Opinion ID: 2259440
Heading Depth: 1
Heading Rank: 2

Heading: the court's findings of fact

Text: Appellants make numerous challenges to the trial court's findings of fact and conclusions of law. Most of them, reduced to essentials, are contentions that the evidence was insufficient to support the findings, and hence that the imposition of sanctions against each and all of them was legally erroneous. Intertwined with these assertions are others of a more purely legal nature. We will strive to address them all in this section of our opinion even though, strictly speaking, they are not all claims of evidentiary insufficiency. Our standard of review is well established. In a case tried without a jury, we address legal issues de novo, but the judge's findings of fact can be reversed only if they are plainly wrong or without evidence to support [them]. D.C.Code § 17-305(a) (1997); see, e.g., Washington Medical Center v. Holle, 573 A.2d 1269, 1284 (D.C.1990); Simpson v. Chesapeake & Potomac Telephone Co., 522 A.2d 880, 885 (D.C.1987). Applying this standard, we hold that the findings as to each appellant are amply supported by the evidence.
Dr. Jemison claims that because he was not a party to the underlying lawsuit, the court had no jurisdiction to assess attorneys' fees and punitive damages against him. The complaint names only a singular defendant, National Baptist Convention, USA, Inc., listing President, T.J. Jemison, Sr. in lower-case letters as the person to be served with process. Similarly, the TRO application requests enjoining the National Baptist Convention, USA, Inc. and does not mention Jemison. Dr. Jemison, however, does not offer any legal support for the proposition that the court has no jurisdiction to sanction a non-party, and we conclude, in the particular circumstances of this case, that the court had the power to do so. The trial court's authority to sanction Dr. Jemison was based on his involvement in the fraudulent scheme and the filing of the suit that arose from it, even though he was technically not a party. Jemison arranged for the filing of a collusive lawsuit and was actively involved in the submission of forged documents to the court. The evidence showed that Jemison wired legal fees directly to Mr. Mundy, knowing that Mundy was filing the suit. Jemison also forwarded to Mundy a letter to himself from Dr. Allen, referring to complaints about election irregularities, in order to bolster the TRO application. This letter was written by Dr. Allen at the request of Dr. Jemison and simply acknowledged complaints that Jemison himself had made. Probably the most egregious of Jemison's activities was the fabrication of an exchange of letters between himself and Nixon, which he hoped would lend credence to the suggestion of massive irregularities so as to require court intervention. The letter bearing Nixon's signature was never seen by Nixon; it had been forged by Jemison and Fleming. The letter signed by Jemison was carefully tailored to respond to the fabricated letter which purportedly came from Nixon. Both letters were then sent to Mr. Mundy, along with the letter from Dr. Allen. Jemison contends (without citing a single case) that because he was not a named party to the litigation, the trial court had no power to impose sanctions on him for his involvement in the fraudulent activities which culminated in the filing of a collusive lawsuit. But whether he was or was not a party is not the real issue. Rather, as appellees point out, the issue is whether the trial court had personal jurisdiction over Dr. Jemison which would enable the court to impose sanctions on him for his wrongful conduct. [5] We note, first of all, that Jemison never raised his not a party claim in the trial court until long after the sanctions order was entered. It first surfaced in his motion for reconsideration (which we shall address in part V of this opinion), filed more than eight months after issuance of the order. It is settled law that a lack of personal jurisdiction can be waived, and we conclude that Jemison waived it in this case by failing to raise it at any time before filing the motion for reconsideration. We agree with appellees that one cannot, after receiving an unfavorable ruling from the trial judge, concoct objections for use on appeal. Copeland v. Marshall, 205 U.S.App.D.C. 390, 415, 641 F.2d 880, 905 (1980) (en banc). But even assuming, for the sake of argument, that the claim was adequately preserved by its inclusion in the motion for reconsideration, we would have to reject it. The Supreme Court has stated that if in the informed discretion of the court, neither the statute nor the rules are up to the task, the court may safely rely on its inherent power to sanction those who engage in bad faith conduct in the course of litigation. Chambers v. NASCO, Inc., 501 U.S. 32, 50, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991). Although in Chambers the sanctioned person was an actual party to the case, a recent case in the Ninth Circuit used similar reasoning to affirm the imposition