Michael Gulisano v. Burlington, Inc.

20-12660Court of Appeals for the Eleventh Circuit12 de mai. de 2022

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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-12660
____________________
MICHAEL GULISANO,
Interested Party-Appellant,
CATHY COHEN,
Plaintiff,
versus
BURLINGTON, INC.,
Defendant-Appellee.
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2 Opinion of the Court 20-12660
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:18-cv-81420-BB
____________________
Before J ORDAN, J ILL PRYOR , and MARCUS, Circuit Judges.
JILL PRYOR, Circuit Judge:
When attorney Michael Gulisano represented a client in a
negligence action in the Southern District of Florida, he obtained a
default judgment against a non-existent entity, “Burlington, Inc.”
He added an unrelated entity, Burlington Coat Factory Direct Cor-
poration, as a judgment debtor on the resulting writ of execution.
He used the writ of execution to levy funds from another entity,
Burlington Stores, Inc. After Burlington Stores, Inc. and Burlington
Coat Factory Warehouse Corporation protested and sought to
quash the writ, Gulisano asked the district court in the Southern
District of Florida to amend its default judgment order and name
Burlington Stores, Inc. and Burlington Coat Factory Warehouse
Corporation as judgment debtors. The district court denied the
motion and, finding it to be legally and factually frivolous, imposed
sanctions under Federal Rule of Civil Procedure 11. It also denied
Gulisano’s motion for reconsideration of the sanctions order. After
careful review and with the benefit of oral argument, we affirm.
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I. FACTS1
While Cathy Cohen was shopping at a Burlington Coat Fac-
tory store in Royal Palm Beach, Florida, she looked at a set of tables
on display. When Cohen attempted to inspect the tables, they fell
on her knee. Cohen jumped back to avoid the falling tables, injur-
ing her neck and back.
Cohen hired Gulisano as her attorney. He filed a civil action
on her behalf in federal court in the Southern District of Florida.
The complaint Gulisano drafted alleged that defendant “Burling-
ton, Inc.”2 had been negligent and was liable for damages to Cohen.
Gulisano served a summons and a copy of the complaint on CT
Corporation System, ostensibly the registered agent of “Burling-
ton, Inc.” After “Burlington, Inc.” failed to file an answer or other-
wise respond to the lawsuit, the district court clerk entered a de-
fault. Following a hearing on damages, the district court entered a
default judgment, awarding Cohen $677,774.75. The district
court’s final judgment named “Burlington, Inc.” as the sole defend-
ant.
To collect on the default judgment, Gulisano requested that
the court issue a writ of execution naming “Burlington, Inc. a/k/a
1 Because we write for the parties, we recount only the facts necessary to ex-
plain our decision.
2 Gulisano referred to the defendant as both “Burlington Inc.” and “Burling-
ton, Inc.” For the sake of consistency, this opinion will use “Burlington, Inc.”
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Burlington Coat Factory Direct Corporation” as the judgment
debtor. The court issued the writ.
Seeking to execute the writ, Gulisano used employer identi-
fication numbers (“EIN”)3 to perform an asset search to find bank
accounts from which he could levy funds. But, instead of using the
EIN number of the judgment debtor, “Burlington, Inc.”—which
did not exist—he used the EIN numbers of two other entities: Bur-
lington Stores, Inc. (“BSI”) and Burlington Coat Factory Direct
Corporation (“BCFDC”). BSI is the parent company of the entities
that operate Burlington Coat Factory stores, including BCFDC and
Burlington Coat Factory Warehouse Corporation (“BCFWC”),
which operates the Florida stores. After locating bank accounts in
New Jersey that belonged to BSI, Gulisano registered the judgment
in the District of New Jersey. The New Jersey district court then
issued a writ of execution against “Burlington, Inc.” The United
States Marshals Service delivered the writ to BSI’s bank. The bank
withdrew the amount of the judgment award, plus costs, from
BSI’s account.
Once they discovered the withdrawal, BSI and BCFWC filed
a motion in the New Jersey district court to vacate the levy, quash
the writ of execution, and vacate the default judgment. They
pointed out that the writ of execution was based on a default
3 An EIN number is the nine-digit tracking number that the Internal Revenue
Service assigns to the tax accounts of businesses.
