Case: 14-15334

Date Filed: 06/23/2016

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
________________________
No. 14-15334
Non-Argument Calendar
________________________
D.C. Docket No. 6:13-cv-00418-GKS-GJK
DANIELLE TACORONTE,
PlaintiffAppellant/
Cross-Appellee,
versus
MARC B. COHEN,
individually,
GREENSPOON MARDER, P.A.,
DefendantsAppellees/
Cross-Appellants,
GREENSPOON MARDER & ASSOCIATES, INC., et al.,
Defendants.
________________________
Appeals from the United States District Court
for the Middle District of Florida
________________________
(June 23, 2016)

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Before MARTIN, JULIE CARNES, and ANDERSON, Circuit Judges.

PER CURIAM:
The district court imposed Rule 11 sanctions against Plaintiff Danielle
Tacoronte and ordered her to pay reasonable attorneys fees and costs to
Defendants Greenspoon Marder and Marc Cohen. Plaintiff appeals the district
courts order imposing Rule 11 sanctions against her. Defendants concede that
Plaintiffs debt to them was discharged in her Chapter 7 bankruptcy proceeding.
However, Defendants cross-appeal, arguing that the district court should have
levied the sanctions against Plaintiffs attorney as the person primarily responsible
for the underlying Rule 11 violations. We hold that the district court abused its
discretion in imposing sanctions against Plaintiff on the ground that Plaintiffs
arguments were not warranted based on existing law or a nonfrivolous extension of
existing law. Accordingly, we vacate the district courts Rule 11 orders and
remand for further proceedings consistent with this opinion.
I.

BACKGROUND

Plaintiff obtained a $130,000 line of credit from Wells Fargo Bank. She
eventually defaulted on a balance of approximately $129,000. Wells Fargo sued
Plaintiff in Florida state court to recover her unpaid balance. Defendant
Greenspoon Marder represented Wells Fargo in the litigation against Plaintiff.

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Defendant Marc Cohen, a shareholder of Greenspoon Marder, took the lead. The
Florida state court entered judgment against Plaintiff in the amount of $129,000.
Plaintiff then sued Defendants in federal district court. 1 Plaintiffs amended
complaint contained three counts. Count I asserted violations of the Fair Debt
Collection Practices Act (FDCPA), 15 U.S.C. 1692. Count II asserted
violations of the Florida Consumer Collection Practices Act (FCCPA), Fla. Stat.
559.55.785. And Count III asserted violations of the Fair Credit Reporting Act
(FCRA), 15 U.S.C. 1681 et seq. Each claim centered on two aspects of the
state court litigation. First, Defendant Cohen had failed to file a notice of
appearance until almost a year after he was retained by Wells Fargo. Second,
Defendant Cohen had pulled Plaintiffs consumer report from Equifax, and
because Equifax had failed to update its records, an inquiry was placed on
Plaintiffs report in the name of Cohens previous employer.
Defendants moved for summary judgment on January 14, 2014. Plaintiff
moved for summary judgment on January 31, 2014more than two weeks after
the deadline for filing dispositive motions. That same day, Plaintiff sought leave to
file a second amended complaint in which she would abandon Counts I and II.
The district court denied Plaintiffs motion to amend. Plaintiff then moved to
1

