United States Court of Appeals

FOR THE EIGHTH CIRCUIT

 _____________

 No. 97-1880

 _____________

Kansas Public Employees Retirement *

System, *

*

Plaintiff - Appellant *

*

v. *

*

Reimer & Koger Associates, a Kansas *

Corporation; Ronald Reimer, an *

individual; Kenneth H. Koger, an *

individual; Clifford W. Shinski, an *

individual; Brent Messick, an * Appeals from the United States

individual; Robert Crew, an individual, * District Court for the Western

* District of Missouri.

Defendants - Appellees *

*

Sherman Dreiseszun, an individual; *

I. I. Ozar, an individual; Frank Sebree, *

an individual; Michael K. Russell; an *

individual; Gage & Tucker, a Law *

Partnership; Peat, Marwick, Mitchell *

& Co., an accountancy firm; KPMG *

Peat Marwick, an accountancy firm; *

Robert Spence, an individual; Marilyn *

J., Co-Executor of the Estate of Frank *

S. Morgan, *

*
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Defendants. *

 _____________

 No. 97-2811

 _____________

Kansas Public Employees Retirement *

System; *

*

Plaintiff - Appellant, *

*

Robert Crew, an individual, *

*

Plaintiff *

*

v. *

*

Reimer & Koger Associates; Ronald *

Reimer, an individual; Kenneth H. *

Koger, an individual; Clifford W. *

Shinski, an individual; Brent Messick, *

an individual; Sherman Dreiseszun, an *

individual; I. I. Ozar, an individual; *

Frank Sebree, an individual; Michael *

K. Russell, an individual; Gage & *

Tucker, a law partnership; Peat, *

Marwick, Mitchell & Co., an *

accountancy firm, *

*

Defendants *

*

KPMG Peat Marwick, an accountancy *

firm; Robert Spence, an individual; *

*

Defendants - Appellees *

*

Thomas S. Morgan, co-executor of the *
The Honorable Pasco M. Bowman became Chief Judge of the United States

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Court of Appeals for the Eighth Circuit on April 18, 1998.

Earlier cases were: Kansas Public Employees Retirement System v. Reimer & 2

Koger Assoc., Inc., 4 F.3d 614 (8th Cir. 1993) (KPERS I), cert. denied, 511 U.S. 1126

(1994); Kansas Public Employees Retirement System v. Reimer & Koger Assoc., Inc.,

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estate of Frank S. Morgan; Marilyn J., *

Co-Executor of the Estate of Frank S. *

Morgan, *

*

Defendants. *

 

 _____________

Submitted: January 13, 1998

Filed: January 14, 1999

_____________

Before BOWMAN, Chief Judge, McMILLIAN, and JOHN R. GIBSON, Circuit

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Judges.

_____________

JOHN R. GIBSON, Circuit Judge.

Kansas Public Employees Retirement System appeals from orders of the district

court awarding attorneys fees and costs against it under 28 U.S.C. § 1927 (1994).

KPERS points out that the awards were entered against KPERS itself, whereas the

statute authorizes awards against KPERS's attorneys. KPERS argues that the fees and

costs were not justified, as it did not act unreasonably or in bad faith. KPERS also

contends that the award in favor of Peat Marwick is excessive. We affirm the orders

of the district court as modified.

The litigation brought by KPERS against Reimer and Koger Associates, Inc., and

KPMG Peat Marwick, as well as numerous other parties, is now before this court for

the eighth time. The controversy before us follows our decision in KPERS v. Reimer 2
60 F.3d 1304 (8th Cir.1995) (KPERS II); Kansas Public Employees Retirement

System v. Reimer & Koger Assoc., Inc., 61 F.3d 608 (8th Cir. 1995) (KPERS III), cert.

denied, 516 U.S. 1114 (1996); Kansas Public Employees Retirement System v. Reimer

& Koger Assoc., Inc., 77 F.3d 1063 (8th Cir.)(KPERS IV), cert. denied, 117 S. Ct. 359

(1996); In re Kansas Public Employees Retirement System, 85 F.3d 1353 (8th Cir.