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20-12660 Opinion of the Court 5
judgment entered against “Burlington, Inc.,” but the judgment was
levied on BSI, an unrelated entity not named in the Florida action.
Gulisano opposed the motion. He asserted that “Burlington,
Inc.” was a registered fictitious name or a misnomer that was sim-
ilar enough to the correct name that it gave BSI and BCFWC—
which he collectively referred to as “Burlington”—notice of the ac-
tion.
The day after he filed his response in the New Jersey district
court, Gulisano filed in the Florida district court a “Motion to
Amend Final Default Judgment to Remove Any Ambiguity of the
Correct Defendant’s Identity.” In this motion, Gulisano asked the
district court to amend the default judgment so that all references
to the defendant “Burlington, Inc.” would become “Burlington,
Inc. a/k/a Burlington Stores, Inc. a/k/a Burlington Coat Factory
Warehouse Corporation.” Doc. 33 at 6 (internal quotation marks
omitted).4 Gulisano requested this change in order to “remove any
alleged ambiguity that ‘Burlington, Inc.’ is
not the same entity as”
BSI and BCFWC.
Id. (emphasis in original). He contended that
“Burlington, Inc.” properly referred to BSI and BCFWC because
the company went by multiple names, all of which included the
word “Burlington.” He argued that BSI and BCFWC were the
same entity, operating under the fictitious name “Burlington, Inc.”
He also argued that he had served “Burlington” via its registered
4 “Doc.” numbers refer to the district court’s docket entries.
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agent, and that service on “Burlington, Inc.” was effective service
on BSI.
BSI and BCFWC opposed the motion to amend. They
acknowledged that there were multiple entities that together
owned and operated the retail stores known as Burlington Coat
Factory, but stated that “Burlington, Inc.” was not one of those en-
tities. Nor was it a fictitious name for BSI or another Burlington
Coat Factory entity. Therefore, they argued, the judgment against
“Burlington, Inc.,” a completely unrelated entity, was improperly
levied on BSI. Noting that the New Jersey district court had granted
their motion to quash the writ of execution, BSI and BCFWC asked
the Florida district court to deny the motion to amend the judg-
ment.
In the Florida district court, BSI and BCFWC also moved for
sanctions under Federal Rule of Civil Procedure 11, asserting that
the motion to amend was frivolous because Gulisano could not
have reasonably believed that BSI and BCFWC used the fictitious
name “Burlington, Inc.” They also asserted that Gulisano had mis-
represented to the court that effective service had been made on
“Burlington, Inc.”
The district court denied the motion to amend. It observed
that, although Gulisano now argued that he had sued BSI and
BCFWC under their purported fictitious name, the complaint had
not alleged that the defendant used a fictitious name. And, despite
many opportunities, Gulisano never sought to amend the com-
plaint to add that allegation, nor did he attempt to voluntarily
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20-12660 Opinion of the Court 7
dismiss the action without prejudice and initiate a new action
against the intended entities. The district court found no support
for his claims that “Burlington, Inc.” was the same entity as or the
fictitious name of BSI or BCFWC: “Appallingly, the Court has not
identified a single piece of evidence . . . that substantiates the use of
‘Burlington, Inc.’ as the proper entity to be named in this action,
either as a fictitious name or as a company authorized to conduct
business in Florida.” Doc. 50 at 9. The court observed that Guli-
sano’s motion to amend failed to explain why the default judgment
named “Burlington, Inc.” but the writ of execution named BCFDC.
It concluded, “Like the motion for writ of execution, it is clear that
the instant Motion to Amend Judgment is a back-door attempt to
correct an improperly named party and recover a $677,774.75 de-
fault judgment plus costs from the intended, but unnamed, entities
without having to litigate the matter any further.”
Id. at 11.
In the same order, the court granted the motion for sanc-
tions. It found that Gulisano had “add[ed] an independent and dis-
tinct legal entity to a motion for writ of execution that was neither
referenced at any point in the litigation nor explicitly listed in the
Court’s Final Judgment” and had “attempt[ed] to conflate various
distinct corporate entities in order to recover an award of damages
obtained through a default judgment against a non-existent corpo-
rate entity.”
