MARIANNA YEH, APPELLANT, v. GARY HNATH, APPELLEE.
No. 21-FM-0737
DISTRICT OF COLUMBIA COURT OF APPEALS
Decided May 25, 2023
(Submitted September 29, 2022)
Notice: This opinion is subject to formal revision before publication in the Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the Court of any formal errors so that corrections may be made before the bound volumes go to press.
Aaron Marr Page was on the brief for appellant.
Sogand Zamani was on the brief for appellee.
Before BECKWITH, EASTERLY, and DEAHL, Associate Judges.
EASTERLY, Associate Judge: Marianna Yeh sued Gary Hnath in Superior Court for a divorce, asserting that the two were in a common-law marriage. Mr. Hnath successfully moved for summary judgment and sought sanctions against Ms. Yeh in the form of attorneys’ fees. Citing
I. Facts and Procedural History
The following facts derive from the record or were found by the trial court and are uncontested by the parties. Ms. Yeh and Mr. Hnath began a romantic relationship sometime in 2006, while Mr. Hnath was married to another woman. The two purchased a condo in D.C. together, held under both of their names as tenants by the entirety—a form of property reserved for married couples1—and Ms. Yeh relocated from Canada to move in with Mr. Hnath. Mr. Hnath and his first wife divorced in 2008, as his relationship with Ms. Yeh continued.
In the years that followed, Ms. Yeh and Mr. Hnath maintained what was by all
The two never formally registered a domestic partnership2 or undertook a marriage ceremony, however, and after intermittent “off and on” periods they permanently separated in 2017 or 2018. Mr. Hnath formally married another woman in October 2018, and in early 2019 he stopped making payments on the mortgages and car loans that he shared with Ms. Yeh. At leаst one of the property mortgages went into default and entered foreclosure proceedings with the mortgage lender, and in August 2019 Mr. Hnath sued Ms. Yeh to partition their jointly owned properties and thereby force their sales.
Ms. Yeh subsequently filed the complaint underlying this case in November 2019, requesting absolute divorce to dissolve what she alleged was a common-law marriage between herself and Mr. Hnath that began in August 2008.3 In her complaint, she alleged that Mr. Hnath had consented to spousal support payments including the payments on their mortgages. Apparently as a result of Ms. Yеh‘s divorce action, Mr. Hnath‘s suit for partition was dismissed. After Mr. Hnath filed an answer to the divorce complaint, the parties engaged in discovery through 2020 and (because proceedings were significantly delayed due to the COVID-19 pandemic) into 2021.
On January 5, 2021, Mr. Hnath moved to compel discovery and requested sanctions for Ms. Yeh‘s failure to provide him with a transcript of her October 2018 deposition in an unrelated case in which she had sued a former employer for sexual harassment and other claims. In this transcript, Ms. Yeh stated at one point that she was not married and later that Mr. Hnath hаd previously been her “domestic partner . . . [f]rom December 2006 to sometime in . . . the middle of 2017.” Ms. Yeh also therein answered detailed questions about her intimate relationship with another man
that occurred around 2015. After Mr. Hnath finally obtained a copy of the transcript from a source other than Ms. Yeh, he emailed Ms. Yeh on January 20, 2021,4 demanding that she withdraw her complaint and declaring he would seek sanctions if she did not do so by noon the following day. As the basis for this demand, Mr. Hnath cited Ms. Yeh‘s sworn statements that she did not consider herself married to Mr. Hnath when she sat for the deposition in 2018. The email did not have a draft motion for sanctions attached. Nothing in the record indicates that Ms. Yeh responded or that Mr. Hnath took any action the following day.
was warranted, the trial court issued a two-page order on February 27, 2021, and granted judgment to Mr. Hnath, stating that a detailed order would follow. In the same order the court held Mr. Hnath‘s motions5 for sanctions in abeyance, stating that it would schedule a hearing “in due course.”
The Superior Court subsequently issued a March 23, 2021, order explaining its reasoning for granting summary judgment to Mr. Hnath. The court determined that Ms. Yeh had failed to present any evidence of an express, present-tense mutual agreement between herself and Mr. Hnath that they were married, a requisite element of a common-law marriage in the District as set out in Gill v. Nostrand, 206 A.3d 869, 875 (D.C. 2019). The court also reasoned that Ms. Yeh‘s shifting allegations of the date the marriage began, her own repeated contemporaneous representations that she and Mr. Hnath were “domestic partners,” and the lack of evidence of their reputation in the local community as a married couple all weighed against her claim. Lastly, the court observеd that Ms. Yeh would have needed to establish that she and
Mr. Hnath reaffirmed their intent to be married once the legal impediment of Mr. Hnath‘s first marriage had been removed, but found that she had failed to do so.6
On April 28, 2021—two months after the court granted summary judgment—Mr. Hnath filed a standalone motion for sanctions in the form of attorneys’ fees, again citing both
she lacked the financial resources to pay the requested fees.
