The opinion of the court was delivered by: Herndon, Chief Judge:
Before the Court are two motions filed by Defendants Worldwide Asset Purchasing, LLC and Freedman, Anselmo, Lindberg & Rappe, LLC and Plaintiff Soi Quay Hoang respectively. Defendants have filed a request for sanctions (See Docs. 34 & 35) to which Plaintiff Soi Quay Hoang's attorney Edgar Lim has filed a response (Doc. 36). Plaintiff's attorney has also filed a Motion to Substitute Party Plaintiff (Doc. 38). On June 24, 2010, the Court held a hearing on the two motions, but ultimately took the matter under advisement (Doc. 44). After the hearing, Plaintiff's attorney submitted a Post-Hearing Suggestions and Rebuttal (Doc. 43), further documenting his position. After careful review of the record, including the arguments and the documents put forth before it, the Court rules as follows.
At the hearing, the parties agreed on the basic chronology of the case.
The case was opened on March 9, 2009 and Plaintiff's Complaint was filed March 10, 2009. The Complaint alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. in attempting to collect a debt owed to Bank of America in the amount of $4,618.36 which Plaintiff alleged she did not owe nor had she assumed liability of any of the debts of her paramour (Doc. 2 at ¶¶ 7-11). At some point after the Complaint was filed, approximately two weeks after the filing of the Complaint, Plaintiff passed away. The date of her passing is not exact as Plaintiff's attorney has failed to provide a copy of her death certificate or to verify the exact date of her death, even after ordered to do so by this Court (Doc. 32). Defendants have, through their own research, determined that Plaintiff most likely died on March 25, 2009, as a review of the public records revealed that a Soi Quay Hoang with the same social security number, address, and date of birth died on that date.*fn1 A suggestion of death was never filed and the Defendants were never notified of Plaintiff's passing. In fact, the summons on Defendants was returned executed on March 31, 2009 (Docs. 4 & 5).
After the summons was returned, the case proceeded in the normal fashion. A scheduling conference was directed to be held by the Magistrate Judge although it was ultimately canceled presumably upon the parties agreeing to a proposed scheduling Order. On May 18, 2009, Defendants filed a motion to dismiss (Doc. 14) which Plaintiff filed a response to (Doc. 23). The Court ruled on that motion in November of 2009, denying the motion to dismiss (Doc. 25). A settlement conference was set for January 15, 2010.
On the day before the settlement conference, Plaintiff's attorney Mr. Edgar Lim called Defendants' attorney and asked to postpone the settlement conference and when Defendants stated that was not possible, Mr. Lim offered to settle the case. The case was eventually settled over the phone for approximately $3,000. The settlement conference was cancelled and a Sixty Day Order stating that the case had settled was entered (See Docs. 28 & 29). However, when Defendants tendered the agreement for Plaintiff's signature, Mr. Lim informed Defendants that Plaintiff had died although Defendants were lead to believe that Plaintiff had died after the settlement had been reached. Both parties filed motions to delay the entry of judgment (Docs. 30 & 31). Mr. Lim argued that he needed additional time to open an estate for Plaintiff and to substitute it as a party, while Defendants argued that they needed additional time to investigate the timing of Plaintiff's death. The Court granted the additional time but Ordered Plaintiff to turn over a copy of the death certificate so it could be determined exactly when Plaintiff died (Doc. 32).
Plaintiff's attorney filed a response to the Order admitting that he knew at the time he negotiated the settlement that his client was deceased but that he was ignorant of the rule that he was supposed to inform the other side of her death and the fact that he was not authorized to settle the case. He stated that he was open to sanctions for his behavior (Doc. 33). However, Mr. Lim failed to provide the Court with a copy of the death certificate as he was ordered to do in the Court's previous Order (Doc. 32). Defendants, having discovered that Plaintiff most likely died shortly after her case was filed, filed a motion for sanctions, requesting attorneys fees and costs as well as the complete dismissal of the case (Docs. 34 & 35). Plaintiff's attorney filed a reply, pleading with the Court to keep Plaintiff's case alive (Doc. 36). He also filed a motion to substitute (Doc. 38) although no Suggestion of Death had ever been formally filed on the record. Defendants subsequently filed a Suggestion of Death (Doc. 41).
At the hearing, Plaintiff's attorney, Mr. Edgar Lim, defended his actions, arguing that he did not know of Plaintiff's passing until December 2009 as he had not tried to contact her until after he had received the discovery requests from Defendants in November 2009. Mr. Lim admitted that he knew of Plaintiff's death at the time of the settlement conference but that he panicked upon learning of her death. He has tried to open an estate in Illinois for Plaintiff and her son will not speak to him, although her paramour of 20 years wants the case to continue and believes that he can proceed in the estate as her "next of friend." He also argued that the cause of action should not be dismissed simply because of her death and that he had evidence of her injuries in the form of her paramour's testimony. Mr. Lim was open to sanctions as he realized his mistake in the case, but argued that sanctions should only be sought from the time he became aware of the death and not from the start of the case.
After the hearing was conducted and the matter taken under advisement, Mr. Lim, without leave of the Court, filed a rebuttal argument which he labeled as Post-Hearing Suggestions and Rebuttal (Doc. 43). Plaintiff's attorney argued that he was not a party to the suit and had he not failed to inform the Court of Plaintiff's passing, the case would have remained unaffected and would have survived her death. Mr. Lim argued that Defendants' arguments were disingenuous, that Plaintiff's availability was never an issue with him so that he had no reason to contact her and that Defendants were incorrect on many of their statements about their state collection case against Plaintiff.
In response to learning that Plaintiff has been deceased since shortly after the filing of this suit, Defendants filed a Report to Court and Request for Sanctions (Doc. 34). Having discovered that Plaintiff died ten days after the filing of this Complaint, a fact never revealed to Defendants by Plaintiff's attorney during the course of this case, eventual settlement negotiations, and even after Defendants confronted Plaintiff's attorney about the timing of Plaintiff's death, Defendants seek a sanction of attorneys fees under 28 U.S.C. §1927. They also seek dismissal of this case. Defendants argue that by continuing to ...