Id. at 13–14. The court found this conduct to be “both
frivolous and dishonest.”
Id. at 13. It stated that a brief investigation
would have revealed the proper entities to sue, but Gulisano’s pre-
suit investigation was “woefully deficient,” and his post-judgment
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8 Opinion of the Court 20-12660
investigation was done in bad faith.
Id. at 14. Because of his “serious
fraudulent conduct,” the court granted the motion for Rule 11
sanctions against Gulisano.
Id. at 18. It ordered him to pay attor-
ney’s fees and costs and referred him to the Florida Bar for appro-
priate disciplinary action.
Gulisano filed under Federal Rule of Civil Procedure 59 a
motion for reconsideration of the court’s order imposing sanctions.
After a hearing, the court denied his motion, concluding that it
merely disagreed with the court’s reasoning and failed to establish
a clear error of law or manifest injustice. It ordered him to pay
$19,549.12 in sanctions.
Gulisano filed this appeal of the order granting sanctions and
the order denying reconsideration.
II. STANDARD OF REVIEW
We review a district court’s imposition of Rule 11 sanctions
for abuse of discretion.
Kaplan v. DaimlerChrysler, A.G., 331 F.3d
1251, 1255 (11th Cir. 2003). We must affirm unless we find that the
court applied the wrong legal standard or based its ruling on a
clearly erroneous assessment of the evidence.
Jones v. Int’l Riding
Helmets, Ltd., 49 F.3d 692, 694 (11th Cir. 1995).
We review for abuse of discretion a district court’s denial of
a motion for reconsideration under Rule 59.
Am. Home Assurance
Co. v. Glenn Estess & Assocs., Inc., 763 F.2d 1237, 1238–39 (11th
Cir. 1985).
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III. ANALYSIS
There are two issues before us on appeal: (1) whether the
district court abused its discretion in granting BSI and BCFWC’s
motion for sanctions, and (2) whether the district court abused its
discretion when it denied Gulisano’s motion for reconsideration of
the sanctions order. We see no abuse of discretion in the first issue
and deem the second issue abandoned.
A. The District Court Acted Within Its Discretion in Imposing
Sanctions on Gulisano.
Federal Rule of Civil Procedure 11 authorizes a district court
to impose sanctions against an attorney who files frivolous plead-
ings or motions. Fed. R. Civ. P. 11(b), (c).5 Rule 11 sanctions are
5 Rule 11 provides in pertinent part:
(b) Representations to the Court. By presenting to the court a pleading, writ-
ten motion, or other paper—whether by signing, filing, submitting, or later
advocating it—an attorney or unrepresented party certifies that to the best of
the person’s knowledge, information, and belief, formed after an inquiry rea-
sonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause
unnecessary delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing
law or by a nonfrivolous argument for extending, modifying, or reversing ex-
isting law or for establishing new law;
(3) the factual contentions have evidentiary support or, if specifically so iden-
tified, will likely have evidentiary support after a reasonable opportunity for
further investigation or discovery; and
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10 Opinion of the Court 20-12660
warranted when a party files a pleading or motion that “(1) has no
reasonable factual basis; (2) is based on a legal theory that has no
reasonable chance of success and that cannot be advanced as a rea-
sonable argument to change existing law; and (3) is filed in bad faith
for an improper purpose.”
Johnson v. 27th Ave. Caraf, Inc., 9 F.4th
1300, 1314 (11th Cir. 2021) (internal quotation marks omitted).
Rule 11 imposes an affirmative duty on an attorney to con-
duct a reasonable inquiry into both the facts and the law before
filing a pleading or motion.
Bus. Guides, Inc. v. Chromatic
Commc’ns Enters., Inc., 498 U.S. 533, 551 (1991);
Mike Ousley
Prods., Inc. v. WJBF-TV, 952 F.2d 380, 382 (11th Cir. 1992). When
deciding whether to impose sanctions under Rule 11, a district
court must conduct a two-step inquiry, determining “(1) whether
the party’s claims are objectively frivolous; and (2) whether the per-
son who signed the pleadings should have been aware that they
were frivolous.”
