UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RANSOM J. DAVIS, Esq.,
Appellant,

EDWARD LARRY COATES,
Plaintiff-Appellant,
                                                                    No. 96-2154
v.

UNITED PARCEL SERVICE,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Frederic N. Smalkin, District Judge.
(CA-96-408-S)

Submitted: September 9, 1997

Decided: November 5, 1997

Before WILKINS, HAMILTON, and LUTTIG, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

Ransom J. Davis, DANEKER, MCINTIRE & DAVIS, P.C., Balti-
more, Maryland, for Appellants. Emmett F. McGee, Jr., Patricia A.
Sumner, PIPER & MARBURY, L.L.P., Baltimore, Maryland, for
Appellee.

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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

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OPINION

PER CURIAM:

Appellant Edward Larry Coates appeals from the district court's
order granting summary judgment in favor of United Parcel Service,
Inc. ("UPS") and dismissing his civil complaint alleging defamation,
false imprisonment, intentional infliction of emotional distress, abuse
of process, and negligent investigation. Coates' counsel also appeals
the imposition of Rule 111 sanctions. On appeal, Coates challenges
whether summary judgment was appropriate, whether the district
court abused its discretion by denying his request for additional dis-
covery and by imposing sanctions on counsel, and whether the district
judge should have recused himself. Finding no reversible error, we
affirm.

Coates joined UPS in 1991 as an at-will employee. In November
1994, Coates' former roommate, Brian McElroy, contacted UPS loss
prevention personnel and informed them that Coates bragged about
stealing property from UPS and that he had seen some of the stolen
items in Coates' apartment. UPS investigators interviewed McElroy,
who provided a written statement. Investigators were able to deter-
mine that at least five of the items identified by McElroy were last
accounted for on a Friday before Coates' Saturday shift and that some
of the items were last seen on delivery trucks parked near the truck
Coates drove.

Armed with this information, investigators interviewed Coates and
his girlfriend, who was also a UPS employee and alleged to be an
accomplice. Both denied stealing UPS property. Coates was sus-
pended shortly after the interview pending the results of the investiga-
tion. UPS investigators turned the case over to local police for an
independent investigation. The police interviewed Coates and eventu-
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1 Fed. R. Civ. P. 11.

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ally obtained a search warrant for his apartment. Police were unable
to find any stolen items in Coates' apartment, and he was reinstated
within approximately one week of his suspension with no loss of pay
or benefits.

Coates filed the instant action, alleging that UPS defamed him by
letting it be known at work and in his apartment complex that he was
suspected of theft, that he was the victim of false imprisonment dur-
ing the interview with UPS loss prevention investigators, that he suf-
fered severe emotional distress as result of Defendant's actions, that
Defendant abused the legal system by making false representations to
the police which resulted in the issuance of a search warrant, and that
Defendant was negligent in its investigation of his case. After taking
Coates' deposition, Defendant filed a motion for summary judgment,
asserting that Coates failed to present any evidence to support his
allegations. The district court granted Coates' request to defer
responding to the motion until after the discovery period expired.
However, the court warned Coates that no additional extensions
would be granted and that the court would consider imposing Rule 11
sanctions if the Defendant was entitled to summary judgment based
on the evidence at the time of the motion.

Despite the court's warning, Coates failed to file a timely response
to the motion for summary judgment. While the district court filed an
order striking Coates' response, it nevertheless considered the
response in ruling on the motion for summary judgment. The court
also ordered Coates to show cause why Rule 11 sanctions should not
be imposed. After receiving responses from both parties and holding
a hearing, the district court imposed sanctions on Coates' counsel in
the amount of $500.

We find that the district court properly granted the Defendant's
motion for summary judgment. Under Fed. R. Civ. P. 56(e), Coates
"must set forth specific facts showing that there is a genuine issue for
trial." Moreover, conclusory allegations or hearsay are insufficient to
withstand a motion for summary judgment. Evans v. Technologies
Applications & Serv. Co., 80 F.3d 954, 962 (4th Cir. 1996). In the
present case, Coates was unable to present any evidence to support his
allegations.

