George A. GLASS, Jr. and Nona Glass, Plaintiffs, and Phelps-Chartered, Appellant, v. Ron PFEFFER, Walt Mosby, Joe Iarossi, Robert Robinson, Ray Vines, Jim Weckwerth, and James Gilchrist, Defendants, and Dean Forster, Defendant-Appellee.
No. 85-2823.
United States Court of Appeals, Tenth Circuit.
June 13, 1988.
849 F.2d 1261
William E. Enright of Scott, Quinlan & Hecht, Topeka, Kan., for defendant-appellee Dean Forster.
Before LOGAN, McWILLIAMS and TIMBERS,s Circuit Judges.
LOGAN, Circuit Judge.
In an earlier appeal in this case, this court affirmed a judgment dismissing a civil rights action brought by plaintiffs Glass against defendant police officers. Glass v. Pfeffer, 657 F.2d 252 (10th Cir.1981) (Glass I ). Before that appeal was taken, the district court ordered plaintiffs and the law firm (Fred W. Phelps-Chartered) of their counsel, Fred W. Phelps, Jr., to pay $1400 in attorney‘s fees which one defendant, Dean Forster, incurred after his deposition was taken by plaintiffs. The district court ruled that Forster‘s deposition clearly demonstrated that he was not present at the time of the mistaken arrest that formed the basis of plaintiffs’ complaint. The court found no excuse for plaintiffs’ failure voluntarily to dismiss Forster from the action after taking that deposition.
On remand, then, the sole issue became whether attorney‘s fees should be assessed against plaintiffs’ counsel. The court‘s hearings on this issue nevertheless mushroomed into a major trial about counsel‘s good faith and the legal propriety of leaving Forster a defendant in the case after the deposition. Phelps-Chartered called many witnesses, and filed numerous motions and other documents resulting in several rulings by the district court. Ultimately the court held the Phelps-Chartered firm responsible for Forster‘s attorney‘s fees in the amount of $7734.34, including the $1400.00 originally assessed.
As all other issues were resolved in Glass I, the instant appeal addresses only the propriety of the attorney‘s fee award and its amount. In essence, Phelps-Chartered raises four issues relating to the award: (1) whether any attorney‘s fee award was justified against plaintiffs’ attorneys; (2) whether the amount awarded is sustainable; (3) whether the award was proper against Phelps-Chartered rather than Fred W. Phelps, Jr. or Fred W. Phelps-Chartered; and (4) whether the district judge should have recused himself.
I
This court‘s opinion in Glass I comprised the law of the case for the district court on remand. We found that the award of attorney‘s fees in favor of Forster was justified under the district court‘s inherent power, Glass I, 657 F.2d at 257-58, the only infirmity being in the notice and opportunity for hearing before making the award. Id. Thus, the sole issue on remand should have been whether fees were properly placed upon the attorney rather than upon plaintiffs alone. Normally such a hearing would address whether the attorney had a reasonable excuse or some explanation that would convince the court that the client or another person should be held responsible for the actions subject to sanction. Instead, the attorneys here attacked the court‘s findings of bad faith and abuse of process which underlay the award, arguing strenuously that Forster was properly retained in the case after they discovered that he was not present at the arrest. In particular, they argued that Forster was a proper defendant under
We find that the district court properly rejected plaintiff‘s Sec. 1985(2) claim on both procedural and substantive grounds. Procedurally, we are satisfied that plaintiffs’ lawsuit, against which the district court granted summary judgment, did not include a Sec. 1985(2) claim. Plaintiffs’ complaint alleged no claim under Sec. 1985(2); it referred solely to
In essence, plaintiff George Glass alleges that Forster visited with him shortly after police mistakenly entered his home and arrested him and that Forster conspired with other defendants in the case by drawing up a report falsely describing what George Glass said. Even if we accept plaintiffs’ allegation that Forster lied in his report as part of a conspiracy, plaintiffs nonetheless fail to allege that these actions in any way intimidated or deterred them from subsequently pursuing this action in federal court. Absent the element of intimidation or deterrence, plaintiffs suffered no injury under Sec. 1985(2), and thus did not state a colorable Sec. 1985(2) claim. See Brown v. Chaffee, 612 F.2d 497, 502 (10th Cir.1979) (rejecting witness intimidation claim under Sec. 1985(2) because conspiracy was not one “directly affecting, in the context of this case, the act of testifying as a witness“); McLean v. International Harvester Co., 817 F.2d 1214, 1218 (5th Cir.1987) (following Brown ); Chahal v. Paine Webber, Inc., 725 F.2d 20, 23 (2d Cir.1984) (setting forth elements of witness intimidation claim under Sec. 1985(2); alleged conspiracy to intimidate or deter must cause injury to plaintiff); Malley-Duff & Associates, Inc. v. Crown Life Insurance Co., 792 F.2d 341, 355-56 (3d Cir.1986) (following Chahal ), aff‘d sub nom. Agency Holding Corp. v. Malley-Duff & Associates, Inc., --- U.S. ----, 107 S.Ct. 2759, 93 L.Ed.2d 573 (1987); Miller v. Glen & Helen Aircraft, Inc., 777 F.2d 496, 498 (9th Cir.1985) (same).2
We therefore affirm the district court‘s initial award of attorney‘s fees on remand. Further, we reject the contention that the district court failed to find subjective bad faith or its equivalent. The court, with ample support from the record, found that “plaintiffs’ counsel willfully continued to advance groundless and patently frivolous litigation against defendant Forster,” II R. tab 193 at 9, and that such conduct was “tantamount to bad faith.” Such a finding is not clearly erroneous, Sterling Energy, Ltd. v. Friendly National Bank, 744 F.2d 1433, 1435-36 (10th Cir.1984), and describes conduct sufficiently grave to be sanctioned under the court‘s inherent power to control attorney conduct. Roadway Express, Inc. v. Piper, 447 U.S. 752, 767, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 (1980); see also Braley v. Campbell, 832 F.2d 1504, 1512 (10th Cir.1987) (en banc) (“Subjective good faith ought not to be an infinitely expansive safe harbor to protect an attorney who brings an action that a competent attorney could not under any conceivable justification believe not frivolous.“).
