## 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, * *-2- 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 Ho norable Pasco M. Bowman became Chief Judge of the United State s 1 Court of Appeals for the Eighth Circuit on April 18, 1998. Earlier cases were: Kansas Pub lic 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. , -3- 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, Circui t 1 Judges.

_____________ JOHN R. GIBSON, Circuit Judge. Kansas Public Employees Ret irement System appeals from orders of the district
cour t 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 th e statute authorizes awards against KPERS's attorneys. K PERS argues that the fees and costs wer e not justified, as it did not act unreasonably or in bad faith. KPERS als o 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 Ass ociates, Inc., and KPMGPeat 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 260 F.3 d 1304 (8th Cir.1995) ( KPERS II ); Kansas Public Employees Retiremen t

System v. Reimer & Koger Assoc., Inc. , 61 F.3d 608 (8th Cir. 1995) ( KPER S 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 Retiremen t System v. Russell , 140 F.3d 748 (8th Cir.1998) ( KPERS VII ). -4- & Koger A ssociates, 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 limitation s should be applied, rather than the ten-year statute created by the Kansas legislatur e expres sly for actions against KPERS. 61 F.3d at 614-15. Shortly after our opinion , KPERS filed a sta

te court suit in Shawnee County, Kansas against Reimer and Koger, Michael Russell, and Shook Hardy, alleging the same claims and damages asserted in this lit igation, and also brought suit against Peat Marwick in the same venue. I n addition, it filed a third motion to remand this case to Shawnee County, Kansas. The distric t court issued four preliminary injunctions on September 29, 1995, prohibitin g KPER S from filing or pursuing additional suits arising out of the Home Saving s 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 connec tion with their applications for preliminary injunction, the Reimer and Koger defendants and the Peat Marwick defendants moved, pursuant to 28 U.S.C. § 19 27, for an award of the attorneys' fees and costs they incurred in seeking th e in junction. The sanctions were specifically sought against KPERS's counsel. Whil e KPERS filed suggestions in opposition to the preliminary injunction, it made n o response to the request for the section 1927 sanctions.-5-

The district court granted the injunction, but reserved the fee request issue.
After our opinion in KPERS IVupholding 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 unreas onable behavior and bad faith when i t brought suit against the Reimer & Koger defendants on Augus t 25, 1995, in Kansas state court. The claims asserted against the Reimer & Koger defendants in the Kans as case were substantially identical to the claims KPERS asserted against those defendant s in this case. The Kansas cas e was brought only one month after KPERS received the advers e ruling on the statute of limitations issue from the Court of Appeals which was four years after KPERS first brought sui t against the Reimer & Koger defen dants in this case. The timing of the filing of the Kansas case wa s not coincidental. KPERS admit ted in briefs submitted to this court and in a statement t o the media that it brought the Kansas case in an effort t o ob taina favorable decision in the Kansas courts on the statute o f limitations issue. See KPERS v. Reimer & Koger , 77 F.3d at 1066. Furthermore, by filing the Kansas case, KPERS unreasonably and vexati ously delayed the processing of this case. Filing the Kansas cas e distracted both the other part ies 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, KPER S mu ltiplied

the proceedings for the Reimer & Koger defendants thereb y 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 fe e award, but instead outlined the procedure under which the parties should attempt t o ag ree on the proper amount. The court did not rule on the Peat Marwick defendants ' fee request.-6-

A week af

ter the award of fees to the Reimer & Koger defendants, the Peat Marwick defendants renewed t heir motion for an award of fees. KPERS asked for the opportunity to address th e 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 & Koge r defendants. The court entered an order asking the defendants to show cause why the fee award i n the Reimer & Koger defendants' favor should not be withdrawn. Th e Reimer & Koger defend ants and the Peat Marwick defendants responded, but KPERS didnot. The court then entered an order on February 27, 1997, awarding the Reimer & Koger defendants fees in the $10,964.65 amount stipulated by t he parties and holding that the Peat Marwick defendants were also entitled to fees. The court ordered th e 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 Marwi ck defendants, relying on Fed. R. Civ. P. 59 and 60. The court then denied the Rule 59 a nd 60 motion. On May 15, 1991, the court awarded the Peat Marwic k 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 outthat the awards were erroneously entered against KPERS itself, whereas sectio n 19 27 only authorizes an award against KPERS's counsel. The defendants sought th e award a gainst KPERS's counsel, as authorized by section 1927. In this respect th e districtcour t erred, but we have authority to modify the order to eliminate this error

. Under 28 U.S.C. § 2106 (1994) we may modify anyorder brought before us, which we have do ne 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 w ere not justified on the facts, and that its acts were not objectively un reasonable or in bad faith. KPERS waived its opportunity to oppose the Reimer & Koger defendants' section 1927-7-

motion, and the arguments that it attempts to assert here have not been preserved, a s 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 pu rsuant to Fed. R. Civ. P. 59(e) to alter or amend the judgment, nor did i t seek relief u nder Fed. R. Civ. P. 60(b). Seventeen days after the entry of the order , KPERS wr ote a letter to the district court seeking the opportunity to brief th e appropriateness of the award. The district court stated that KPERS's letter was not a motion in conformity with Rul e 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 anypersuasive argument for disturbing the Augu st2 order. We therefore conclude that KPERS waived its objections to th e Reimer & Koger award.

Atany 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). KPER S has not established that the district court clearly erred inthe 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 bas ed 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 i n awarding the fee. It is relevant that KPERS also found it desirable t o retai n Chicago counsel. See Avalon Cinema Corp. v. Thompson , 689 F.2d 137, 14 1 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 counse l $26,292. 50. The district court gave careful study to the application for fees, as i s evident from its order, and did not err in this respect.-8-

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 o f record in this case rather than agai nst 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.