Plaintiffs original complaint also asserted claims against Jodi Cohen, who had previously
represented Wells Fargo in the state litigation, and Wells Fargo. The district court dismissed
Plaintiffs claims against Jodi Cohen, and Plaintiffs amended complaint dropped the claims
against Wells Fargo.
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voluntarily dismiss Counts I and II of her amended complaint. The district court
granted Plaintiffs motion but conditioned dismissal on Plaintiff paying
Defendants attorneys fees incurred in defending the claims in Counts I and II.
After the district court issued its order, Plaintiff sought to withdraw her motion to
voluntarily dismiss Counts I and II, which the district court denied.
On April 1, 2014, the district court denied Plaintiffs motion for summary
judgment on Count III, the only remaining Count. The district court granted
Defendants summary judgment motion on Count III and entered final judgment.
Defendants subsequently moved for Rule 11 sanctions. The district court
granted Defendants motion, ordered Plaintiff to pay the reasonable attorneys fees
and costs that Defendants had incurred since the date Plaintiff filed her amended
complaint, and directed Defendants to renew their motion for attorneys fees and
costs and provide an accounting of the costs, fees, and expenses sought.
Defendants filed a renewed motion for attorneys fees and costs with a
memorandum detailing the hours and billing rates for each person who had worked
on the case. Defendants sought $198,787.81 in attorneys fees and $1,301.96 in
costs. The district court referred the initial determination of the proper amount of
fees and costs to a magistrate judge. The magistrate judge issued a report and
recommendation (R&R), which recommended that the district court award
Defendants the full amount of costs sought but only $117,552.13 in fees, reflecting
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a reduced hourly rate and a reduced number of hours. Plaintiff objected to the
R&R; Defendants did not. The district court adopted the R&R, awarding
Defendants a total of $118,854.09 in fees and costs.
On November 25, 2014, Plaintiff appealed the district courts sanctions
orders.2 Defendants cross-appealed on December 5, 2014. Plaintiff then filed for
Chapter 7 bankruptcy, which triggered an automatic stay effective March 2, 2015.
Plaintiff named Defendants as creditors, and the bankruptcy court discharged
Plaintiffs debt to Defendants.
II.

DISCUSSION

Plaintiffs initial brief advances two arguments. First, Plaintiff asserts that
her appeal is moot in light of the bankruptcy discharge. Second, Plaintiff contends
that the district courts order awarding fees and costs is void ab initio in light of
the bankruptcy discharge and, accordingly, Defendants cross-appeal is improper.
Defendants readily acknowledge that the award of attorneys fees and costs was
discharged as to Plaintiff. However, Defendants argue that Plaintiffs bankruptcy
2

Plaintiff had previously appealed the following district court orders to this Court: (1) the order
granting Plaintiffs motion to voluntarily dismiss two of her counts, which conditioned dismissal
on payment of attorneys fees and costs incurred in defending those counts; (2) the order denying
Plaintiffs subsequent motion to withdraw her motion to dismiss those two counts; (3) the order
granting summary judgment in favor of Defendants; and (4) the order directing Plaintiff to pay
Defendants reasonable fees and costs. We consolidated the appeals of the first three orders and
dismissed the appeal of the fourth order because the amount of fees had not yet been set. See
Santini v. Cleveland Clinic Fla., 232 F.3d 823, 825 n.1 (11th Cir. 2000) (Because the magistrate
judge has not yet reduced the sanctions order to a specific sum, the order it not final and the court
lacks jurisdiction over Millers appeal.). As to the first three orders, we affirmed the district
courts rulings in toto. See Tacoronte v. Cohen, 594 Fed. Appx 605 (11th Cir. 2015).
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did not altogether void the district courts judgment imposing sanctions. In their
cross-appeal, Defendants argue that [t]he Rule 11 violations found by the district
court involve elementary errors in understanding and applying legal principles, or
ascertaining the existence of facts that would meet applicable legal standards.
Defendants contend that these errors are uniquely faults of the lawyer, not the
represented party, and accordingly, that the district court abused its discretion in
imposing sanctions against Plaintiff rather than her attorney. Notably, neither
party disputes that sanctions were warranted, and neither party takes issue with the
amount of fees and costs awarded.
We reject Plaintiffs argument that the bankruptcy courts order discharging
Plaintiffs debt to Defendants rendered the district courts orders awarding
Defendants attorneys fees and costs void ab initio, thereby dooming Defendants
cross-appeal. Plaintiffs only authority for this novel proposition is an unpublished
opinion from the District Court for the District of Connecticut. See In re Heating
Oil Partners, No. 3:08-cv-1976, 2009 WL 5110838 (D. Conn. Dec. 17, 2009). As
relevant here, that opinion held, unremarkably, that a district court order entered in
violation of an automatic stay is void ab initio. Id. at *8 (In the Second Circuit, as
a general rule, any action taken in violation of the automatic stay is void ab initio
and thus without effect.). Here, the district courts order awarding Defendants
attorneys fees and costs pre-dated Plaintiffs bankruptcy suit. Therefore, the order
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was not entered in violation of an automatic stay, and the order is not void ab
initio. Thus, Defendants cross-appeal is properly before us. We apply an abuseof-discretion standard in reviewing all aspects of a district courts Rule 11
determination. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990). A
district court abuses its discretion when it misapplies the law in reaching its
decision or bases its decision on findings of fact that are clearly erroneous. Arce
v. Garcia, 434 F.3d 1254, 1260 (11th Cir. 2006).
In general, Rule 11 is violated, and sanctions are warranted, when a party
files a pleading, motion, or paper that (1) is filed in bad faith or for an improper
purpose (see Rule 11(b)(1)); (2) is based on a legal theory that has no reasonable
chance of success and that cannot be advanced as a reasonable argument to change
existing law (see Rule 11(b)(2)); or (3) has no reasonable factual basis (see Rule
11(b)(3)).3 See also Baker v. Alderman, 158 F.3d 516, 524 (11th Cir. 1998). An
attorney may be sanctioned when a pleading suffers any of these defects.
However, district courts are forbidden from imposing monetary sanctions on a
party for a violation of Rule 11(b)(2), i.e., when a pleading advances a legal theory
that is unwarranted under existing law or a nonfrivolous extension of existing law.
See Fed. R. Civ. P. 11(c)(5)(A) (The court must not impose a monetary sanction

