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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 18, 2011 Decided March 1, 2011

No. 09-7095

BETTY GENE ALI,

APPELLEE

v.

RICHARD L. TOLBERT,

APPELLEE

ANTHONY G. NOBLE,

APPELLANT

Consolidated with 09-7096

Appeals from the United States District Court

for the District of Columbia

(No. 1:02-cv-02271)

Thomas C. Willcox argued the cause for appellee/crossappellant Betty Gene Ali.

Peter F. Axelrad argued the cause for appellee/crossappellee Richard L. Tolbert. Michael S. Steadman, Jr. was on

brief.

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Pamela A. Bresnahan argued the cause for appellant/crossappellee Anthony L. Noble. Elizabeth Treubert Simon was on

brief.

Before: HENDERSON, GARLAND and BROWN, Circuit

Judges.

KAREN LECRAFT HENDERSON, Circuit Judge: Betty Gene

Ali appeals the district court’s grant of summary judgment,

pursuant to Rule 56 of the Federal Rules of Civil Procedure, on

her claim that Richard Tolbert and Anthony L. Noble violated

the District of Columbia Consumer Protection Procedures Act

(CPPA) by inducing her to sell her house to Noble and then

failing to pay her the full amount promised. See Ali v. Mid-Atl.

Settlement Servs., Inc., 640 F. Supp. 2d 1 (D.D.C. 2009). In

addition, Noble appeals the district court’s sanction under Rule

11 of the Federal Rules of Civil Procedure awarding Ali $25,230

for litigation expenses incurred because Noble evaded service of

the complaint and failed to file an answer after service was

effected. See Ali v. Mid-Atl. Settlement Servs., Inc., 235 F.R.D.

1 (D.D.C. 2006). We affirm the summary judgment because the

court correctly concluded on the record before it that Tolbert is

not a “merchant” subject to the CPPA. We vacate the sanction

award because Noble’s conduct did not involve

“[r]epresentations to the Court” made by “presenting to the court

. . . a pleading, written motion, or other paper” sanctionable

under Rule 11 and we remand to the district court to decide

whether to sanction Noble instead under its inherent judicial

authority. 

I.

The record reveals the following facts. In 1998, Ali

inherited a house at 1010 G St. S.E. after her parents died. In

1999, she listed the house for sale for $299,000 but was unable

to sell it. In January 2000, she secured a mortgage on the house

for approximately $100,000. As of July 2000, the mortgage

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balance was approximately $105,000 and Ali was some $11,000

in arrears. Faced with foreclosure, Ali met with an employee of

the “EZ Mortgage” company in Lanham, Maryland to refinance

her mortgage but was turned down. As the meeting ended, Ali

learned that Tolbert, whom she knew from junior high school,

was affiliated with EZ Mortgage and on the premises. She

asked Tolbert—who was an “advertising consultant” at the

company—for assistance in securing a loan but he was unable

to help. In the days following the conversation, Ali telephoned

Tolbert more than once to ask if he wanted to purchase her

property and Tolbert eventually agreed to buy it on behalf of

Noble, whom Tolbert referred to as his “step-son.”

On August 3, 2000, Ali and Noble signed a sales contract

under which Noble was to purchase the property from Ali for

$150,000. They also signed an “Addendum Contract” which

provided that Ali pay six per cent of the sales contract price

toward Noble’s closing costs and which further stated: “Both

parties realize property is facing forecloser [sic]. Property is

sold below market value to prevent forecloser [sic] sale.”

Addendum Contract to D.C. Real Estate Sales Contract, Ali v.

Mid-Atl. Settlement Servs., Inc., C.A. No. 02-2271 (D.D.C. Sept.

17, 2007) (JA 474). Noble paid Ali an immediate deposit of 

$500.00. On August 9, 2000, Noble paid $11,404.53 to Riggs

Bank to bring Ali’s mortgage current and prevent foreclosure.

From that date to the closing on November 21, 2000, Noble

tendered Ali six checks totaling $15,600. 

Ali and Tolbert both attended the closing but Noble did not.

At that time, Ali signed a “HUD-1” settlement sheet that

identified Ali as the seller, Noble as the purchaser and the

purchase price as $150,000. HUD-1 at 1, Ali v. Mid-Atl.

