Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-06045/USCOURTS-ca10-89-06045-0/pdf.json

Parties Involved:
Irving A. Hill
Appellant
Ronald M. Hill
Appellant
Hill Resources, Inc.
Appellant
William O. Johnstone
Appellee
Stephen R. Kerr
Appellee

Document Text:

.J 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

HILL RESOURCES, INC., a } 

corporation, IRVING A. HILL, } 

an individual, and RONALD M. } 

HILL, an individual, for } 

themselves and on behalf of } 

all other persons similarly } 

situated, } 

} 

Plaintiffs-Appellants, } 

} 

and } 

} 

ALLAN DeVORE, } 

AUG l 71989 

ROBERT L. HOECKER 

Clerk 

} No. 89-6045 

Appellant, } 

} 

v. } 

} 

STEPHEN R. KERR, an } 

individual, and WILLIAM o. } 

JOHNSTONE, an individual, } 

} 

Defendants-Appellees, } 

} 

MORRISON G. TUCKER, an } 

individual, and UNITED } 

OKLAHOMA BANKSHARES, INC., } 

an Oklahoma bank holding } 

corporation, } 

} 

Defendants. } 

(D.C. Civil No. 88-226-B} 

(W.D. Okla.} 

ORDER AND JUDGMENT* 

Before EBEL, SETH and McWILLIAMS, Circuit Judges. 

*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: 89-6045 Document: 01019975949 Date Filed: 08/17/1989 Page: 1 
• J 

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); Tenth Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

Irving A. Hill, Ronald M. Hill ("the Hills"), and their 

attorney, Allan Devore, appeal the district court's order granting 

Stephen R. Kerr and William O. Johnstone's motion for sanctions 

under Rule 11 of the Federal Rules of Civil Procedure and 

attorney's fees and costs based on those sanctions. We affirm. 

On February 12, 1988, the Hills filed suit against appellees, 

among others, charging common law fraud, violations of the RICO 

Act, 18 U.S.C. §§ 1961-62, and mail fraud, 18 U.S.C. § 1341. 

Appellees moved to dismiss the complaint. The district court 

treated the motion to dismiss as a motion for summary judgment, 

and granted summary judgment in favor of appellees. The Hills 

filed a motion to reconsider the order. Appellees moved for 

sanctions under Rule 11, and attorney's fees and costs. After 

summary judgment, and while their motion to reconsider was 

pending, the Hills filed an amended complaint naming appellees as 

defendants again. Appellees amended their motion for sanctions to 

seek sanctions against Allan Devore as well as the Hills. After 

an extensive hearing, the district court awarded sanctions against 

appellants. 

In the Tenth Circuit we apply an abuse-of-discretion standard 

across the board to all Rule 11 issues. Adamson v. Bowen, 855 

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Appellate Case: 89-6045 Document: 01019975949 Date Filed: 08/17/1989 Page: 2 
. . ' 

F.2d 668, 673 (10th Cir.). Appellants, citing Zaldivar v. City of 

Los Angeles, 780 F.2d 823, 828 (9th Cir.), apparently assume that 

in Rule 11 cases we apply the three-tier standard, which calls for 

de novo review of whether the sanctioned behavior violated Rule 

11. Perhaps for this reason they attempt to reargue their case on 

appeal, rather than demonstrate how the trial court abused its 

discretion in this case. In Adamson v. Bowen, 855 F.2d at 673 

n.6, we expressly rejected the standard espoused in Zaldivar, and 

decline to embrace that standard today. 

Appellants alleged in their complaint that appellees had 

misrepresented the meaning of "prime rate" or "base rate" in 

negotiating a loan with appellants. However, appellants came 

forward with no evidence purported to show that appellees had made 

such misrepresentations. The Hills' depositions in a prior, 

nearly identical case indicated that neither of them was aware of 

any such statements by appellees. At the sanctions hearing, 

Ronald Hill finally testified that appellees made such 

misrepresentations, but the district court apparently discounted 

this eleventh-hour recollection. The Hills had never before 

presented testimony to this effect, either by deposition or 

affidavit, even in opposition to appellees' motion to dismiss. A 

reasonable inquiry would have uncovered the lack of support for 

the allegations against appellees in the Hills' original 

complaint. 

Appellants also appeal the district court's award of 

sanctions based on the Hills' amended complaint naming appellees 

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Appellate Case: 89-6045 Document: 01019975949 Date Filed: 08/17/1989 Page: 3 
as defendants after appellees had won summary judgment on the 

original complaint. Appellants argue that the failure to name 

appellees in their amended complaint would have waived the Hills' 

rights under their pending motion to reconsider and their right to 

appeal the district court's order granting summary judgment. 

Appellants present no case to support this proposition. We agree 

with the district court that including appellees in the amended 

complaint, and forcing them to defend themselves against the same 

accusations upon which they had already prevailed, was 

unreasonable and not warranted by existing law. Furthermore, the 

amended complaint perpetuated the deficiencies of the original 

complaint. We find no abuse of discretion by the trial court. 

The judgment of the district court is AFFIRMED. 

The mandate shall issue forthwith. 

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Entered for the Court 

Oliver Seth 

Circuit Judge 

Appellate Case: 89-6045 Document: 01019975949 Date Filed: 08/17/1989 Page: 4