Record Club of America, Inc. v. Credit Services, Inc.
Record Club of America, Inc. v. Credit Services, Inc.
Opinion of the Court
OPINION
The defendant, Credit Services, Inc., moves for summary judgment, pursuant to Federal Rule of Civil Procedure 56, for sanctions, pursuant to Federal Rule of Civil Procedure 11 and 28 U.S.C. § 1927, and for an injunction permanently enjoining plaintiff Record Club of America (RCOA) from filing any action against the defendant under a license agreement entered into between the parties as partial settlement of an antitrust action brought by RCOA against the defendant in 1974.
In the license agreement, Crédit Services, Inc., an owner and issuer of recordings, gave RCOA, a retailer of recordings, the right to manufacture and distribute for fifteen years all records and tapes owned by Credit Services, Inc. In December 1974, RCOA filed a petition for arrangement under Chapter XI of the Bankruptcy Act in the United States Bankruptcy Court for the Middle District of Pennsylvania; thereafter, on February 16, 1982, RCOA filed suit against Credit Services, Inc. in the Bankruptcy Court, alleging breach of good faith and fraudulent repudiation of the license agreement, fraudulent conveyance, and tortious interference with RCOA’s right to assign the rights it received from the license agreement. Credit Services, Inc. moved to dismiss the complaint on the ground that the Bankruptcy Court lacked jurisdiction over the matters stated therein.
Prior to the Bankruptcy Court’s ruling on the dismissal motion, plaintiff, on April 18, 1985, filed two additional actions against Credit Services, Inc., alleging identical causes of action to those pending before the Bankruptcy Court. One of these actions was filed in the Supreme Court of the State of New York, while the other was filed in federal court. On September 26, 1985, the state court, without setting forth the grounds upon which it relied, dismissed the action pending before it. Thereafter on October 1, 1985, this Court dismissed the federal action because of the duplicative nature of plaintiff’s claim.
On December 20, 1985, almost four years after RCOA filed its complaint, the Bankruptcy Court dismissed it on the ground that the court lacked the power to hear the debtor’s action for breach of contract and other similar actions created by state law. On April 22, 1986, this Court ordered the imposition of Rule 11 sanctions of $2,000
Defendant asserts that this Court’s previous dismissal was on the merits, pursuant to Rule 41(b), Fed.R.Civ.P. Rule 41(b) provides in relevant part:
Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits.
In this instance, the dismissal was a final adjudication upon the merits. The Court did not specify in its order of dismissal whether the dismissal was without prejudice,
Though Rule 41(b) does not apply to situations in which an action is dismissed because of some initial procedural bar to reaching the merits of plaintiff’s claims,
Plaintiff’s counsel is either so ignorant of the Rules of this Court or so deliberate in her disregard of the Rules that no useful purpose could be served in discussing her most recent conduct, which brings on defendant’s motion to dismiss this latest duplicative action. The prior dismissal was res judicata under Rule 41(b). Plaintiff’s instant action is not only in violation of Rule 11, Fed.R.Civ.P.,
The action is dismissed with prejudice. Since the sanctions heretofore imposed seem to have had.no effect, additional sanctions are assessed upon plaintiff’s attorney, who is the wife of the head of plaintiff corporation, in the sum of $5,000, and plain
So ordered.
. The identity of the claim is acknowledged by the plaintiff in its memorandum in opposition to the motion for dismissal.
. See Lyell Theatre Corp. v. Loews Corp., 682 F.2d 37 (2d Cir. 1982).
. See Costello v. United States, 365 U.S. 265, 81 S.Ct. 534, 5 L.Ed.2d 551 (1961).
. See Costello v. United States, 365 U.S. 265, 81 S.Ct. 534, 5 L.Ed.2d 551 (1961).
. See id. at 287, 81 S.Ct. at 545.
. See Oliven v. Thompson, 803 F.2d 1265, 1275 (2d Cir. 1986) (quoting Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 254 (2d Cir. 1985)).
. See, e.g., Weiss v. United States, 227 F.2d 72 (2d Cir. 1955), cert. denied, 350 U.S. 936, 76 S.Ct. 308, 100 L.Ed. 817 (1956).
. See In re Martin-Trigona, 737 F.2d 1254, 1263 (2d Cir. 1984).
Reference
- Full Case Name
- RECORD CLUB OF AMERICA, INC. v. CREDIT SERVICES, INC.
- Status
- Published