Settlement Servs., Inc., C.A. No. 02-2271 (D.D.C. Oct. 21, 2007)

(Ex. C, Ali’s Resp. to Def. Tolbert’s Mot. for Summ. J) (JA

623). The HUD-1 also stated that Noble was paying Ali

$199.22 for prepaid taxes, increasing the “GROSS AMOUNT

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DUE TO SELLER” to $150,199.22, and listed deductions from

this amount of $105,725.14 to satisfy the existing mortgage,

$300 for a water bill escrow and $9,000 for Noble’s closing

costs, leaving $35,174.08 identified as “CASH TO SELLER.”

Id. Ali also signed a notarized “Agreement” of the same date,

which stated:

I, Betty G. Ali, hereby acknowledge that I have

received a total sum of $29,996.42 from Anthony

Noble for the real property located at 1010 G Street,

S.E., Washington, D.C. All monies advanced through

November 21, 2000 will be reimbursed to Mr. Noble at

closing. Pre pay [sic] rent in the amount of $1,500.00

good thru [sic] January 2 . Grand total of $31,496.42. nd

Agreement, Ali v. Mid-Atl. Settlement Servs., Inc., C.A. No. 02-

2271 (D.D.C. Jan. 24, 2006) (Ex. D, Opp’n to Pl.’s Mot. for

Recons. of Ord. Denying Pl. Atty’s Fees & Req. that Court

Vacate Default J.) (JA 242). The settlement company then

issued Ali a check in the amount of $3,177.66 reflecting the

balance due Ali after these sums were deducted.1

On October 28, 2002, Ali filed an action in District of

Columbia Superior Court, which was removed to the district

court pursuant to 28 U.S.C. § 1441 based on diversity of

citizenship. See Notice of Removal, Ali v. Mid-Atl. Settlement

Servs., Inc., C.A. No. 02-2271 (D.D.C. Nov. 18, 2002). The

amended complaint asserts six counts against Tolbert, Noble or

both but this appeal involves only Count 1 alleging that Tolbert

As the district court noted, this balance is $500 less than the

1

$35,174.08 figure on the HUD-1, which may reflect deduction of the

$500 deposit Noble paid Ali at the time of the sales contract. See Ali

v. Mid-Atlantic, 640 F. Supp. 2d at 5 n.3.

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violated the CPPA, D.C. Code § 28-3904.2

On July 13, 2004, Ali filed a request for entry of default

against Noble on the ground he had not filed an answer despite

having been served multiple times, in both Forest Heights,

Maryland, where he maintained his permanent residence, and in

Philadelphia, where he was attending law school. The clerk of

court entered a default the same day. The court then issued an

order to show cause why the motion for default judgment should

not be granted. Noble moved to set aside the entry of default,

asserting he had not been personally served and therefore was

not on legal notice of the court filings. Ali opposed the motion

and requested Rule 11 sanctions against Noble and his counsel

in the form of attorney’s fees to cover the costs of repeated

service attempts and of responding to Noble’s motion to set

aside default, asserting she had served Noble three times over a

one-year period and characterizing his denial of service as

“frivolous and unfounded.” Pl.’s Resp. to [Noble’s] Mot. to Lift

Entry of Default, at 6, 8, Ali v. Mid-Atl. Settlement Servs., Inc.,

C.A. No. 02-2271 (D.D.C. Oct. 12, 2004) (JA 75, 77). The court

denied the motion to set aside default as “deficient” because it

was “not accompanied by a verified answer as is required by

Local Civil Rule 7(g)” and directed Noble, inter alia, to respond

with supporting affidavits to Ali’s claim that he had been served

with the complaint and to her request for attorney’s fees. Ali

subsequently filed a formal motion for sanctions.

Following additional filings, the court issued a decision on

January 6, 2006 granting the sanctions motion in part. The court

concluded that Ali had indeed effected service on Noble three

times—in November 2002, May 2003 and September

2003—and declared Noble’s counsel “admonished for his role

The other five counts against Tolbert and Noble allege common

2

law fraud, civil conspiracy to defraud, aiding and abetting fraud,

negligence and equitable rescission of the sale.