1996) (KPERS V); Kansas Public Employees Retirement System v. Blackwell,

Sanders, Matheny, Weary & Lombardi, L.C., 114 F.3d 679 (8th Cir. 1997) (KPERS

VI), cert. denied, 118 S. Ct. 738 (1998); and Kansas Public Employees Retirement

System v. Russell, 140 F.3d 748 (8th Cir.1998) (KPERS VII).

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& Koger Associates, Inc., 61 F.3d 608 (8th Cir. 1995) (KPERS III), cert. denied, 516

U.S. 1114 (1996), in which we held that the Kansas two-year statute of limitations

should be applied, rather than the ten-year statute created by the Kansas legislature

expressly for actions against KPERS. 61 F.3d at 614-15. Shortly after our opinion,

KPERS filed a state court suit in Shawnee County, Kansas against Reimer and Koger,

Michael Russell, and Shook Hardy, alleging the same claims and damages asserted in

this litigation, and also brought suit against Peat Marwick in the same venue. In

addition, it filed a third motion to remand this case to Shawnee County, Kansas. The

district court issued four preliminary injunctions on September 29, 1995, prohibiting

KPERS from filing or pursuing additional suits arising out of the Home Savings

investments against these parties. We affirmed this order in KPERS v. Reimer &

Koger, 77 F.3d 1063, 1070 (8th Cir.) (KPERS IV), cert. denied, 117 S. Ct. 359 (1996).

In connection with their applications for preliminary injunction, the Reimer and

Koger defendants and the Peat Marwick defendants moved, pursuant to 28 U.S.C. §

1927, for an award of the attorneys' fees and costs they incurred in seeking the

injunction. The sanctions were specifically sought against KPERS's counsel. While

KPERS filed suggestions in opposition to the preliminary injunction, it made no

response to the request for the section 1927 sanctions.
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The district court granted the injunction, but reserved the fee request issue. 

After our opinion in KPERS IV upholding the preliminary injunction, the district

court granted the Reimer & Koger defendants' motion for section 1927 fees and costs.

In doing so, the district court stated:

KPERS acted with objectively unreasonable behavior and bad faith

when it brought suit against the Reimer & Koger defendants on August

25, 1995, in Kansas state court. The claims asserted against the Reimer

& Koger defendants in the Kansas case were substantially identical to the

claims KPERS asserted against those defendants in this case. The Kansas

case was brought only one month after KPERS received the adverse

ruling on the statute of limitations issue from the Court of Appeals which

was four years after KPERS first brought suit against the Reimer & Koger

defendants in this case. The timing of the filing of the Kansas case was

not coincidental. KPERS admitted in briefs submitted to this court and in

a statement to the media that it brought the Kansas case in an effort to

obtain a favorable decision in the Kansas courts on the statute of

limitations issue. See KPERS v. Reimer & Koger, 77 F.3d at 1066.

Furthermore, by filing the Kansas case, KPERS unreasonably and

vexatiously delayed the processing of this case. Filing the Kansas case

distracted both the other parties in this case and the court from our efforts

to resolve the issues in this case in an efficient and expeditious manner.

In addition, by filing a parallel suit in Kansas state court, KPERS

multiplied the proceedings for the Reimer & Koger defendants thereby

unreasonably increasing the expense of the defense of this case.