II
Phelps-Chartered next raises two arguments concerning the amount of attorney‘s fees awarded. First it asserts that even if the initial award of $1400.00 in fees was proper, the district court erred in awarding Forster an additional $6334.34 for litigating on remand his entitlement to the fee award. This argument implicates competing concerns. On the one hand, we held in Glass I, 657 F.2d at 258, that plaintiffs’ counsel had a due process right to notice and hearing to contest the imposition of fees. As Phelps-Chartered suggests, this right would be of little value if its exercise automatically results in a still larger fee award. On the other hand, when, as here, attorneys engage in scorched earth tactics to challenge such a fee award, a refusal to permit recovery of additional fees for defending that award would allow counsel to dilute the value of the original award or force the recipient to abandon that award entirely.
Phelps-Chartered‘s second challenge to the amount of fees awarded is that the district court did not require sufficient documentation as to the reasonableness of the fees awarded. We likewise reject this argument. Forster submitted documentation, see Doc. Nos. 143, 187, 192, upon which the district court expressly relied in awarding fees. See II R. tab 193 at 10. Because Phelps-Chartered did not object before the district court to the adequacy of this documentation, we will not consider this argument now on appeal. Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1556 (10th Cir.1988).
III
Phelps-Chartered next contends that the award should have been against Fred W. Phelps, Jr. or Fred W. Phelps-Chartered, rather than against Phelps-Chartered, some of whose owners or employees were not practicing law at the time of the attorney dereliction in this case. In this regard, Phelps-Chartered first asserts that the district court improperly shifted the award after remand from Fred W. Phelps, Jr., individually to Phelps-Chartered. The record, however, clearly shows that the original fee award was against Fred W. Phelps-Chartered, and not against Fred W. Phelps, Jr. or any individual attorney. I R. tab 109 at 9-10; I R. tab 114 at 3-4.4 Our examination of the record satisfies us that the district court made quite clear that it intended to levy sanctions against the law firm that employed Fred W. Phelps, Jr. rather than holding him personally and solely responsible.
Under general legal principles a corporation is liable for the acts of its employees committed within the scope of employment. Kline v. Multi-Media Cablevision, Inc., 233 Kan. 988, 989, 666 P.2d 711, 713 (1983); Russell v. American Rock Crusher Co., 181 Kan. 891, 894, 317 P.2d 847, 849 (1957). More specifically, it is appropriate to levy attorney‘s fees against a firm that is responsible for the pleadings signed by its employees. Calloway v. Marvel Entertainment Group, 650 F.Supp. 684, 686-87 (S.D.N.Y.1986) (firm on whose behalf attorney signed papers liable under
At the time of the breach of duty, the Fred W. Phelps-Chartered corporation apparently was the employer of Fred W. Phelps, Jr., for the signature on the original complaint is Fred W. Phelps-Chartered by Fred W. Phelps, Jr. I R. tab 1 at 4. Phelps-Chartered, the appellant herein, is the successor to Fred W. Phelps-Chartered. Although a successor corporation is not generally liable for the debts of its transferor, an exception exists when the successor is merely a continuation of its predecessor. Crozier v. Menzies Shoe Co., 103 Kan. 565, 175 P. 376, 376-77 (1918); City of Altoona v. Richardson Gas & Oil Co., 81 Kan. 717, 106 P. 1025, 1025 (1910); see also R.J. Enstrom Corp. v. Interceptor Corp., 555 F.2d 277, 281-82 (10th Cir.1977) (Oklahoma law). On remand in the instant case Forster argued that Phelps-Chartered was a mere continuation liable for the debts of Fred W. Phelps-Chartered, I R. tab 143 at 2, and that he therefore sought his fee award against the latter. Phelps-Chartered never challenged this characterization before the district court, despite having ample opportunity to do so. Further, the general conduct of the litigation before the district court indicates that Phelps-Chartered merely continued the business of Fred W. Phelps-Chartered; the attorney for Phelps-Chartered at one point told the court that “Fred W. Phelps Chartered ... is now Phelps Chartered.” X R. 7. By awarding fees against the successor, the district court implicitly found it to be liable on this debt of its predecessor, a finding we hold is not clearly erroneous.