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in Noble’s failure to respond as required after Noble was served

with the summons and complaint by making factual assertions

that were not based on a reasonable inquiry or supported by the

evidence, and by making fact-based legal arguments that were

not based on a reasonable inquiry into the facts and not

warranted by existing law.” Mem. Op. & Order at 19-20, Ali v.

Mid-Atl. Settlement Servs., Inc., C.A. No. 02-2271 (D.D.C. Jan.

6, 2006) (JA 211-12). The court denied the sanctions motion 3

“in all other respects.” Id. at 20 (JA 212). The court advised

both Noble and his counsel, however, that “any further delays

attributable in whole or in part to any continued baseless

assertion that Noble was not served may result in the imposition

of monetary sanctions” and that a judgment of default and an

order for rescission of the sale would be entered unless Noble

filed a verified answer by January 17, 2006. Id. at 19 (JA 211).

Ali moved for reconsideration of the denial of monetary

sanctions, which the court granted on March 10, 2006. Ali v.

Mid-Atlantic, 235 F.R.D. at 4. In its decision, the court imposed

monetary sanctions on Noble personally, concluding that his

conduct in evading process and failing to file a verified answer,

even after seeking to set aside the entry of default, warranted

Rule 11 sanctions. Id. Specifically, the court found that

“Noble’s attempts to evade service and his four-year delay in

filing a required responsive pleading was willful and part of a

sustained pattern over time that needlessly delayed the progress

of this action and has caused unnecessary expense for Ali.” Id.

The court directed Ali “to submit proof of the fees and expenses

incurred in twice serving Noble in Philadelphia and in the filings

The court noted Ali’s process servers served the complaint by

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hand on Noble’s mother at his permanent home address on November

13, 2002, by hand on the concierge at his apartment in Philadelphia on

May 13, 20003 and, after Noble moved to a new Philadelphia

apartment, by placing the complaint under his door on September 23,

2003 as Noble directed him to do in a telephone conversation.

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related to the entry of default and the motion for default

judgment.” Id. 

Noble filed a motion to reconsider and vacate the sanctions,

asserting that the sanctioned conduct was attributable to his

then-counsel rather than to him. The court denied Noble’s

motion, stating:

Noble was sanctioned because of what he did. He

“played a cat and mouse game in order to evade the

jurisdiction of the court.” Mem. Op. at 6, Mar. 10,

2006. He “elected to ignore repeated summonses.” Id. 

His “attempt to evade service was ‘disingenuous.’ ” 

Id. His pattern of evasion “was willful, deliberate and

sustained[.]” Id. at 7. Those immutable facts are

independent of and unmitigated by how his lawyer

decided to argue those facts or when his lawyer sought

to remedy them.

Order, Ali v. Mid-Atl. Settlement Servs., Inc., C.A. No. 02-2271

(D.D.C. June 2, 2006) (emphasis in original) (JA 330). After

Ali’s counsel filed proof of fees and expenses, as directed, the

court issued a minute order directing Noble to pay Ali $25,230.4

On July 17, 2009, the district court granted summary

judgment in favor of Tolbert and Noble on all six counts against

them, concluding as to Count 1 that Tolbert was not a

“merchant” subject to liability under the CPPA. Noble timely

appealed the sanctions order and Ali timely appealed the

summary judgment. We treat the two appeals separately.

The court subsequently directed the sanctions be “payable to

4

plaintiff’s counsel, alone.” Order, Ali v. Mid-Atl. Settlement Servs.,

Inc., C.A. No. 02-2271 (D.D.C. June 15, 2007) (JA 349).

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II.

A. Noble’s Appeal: Rule 11 Sanctions 

“Sanctions for violation of Federal Rule of Civil Procedure

11(b) are reviewable for abuse of discretion.” Burns v. George

Basilikas Trust, 599 F.3d 673, 677 (D.C. Cir. 2010) (citing

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990)).

We conclude that the sanction award against Noble cannot stand

because it is not authorized by the language of Rule 11. See

Lucas v. Duncan, 574 F.3d 772, 776-77 (D.C. Cir. 2010)

(vacating Rule 11 sanction award because rationale for

magistrate judge’s sanction had “no basis in the text” of Rule 11

and “trial court ‘necessarily abuse[s] its discretion if it base[s]

its ruling on an erroneous view of the law’ ” (quoting Cooter &

Gell, 496 U.S. at 405)) (alterations in original).

