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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FI LED 

United States Court of Appeals 

UNITED STATES COURT OF APPEALS Tenth Circuit 

FOR THE TENTH CIRCUIT JUL 2 9 1992 

ROBERT L. HOECKER 

Clerk COGENCO INTERNATIONAL, INC., a Colorado) 

corporation, ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

BEVERLY WOODS WEST CORP., doing business) 

as The Lexington House, ) 

) 

Defendant, ) 

) 

) 

GARY A. WEINTRAUB, ) 

) 

Attorney-Appellant. ) 

ORDER AND JUDGMENT* 

No. 91-1344 

(D.C. No. 86-Z-621) 

(D. Colo.) 

Before MOORE, BARRETT, and BRORBY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a): 10th Cir. R. 34.1.9. 

submitted without oral argument. 

* 

The case is therefore ordered 

This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 91-1344 Document: 010110275147 Date Filed: 07/29/1992 Page: 1
Appellant Gary A. Weintraub, counsel for Defendant Beverly 

Woods West, doing business as The Lexington House, appeals from 

the United States District Court for the District of Colorado's 

Order Awarding Attorneys' Fees pursuant to Fed. R. Civ. P. 11 

against him. On appeal, Weintraub argues that (1) sanctions under 

Rule 11 were improper and (2) if sanctions were proper, the 

attorney's fees awarded were excessive. We affirm the award of 

Rule 11 sanctions, but reverse as to the amount of attorney's fees 

awarded to Richard A. Goldberg and his law firm, Brenman, Raskin, 

Friedlob & Tenenbaum, P.C. 

Plaintiff Cogenco International, Inc., commenced this action 

in the district court seeking a judgment against Lexington for 

amounts Lexington allegedly owed Cogenco for default on a lease 

agreement. After the action was commenced, Lexington tendered a 

$16,000.00 check to Cogenco along with a proposed settlement. 

Cogenco rejected the proposed settlement, but kept the check. 

Pursuant to a stipulation of the parties, the district court 

entered judgment in favor of Cogenco. Cogenco registered the 

judgment in Illinois. Thereafter, it garnished Lexington's bank 

account. Cogenco presented the check from the proposed and 

rejected settlement to Lexington's bank. Although a stop payment 

order had been issued for the check, the bank issued a cashier's 

check to Cogenco for $16,000.00. Cogenco cashed the check, 

indicating on the back that it was in partial satisfaction of the 

judgment. After Cogenco cashed the check, Lexington objected to 

the garnishment in the United States District Court for the 

Northern District of Illinois. The Illinois district court stayed 

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Appellate Case: 91-1344 Document: 010110275147 Date Filed: 07/29/1992 Page: 2
proceedings and directed that the objections be filed in the 

Colorado district court. Lexington then filed a similar motion in 

the district court below objecting to the garnishment and seeking 

to enforce the proposed and rejected settlement. The district 

court denied the motion as frivolous and entered an order imposing 

Rule 11 sanctions against Lexington's attorneys, Weintraub and 

Michael I. Thynne. Cogenco's counsel then submitted their 

attorney's fees requests. 

Lexington moved to vacate the order imposing Rule 11 

sanctions and alternatively objected to the amount of attorney's 

fees requested. The district court denied the motion to vacate 

and awarded attorney's fees and costs of $2,035.00 to William A. 

Powers and attorney's fees of $1,750.00 to the law firm of 

Brenman, Raskin, Friedlob & Tenenbaum, P.C. The order required 

only that Weintraub pay the attorney's fees. Weintraub appealed. 1 

I. 

Weintraub first argues that the district court erred in 

awarding Rule 11 sanctions. He complains that a l though the 

district court found the motion for stay frivolous , it did not 

specifically find either that the motion for stay was not 

well-grounded in fact, not warranted by existing law or a good 

1 Subsequently, the district court entered an amended order, 

nunc pro tune, ordering that both Weintraub and Thynne pay the 

attorney's fees. The district court lacked jurisdiction to enter 

this order after the notice of appeal was filed; thus, the 

subsequent order is null and void. See Garcia v. Burlington N. 

R.R., 818 F.2d 713, 721 (10th Cir. 1987). 

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Appellate Case: 91-1344 Document: 010110275147 Date Filed: 07/29/1992 Page: 3
faith argument for the extension of the law, or brought for an 

improper purpose. 

In reviewing all aspects of a district court's 

Rule 11 determination, this court applies an abuse of 

discretion standard. Under this standard, reversal 

would be appropriate only if a district court "based its 

ruling on an erroneous view of the law or on a clearly 

erroneous assessment of the evidence." 

Hughes v. City of Fort Collins, 926 F.2d 986, 988 (10th Cir. 

199l)(quqting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 

S. Ct. 2447, 2461 (1990))· Because the district court is familiar 

with the issues and litigants, it is better able to apply the 

fact-based legal standard of Rule 11, Cooter & Gell, 110 S. Ct. at 

2459, and to determine when a sanction is warranted, id. at 2460. 

We may not second-guess the district court's determinations. 

Hughes, 926 F.2d at 989. 