Phelps-Chartered argues that Richard Rogers, the district judge who presided throughout, should have recused himself from the case before assessing these fees. See
Turning first to Phelps-Chartered‘s claims of bias against the firm or against civil rights plaintiffs in general, we note that Sec. 144 requires an affidavit of bias and prejudice, which must be timely, sufficient, made by a party, and accompanied by a certificate of good faith of counsel. Hinman v. Rogers, 831 F.2d 937, 938 (10th Cir.1987) (per curiam). Second, although we must accept the truth of the facts alleged in the affidavit under Sec. 144, United States v. Ritter, 540 F.2d 459, 462 (10th Cir.) (per curiam), cert. denied, 429 U.S. 951, 97 S.Ct. 370, 50 L.Ed.2d 319 (1976), we construe that affidavit strictly against the party seeking recusal. Weatherhead v. Globe International, Inc., 832 F.2d 1226, 1227 (10th Cir.1987). The affidavit is insufficient if it merely states conclusions, rumors, beliefs and opinions; it must “state with required particularity the identifying facts of time, place, persons, occasion, and circumstances.” Hinman, 831 F.2d at 939. Applying this standard, we hold that the district court did not err in ruling against Phelps-Chartered under Sec. 144; the Phelps-Chartered affidavit lacked particularity, and was filled with conclusions, rumors and inuendo.
Addressing these same claims under Sec. 455, we note that section provides considerably broader scope for claims of prejudice and bias. Under this section, factual allegations need not be taken as true, and the test is whether “a reasonable person, knowing all the relevant facts, would harbor doubts about the judge‘s impartiality.” Hinman, 831 F.2d at 938. Applying this standard, after reviewing the record we are convinced that no reasonable person could doubt Judge Rogers’ impartiality in the proceedings below.
Finally, we address the allegations of “conspiracy” between Judges Rogers and O‘Connor. Despite the serious nature of this charge, it boils down to the happenstance of the timing of the July 31, 1985 motion for O‘Connor to recuse, II R. tab 197 at App.A, and Judge Rogers’ August 22, 1985 ruling in the instant case upholding sanctions. While such timing might in some circumstances support an inference of conspiracy, we do not believe that it does here, either under Sec. 144 or Sec. 455.5 The initial award of attorney‘s fees was made January 25, 1980. I R. tab 109 at 9. The Glass I decision, ordering the remand, issued August 3, 1981. The remand proceedings in district court commenced shortly thereafter, and, as noted above, should have been concluded years before the 1985 events relied upon in this argument. The delays were the responsibilities of the sanctioned attorneys and arise from an apparent policy of contesting everything, conceding nothing, to the bitter and protracted end.
Any charge that judges improperly conspired to the prejudice of litigants is most grave, and must rest on more than Phelps-Chartered provided here. As the Federal Circuit recently stated, “Counsel should not make such an assertion precipitously or recklessly, nor on unsupported rumor, conjecture, and speculation. To do so is to trifle with the court and the administration of justice.” Maier v. Orr, 758 F.2d 1578, 1583-84 (Fed.Cir.1985). The record is clear that Phelps-Chartered‘s recusal motions in fact are simply an avenue to attack adverse rulings made in a case pending in the district court since 1977. Such adverse rulings are not in themselves grounds for recusal. United States v. Bray, 546 F.2d 851, 857 (10th Cir.1976). The district judge did not abuse his discretion in refusing to recuse himself. Weatherhead, 832 F.2d at 1227.
Finally, we have before us a motion to award Forster attorney‘s fees for the defense of this appeal. Phelps-Chartered has responded in part by asking for time, if we should affirm as we do here, to review and possibly contest the hours and proposed charges. We grant Forster‘s motion for attorney‘s fees, to be paid by Phelps-Chartered. Despite our concern that the district court has already been overburdened by this case, we believe that court is better equipped to resolve whatever challenges Phelps-Chartered may make to the hours and charges than this appellate court. Therefore we remand to the district court for the sole and limited purpose of determining a reasonable fee for the time spent defending on appeal the attorney fee award to Forster. Phelps-Chartered can present there any challenges to the reasonableness of appellee Forster‘s fee request.
AFFIRMED, but remanded for a determination of an appropriate attorney fee award for Forster‘s defense of this appeal.