Baker v. Alderman, 158 F.3d 516, 524 (11th Cir.
1998). A factual claim is frivolous when it has no reasonable factual
(4) the denials of factual contentions are warranted on the evidence or, if spe-
cifically so identified, are reasonably based on belief or a lack of information.
(c) Sanctions.
(1) In General. If, after notice and a reasonable opportunity to respond, the
court determines that Rule 11(b) has been violated, the court may impose an
appropriate sanction on any attorney, law firm, or party that violated the rule
or is responsible for the violation. Absent exceptional circumstances, a law
firm must be held jointly responsible for a violation committed by its partner,
associate, or employee.
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20-12660 Opinion of the Court 11
basis.
See id. A legal claim is frivolous when it has no reasonable
chance of succeeding.
See id. When the attorney’s evidence is
“merely weak,” but supports a claim under existing law after a rea-
sonable inquiry, sanctions are unwarranted.
Id. Sanctions are war-
ranted, however, when the attorney exhibits “a deliberate indiffer-
ence to obvious facts.”
Id. (internal quotation marks omitted).
If the attorney failed to make a reasonable inquiry, then “the
court must impose sanctions despite the attorney’s good faith be-
lief that the claims were sound.”
Worldwide Primates, Inc. v.
McGreal, 87 F.3d 1252, 1254 (11th Cir. 1996)
. The reasonableness
of the inquiry depends on the circumstances of the case.
See id.
In addition, an attorney’s obligations with respect to the
contents of pleadings or motions are not measured solely as of the
time when the pleading or motion is initially filed with the court,
but also at the time when the attorney, having learned the claims
lack merit, reaffirms them to the court.
Turner v. Sungard Bus.
Sys., Inc., 91 F.3d 1418, 1422 (11th Cir. 1996) (citing Fed. R. Civ. P.
11(b) advisory committee’s note to 1993 amendment). “That the
contentions contained in the complaint were not frivolous at the
time it was filed does not prevent the district court from sanction-
ing [the attorney] for his continued advocacy of them after it should
have been clear that those contentions were no longer tenable.”
Id.
The district court did not abuse its discretion when it deter-
mined that Gulisano’s claim that the default judgment against
“Burlington, Inc.” allowed him to collect damages from BSI and
BCFWC was objectively frivolous. That claim was undergirded by
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two arguments. First, Gulisano argued that “Burlington, Inc.” was
the fictitious name of BSI and BCFWC. That argument was frivo-
lous because there were no facts to support it. Second, he argued
that a judgment entered against a corporation’s fictitious name
could bind multiple distinct corporate entities. That argument was
frivolous because it ignored basic principles of corporations law.
First, there was no factual support for Gulisano’s claim that
“Burlington, Inc.” was the fictitious name of BSI and BCFWC. It is
true that Gulisano attached hundreds of pages to the motion to
amend to illustrate that BSI used the name “Burlington,” including
pictures from the website, pictures of the interiors of Burlington
stores, the federal trademark registration of the Burlington logo,
and BSI’s SEC 10-K Form. But he presented no evidence that BSI
or any other Burlington entity used the name “Burlington, Inc.”
Nor did he show that “Burlington, Inc.” was a corporate entity in
Florida or anywhere else. Eventually Gulisano admitted to the dis-
trict court that “Burlington, Inc.” did not exist.
Nor was “Burlington, Inc.” a fictitious name. In Florida, a
corporation engaging in business under a fictitious name must first
register the name with the State. Fla. Stat. § 865.09(3)(a). State rec-
ords show that “Burlington, Inc.” was not a registered fictitious
name. BSI stated that neither it nor any other Burlington entity
used the name. Gulisano provided evidence that BCFWC applied
for two fictitious names in Florida, “Burlington” and “Burlington
Coat Factory.” But he produced no evidence revealing use or reg-
istration of the fictitious name “Burlington, Inc.” Without this
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20-12660 Opinion of the Court 13
evidence, he failed to support the factual contention made in the
motion to amend that he had sued BSI and BCFWC under their
fictitious name.
Second, there was no legal support for Gulisano’s argument
that his judgment against “Burlington, Inc.” entitled him to collect
monies from BSI or BCFWC. In Florida, a corporation must be
sued under its corporate name.
