792 F.3d 923
8th Cir.2015Background
- David and Nancy Meyer obtained loans from U.S. Bank for a swine business and later transferred business assets to a revocable trust (the Trust) of which they were grantors and trustees.
- The revolving credit loan defaulted in July 2008; litigation and bankruptcy followed. The Meyers previously sued U.S. Bank individually and lost (Meyer I).
- The Trust later sued U.S. Bank in state court for tortious interference, alleging the bank refused to wire money to the Trust’s feed supplier ("feed deprivation tactics") to force forbearance agreements.
- U.S. Bank removed the case to federal court, moved for summary judgment, and sought sanctions under Fed. R. Civ. P. 11; the district court granted summary judgment for U.S. Bank and imposed a $5,000 Rule 11 sanction against the Trust and its attorneys.
- The Trust appealed only the district court’s procedural handling (arguing it was wrongly treated as a Rule 12(b)(6) dismissal), not the merits; the Eighth Circuit affirmed the summary judgment and the Rule 11 sanction.
- On cross-motions for appellate sanctions, the court denied fees but found the Trust’s appeal was "frivolous as argued," awarding U.S. Bank double costs under Fed. R. App. P. 38.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court erred procedurally by treating dismissal as Rule 12(b)(6) rather than summary judgment | Trust: court improperly dismissed under 12(b)(6) instead of Rule 56; complaint should be construed liberally | Bank: it moved and supported summary judgment with documents; court properly treated motion as Rule 56 and gave parties opportunity to present evidence | No error; court properly granted summary judgment under Rule 56 and denied reconsideration |
| Whether Trust’s tortious-interference claim was barred by res judicata/judicial estoppel given Meyer I and bankruptcy filings | Trust: claim is independent and relies on Trust as separate plaintiff/operator of business | Bank: Trust is revocable and controlled by Meyers; prior adjudications and filings show Meyers personally ran the business, so claim is precluded | Claim precluded; complaint lacked allegation of an unjustified intentional act and failed as a matter of law |
| Whether filing the state-court complaint in the name of the Trust warranted Rule 11 sanctions | Trust: assuming trusts can sue in some contexts, claim was a reasonable extension of law; Bank waived objection by removing and litigating merits | Bank: filing was a repackaging of previously litigated claims by the same parties; filings contradicted Trust’s ownership/operation allegations | Rule 11 sanction appropriate; district court did not abuse discretion in imposing $5,000 against Trust and counsel |
| Whether appellate sanctions (fees and/or double costs) under Fed. R. App. P. 38 are appropriate | Trust: appealed good-faith procedural issues | Bank: appeal is frivolous and misrepresented district court orders and law | Appeal was not frivolous per se but was "frivolous as argued"; denied attorneys’ fees but awarded double costs to Bank |
Key Cases Cited
- Meyer v. U.S. Bank Nat’l Ass’n, 715 F.3d 703 (8th Cir. 2013) (prior appeal resolving Meyers’ individual claims)
- Willhite v. Collins, 459 F.3d 866 (8th Cir. 2006) (standard of review for Rule 11 sanctions)
- Kountze ex rel. Hitchcock Found. v. Gaines, 536 F.3d 813 (8th Cir. 2008) (affirming sanctions for relitigation by related party)
- Abbs v. Principi, 237 F.3d 1342 (Fed. Cir. 2001) (defining “frivolous as argued”)
- Exec. Air Taxi Corp. v. City of Bismarck, 518 F.3d 562 (8th Cir. 2008) (discussing Rule 11 baselessness standard)