By its terms, Rule 11 applies to “[r]epresentations to the

Court” made in “presenting to the court (whether by signing,

filing, submitting, or later advocating) a pleading, written

motion, or other paper.” Fed R. Civ. P. 11(b) (2006). In Hilton

Hotels Corp. v. Banov, 899 F.2d 40 (D.C. Cir. 1990), we noted

that six other circuits had concluded, applying the version of

Rule 11 then in effect, the “emphasis on the need to perform a

‘reasonable inquiry’ before ‘sign[ing]’ a ‘pleading, motion, or

other paper’ suggests that the rule authorizes sanctioning an

attorney only for unreasonably filing such a submission.” 899

F.2d at 44-45 (emphasis in original)’ see also Chambers v.

NASCO, Inc., 501 U.S. 32, 41 (1991) (“Rule 11 . . . governs

only papers filed with a court”). The current version of the

Rule, promulgated in 1993, is at least as emphatic in its focus on

“Representations to the Court” in “a pleading, written motion,

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or other paper” that is “present[ed] to the court.” See Milltex 5

Indus. Corp. v. Jacquard Lace Co., 55 F.3d 34, 37 n.5 (2d Cir.

1995) (“In the instant case, the district court found Rule 11 of

the Federal Rules of Civil Procedure inapplicable because the

misconduct it observed did not involve any pleading or paper

submitted to the court. We find this aspect of the district court's

decision unexceptionable.”) (internal citation omitted). In this

case, the court made clear that Noble’s sanctionable conduct was

not his representation in a document presented to the court but

the failure to present a document—namely, a verified

answer—in response both to the summons and complaint served

Current Rule 11(c) authorizes the court to “impose an

5

appropriate sanction on any attorney, law firm, or party” that it

determines has violated Rule 11(b). Fed. R. Civ. P. 11(b)(1) (2010).

Rule 11(b), titled “Representations to the Court,” provides that “[b]y

presenting to the court a pleading, written motion, or other

paper—whether by signing, filing, submitting, or later advocating

it—an attorney or unrepresented party certifies that to the best of the

person’s knowledge, information, and belief, formed after an inquiry

reasonable under the circumstances” the presented paper meets

specified standards in that (1) it is not “presented for any improper

purpose,” (2) its “claims, defenses, and other legal contentions” are

warranted under the law (3) its “factual contentions” are at least likely

to “have evidentiary support” and (4) its “denials of factual

contentions” are reasonably warranted “on the evidence” or on “a lack

of information.” Id. 11(b)(1)-(4). The previous version authorized

sanctions against a party or counsel for violating its directive that

“[e]very pleading, motion, and other paper” be signed by counsel or

by the party if unrepresented and that the signature “constitute[d] a

certificate by the signer that the signer ha[d] read the pleading, motion,

or other paper; that to the best of the signer’s knowledge, information,

and belief formed after reasonable inquiry it [wa]s well grounded in

fact and [wa]s warranted by existing law or a good faith argument for

the extension, modification, or reversal of existing law, and that it

[was] not interposed for any improper purpose.” Fed. R. Civ. P. 11

(1990).

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on Noble three times and to the motion for entry of default—in

combination with the “cat and mouse game” Noble played to

evade service. See 235 F.R.D. at 4. Because the sanctioned

misconduct did not involve representations in a document

presented to the court as required under Rule 11, we vacate the

sanction award. 

Notwithstanding Noble’s conduct is not sanctionable under

Rule 11, sanctions may nonetheless be warranted under the

district court’s inherent authority, which “enables courts to

protect their institutional integrity and to guard against abuses

of the judicial process with contempt citations, fines, awards of

attorneys’ fees, and such other orders and sanctions as they find

necessary, including even dismissals and default judgments.”

Shepherd v. Am. Broad. Cos., 62 F.3d 1469, 1472 (D.C. Cir.