The court held a hearing at which it heard argument from counsel for and against sanctions and asked Mr. Hnath to submit an affidavit detailing the fees he sought to be awarded. Mr. Hnath submitted an affidavit from counsel seeking an award of $74,227.36. The court then granted Mr. Hnath‘s motion, ordering Ms. Yeh to pay the full amount of fees claimed. The court found that Mr. Hnath had “shown by clear and convincing evidence that [Ms. Yeh had] brought and litigated her meritless claim in bad faith, such that [it had] the discretion to award attorney‘s fees under both Rule 117 and under its inherent authority to police itself.” Observing that Ms. Yeh‘s “claim that the parties had a common law mаrriage was uncolorable” and “implausible,” the court reasoned that it could
infer, given the lack of evidence and the surrounding circumstances, that the claim was brought for an improper purpose, namely to harass [Mr. Hnath], for unnecessary delay (to continue to exclusively enjoy use of their jointly held property and interfere with prompt resolution of his complaint for partition and force the sale), and to needlessly increase his litigation expenses, perhaps in hopes of reaching a favorable settlement.
The court further reasoned thаt “[n]ot only did [Ms. Yeh] initiate this claim under questionable circumstances, but the litigation tactics used throughout this case appear to have been used to conceal important discovery documents,” specifically her 2018 deposition transcript from her separate lawsuit for sexual harassment.8 Ms. Yeh timely appealed the sanctions order.
II. Analysis
In general, parties before the District‘s courts are responsible for paying the costs and fees that their own attorneys incur during the course of litigation, a practice known as the “American rule.” Synanon Found., Inc. v. Bernstein, 517 A.2d 28, 35, 37 (D.C. 1986). This rule aims to avoid chilling possibly meritorious actions, whereas a fee-shifting default might deter a party from ever initiating a claim for fear of being stuck with an unpayable bill should they lose. See id. at 36. We permit departures from the American rule, however, under limited circumstances where the court orders a party to pay their opponent‘s fees as a sanction for misconduct. See
id. at 36-37. Some of these circumstances are defined by court rule, see, e.g.,
Whichever authority a court relies on tо impose a fee-shifting sanction,
A. Rule 11 Sanctions
must be given “notice and a reasonable opportunity to respond.”
The Superior Court determined that Mr. Hnath effectively complied with thе safe harbor requirement when he emailed Ms. Yeh declaring he would seek sanctions by noon the next day, several months before he filed his standalone
sanctions motion, which itself postdated the court‘s summary judgment ruling. In making this determination, the court cited one case, United States v. BCCI Holdings (Luxembourg), S.A., 176 F.R.D. 1, 2 (D.D.C. 1997), in which the federal trial court stated that it “might have construed” a letter indicating an intent to file a motion for sanctions as satisfying the safe harbor provision under the federal analogue to Rule 11 had the letter been differently worded. But this unpublished and in any event nonbinding ruling is contrary to this court‘s express holding that “a letter informing opposing counsel of an intention to pursue sanctions is not the functional equivalent of actual service of the Rule 11 motion.” Goldberg. Marchesano. Kohlman. Inc. v. Old Republic Sur. Co., 727 A.2d 858, 864 (D.C. 1999). Therefore, Mr. Hnath‘s January 20, 2021, email could not satisfy the requirements of Rule 11 as a matter of law, and the trial court‘s conclusion to the contrary was in error.
Although the trial court did not consider Mr. Hnath‘s subsequent actions, he argues in his brief to this court that those actions fulfilled the procedural requirements of Rule 11. Mr. Hnath‘s motion
of filing and was filed only after the court had granted summary judgment, thus making it impossible for Ms. Yeh to take corrective action and abandon her suit even if she had been given the requisite 21 days to do so. See Goldschmidt, 935 A.2d at 379 (“A party cannot initiate the Rule 11 process after judgment has been entered.“).
We conclude that, because the trial court erroneously concluded that Mr. Hnath cоmplied with the mandatory terms of Rule 11, the court abused its discretion in granting Mr. Hnath‘s motion for sanctions thereunder.
B. Sanctions Under the Court‘s Inherent Authority
The rules of procedure aside, the trial court also holds the power to grant attorneys’ fees to an opposing party as part of its “herent authority to award sanctions in appropriate circumstances for intentional abuse of the litigation process.” Jumper I, 909 A.2d at 176. We have referred to this exception to the default American rule as the “bad-faith exception.” See Synanon, 517 A.2d at 37. To assess attorneys’ fees under this exception, the court must first make a finding that the sanctioned party acted “in bad faith, vexatiously, wantonly, or for oppressive reasons,” Jumper I, 909 A.2d at 176 (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991)), by clear and convincing evidence, In re Jumper (Jumper II), 984
A.2d 1232, 1247-48 (D.C. 2009); see also Jung v. Jung, 844 A.2d 1099, 1108 (D.C. 2004) (placing this “heavy burden” on the party seeking sanctions). We review this predicate finding of bad faith for clear error. Jumper II, 984 A.2d at 1247.
