Ampro v. Forgey

United States Court of Appeals
Fifth Circuit
F I L E D
February 8, 2007
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 06-20073
_______________
AMPRO ENERGY, L.P.,
Plaintiff,
VERSUS
JASON P. FORGEY, ET AL.,
Defendants,
ATTORNEY PETER ANDREW KRAUS,
Movant-Appellant.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
m 4:04-CV-3389
______________________________
Before SMITH, BARKSDALE, and DENNIS,
Circuit Judges.
PER CURIAM:*
Peter Kraus appeals the imposition of sanc-
tions. Finding no abuse of discretion, we
affirm.
* Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be pub-
lished and is not precedent except under the limited
(continued...)
*(...continued)
circumstances set forth in 5TH CIR. R. 47.5.4.

-- 1 of 3 --

2
I.
After the instant lawsuit was filed, Kraus
consulted with defendant Stream Gas & Elec-
tric, Ltd. (“Stream”), about potentially filing
counterclaims. Kraus then contacted counsel
for plaintiff Ampro Energy, L.P. (“Ampro”),
to ascertain the status of the suit.1 On October
31, 2005, Ampro filed a status report with the
court that listed Kraus as counsel for several
defendants. The status report included, as Ex-
hibit 13, an e-mail exchange between Kraus,
plaintiff’s counsel, and Snyder, an executive of
Stream, in which plaintiff’s counsel asked
whether Kraus’s clients would execute a mutu-
al release of claims. Kraus responded with the
following:
That would depend on the scope of the re-
lease. My clients feel you [sic] clients’ ac-
tions in challenging [Stream]’s startup dam-
aged them, and are likley [sic] not going to
sign a release at this time to forfeit the right
to pursue appropriate relief if they choose.
That said, I’ll be happy to review your pro-
posed release.
Snyder responded that there would be no re-
lease and that the suit should proceed.
Three days later, on November 3, the court
issued an order stating that a conference
would be held on November 16, and “the re-
maining individual parties must appear with
their counsel.” Five days after the order was
issued, Kraus e-mailed plaintiff’s counsel
about the October 31 status report and stated
that “[a]lthough I have sent you correspon-
dence indicating I represent Stream in certain
matters, I have never entered an appearance as
counsel of record for any party in Ampro v.
Forgey.” He suggested that plaintiff’s counsel
refrain from referring to him as counsel of rec-
ord and correct any representations “[t]o the
extent that [they] require correcting.”
On November 10, Dawna Kelly, the district
court’s case manager, faxed Kraus a copy of
the order with a personal note that the court
“expects youSSand your former clientsSSat the
hearing.” Kraus e-mailed Kelly, stating his
surprise at being summoned to the conference,
because he had “never entered any appearance
as counsel for any party in this lawsuit.” He
explained his belief that the status report had
incorrectly identified him as counsel for
Stream and Rodriguez.
On November 14, the court responded to
Kraus via e-mail, stating, “I understand your
limited participation. I expect you here No-
vember 16th.” Kraus responded that he un-
derstood and that he was in the process of ne-
gotiating a final resolution of Ampro’s claims
against Stream and Rodriguez.
Despite the court’s order, on the evening
before the conference Kraus prepared an
e-mail, apparently to Kelly, stating that the
parties had reached an agreement, and oppos-
ing counsel would provide it to the court at the
hearing. Kraus then said that he would not
appear at the hearing, because “all claims and
potential claims of any potential clients of mine
will be disposed of by the agreed order of dis-
missal with prejudice.” Kraus did not send the
e-mail to Kelly or the court, but only to oppos-
ing counsel.
1 The introductory paragraph of the e-mail
stated the following:
My name is Peter Kraus of the firm Waters &
Kraus of Dallas. I am contacting you in con-
nection with our firm’s representation of Rob
Snyder and his newly-created company, Stream
Energy, in regard to the ongoing litigation in
Federal District Court in Houston with your
client, Ampro Energy, L.P.

-- 2 of 3 --

3
Kraus did not appear at the hearing, and
“[b]ecause he ignored the court’s orderSSand
subsequent e-mailSSto appear,” the court or-
dered sanctions of $1,000. Kraus filed a mo-
tion apologizing and asking the court to recon-
sider, asserting that the court lacked jurisdic-
tion to issue sanctions because he was not a
“party’s attorney” under Federal Rule of Civil
Procedure 16(f). The court denied the motion,
finding that Kraus had told opposing counsel
that he represented Snyder and Stream and
had told the court that he was negotiating on
behalf of Stream and Rodriguez, expected to
submit a final order on their behalf, and un-
derstood the court’s order for him to appear.
II.
“This Court reviews the imposition of sanc-
tions for an abuse of discretion.” Maguire Oil
Co. v. City of Houston, 143 F.3d 205, 208
(5th Cir. 1998) (quoting Matta v. May, 118
F.3d 410, 413 (5th Cir.1997)). “A court abus-
es its discretion to impose sanctions when a
ruling is based on an erroneous view of the law
or on a clearly erroneous assessment of the ev-
idence.” Id. Rule 16(f) authorizes sanctions
“[i]f a party or party’s attorney fails to obey a
scheduling or pretrial order, or if no appear-
ance is made on behalf of a party at a schedul-
ing or pretrial conference.”
Kraus contends that the district court
lacked jurisdiction to impose sanctions on him
because he was not a “party’s attorney.” The
court found, however, that Kraus had told
plaintiff’s counsel that he was representing
Stream and that he was negotiating on behalf
of Stream and Rodriguez and expected to sub-
mit a final order. In addition, the October 31
status report includes an e-mail from Kraus to
plaintiff’s counsel in which he refers to several
of the defendants as “my clients.”
Kraus rests his argument on the fact that
“[t]he only reference to appellant as counsel
for Stream was in an incorrect statement in
plaintiff’s status report based on an assumption
that appellant was acting as Stream’s counsel
in this case, and even that misstatement was
promptly corrected by appellant to both Am-
pro and to the Court.” But, as described
above, this is not the only reference to Kraus
as counsel. Kraus omits any mention of his
communications stating that he represents par-
ties to this suit and referring to such parties as
his clients.
Although we are aware of no caselaw de-
fining when an attorney becomes a “party’s at-
torney” under Rule 16, we do not need such a
definition today. Kraus is Stream’s attorney
under any definition of the word, because he
stated that he was representing Stream, re-
ferred to Stream as his client, told the court
he would be negotiating on behalf of Stream,
and did negotiate on Stream’s behalf.
The sanctions were not based on an errone-
ous view of the law or on a clearly erroneous
assessment of the evidence. Moreover,
Kraus’s thrice-repeated protestation that he
will gladly pay the sanction to a charity if we
will reverse the sanction rings hollow; either
the sanction is reversible error, or it is not.
There is no abuse of discretion, and the order
imposing sanctions is AFFIRMED.

-- 3 of 3 --