1995); see generally Chambers, 501 U.S. at 43-46 (describing

extent of inherent judicial authority). Accordingly, we remand

for the district court to consider whether to exercise its inherent

authority to sanction Noble. To support a sanction under this

authority, the court must make a finding by clear and convincing

evidence that Noble committed sanctionable misconduct that is

tantamount to bad faith. Shepherd, 62 F.3d at 1472 (clear and

convincing evidence); Roadway Exp., Inc. v. Piper, 447 U.S.

752, 767 (1980) (bad faith). 

B. Ali’s Appeal: District of Columbia Consumer Protection

Procedures Act 

We review a grant of summary judgment de novo, viewing

the evidence in the light most favorable to the nonmoving party.

Tate v. District of Columbia, 627 F.3d 904, 908 (D.C. Cir.

2010). Summary judgment is appropriate “ ‘if the pleadings, the

discovery and disclosure materials on file, and any affidavits

show that there is no genuine issue as to any material fact and

that the movant is entitled to judgment as a matter of law.’ ” Id.

(quoting Fed. R. Civ. P. 56(c)) (other internal quotation

omitted). Applying this standard, we conclude the district court

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properly granted summary judgment on Count 1 of the amended

complaint, the only ruling Ali challenges on appeal. See Ali Br.

23-30.

Count 1 alleges that Tolbert, in “brokering the sale of

1010[ ]G Street,” violated the CPPA by “ha[ving] Ms. Ali agree

to sell 1010 G Street on unconscionable terms, in violation of

subsection (r)” of D.C. Code § 28-3904—which makes it a

violation of the CPPA “for any person to . . . make or enforce

unconscionable terms or provisions of sales or leases”—and by

doing so “with full knowledge of [Ali’s] inability to negotiate a

fair price for the sale of her property, or to avoid foreclosure by

negotiations with her lender.” Am. Compl. ¶¶ 44, 47, Ali v.

Mid-Atl. Settlement Servs., Inc., C.A. No. 02-2271 (D.D.C. Mar.

31, 2004) (JA 35-36). The district court granted summary

judgment on Count 1 on the ground that “the pleadings and the

evidence demonstrate there is no genuine issue of material fact

as to whether Tolbert was a merchant under the [CPPA]” and he

therefore cannot be held liable thereunder. Ali v. Mid-Atl., 640

F. Supp. 2d at 7. The district court was correct. 

“In answering questions involving the proper interpretation

of D.C. statutes, this court relies on the construction of these

laws by the D.C. Court of Appeals.” Poole v. Kelly, 954 F.2d

760, 761 (D.C. Cir. 1992). The D.C. Court of Appeals has

repeatedly concluded that the CPPA “ ‘was designed to police

trade practices arising only out of consumer-merchant

relationships.’ ” Snowder v. District of Columbia, 949 A.2d

590, 599 (D.C. 2008) (quoting Howard v. Riggs Nat’l Bank, 432

A.2d 701, 709 (D.C. 1981)) (citingCarleton v. Winter, 901 A.2d

174, 179 (D.C. 2006); DeBerry v. First Gov’t Mortg. &

Investors Corp., 743 A.2d 699, 701 (D.C.1999)). At the time of

the sale of Ali’s property, the CPPA defined “merchant” as a

“person who does or would sell, lease (to), or transfer, either

directly or indirectly, consumer goods or services, or a person

who does or would supply the goods or services which are or

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would be the subject matter of a trade practice.” D.C. Code

§ 28-3901(a)(3) (2000). Ali has pointed to no evidence in the

record even suggesting Tolbert supplied, or held himself out as

a person who would supply, any goods or services to Ali in

connection with her ownership or sale of the house. At most,

Tolbert assisted Noble in purchasing the property, placing him

on the “consume” rather than the supply side of the transaction.

See Howard, 432 A.2d at 709 (merchant “must be a ‘person’

connected with the ‘supply’ side of a consumer transaction”

(quoting Council of the District of Columbia, Comm. on Pub.

Servs. & Consumer Affairs, Rep. on Bill 1-253, at 13 (Mar. 24,

1976)).6

Ali contends Tolbert’s conduct was comparable to that of

the defendant in Byrd v. Jackson, 902 A.2d 778 (D.C. 2006),

In 2007, the District of Columbia City Council amended the

6

definition of “merchant” by, inter alia, adding the qualification that a

person supply goods or services “in the ordinary course of business.”