Order of Aug. 2, 1996, slip. op. at 3-4. The court did not set the amount of the fee

award, but instead outlined the procedure under which the parties should attempt to

agree on the proper amount. The court did not rule on the Peat Marwick defendants'

fee request.
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A week after the award of fees to the Reimer & Koger defendants, the Peat

Marwick defendants renewed their motion for an award of fees. KPERS asked for the

opportunity to address the court on the issue of the fees awards, and on September 23,

1996, filed a brief opposing the award of section 1927 fees to the Reimer & Koger

defendants. The court entered an order asking the defendants to show cause why the

fee award in the Reimer & Koger defendants' favor should not be withdrawn. The

Reimer & Koger defendants and the Peat Marwick defendants responded, but KPERS

did not. The court then entered an order on February 27, 1997, awarding the Reimer

& Koger defendants fees in the $10,964.65 amount stipulated by the parties and holding

that the Peat Marwick defendants were also entitled to fees. The court ordered the

parties to attempt to agree on an amount for the Peat Marwick defendants' fees, but the

parties did not so agree.

On March 10, 1997, KPERS moved to reconsider the award of fees to the Peat

Marwick defendants, relying on Fed. R. Civ. P. 59 and 60. The court then denied the

Rule 59 and 60 motion. On May 15, 1991, the court awarded the Peat Marwick

defendants fees and expenses in the amount of $25,014.15. 

KPERS's arguments need not detain us long. The first has merit. KPERS points

out that the awards were erroneously entered against KPERS itself, whereas section

1927 only authorizes an award against KPERS's counsel. The defendants sought the

award against KPERS's counsel, as authorized by section 1927. In this respect the

district court erred, but we have authority to modify the order to eliminate this error.

Under 28 U.S.C. § 2106 (1994) we may modify any order brought before us, which we

have done in the past. See Lindquist & Vennum v. FDIC, 103 F.3d 1409, 1421 (8th

Cir.), cert. denied, 118 S. Ct. 77 (1997).

We reject KPERS's arguments that the attorneys' fees and costs were not justified

on the facts, and that its acts were not objectively unreasonable or in bad faith. KPERS

waived its opportunity to oppose the Reimer & Koger defendants' section 1927
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motion, and the arguments that it attempts to assert here have not been preserved, as

they were not presented to the district court until after it had ruled that the Reimer &

Koger defendants were entitled to the fees. Following the entry of the district court's

order awarding fees to the Reimer & Koger defendants, KPERS did not move within

ten days pursuant to Fed. R. Civ. P. 59(e) to alter or amend the judgment, nor did it

seek relief under Fed. R. Civ. P. 60(b). Seventeen days after the entry of the order,

KPERS wrote a letter to the district court seeking the opportunity to brief the

appropriateness of the award. The district court stated that KPERS's letter was not a

motion in conformity with Rule 7 and Rule 10 of the Federal Rules of Civil Procedure.

KPERS thereafter submitted what the district court characterized as an unsolicited brief;

the court stated that the brief did not contain any persuasive argument for disturbing the

August 2 order. We therefore conclude that KPERS waived its objections to the

Reimer & Koger award.

At any rate, we review the district court's orders only for abuse of discretion.

Gundacker v. Unisys Corp., 151 F.3d 842, 849 (8 Cir. 1998), pet'n for cert. filed, No. th

98-763 (Nov. 5, 1998). KPERS has not established that the district court clearly erred

in the factual recitations supporting the awards of costs and fees under section 1927,

nor that there was an abuse of discretion in concluding that KPERS acted unreasonably

and in bad faith.

As for the amount of the award, while it is true that the fees and costs awarded

to Peat Marwick were based on Chicago hourly rates which were higher than the rates

of Kansas City counsel, we cannot conclude that the district court erred or abused its

discretion in awarding the fee. It is relevant that KPERS also found it desirable to

retain Chicago counsel. See Avalon Cinema Corp. v. Thompson, 689 F.2d 137, 141

n.7 (8 Cir. 1982). It is also significant that the district court awarded to Peat Marwick th

fees and costs in the amount of $25,014.15, while it had actually paid its counsel

$26,292.50. The district court gave careful study to the application for fees, as is

evident from its order, and did not err in this respect.
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Accordingly, we modify the district court's orders to provide, in accordance with

28 U.S.C. § 1927, that the award of costs and fees be against KPERS's counsel of

record in this case rather than against KPERS itself. In all other respects, the orders of

the district court are affirmed.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.