                                                                                                                           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Precedential or Non-Precedential: Non-Precedential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.
http://digitalcommons.law.villanova.edu/thirdcircuit_2009/1526


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                                             NOT PRECEDENTIAL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)


                                  1
                                         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.

                                             2
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


                                              3
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


                                              4
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.




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