“Because of their very potency, inherent powers must be exercised with restraint and discretion.” In re M.L.P., 936 A.2d 316, 323 (D.C. 2007) (quoting Chambers, 501 U.S. at 44). Consequently, this court‘s decisions have urged “caution” and “circumspection” before courts exercise their inherent authority to award attorneys’ fees, in order to safeguard the right of access to the courts. Jumper I, 909 A.2d at 176 (quoting Chambers, 501 U.S. at 50); Jumper II, 984 A.2d at 1248 (quoting Jung, 844 A.2d at 1108). We have emphasized that the standard for the bad-faith exception is “necessarily stringent,” such that a fee-shifting sanction is “proper only under extraordinary circumstances or when dominating reasons of fairness so demand.” Jumper I, 909 A.2d at 176-77 (quoting In re Est. of Delaney, 819 A.2d 968, 998 (D.C. 2003)); accord Synanon, 517 A.2d at 37 (collecting cases). And we have said that “the court must scrupulously avoid penalizing litigants for aggressively litigating their claims or discouraging good faith assertions of colorable claims and defenses.” Jung, 844 A.2d at 1108. Rather, the sanctioned party‘s conduct “must be so egregious that fee shifting becomes warranted as a matter of equity.” Id. at 1107. Applying this standard, we have recognized that a party proved
bad faith by сlear and convincing evidence only in a limited set of scenarios: where a lawyer knowingly violated the rules of professional conduct,10 a party committed a fraud
The Superior Court concluded that Ms. Yeh “lacked a good faith basis to even
bring her lawsuit.” Ms. Yeh‘s case was undoubtedly meritless—indeed, as the trial court assessed, it “was not a close call.” But a claim need not be meritorious to avoid a bad-faith finding; it need only be colorable, a measure that is satisfied “when it has some legal and factual support, considered in light of the reasonable beliefs of the individual making the claim.” Jung, 844 A.2d at 1108 (emphasis added and internal quotation marks omitted). As summarized above, the record contains some evidence that she and Mr. Hnath had a serious, long-lasting romantic relationship featuring many of the functional hallmarks of marriage—for example, co-habitation, joint property ownership, comingled finances, and some (admittedly mixed) evidence that the two presented to others as husband and wife.14 Facts like these can provide support for a claim of common-law marriage. See, e.g., Gill, 206 A.3d at 875 (naming evidence of durable cohabitation and the general reputation of the relationship among relatives and acquaintances as factors to weigh in a common-law marriage analysis). To be clear, moderately diligent research by Ms. Yeh‘s counsel would have shown that her evidence did not prove the required assertion of an express mutual agreement, but “[b]ad faith must be distinguished from, for example, negligence or professional incompetence.” See Jumper I, 909 A.2d at 177. The legal shortcomings of her clаim notwithstanding, given the evident serious
relationship between the parties, we cannot say on this record it was unreasonable for Ms. Yeh to believe in good faith that her relationship with Mr. Hnath merited legal recognition as a common-law marriage. See McCoy v. District of Columbia, 256 A.2d 908, 910 (D.C. 1969) (noting that the concept of common-law marriage is “almost uniformly misunderstood“).
Moreover, it is not enough for a defendant seeking sanctions from the initiation of an action to establish that a plaintiff‘s claim was “entirely without color” when brought; they must also establish by clear and convincing evidence that it was “asserted wаntonly, for purposes of harassment or delay, or for other improper reasons.” Jumper II, 984 A.2d at 1248. This language resembles in part that of
and yet come to believe that the qualities of her relationship might under law constitute a common-law marriage. Without proof that she knew her claim was baseless when she filed it, Ms. Yeh‘s claim was not so “entirely without color” as to give rise to an inference that she filed her claim “wantonly” or otherwise in bad faith. See Delaney, 819 A.2d at 999 (internal quotation marks omitted) (“Sanctions should not be imposed unless it is patently clear that a claim had absolutely no chance of success prior to filing.” (cleaned up)).