RHPC, Inc. v. Gardner, 533 So. 2d
312, 314 (Fla. Dist. Ct. App. 1988). A corporation operating under
a fictitious name has no independent legal existence.
Osmo Tec
SACV Co. v. Crane Env’t, Inc., 884 So. 2d 324, 327 (Fla. Dist. Ct.
App. 2004). “In pleadings, the corporate name must be strictly
used.”
RHPC, Inc., 533 So. 2d at 314. The district court explained
that, when suing an entity under its fictitious name, the plaintiff
should state the entity’s true name, the designation “d/b/a” or “do-
ing business as,” and the fictitious name. Thus, even if “Burlington,
Inc.” had been the registered fictitious name of BSI or BCFWC,
Gulisano should have included those proper corporate names in
the complaint. He failed to do so. Instead, he named only “Burling-
ton, Inc.” without including a d/b/a designation.
The district court denied the motion to amend and rejected
Gulisano’s argument that “Burlington, Inc.” was a fictitious name.
On appeal, Gulisano argues that “Burlington, Inc.” was a typo-
graphical error—he had accidentally omitted “Stores” from the
party’s name on the complaint and repeated the error throughout
the suit. It hardly matters whether Gulisano intentionally chose to
use a fictitious name or inadvertently repeated a mistake. He tried
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to use a judgment against a non-existent party to collect from an
unrelated non-party and persisted in his attempts well past the time
when he learned of his error. We agree with the district court’s
conclusion that “the factual and legal contentions asserted [in the
motion were] objectively frivolous.” Doc 50. at 14.6
We turn now to the question whether Gulisano should have
known that his arguments were legally and factually frivolous. Our
answer is yes. Gulisano should have known that the motion to
amend was frivolous because “even the most minimal investiga-
tion would have alerted” him that there was no such entity as “Bur-
lington, Inc.”
McGreal, 87 F.3d at 1255. The district court found
that a search of registered corporations in Florida would have re-
vealed proper Burlington Coat Factory entities that he could have
sued. And we know that Gulisano could have performed such an
investigation because, after obtaining the default judgment against
“Burlington, Inc.,” he used the EIN numbers of BSI and BCFDC to
locate their assets. He failed to mention whether he performed an
asset search on “Burlington, Inc.” or what, if anything, he found.
That he had to identify other entities from which to collect the
6 Gulisano said that he effected service on BSI through its registered agent.
The agent said that it sent Gulisano a letter rejecting service on “Burlington,
Inc.” Gulisano said that he never saw the letter. BSI and BCFWC said that
neither BSI, nor any related entity, ever received notice of the complaint. The
district court explicitly declined to resolve or rely on the notice issue. Because
we, like the district court, need not resolve the issue to decide that sanctions
were warranted, we do not address it further.
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20-12660 Opinion of the Court 15
judgment should have informed him that the named judgment
debtor did not exist.
Even if Gulisano had failed to discover that “Burlington,
Inc.” was non-existent and unrelated to the other Burlington enti-
ties, he learned these facts from BSI and BCFWC’s motion to quash
the writ and opposition to the motion to amend. Though BSI and
BCFWC had “alerted [him] to the potential impropriety of his col-
lection efforts,” Gulisano persisted in claiming that he could collect
the award from BSI, BCFWC, or BCFDC, despite failing to name
any of them as parties to the default judgment. Doc. 50 at 15. The
district court properly concluded, “[I]t is abundantly clear that Mr.
Gulisano should have known, and seemingly did know, that the
claims he asserted during these proceedings were objectively and
patently frivolous.”
Id. at 15. Gulisano violated his duty of candor
by “insisting upon a position after it [was] no longer tenable.”
Peer
v. Lewis, 606 F.3d 1306, 1311 (11th Cir. 2010) (internal quotation
marks omitted). And, because “[a] finding of bad faith is warranted
where . . . a frivolous argument is knowingly or recklessly raised,”
the district court correctly determined that Gulisano acted in bad
faith.
Johnson, 9 F.4th at 1314 (alteration adopted) (internal quota-
tion marks omitted). We thus conclude that the district court acted
well within its discretion in imposing sanctions on Gulisano.
