Bakker v. GrutmanBakker v. Grutman
- Reporters:
- , , ,
- Before:
- Murnaghan, Widener, Young
MURNAGHAN, Circuit Judge:
In the law as it has evolved in the United States, normally a party, plaintiff or defendant (or the lawyers for either), whether prevailing or non-prevailing, must bear his or her own expenses, including attorney‘s fees and costs. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975) (the “Americаn Rule“). There are exceptions to that rule under
Awards and denials are judged on an abuse of discretion basis, and due deference, in such an event, is pаid to the district judge‘s determination.
We have before us a case giving rise to such claims for expenses and sanctions, originally commenced by appellees the Rev. Jim Bakker and his wife Tammy Bakker (collectively “the Bakkers“) on March 14, 1988, in the Court of Common Pleas, York County, South Carolina. Brought against appellants Norman Roy Grutman and the law firm of Grutman, Miller, Greenspoon and Hendler (together referred to as “Grutman“), it alleged legal malpractice, the gravamen of which was alleged disloyalty of Grutman to the Bakkers, while serving as their counsel, in that Grutman secured the Bakkers’ removal from the stewardship of the Heritage Village Church and Missionary Fellowship, Inc. (“PTL“) and their replacement by the Rev. Jerry Falwell, another person allegedly represented contemporaneously by Grutman.
The case, on March 30, 1988, was removed by Grutman to the United States District Court for the District of South Carolina. Grutman then moved for an extension of time in which to file responsive pleadings. The motion stated that the request had been consented to by W. Ryan Hovis, one of the lawyers who had represented the Bakkers while the case was in South Carolina state court. When filed in state court, counsel for the Bakkers were Hovis, Melvin Belli, and Jаmes H. Toms. Upon removal to the federal district court, Hovis, Belli, and Toms were replaced as counsel by Victoria Eslinger by Order dated May 20, 1988.1
Grutman, upon filing an answer on April 20, 1988, on May 4, 1988, noticed the Bakkers for depositions, requesting production of an extensive list of documents. The date as of which the depositions were scheduled was May 31, 1988. On May 13, 1988, one week before her substitution was recognized by the district court, Eslinger filed a motion for a protective order, including a request for an extension of time to respond to Grutman‘s discovery requests. Thereafter, Hovis, Belli, and Toms played no further part in the representation of the Bakkers in the case pending in the South Carolina district court.
The requested extension to respond granted June 9, 1988 and consented to by Grutman led to a response by Eslinger that was somewhat inсomplete since the documents requested were in substantial part unavailable to the Bakkers because of 1) an investigation by the Internal Revenue Service into the PTL‘s tax exempt status, 2) the investigation of PTL by a grand jury of the United States District Court for the Western District of North Carolina, and 3) the PTL bankruptcy proceedings which had been commenced.
The answer was not objected to by Grutman as incomplete, deficient, improper or calculated to delay or frustrate Grutman‘s conduct of the case.
By letter dated August 16, 1988, Grutman sought a continuance of the case, on the grounds of not being ready for trial. Next, Grutman scheduled various witness depositions in September 1988, including the deposition of the president of Rock Hill National Bank in Rock Hill, South Carolina, which counsel for Rock Hill National Bank moved to quаsh.
On December 5, 1988, the Western District of North Carolina grand jury indicted Rev. Bakker. On February 1, 1989, Grutman moved pursuant to
On February 7, 1989, the Bakkers, through Eslinger, moved for dismissal of the case with prejudice pursuant to
Thereafter, on May 12, 1989, Grutman moved for sanctions against the Bakkers and Belli pursuant to
Both of Grutman‘s motions for sanctions were heard by the district court on April 18, 1990. By order dated September 18, 1990, and entered on September 20, 1990, the district court denied both motions. On Octobеr 1, 1990, Grutman initiated the instant appeal.
Bearing in mind 1) the minimal nature of activities in federal court by those as to whom Grutman has sought sanctions, 2) the confinement of Eslinger to action concerning discovery requests with Grutman‘s acquiescence or non-objection to what she had done, and 3) absence of any proof that, before answering, Eslinger failed to make sufficient inquiry or that her purpose was improрer, the district judge‘s disallowance of sanctions was not an abuse of discretion. Cooter & Gell v. Hartmarx Corp., --- U.S. ----, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359 (1990); Blue v. Department of the Army, 914 F.2d 525, 538 (4th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 1580, 113 L.Ed.2d 645 (1991). The district judge did not abuse his discretion in applying the standard of objective reasonableness to reach the decision that Grutman should not receive sanctions. See Cabell v. Petty, 810 F.2d 463, 466 (4th Cir.1987); Oliveri v. Thompson, 803 F.2d 1265, 1275 (2d Cir.1986), cert. denied, 480 U.S. 918, 107 S.Ct. 1373, 94 L.Ed.2d 689 (1987).
Of course, as to Hovis and Belli, Grutman has sought to have us apply Meadow Ltd. Partnership v. Meadow Farm Partnership, 816 F.2d 970 (4th Cir.1987), to hold liable for sanctions counsel who not only appeared in state court but continuеd actively, without justification, to pursue the matter following removal to federal court. But, in so contending, Grutman has attempted to distinguish Kirby v. Allegheny Beverage Corp., 811 F.2d 253 (4th Cir.1987), by sliding over a controlling factual difference. Here the continued representation in the federal court was so minimal, or even non-existent, as to make Kirby rather than Meadow Ltd. Partnership applicable.
