P. 2744. “In determining the
propriety of such an award, we are ever guided by the principle that an
appeal is not frivolous simply because it lacks merit[; r]ather, it must be
found that the appeal has no basis in law or fact.” Dougherty, 914 A.2d at
878 (imposing sanctions pursuant to Pa.R.A.P. 2744 based upon pro se
(Footnote Continued Next Page)
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frivolous appeal despite his full knowledge that Wallace never preserved her
objection to Arbitrator Rickles’s participation. We affirm the trial court’s
June 30, 2017 order and remand to the trial court to determine an award of
appropriate costs and attorneys’ fees to be imposed against Attorney Tolan
in favor of State Farm.
Order affirmed. Case remanded for calculation and imposition of
attorneys’ fees and costs occasioned by this appeal. Jurisdiction
relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/30/18
(Footnote Continued) _______________________
appellant’s undeveloped arguments on appeal and “total inability to produce
any evidence that fraud or misconduct resulted in the denial of a hearing or
caused an inequitable [arbitration] award”). We may award sanctions sua
sponte. Feingold, 15 A.3d at 943 (imposing sua sponte counsel fees
against Feingold in wholly frivolous appeal of lawsuit filed pro se against
defendants and opposing counsel for the purpose of harassment).
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