Nor do we discern clear and convincing evidence to support the court‘s inference that Ms. Yeh‘s complaint was filed “for the improper purpose of harassing [Mr. Hnath] and delaying resolution” of Mr. Hnath‘s partition action. The timing of the divorce complaint does suggest that Ms. Yeh filed it in reaction to Mr. Hnath‘s partition suit, but this does not itself sufficiently evince a purpose to harass or improperly delay. It seems entirely plausible that the question of any lasting legal effects of her relationship with Mr. Hnath had not been relevant to Ms. Yeh prior to the partition suit, and Ms. Yeh could have reasonably, and perhaps justifiably, feared the loss of the properties Mr. Hnath sought to partition, given the indications in the record that she used them as her primary residences. Seeking to protect a potentially valid property interest at stake in another action is not an improper purpose that might justify a bad-faith sanction. The other evidence the court cites of Ms. Yeh‘s
improper purpose—text messages from Ms. Yeh from February 2015 and October 2018 suggesting her desire for rеlationships with wealthy men and animosity toward Mr. Hnath and his new wife, respectively—both well predate her complaint and shed little, if any, light on this lawsuit. “The truth is that litigation often is brought for a host of purposes,” and the record lacks clear and convincing evidence that here Ms. Yeh‘s predominant motive was an egregiously improper one. See Jung, 844 A.2d at 1112 (“We do not comprehend the bad faith exception to the American rule to allow the trial judge to sanction litigants for bringing colorable claims when they also happen to have other ulterior motives of questionable рropriety.“).
Finally, the court concluded that Ms. Yeh litigated her suit in a bad-faith manner. It drew this conclusion primarily on the basis of Ms. Yeh‘s apparent delays in disclosing the transcript of her 2018 deposition testimony in the unrelated sexual harassment lawsuit. Ms. Yeh, through counsel, did resist turning over the transcript in question, but she represented that her reluctance was due to her desire to avoid violating a protective order issued in that case that rendered some of the transcripts confidential. That position was not so far beyond plausible that it was a clear smokescreen for imprоper delay. We also think the Superior Court‘s assessment that the transcript would have “devastated” her claim is somewhat of an overstatement.
married, in the context of a case where the legal status of her relationship with Mr. Hnath was not at issue, is no doubt adverse evidence in her later suit, but is not clear and convincing evidence that her suit was, as Mr. Hnath argued, a “shakedown“—and her admission that she and Mr. Hnath had been “domestic partners” was not remarkably different from other evidence already in the record of similar rеpresentations from both parties.
The court additionally identified Ms. Yeh‘s otherwise deficient discovery responses and her successive motions for pendente lite relief as evidence of bad faith. It is evident that Ms. Yeh‘s discovery responses were not always fully forthcoming, requiring repeated exhortations from Mr. Hnath for supplementary responses. But her conduct in discovery appears within the realm of quotidian guardedness and noncompliance, not evidence of the “deliberate oppressiveness” that would merit bad-faith sanctions. See Schlank v. Williams, 572 A.2d 101, 111 (D.C. 1990). And while the court emphasized Ms. Yeh‘s repeated filing of four motions for pendente lite relief, we can identify only two, with an additional related motion for reconsideration when the first was held in abeyance.15 Ms. Yeh clearly stated in her second motion that she was renewing her efforts to secure alimony pending litigation
because her financial circumstances had changed following her loss of employment; this solitary successive filing based on a change in circumstances likewise cannot reasonably be said to be an abuse of the judicial system.
In sum, we cannot discern clear and convincing evidence in the record that Ms. Yeh‘s actions in pursuing her case remotely resembled conduct we have previously affirmed as sanctionable. She perpetrated no flagrant fraud on the court, she did not wantonly disobey its orders, and she did not knowingly violate any professional ethical duties. Although we do not condone Ms. Yeh‘s apparently half-hearted approach to the discovery process, her behavior overall appears of a kind with that of countless litigants in our courts who bring ill-supported claims under acrimonious conditions and ultimately lose on the merits—and far from the extraordinary circumstances or egregious misconduct that would justify invocation of the bad-faith exception. We conclude that the trial court‘s finding of bad faith was clearly erroneous and consequently that the court abused its discretion in sanctioning Ms. Yeh under its inherent authority.16
For the foregoing reasons, the judgment of the Superior Court granting monetary sanctions against Ms. Yeh is reversed.
So ordered.
In imposing a monetary sanction, the trial court should expressly consider at least four factors, all of which serve to limit the amount assessed: (1) the reаsonableness of the injured party‘s attorneys’ fees . . . ; (2) the minimum amount that will serve to adequately deter the undesirable behavior; (3) the offending party‘s ability to pay, bearing in mind that sanctions should not be so large as to bankrupt the offending party . . . or otherwise cause the offending party great financial distress; and (4) the offending party‘s history, experience, and ability, the severity of the violation, the degree to which malice or bad faith contributed to the violation, the risk of chilling the type of litigation involved, and other factors as deemed appropriate in individual circumstаnces.
Williams v. Bd. of Trs. of Mount Jezreel Baptist Church, 589 A.2d 901, 911-12 (D.C. 1991) (cleaned up). The trial court in this case did not engage in any such express analysis.