Additionally, under Rule 11(b)(4), an attorney or party may be sanctioned when denials of
factual contentions are unwarranted based on the evidence. But that provision is not relevant to
this appeal.
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. . . against a represented party for violating Rule 11(b)(2).); see also Byrne v.
Nezhat, 261 F.3d 1075, 1118 (11th Cir. 2001) (Rule 11 does not permit
sanctioning a client, however, when the basis for the sanction is that the pleading
was legally frivolous.), abrogated on other grounds by Bridge v. Phoenix Bond &
Indem. Co., 553 U.S. 639 (2008).
Defendants motion for Rule 11 sanctions was based on Plaintiffs amended
complaint, which contained three Counts. Count I asserted claims under the
FDCPA; Count II asserted claims under the FCCPA; and Count III asserted claims
under the FCRA. The district court concluded that each Count violated Rule 11
and therefore ordered Plaintiff to pay Defendants attorneys fees incurred in
defending Counts I, II, and III. As catalogued below, the district court found that
sanctions were warranted based on violations of subsections (1), (2), and (3) of
Rule 11(b).
With respect to Plaintiffs five FDCPA claims asserted in Count I, the
district court first noted that the statute of limitations had likely run as to each
claim. On the merits, the district court found that sanctions were warranted as to
Count I because:
[Plaintiffs] claims under 1692e(2) and 1692f(1) contained in Count
I of her First Amended Complaint were brought without evidentiary

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support and without any reasonable expectation that the discovery

process would produce any evidentiary support for these claims.
[Plaintiff] fail[ed] to provide a single citation to any primary legal
authority that supports her legal theory . . . . Nor does [Plaintiff] present
this theory as a good faith argument for extending existing law,
modifying existing law, or establishing new law.
[Plaintiff] repeatedly quoted [15 U.S.C.] 1681b in her filings with this
Court, each time curiously neglecting to reproduce the phrase review or
collection of an account of[] the consumer . . . . A plain reading of
1681b(a)(3)(A) reveals that Defendants had permissible purpose in
obtaining [Plaintiffs] Equifax consumer report for the purpose of
reviewing or collecting upon the account [Plaintiff] had with Wells
Fargo.
[Plaintiffs] attempts to ignore and hide relevant, controlling authority
are sanctionable in themselves.
Most importantly, though, no provision of the FDCPA imposes liability
on a user of a consumer report (such as Defendants) for a consumer
reporting agencys misstatement on a consumer report that the agency
furnishes to the consumer. Unsurprisingly, [Plaintiff] fails to identify any