of attorneys' fees against a non-party, in circumstances comparable to what we have here. Corder v. Howard Johnson & Co., 53 F.3d 225 (9th Cir.1994), involved a dispute over the management of a private pension plan; the suit alleged a breach of fiduciary duty by the plan's investment advisor. After ruling on the merits of the underlying claim, the trial court awarded attorneys' fees against Gary Baugh, the president of the company that had established the plan. Even though he was not a party to the litigation in his individual capacity, [6] the court found that Mr. Baugh had induced the Beneficiaries to sue [the investment advisor] and was motivated to do so to spread the loss resulting from the Beneficiaries' action against him. Id. at 232. Expressly rejecting Baugh's claim that the trial court had erred in assessing attorneys' fees against him because he was not a party, the court held that even in the absence of statutory authority, a court may impose attorney's fees against a non-party as an exercise of the court's inherent power to impose sanctions to curb abusive litigation practices. Id. (citations omitted). Similarly, in Lockary v. Kayfetz, 974 F.2d 1166 (9th Cir.1992), cert. denied, 508 U.S. 931, 113 S.Ct. 2397, 124 L.Ed.2d 298 (1993), the same court affirmed the imposition of sanctions on a non-party corporation (PLF) which had contacted and organized the plaintiffs and paid for the litigation ... [and had] sometimes... held itself out as the representative of the plaintiffs, sometimes as the employer of the plaintiffs' lawyers, and always as the entity directing the litigation and calling the shots. Id. at 1168. After the case was resolved against the plaintiffs, the trial court imposed sanctions on PLF, the entity which had controlled the litigation ... and was, in the court's view, responsible for the substantial abuse of the court system. Id. at 1169. Relying heavily on Chambers v. NASCO, Inc., supra , the Court of Appeals upheld this ruling as a proper exercise of the trial court's inherent powers to sanction PLF as the responsible entity. Id. at 1170. We agree with the reasoning of the Ninth Circuit in these two cases and adopt it here. We hold that the trial court had the inherent power to sanction Dr. Jemison, given the clear proof of his flagrant abuse of the judicial process. Like Mr. Baugh in the Corder case and PLF in the Lockary case, Dr. Jemison was deeply involved in the fraudulent scheme from the very beginning. He took an active part in the planning of the litigation and in the preparation of the false documents on which the TRO request was based. The evidence clearly showed that Jemison, along with Fleming and Nixon, was at the very heart of the fraud. We reject his argument that the evidence was insufficient to support the court's imposition of sanctions.
Ms. Fleming likewise maintains that her involvement in the fraudulent activities was minimal, and that she therefore should not have been sanctioned. She asserts, for example, that she had nothing to do with the selection of Mr. Mundy as counsel for the suit that was filed in the District of Columbia. While it is quite possible that Fleming may not have made the final selection, the evidence showed that she was actively involved in choosing the venue for the suit and in finding Mr. Mundy. She was in direct contact with Mundy's office from the beginning, consulting about jurisdiction and TRO standards. After the TRO was obtained, there were numerous phone calls between Mundy's office and Fleming's office. Fleming also contends that the evidence failed to show that she participated in the drafting of the complaint and the TRO application. She cites Mr. Mundy's statement that there were several calls back and forth to myself and Ms. Fleming in which I was trying to identify who the members of the Election Committee were. Mundy went on to say that this wasn't for the purpose of filing. [It was for] setting forth the grievances and asking for official action by the National Baptist Convention. The trial court could properly infer, as it did, that while there was no direct proof that Fleming participated in the drafting of the legal papers, the repeated calls and faxes between Fleming and Mundy showed that Fleming at least had some role in their preparation. Finally, Fleming asserts that she had no knowledge that fraudulent affidavits were being collected or that any affidavits were to be submitted with the complaint and the TRO application. She states that Rev. Lewis and Rev. Kimber conceived the idea of affidavits, prepared them, and provided them to Mr. Mundy. Ms. Fleming, however, admitted preparing the single affidavit signed and submitted by Rev. Kimber. As the trial court noted, all of the affidavits are significantly similar in form, in format, and even in typeface to the Kimber affidavit. Furthermore, the Kimber affidavit had to have been prepared by someone with knowledge of the other affidavits. All of these facts support the court's finding that Ms. Fleming was involved in filing a collusive and fraudulent lawsuit.