Rule 11, in pertinent part, provides that 

The signature of an attorney or party constitutes a 

certificate by the signer that the signer has read the 

pleading, motion, or other paper; that to the best of 

the signer's knowledge, information, and belief formed 

after reasonable inquiry it is well grounded in fact and 

is warranted by existing law or a good faith argument 

for the extension, modification, or reversal of existing 

law, and that it is not interposed for any improper 

purpose, such as to harass or to cause unnecessary delay 

or needless increase in the cost of litigation .... 

If a pleading, motion, · or other paper is signed in 

violation of this rule, the court, upon motion or upon 

its own initiative, shall impose ... an appropriate 

sanction, which may include an order to pay to the other 

party or parties the amount of the reasonable expenses 

incurred because of the filing of the pleading, motion, 

or other paper, including a reasonable attorney's fee. 

Thus, a signature on a pleading certifies the party "has conducted 

a reasonable inquiry into the facts and the law and is satisfied 

that the document is well-grounded in both, and is acting without 

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Appellate Case: 91-1344 Document: 010110275147 Date Filed: 07/29/1992 Page: 4
any improper motive." Business Guides, Inc. v. Chromatic 

Communications Enters., Inc., 111 S. Ct. 922, 929 (1991); accord 

Coffey v. Healthtrust, Inc., 955 F.2d ~388, 1393 (10th Cir. 1992); 

White v. General Motors Corp., 908 F.2d 675, 679 (10th Cir. 1990). 

Determining whether an attorney has violated 

Rule 11 involves a consideration of three types of 

issues. The court must consider factual questions 

regarding the nature of the attorney's prefiling inquiry 

and the factual basis of the pleading or other paper. 

Legal issues are raised in considering whether a 

pleading is "warranted by existing law or a good faith 

argument" for changing the law and whether the 

attorney's conduct violated Rule 11. Finally, the 

district court must exercise its discretion to tailor an 

"appropriate sanction." 

Cooter & Gell, 110 S. Ct. at 2457. 

The purpose of Rule 11 is to deter the filing of baseless 

actions in the district courts. Cooter & Gell, 110 s. Ct. at 

2454. The district court applies an objective standard in making 

its Rule 11 determinations and considers whether a reasonable and 

competent attorney would believe in the merits of an argument. 

Dodd Ins. Servs., Inc. v. Royal Ins. Co. of Am., 935 F.2d 1152, 

1155 (10th Cir. 1991). An attorney's good faith belief in the 

merits of an argument is insufficient. White, 908 F.2d at 680. 

The attorney must actually present a colorable claim that is 

objectively reasonable under the circumstances. Id. 

Weintraub maintains there is no factual basis for an award of 

sanctions because the parties essentially agree on the facts. 

Weintraub correctly states that the parties agree that Lexington 

tendered the $16,000.00 check to Cogenco as an offer of settlement 

and that Cogenco kept the check and eventually cashed a $16,000.00 

cashier's check. Cogenco, however, asked for directions on what 

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Appellate Case: 91-1344 Document: 010110275147 Date Filed: 07/29/1992 Page: 5
to do with the initial $16,000.00 check after it specifically 

rejected the proposed settlement. Receiving no direction, it kept 

the check. Furthermore, Cogenco did not actually cash the initial 

check, because Lexington had issued a stop payment on it. Rather, 

Lexington's bank issued a cashier's check after the district court 

entered its judgment on the parties' stipulation and pursuant to 

the garnishment. Even though the parties essentially agree on the 

facts, the facts are such that Weintraub cannot reasonably argue 

that Cogenco should be bound by the terms of the proposed and 

rejected settlement. 

Weintraub also maintains that there is no legal basis for an 

award of sanctions. He argues that the cashing of the cashier's 

check bound Cogenco to the terms of the settlement, despite the 

entry of judgment between the time the initial check was tendered 

and the cashier's check was cashed. The evidence does not support 

Weintraub's argument. Cogenco did not cash the initial check. 

The bank issued a cashier's check after Lexington's bank account 

had been garnished and after the district court entered judgment. 

There is no indication that Cogenco accepted or should be bound by 

the conditions of settlement originally proposed by Lexington. 

Weintraub's argument is not warranted by existing law or a 

reasonable basis for changing the law. 

Weintraub finally argues that Lexington acted reasonably at 

all times during the litigation and did not seek to harass Cogenco 

or cause unnecessary delay. Although Cogenco does not respond to 

this argument, we conclude from the record on appeal that 

Lexington did not act reasonably. Lexington unnecessarily 

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attempted to delay execution of the judgment in this case by 

filing its motions in the Illinois and Colorado district courts. 

II. 

Weintraub argues that if Rule 11 sanctions were proper, the 

district court awarded an excessive amount of attorney's fees to 

Cogenco's attorneys. Furthermore, he submits that Cogenco had a 

duty to mitigate any attorney's fees but failed to do so. 

We review the 

abuse of discretion. 

F.2d 1131, 1132, 

amount of an award of attorney's fees for an 

See Eisenberg v. University of N.M., 936 

1137 (10th Cir. 1991); Melrose v. 