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primary legal authority that would support such liability. Nor does she
present any argument for modifying or extending existing law.
Regarding Count II, the district court concluded that Plaintiffs FCCPA
claims lacked arguable merit and evidentiary support for the following
reasons:
[Plaintiff] does not delineate how either defendant violated section
559.72(9). . . . For the same reasons stated above with respect to
[Plaintiffs FDCPA claims], [Plaintiffs] claims under section 559.72(9)
would fail.
Ultimately, [Plaintiff] has not filed any material with the Court that
would explain the basis for [her] claim [under 559.72(10)] or provide
evidentiary support for this claim. Nor does [Plaintiff] present this claim
as a non-frivolous argument for changing existing law or creating new
law.
[Plaintiffs] First Amended Complaint is devoid of any fact that would
even tend to support [] a claim [under 559.72(15)]. . . . Ultimately,
[Plaintiff] has not filed any material with the Court that would explain the
basis for this claim or provide support for this claim. . . . Finally,
[Plaintiff] does not present this claim as a non-frivolous argument for
changing existing law or creating new law.
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And as for Count III, the district court concluded that Plaintiffs FCRA
claims lacked any arguable legal merit. The court specifically noted that:
[Plaintiff] has repeatedly failed to recognize that a plain reading of 15
U.S.C. 1681b(a)(3)(A) reveals that Defendants had permissible purpose
to obtain her Equifax consumer report.
[Plaintiff] did not present her FCRA claim as a non-frivolous argument
for changing existing law or to establish new law. Therefore, it is clear
that [Plaintiffs] claim was frivolous and that her counsel failed to
conduct even a basic inquiry into the relevant law concerning the FCRA
claim contain in the First Amended Complaint.
In summing up, the district court explained that it is clear that prior to filing
the First Amended Complaint, [Plaintiffs] counsel failed to conduct a reasonable
inquiry into the facts of this case and the relevant law. The court also noted that it
was left with the general impression that [Plaintiff] initiated and prosecuted this
case . . . solely in the interest of vexatious retaliation towards Wells Fargo and its
attorneys. 4 The district court ultimately ordered Plaintiff to pay Defendants
reasonable attorneys fees and costs incurred in defending the case since the date
Plaintiff had filed her amended complaint. The district court did not impose any
sanctions on Plaintiffs attorney.
4

This suggests the district court found that, on the whole, Plaintiffs amended complaint
violated Rule 11(b)(1).
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No one disputes that Plaintiffs obligation to pay Defendants fees and costs
was discharged in Plaintiffs bankruptcy proceeding. However, as catalogued
above, it appears that the sanctions imposed against Plaintiff were premised in
significant part on the fact that Plaintiffs legal theories were not supported by
existing law or a reasonable extension thereof. This plainly violates Rule
11(c)(5)(A), which prohibits courts from imposing sanctions against a represented
party based on Rule 11(b)(2), and thus amounts to an abuse of discretion. See
Massengale v. Ray, 267 F.3d 1298, 1303 (11th Cir. 2001) (The award violated the
plain language of Rule 11, and the district court abused its discretion in imposing
it.). Because this error so infused the district courts reasoning, the appropriate
course of action is to vacate and remand the district courts sanctions orders and
allow the district court to reconsider whether any portion of the sanctions should
have been imposed against Plaintiffs attorney, keeping in mind the basic policies
of deterrence and education behind Rule 11. Indep. Fire Ins. Co. v. Lea, 979 F.2d
377, 379 (5th Cir. 1992) (quotation marks omitted); see also Byrne, 261 F.3d at
1120 ([B]ecause Rule 11 directs that the sanction should fall upon the individual
responsible for the filing of the offending document, we cannot affirm the Rule 11
monetary sanctions against [the represented client]. (quotation marks and citation
omitted)). We express no view as to the proper apportionment of sanctions. Of
course, if the district court determines that some portion of the sanctions were
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proper as to Plaintiff, she is under no obligation to pay her portion of the fees and
costs.
III.

CONCLUSION

For the foregoing reasons, the district courts sanctions orders are
VACATED and REMANDED for further proceedings consistent with this
opinion.

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