Dr. Nixon claims that his role in the fraud was minimal, far less than that of the other participants. While that is true to some extent, we are satisfied that his involvement was sufficient for a bad faith finding and that he should therefore be subject to the sanctions imposed by the trial court. Nixon asserts that he did not engage in any bad faith conduct, much less participate (as plaintiff) in a massive conspiracy with the defendants. He points out that the trial court found that he never saw the four dozen false affidavits of disenfranchisement which were filed with the court. The court also found that Nixon did not write or authorize the forged letter to Jemison which was attached to the complaint. Despite these findings favorable to Dr. Nixon, however, the trial court also found that Nixon played a major role in the institution of the fraudulent lawsuit. It was Nixon who arranged the special meeting of the Alabama State Convention's Executive Board to obtain the board's approval of a suit challenging the election in its name. He helped to gain votes to support the suit by relieving certain officials of their positions and then appointing others to the board, including Rev. Lewis. Dr. Nixon presented to the Executive Board a memorandum, prepared by Ms. Fleming, which served as the factual foundation for the complaint. Fleming purported to document that 616 voters from Alabama had been denied their right to vote at the convention. Nixon knew that this memorandum had been fabricated and was not accurate. He also told Mr. Mundy that more than 600 Alabama delegates had been denied the right to vote  the central allegation of the fraudulent complaint. Dr. Nixon then assigned Rev. Lewis the task of gathering false statements to support the suit. While there is no way of knowing just how closely Dr. Nixon collaborated with Rev. Lewis in arranging for the forged affidavits, the fact that Nixon assigned the task amply demonstrates his role in the fraud. When one of the purported affiants, Rev. Willie McClung, approached Dr. Nixon about his forged affidavit, Nixon told him to mind [his] own business. Although Nixon left the active management of the suit to Jemison and Fleming, he helped to provide the fabricated allegations upon which the suit was based and, when confronted with the fraud and forgery, did nothing to mitigate it in any way. The court found: The plaintiff, Dr. Nixon, knew firsthand that the allegations raised in the complaint and the application for TRO, consisting of mass denials of 600 or more eligible delegates' right to vote; the assertions that the new Board and President had not been installed; unspecified breaches of the Convention Constitution, and assertions of widespread election irregularities, were not well grounded in fact. This finding is abundantly supported by the evidence. Nixon also argues that the court could not award punitive damages without first assessing compensatory damages, [7] and that the court erred in awarding punitive damages because the trial court never considered evidence of his net worth. We reject both arguments. In this case the award of attorneys' fees was itself compensatory. In the context of bad faith litigation, repayment of the fees incurred in defending against the litigation is properly treated as compensatory damages. See Chambers v. NASCO, Inc., supra, 501 U.S. at 46, 111 S.Ct. 2123. Furthermore, under District of Columbia law, evidence of net worth is not always a prerequisite to an award of punitive damages. See Town Center Management Corp. v. Chavez, 373 A.2d 238, 246 (D.C.1977); see also Jonathan Woodner Co. v. Breeden, 665 A.2d 929, 938 (D.C.1995), modified, 681 A.2d 1097, 1098 (1996) (net worth must be shown only when punitive damages are based on the wealth of the person from whom such damages are sought), cert. denied, ___ U.S. ___, 117 S.Ct. 1083, 137 L.Ed.2d 217 (1997).
Jemison and Fleming claim that they had no knowledge of the altered excerpt from the NBC constitution filed by Mr. Mundy as an attachment to the TRO application. They also argue that the omissions from the constitution were simply faxing errors. Mr. Mundy's testimony, however, as well as his answers to interrogatories, showed that he specifically asked Ms. Fleming to send him a copy of the NBC constitution. The trial court was aware of the importance of the omitted language, and could reasonably find that the likelihood that this one crucial section would be inadvertently omitted was quite remote. The finding that the alteration of the constitution was deliberate and culpable is well supported by the record. [8]
The trial court found that Nixon asked Jemison to pay the attorneys' fees for the legal proceedings against NBC. Dr. Nixon had earlier advised the Executive Board of the Alabama State Convention that it would not have to pay any money toward this litigation. Following Nixon's conversation with Jemison on September 28, 1994, Jemison sent $9,500 to Mr. Mundy in Washington. The court found that there were no documents or discussions supporting Nixon's claim that the retainer fee was a personal loan to him from Jemison, and ruled that the payment of the fee by Dr. Jemison to the attorney representing his purported adversary was improper. Appellants continue to assert that this money was simply a personal loan to Mr. Mundy. They contend that there was no evidence that either Dr. Jemison or Ms. Fleming was in control of Mr. Mundy and his handling of the lawsuit. We disagree. The evidence showed that Dr. Jemison wired the money directly to Mr. Mundy, knowing that Mundy was about to file the complaint and the TRO application. Suits in which one side pays both sides' fees are presumed to be collusive because one of the parties has dominated the conduct of the suit by payment of the fees of both. United States v. Johnson, 319 U.S. 302, 304, 63 S.Ct. 1075, 87 L.Ed. 1413 (1943). There was, as the trial court found, no evidence to rebut this presumption, and thus the court did not err in holding that the payment was improper.