Opinion ID: 1992657
Heading Depth: 1
Heading Rank: 6

Heading: Sanctions And Award Of Costs And Fees To Mr. Esteves

Text: Ms. Esteves contends that the trial court abused its discretion in imposing sanctions solely against her and not her counsel. In his order dated April 25, 1995, the trial judge ordered Ms. Esteves to pay costs and fees to Mr. Esteves relating to his opposition to Ms. Esteves' notice of deposition and request for a continuance, as well as costs and fees covering defense counsel's appearance and preparation for trial on April 13, 1995. [9] In addition, he placed Ms. Esteves on notice that if she did not prevail on the merits of her complaint, Mr. Esteves would be entitled to additional costs and fees. Prior to issuing his April 25, 1995, written order, the trial judge made the following oral comments on April 13, 1995: [M]ake no mistake about it, and I hope when this order is written there won't be any mistake about it. I am finding that the violation[s] of the discovery rules in this case were such that attorney's fees will be relevant as a sanction[,] are appropriate and are to be determined by who prevails in this case .... And I am indeed finding a discovery violation. The only thing I'm leaving open for future decision in this regard is the amount of the attorney's fees and whether or not they will be payable in this case. The trial judge signed an order on June 20, 1995, concluding that since the Amended Complaint is not well grounded in fact nor is it warranted by existing law, Ms. Esteves would have to pay Mr. Esteves' attorney's fees and costs subsequent to those reflected in Defendant counsel's affidavit of June 8, 1995.... [10] Ms. Esteves filed her Rule 60(b) motion on July 18, 1995, which, inter alia, argued that the trial court had no authority to award attorney's fees against her. We review the imposition of sanctions under Super. Ct. Civ. R. 37(b)(2) [11] for abuse of discretion. See Vincent v. Anderson, 621 A.2d 367, 373 (D.C.1993); Floyd v. Leftwich, 456 A.2d 1241, 1244 (D.C. 1983) and Firestone v. Harris, 414 A.2d 526, 527 (D.C.1980). A Rule 11 [12] decision on whether a paper was supported by law ... is subject to de novo review because the issue is strictly one of law; however, whether a violation of the factual inquiry or improper purpose prongs of Rule 11 has occurred is subject to review for abuse of discretion. Montgomery v. Jimmy's Tire & Auto Ctr., Inc., 566 A.2d 1025, 1029 (D.C.1989). On the record before us, we see no abuse of discretion in the award of attorney's fees and costs relating to the discovery violation. See Floyd, supra . There is sufficient basis for the imposition of discovery sanctions in this case. Ms. Esteves did not give reasonable notice to Mr. Esteves regarding the taking of his deposition. Notice was given long after the January 30, 1995, pre-trial conference, and one week prior to the scheduled April 13, 1995, trial date. Since Ms. Esteves caused a two month delay in the trial by failing to conduct timely discovery, the trial court's award of discovery sanctions did not constitute abuse of discretion. See Floyd and Firestone, supra . However the remaining question is whether the trial judge abused his discretion in imposing the sanction solely on Ms. Esteves, rather than on both Ms. Esteves and her attorney. We discuss this issue below. With respect to the Rule 11 sanctions' issue, the trial court stated that Ms. Esteves' Amended Complaint is not well grounded in fact nor is it warranted by existing law.... In Kleiman v. Aetna Cas. and Sur. Co., 581 A.2d 1263, 1266 (D.C.1990), we said: Under Rule 11, ... sanctions are imposed only if reasonable pre-filing inquiry would have disclosed that the pleading, motion, or paper was not well grounded in fact, was not warranted by existing law, or was interposed for improper purpose.... Papers must not be viewed `with 20/20 hindsight'.... Rather, the trial judge should `test the signer's conduct by inquiring what was reasonable to believe at the time the pleading, motion, or other paper was submitted.' (citations omitted). While a failure to prove the allegations of a complaint may be relevant to a Rule 11 analysis, [t]he court's inquiry must be focused on pre-filing conduct. Park v. Sandwich Chef, Inc., 651 A.2d 798, 803 (D.C.1994). Here, the trial judge's oral discussion on June 13 was devoted mainly to Ms. Esteves' failure to present any evidence of fraud; and his June 20, 1995, written findings of fact and conclusions of law do not elucidate any pre-filing conduct. [H]e made no explicit findings as to the precise inquiry that should have been made, and as to whose responsibility it was to make it. Id. (referencing Stansel v. American Sec. Bank, 547 A.2d 990, 996 (D.C.1988)). Furthermore, [a] trial court's imposition of sanctions cannot be sustained `unless the court makes findings on all the relevant issues stated in Rule 11.' Id. (referencing and quoting Green v. Louis Fireison & Assocs., 618 A.2d 185, 189 (D.C.1992)). In that regard, there is no explanation as to how the trial court could conclude that the complaint was not well grounded in fact when it survived a motion to dismiss. In filing the motion to dismiss, Mr. Esteves conceded all the facts in the complaint. Green, 618 A.2d at 189 n. 6. The trial court also concluded that: Plaintiff has not set forth any credible evidence that her consent to the Agreement was induced by fraud[.] Nor has the Plaintiff set forth any credible evidence of fraud in support of her Amended Complaint To Set Aside Property Settlement Agreement Due to Fraud. The trial court clearly focused on the outcome of the trial  the lack of credible evidence of fraud  rather than on the initial filing of the lawsuit. While the outcome of a trial may be relevant, in imposing Rule 11 sanctions on the ground that the amended complaint was not warranted by existing law, a trial judge must inquire into the prefiling analysis of existing law. Park, supra . This was not done here. Moreover, as we said in Green, supra, 618 A.2d at 188-89 Rule 11 is not violated solely because a particular pleading is not warranted by existing law. Rather, [i]f such pleading can be justified by a good faith argument for the extension, modification, or reversal of existing law, sanctions are not in order. Here, the record reflects no inquiry of Ms. Esteves and her counsel as to their pre-filing theory of the fraud case, and whether they contemplated making any type of good faith effort involving an extension, modification or reversal of existing law. Based upon the foregoing, we cannot sustain the imposition of Rule 11 sanctions because the trial court failed to make findings on all the relevant issues stated in Rule 11. Park, 651 A.2d at 803. Finally, both with respect to the discovery sanction under Rule 37 and the sanction under Rule 11, the trial judge did not explain why the sanction was imposed solely on Ms. Esteves, and not her counsel, or both Ms. Esteves and her counsel. Since her counsel was responsible for noticing Mr. Esteves' deposition, and since he also signed the amended complaint, it is not clear on the record before us why the trial judge imposed all the sanctions on Ms. Esteves. If, upon review, the trial court finds that Ms. Esteves' attorney failed to notice Mr. Esteves' deposition during the discovery period, did not follow through in noticing Mr. Esteves' deposition after the April 13, 1995, hearing, did not make a proper pre-filing inquiry concerning the fraud complaint, knew that there was no credible basis on which fraud could be proved under existing law, and had no good faith argument for extending, modifying or reversing existing law, the order imposing sanctions should explain why it requires only the client to pay the attorney's fees and costs of Mr. Esteves, and not the attorney, or both the client and the attorney. For the foregoing reasons, we affirm the trial court's judgment for Mr. Esteves with respect to the merits of Ms. Esteves' amended complaint. However, we vacate the orders awarding sanctions and remand the case to the trial court for further proceedings consistent with this opinion. Affirmed in part and Remanded in part.