Turning to Eslinger, in view of the Supreme Court‘s recent ruling that
Before reaching the issue of sanctionability of any of those filings, the logical gap presented by Pavelic, Kirby, and Meadow Farms must be addressed. To adopt appellees’ view that Eslinger cannot on any grounds be sanctioned on the basis of the complaint filed in state court, might lead tо the somewhat anomalous result that not only Belli and Hovis, but Eslinger as well could automatically all escape sanctions despite the fact that the allegations contained in the complaint continued to be prosecuted for some nine and a half months.
The question is whether Pavelic should be read to argue against holding substituted counsel susceptible to
The signing attorney cannot leave it to some trusted subordinate, or to one of his partners, to satisfy himself that the filed paper is factually and legally responsible; by signing he represents not merely the fact that it is so, but also the fact that he personally has applied his own judgment. Where the text establishes a duty that cannot be delegated, one may reasonably expect it to authorize punishment only of the party upon whom the duty is placed. We think that to be the fair import of the language here.
110 S.Ct. at 459. Applying that ratiоnale to the substitution of counsel in the present case, we must ask whether delegation of responsibility to one‘s successor was reasonable or not. We may assume that under the Meadow Farm analysis, when substitute counsel takes up the claim, either 1) the new counsel should be deemed to have constructively signed the complaint or 2) some new pleading should be necessary to serve as the basis for the impоsition of sanctions against the successor counsel. We conclude that Pavelic supports only the latter.
Grutman‘s attempts by brief to characterize Eslinger‘s substitution alone as “an endorsement of her responsibility for continuing the matter and prosecuting it” is not enough. The first paper she filed and for which Grutman attacks her--the motion to extend time tо respond to discovery requests--clearly indicated that she understood her responsibility was to look into the legal and factual sufficiency of the complaint, and simply needed a reasonable amount of time to do so. She did not take up the baton and charge, without pause for reflection, headlong into the litigation. Cf. Cabell, 810 F.2d at 466 (“Rule 11 does not prohibit merely intentional misconduct. Inexperience, incompetence, willfulness or deliberate choice may all contribute to a violation.“). For that reason, Grutman‘s attempt to characterize Eslinger‘s initial prudence as harassment or vexatiousness must fail. Nothing in the record suggests that Eslinger‘s filing of the motion to extend was motivated by a desire to harass, vex, or annoy Grutman, or that the motion indicated a desire simply to launch headlong into continuеd prosecution of the claim. Indeed, there was the fact of not inconsiderable weight that Grutman consented to the motion.
In another attempt to cast efforts of opposing counsel in the worst possible light, Grutman has characterized Eslinger‘s limited responses to discovery and her delay of the Bakkers’ depositions as further proof of her knowledge that the action was a sham and of her intention simply to run up Grutman‘s legal bills through protracted discovery. Yet there is no support in the record for such allegations. At no time did Grutman object to the responses as being deficient, improper, or calculated to delay or frustrate Grutman‘s defense of the case.
Eslinger‘s efforts at delaying the Bakkers’ deposition were motivated by a genuine concern: a lack of access to documents critical to proper deposition preparation because those documents were in the hands of the United States Attorney‘s Office and the bankruptcy court. It was not until February 1, 1989, that Grutman moved under
We mention, but here it is unnecеssary to rely on the holding by at least one district court, that
While voluntary dismissal of a claim does not strip a district court of its power to impose
After removal to the federal court, the only action of the plaintiff‘s counsel as to the first four counts of the complaint was to request dismissal. Such action cannot be the basis for Rule 11 sanction.
811 F.2d at 257. Unquestionably, nine months elapsed between the time Eslinger entered the case and the time she filed for voluntary dismissal with prejudice. The procedural history of that nine months, however, indicates that Eslinger moved for an extension of time to fulfill her duties under
The procedural history of those nine months also reveals that on August 16, 1988, Grutman sought a continuance of the case, on grounds of not being prepared for trial, and that at least one other, independent deponent, the Rock Hill National Bank in Rock Hill, South Carolina, resisted deposition by moving to quash the subpoena.
So, the nine month period between the time Eslinger first filed any papers and the time she filed for voluntary dismissal cannot be viewed as unreasonable delay indicating an intention to move forward in the prosecution of a frivolous case.5
Having found no abuse of discretion in the decisions declining to allow awards of
Though failing to raise in the district court an alternative basis for sanctions under
Generally, a federal appellate court may not consider an issue which was not passed upon by the trial court. Singleton v. Wulff, 428 U.S. 106, 120, 96 S.Ct. 2868, 2877, 49 L.Ed.2d 826 (1976). “The matter of what questions may be taken up and resolved for the first time on aрpeal is one left primarily to the discretion of the courts of appeals, to be exercised on the facts of individual cases[,]” and there is no general rule governing such a determination. Id. at 121. We have identified such a rule as one involving “plain error,” where a refusal to address the error “would result in a denial of fundamental justice.” Austin v. Torrington Co., 810 F.2d 416, 420 (4th Cir.), cert. denied, 484 U.S. 977, 108 S.Ct. 489, 98 L.Ed.2d 487 (1987); United States v. The Barge Shamrock, 635 F.2d 1108, 1111 (4th Cir.), cert. denied, 454 U.S. 830, 102 S.Ct. 125, 70 L.Ed.2d 107 (1981).
Moreover, Grutman‘s contention that invocation of section 1927 does not raise a new issue on appeal is erroneous. Section 1927 was intended to sanction conduct
Reminiscent of the pot and kettle, the Bakkers’ have urged us to impose sanctions upon Grutman under
The Supreme Court made clear in Cooter & Gell that “[i]f the appeal of a
The judgment is, accordingly, in all respects,
AFFIRMED.
Notes
Section 1927, entitled “Counsel‘s liability for excessive costs,” provides,
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof whо so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.
Rule 38, entitled “Damages for Delay,” provides,
If a court of appeals shall determine that an appeal is frivolous, it may award damages and single or double costs to the appellee.