Shearson/American Express, Inc., 898 F.2d 1209, 1214 (7th Cir. 

1990). 

A. 

With regard 

Goldberg and the 

to the attorney's fees request of Richard H. 

law firm of Brenman, Raskin, Friedlob & 

Tenenbaum, P.C., Weintraub argues the attorney's fees award was 

excessive because Goldberg was never counsel of record and was 

merely available to be substitute counsel if attorney William A. 

Powers was called as a witness. Goldberg was never actually 

needed as substitute counsel. Goldberg and his firm requested 

$3,589.25 for 45.8 hours of The district court awarded 

$1,750.00 for 17.5 hours 

work. 

of work, the amount of time Goldberg 

spent himself. The court determined the work done by Goldberg's 

law clerk and colleague duplicated work done by Powers. 

In determining a reasonable amount of time expended, courts 

must consider a potential duplication of services. Ramos v. Lamm, 

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Appellate Case: 91-1344 Document: 010110275147 Date Filed: 07/29/1992 Page: 7
713 F.2d 546, 554 (10th Cir. 1983). 

attorney may be needed sometimes, as was 

case, additional attorneys present a 

duplication of efforts. See id. 

Although more than one 

the situation in this 

greater likelihood of 

Much of the time claimed by Goldberg related to research. 

Weintraub correctly points out that (1) neither Goldberg nor his 

firm were required to and did not file any pleading; (2) counsel 

of record, Powers, prepared and filed the responsive pleading; and 

(3) the pleading filed was nearly identical to one filed in 

Illinois. Additionally, there is no indication that Goldberg did 

independent supplemental research on any issues or that such 

research would even be necessary. See White v. General Motors 

Corp., 908 F.2d at 684 (injured party had duty to mitigate 

expenses by not overresearching); Ramos, 713 F.2d at 554 (if the 

same task is performed by more than one attorney, multiple 

compensation should be denied). 

Weintraub also asserts that Goldberg spent an inordinate 

amount of time familiarizing himself with the facts of the case. 

Again, we agree. The facts in this case are largely undisputed 

and could have been reviewed quickly. 

Weintraub submits that a fee award should be limited to 

thirty minutes, the amount of time Goldberg actually spent at the 

hearing on the motion objecting to the garnishment and seeking to 

enforce the proposed and rejected settlement. Although we agree 

that the district court abused its discretion by awarding the 

amount of attorney's fees it awarded, we cannot conclude that an 

award of attorney's fees for thirty minutes is appropriate. 

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Accordingly, we remand to the district court to reconsider the 

attorney's fees award to Goldberg and his law firm in light of 

this order and judgment. 

B. 

Weintraub argues that the attorney's fees request of 

William A. Powers also was excessive. Powers requested $7,490.51 

for 57.1 hours. The district court awarded $2,021.00 for 20.2 

hours. The court awarded fees only for the time Powers spent 

preparing Cogenco's response to Lexington's motion. Weintraub 

believes that at most 13.7, rather than 20.2 hours, were necessary 

to prepare the response, because the response was similar to the 

one previously filed in Illinois. Although the district court may 

have awarded fees in excess of what we would have awarded, we 

cannot conclude the district court abused its discretion. See 

Eisenberg, 936 F.2d at 1137. 

III. 

Cogenco requests attorney's fees and costs 

pursuant to Fed. R. App. P. 38 and 10th Cir. R. 46.5. 

on appeal, 

In light of 

our reversal on the amount of attorney's fees awarded to Goldberg, 

we disagree with Cogenco's argument that this appeal is frivolous. 

U.S. Indus., Inc. v. Touche Ross & Co., 854 F.2d 1223, 1244 (10th 

Cir. 1988)(failure to prevail at trial does not necessarily imply 

conduct on appeal was vexatious or that grounds for appeal were 

unreasonable or without proper foundation); Republic Resources 

Corp. v. ISI Petroleum w. Caddo Drilling Program 1981, 836 F.2d 

462, 466 (10th Cir. 1987)(when appellant's arguments are 

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Appellate Case: 91-1344 Document: 010110275147 Date Filed: 07/29/1992 Page: 9
meritorious, no attorney's fees are awarded on appeal); Braley v. 

Campbell, 832 F.2d 1504, 1510 (10th Cir. 1987)(appeal is not 

frivolous when appellant's arguments have merit and result on 

appeal is not obvious); Autorama Corp. v. Stewart, 802 F.2d 1284, 

1288 (10th Cir. 1986)(damages are not warranted when appeal 

contains legitimate disputes whose outcomes a reasonable person 

could differ on). Accordingly, the request is DENIED. 

The judgment of the United States District Court for the 

District of Colorado is AFFIRMED in part and REVERSED in part. 

The action is REMANDED to the district court for further 

proceedings on an award of attorney's fees to Goldberg. 

Weintraub's Motion for Leave to File Reply Brief, Instanter is 

GRANTED. 

The mandate shall issue forthwith. 

10 

Entered for the Court 

Wade Brorby 

Circuit Judge 

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