Gulisano’s arguments against the sanctions order are unper-
suasive. He asserts that the court improperly punished his conduct
throughout the litigation rather than looking solely at the chal-
lenged motion. But to determine whether the motion to amend
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16 Opinion of the Court 20-12660
judgment warranted sanctions, the court had to examine whether
Gulisano conducted a reasonable inquiry before filing the motion.
It thus was required to look beyond the four corners of the motion
to the attorney’s conduct.
See McGreal, 87 F.3d at 1254–55 (affirm-
ing sanctions on an attorney who accepted his client’s assertions
without questioning the client about damages, obtaining or exam-
ining any data, or contacting a third party who could shed light on
the claim’s validity). The district court properly considered Guli-
sano’s reasonable-inquiry conduct preceding the filing of the mo-
tion to amend judgment.
Gulisano also argues that the sanctions motion flouted Rule
11’s safe harbor provision. The safe harbor provision requires the
moving party to serve the motion for sanctions on the nonmoving
party and give it 21 days to withdraw the offending pleading before
filing the motion with the district court. Fed. R. Civ. P. 11(c)(2).
Gulisano does not argue that BSI and BCFWC failed to do that.
Rather, he argues that the sanctions were aimed at conduct that
had already taken place and could not be withdrawn. Although the
district court considered Gulisano’s prior conduct, it imposed sanc-
tions based on the motion itself. The court stated, “[C]ontinuing to
argue Plaintiff’s entitlement to collect the Final Judgment amount
from corporate entities not named or involved in the instant action
by filing and defending the instant Motion[], despite the utter lack
of legal or factual support, is precisely the type of conduct subject
to Rule 11’s duty of candor.” Doc. 50 at 16 (emphasis added). Guli-
sano admits that he could have withdrawn the motion. Thus, the
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20-12660 Opinion of the Court 17
district court acted within its discretion when it imposed sanctions
on a motion that could have been withdrawn under the safe harbor
provision.7
B. The District Court Acted Within Its Discretion in Denying
Gulisano’s Motion for Reconsideration.
Gulisano asked the court to reconsider its decision to impose
sanctions. After conducting an evidentiary hearing, the district
court denied his motion. Gulisano challenges the denial on appeal,
but he has abandoned this challenge.
See Sapuppo v. Allstate Flo-
ridian Ins. Co., 739 F.3d 678, 680 (11th Cir. 2014). He failed to sup-
port the claim with arguments and citations to authority.
See id. at
681. Instead, he merely appended, repeatedly, the same sentence
to the end of his arguments against sanctions: “In the alternative,
the court abused its discretion by denying the Appellant’s Motion
for Reconsideration, which raised this issue as grounds for doing
so.” Appellant’s Brief at 39, 43, 47, 52, 54. These appended sen-
tences are mere “passing references” that cannot raise an issue for
appellate review.
Sapuppo, 739 F.3d at 681. We consider the issue
abandoned.
7 Gulisano contends that the amount of attorney’s fees awarded as sanctions
was too high because BSI failed to mitigate its damages. This argument lacks
merit. First, it is, at best for Gulisano, unclear whether any duty to mitigate
damages was owed. Second, BSI asked Gulisano to withdraw the motion to
amend judgment, and Gulisano refused, forcing BSI to incur attorney’s fees in
defending against the motion. So, it seems to us that Gulisano himself pre-
vented BSI from mitigating its damages.
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18 Opinion of the Court 20-12660
Were we to reach the merits, however, we would affirm the
district court’s denial of the Rule 59(e) motion for reconsideration.
The court found that the motion “amount[ed] to no more than dis-
agreement with the Court’s reasoning and ultimate conclusions.”
Doc. 70 at 10. It failed to establish a clear error of law or manifest
injustice as required. Because the motion merely “relitigate[d] old
matters,” the district court was within its discretion to deny it.
Mi-
chael Linet, Inc. v. Vill. of Wellington, 408 F.3d 757, 763 (11th Cir.
2005).
IV. CONCLUSION
For the foregoing reasons, we affirm the district court’s or-
der imposing sanctions and its denial of the motion for reconsider-
ation.
AFFIRMED.
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