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With regard to Coates' defamation claim, we find that he failed to
present any evidence of defamatory communication to a third party.
No one testified that they were told Coates was a thief or was sus-
pected of theft. Coates' allegation of false imprisonment is likewise
without merit. While Coates asserts in his affidavit opposing sum-
mary judgment that he was denied freedom of movement during his
interview with UPS investigators, this contradicts his prior deposition
testimony. The district court properly held that such a contradiction
cannot create a genuine issue of material fact. See Barwick v. Celotex
Corp., 736 F.2d 946, 960 (4th Cir. 1984). We find that the district
court correctly determined that Coates failed to present sufficient evi-
dence of severe emotional distress, and we further find that Coates
failed to show that the Defendant's conduct was extreme or outrageous.2
Coates' abuse of process claim fails because he did not show that the
Defendant had an ulterior motive or wilfully engaged in actions not
contemplated by law.3 The search warrant in this case was issued after
an independent investigation by local police, and Coates failed to
show any actions by the Defendant which exceeded the bounds of a
normal loss prevention investigation. Finally, we find that the district
court properly granted summary judgment on Coates' allegation of
negligent investigation because Maryland courts have rejected this
cause of action.4

We review the district court's decision denying additional time for
discovery for an abuse of discretion. Lone Star Steakhouse & Saloon,
Inc. v. Alpha of Virginia, Inc., 43 F.3d 922, 929 (4th Cir. 1995). We
find no such abuse here. The district court properly found that Coates
had ample opportunity to schedule the requested depositions, and he
provided no excuse for failing to do so.
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2 See Harris v. Jones, 380 A.2d 611 (Md. 1977). Coates' reliance on
B.N. v. K.K., 538 A.2d 1175 (Md. 1988), is misplaced. In that case, the
court found that severe emotional distress could be inferred because of
the outrageousness of the defendant's conduct (i.e., knowingly transmit-
ting a venereal disease). Since we find no such outrageous conduct in the
present case, such an inference would be inappropriate.

3 See Palmer Ford, Inc. v. Wood , 471 A.2d 297, 310 (Md. 1984).
4 See Bagwell v. Peninsula Reg'l Med. Ctr., 665 A.2d 297, 321 (Md.
Ct. Spec. App. 1995), cert. denied, 669 A.2d 1360 (Md. 1996).

                    4
We also review the district court's decision to impose sanctions for
abuse of discretion. Introcaso v. Cunningham, 857 F.2d 965, 969 (4th
Cir. 1988). We find that the district court did not abuse its discretion
when it rejected Coates' reasons for opposing sanctions. We find
Coates' jurisdictional objection meritless. Counsel was not held
accountable for pleadings filed initially in state court; he was sanc-
tioned for his opposition to Defendant's motion for summary judg-
ment, which was filed in the district court. Coates' assertion that his
claims were supported by the evidence or could be supported if given
more time for discovery fails for the reasons discussed above. More-
over, while it is acceptable for counsel to make a good faith argument
for a change in the law, we find that counsel's conduct in the present
case was sanctionable because it flew in the face of clearly estab-
lished precedent. Finally, contrary to Coates' allegation that the
majority of his claims were valid, the district court properly found
three of the five counts frivolous, and counsel was sanctioned only for
those frivolous counts.

We reject Coates' contention that the district judge should have
recused himself from the case prior to the sanctions phase because the
judge was biased against him. Recusal is a drastic remedy and is usu-
ally reserved for those cases in which the aggrieved party shows that
the bias derived from an extrajudicial source. See United States v.
Gordon, 61 F.3d 263, 267-68 (4th Cir. 1995). There may be rare cases
where the judge exhibits manifest prejudice and antagonism against
a party and there is no extrajudicial source. See Liteky v. United
States, 510 U.S. 540, 554-56 (1994). Coates contends that his case
falls into the latter category because of the court's imposition of a
$500 sanction. However, the Supreme Court held in Liteky that
adverse judicial rulings are seldom proof of bias, and Coates provides
no other evidence to support his allegation.

We therefore affirm the district court's orders granting the Defen-
dant's motion for summary judgment and imposing Rule 11 sanctions
on counsel. We dispense with oral argument because the facts and
legal contentions are adequately presented in the material before the
court and argument would not aid the decisional process.

AFFIRMED

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