Nonprofit Organizations Oversight Improvement Amendment Act of

2007, § 2(a), 2007 D.C. Legis. Serv. (West). This requirement was

not met here as Ali identified no evidence that Tolbert was in the

“business” of brokering real estate transactions, refinancing

mortgages, curing credit problems or any similar service. In fact, she

acknowledged in district court that Tolbert’s role at EZ Mortgage was

as an “advertising consultant.” Resp. to Tolbert Statement of

Undisputed Facts ¶ 10, Ali v. Mid-Atl. Settlement Servs., Inc., C.A. No.

02-2271 (D.D.C. Oct. 21, 2007) (JA 593). We will not apply the 2007

amendment retroactively, however, because there is “no indication

that the Council intended [the change] to be retroactive.” Childs v.

Purll, 882 A.2d 227, 238 (D.C. 2005) (declining to apply retroactively

2000 CPPA amendment eliminating limit on jurisdiction of D.C.

Department of Consumer and Regulatory Affairs (citing Mayo v.

District of Columbia Dep’t of Employment Servs., 738 A.2d 807, 811

(D.C.1999) (“retrospective operation will not be given to a statute . . .

unless such be the unequivocal and inflexible import of the terms”)

(ellipsis in Childs))) (bracketed alteration added).

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who was found to be a “merchant” under the CPPA because he

offered to assist a homeowner—the plaintiff’s late

grandmother—prevent foreclosure on her home. In Byrd,

however, the court found “there was ample evidence supporting

the judge’s finding that [the defendant] had advertised himself

to [the homeowner] as one who would help her avoid

foreclosure, and that she dealt with him on that understanding”:

he had mailed the decedent a “notice advising her of the services

offered” by his company, which typically promoted the

company’s staff as “foreclosure specialists” with “a number of

creative programs” that had helped many homeowners keep

their homes and would do the same for the recipient. 902 A.2d

at 781. Ali has identified no such evidence in this record to

support her claim that, “[a]s in the Byrd case, Mr. Tolbert

offered his services to ‘help’ [Ali].” Ali Br. 28 (italics omitted

in original). Because Ali “failed to make a sufficient showing

on an essential element of her case with respect to which she has

the burden of proof,” the grant of summary judgment to Tolbert

on Count 1 was appropriate. Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986).7

In support of this claim, Ali cites only Noble’s interrogatory

7

response stating that, by advancing funds to stave off foreclosure

pending his purchase of the property, he “believed that he was helping

[Ali] minimize any damage to her financial records by her previous

nonpayments, while also helping her secure a chance of home

ownership in the future.” Ali Br. 20 (citing Def. Noble’s Third

Supplemental Resps. to Pl.’s First Set of Interrogs. at 10, Ali v. MidAtl. Settlement Servs., Inc., C.A. No. 02-2271 (D.D.C. Oct. 21, 2007)

(Ex. G, Pl.’s Mem. in Resp. to Tolbert’s Mot. for Summ. J.) (JA 639).

This statement does nothing to satisfy Ali’s burden to “designate

‘specific facts showing that there is a genuine issue for trial’ ” as to

whether Tolbert held himself out to Ali as a merchant—“an essential

element of her case.” Celotex, 477 U.S. at 323-24 (quoting Fed. R.

Civ. P. 56(e)). Ali also claims Tolbert was a merchant because he

“benefitted from the transaction by acquiring a beneficial interest in

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For the foregoing reasons, we affirm the district court’s

grant of summary judgment on Count 1 of the amended

complaint, vacate its Rule 11 sanction award and remand for the

court to consider whether to impose sanctions under its inherent

authority.

So ordered.

the Property.” Ali Br. 29. Not only is this claim unsupported in the

record, it is quite beside the point as the CPPA’s definition of

“merchant” makes no reference to whether a person derives a benefit

from a challenged transaction. In any event, as noted earlier, Tolbert’s

participation in the purchase of Ali’s house does not place him on the

supply side of the transaction. See Howard, 432 A.2d at 709.

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