Opinion ID: 2156119
Heading Depth: 2
Heading Rank: 3

Heading: The Amount of the Award

Text: Peddlers Square also contends that the amount of the sanction was not reasonable and that the court should have held a hearing before ruling on Mr. Scheuermann's motion. In particular, Peddlers Square maintains that the trial court should not have awarded sanctions based on expenses incurred by Mr. Scheuermann's insurance carrier in defending the suit. Rule 11, however, requires only that the sanction be appropriate and that costs and attorney's fees be reasonable. Williams v. Board of Trustees of Mount Jezreel Baptist Church, 589 A.2d 901, 911 (D.C.1991). In this regard, the Supreme Court has said that the central purpose of Rule 11 is to deter baseless filing . . . and thus . . . streamline the administration and procedure of the . . . courts. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). While this court has not directly considered the effect of insurance on Rule 11 sanctions, it has identified at least four factors which the trial court should consider when imposing a monetary sanction: (1) the reasonableness of the injured party's attorneys' fees, (2) the minimum amount that will serve to adequately deter the undesirable behavior, (3) the offending party's ability to pay, and (4) the degree to which malice or bad faith contributed to the violation, the risk of chilling the type of litigation involved, and other factors as deemed appropriate in individual circumstances. Williams, 589 A.2d at 912 (citations and internal quotation marks omitted). The Eleventh Circuit has upheld an award of Rule 11 sanctions in a similar factual setting. In Pelletier v. Zweifel, 987 F.2d 716 (11th Cir.), cert. denied, 510 U.S. 918, 114 S.Ct. 311, 126 L.Ed.2d 258 (1993), the court affirmed an order imposing sanctions despite the fact that the award compensated the defendant's insurance carrier and not the defendant himself. The defendant in Pelletier established that he had incurred $282,837.96 in attorney's fees and litigation expenses in defending the case in the trial court. On appeal the plaintiff challenged the award, arguing that the defendant was entitled to recover nothing because he had `incurred' no litigation expense at all; rather, his insurance company had incurred and paid the expenses. Id. at 717. Rejecting this argument, the Eleventh Circuit declared: It is of no moment that Zweifel purchased insurance to cover the expense of defending claims . . . [Plaintiffs] are not entitled to free violations of Rule 11 because of Zweifel's prudence in investing in insurance coverage. Id. at 718. The court held accordingly that the plaintiffs' argument that the defendant cannot recover what he may have to pay over to the insurance company in satisfaction of its subrogation rights is patently frivolous. Id. at 718-719. We agree with the holding in Pelletier and accordingly reject Peddlers Square's argument as patently frivolous. In this case the trial court awarded Mr. Scheuermann $49,090.41. Like the Eleventh Circuit, the trial court concluded that there is no apparent reason why plaintiff's Rule 11 penalty should be mitigated by the fortuity that defendant Scheuermann happened to have insurance. In addition, the court considered many of the factors which we enumerated in Williams, stating: Plaintiffs were warned early in the litigation that Scheuermann should not be a defendant and that he would seek Rule 11 sanctions, yet they persisted with their frivolous claims against him. The fees charged are fair and reasonable on their face. The primary purpose of Rule 11 is to deter non-meritorious litigation, and one of the best ways to accomplish deterrence . . . is to make a party who files a lawsuit without reasonable pre-filing investigation of facts or law pay the actual cost of the defense.       . . . When plaintiffs elected to pursue their non-meritorious claims, they had no way of knowing whether defendant had insurance or what part of his defense costs would be taken up by the insurance. Indeed, to the extent the plaintiffs may have assumed Scheuermann carried liability insurance and took that assumption as a green light to pursue claims they might otherwise have thought twice about, that would be all the more reason to include in the Rule 11 sanction the insurer's portion of the attorneys' fees and expenses. We are satisfied that the imposition of a sanction against Peddlers Square based on Mr. Scheuermann's costs and attorney's fees for more than two years of litigation was not unduly harsh. That sanction was based on Mr. Scheuermann's detailed affidavit documenting expenditures, hours of attorney time, rates charged, and specific work performed. In addition, the court recognized that the sanction was necessary to deter future frivolous suits of the type exemplified here. We review all aspects of a [trial] court's Rule 11 determination for abuse of discretion, Cooter & Gell, 496 U.S. at 405, 110 S.Ct. 2447, and on this record we find none. Finally, Peddlers Square maintains that it was entitled to a hearing on the motion for sanctions before the motion could be granted. This argument is equally without merit. Super. Ct. Civ. R. 12 I(f), which deals generally with motions practice, plainly states that the court in its discretion may decide any motion without a hearing. [6] See Williams, 589 A.2d at 911; Montgomery, 566 A.2d at 1031 (while Rule 11 procedures must comport with due process, a hearing is not required in every case (citations omitted)); Pagan v. Horton, 464 A.2d 146, 148 (D.C.1983). In this case the judge who imposed the Rule 11 sanctions had participated in every aspect of the proceedings, and he specifically ruled that a hearing is not necessary to determine that plaintiffs violated Rule 11. Peddlers Square has failed to persuade us that this ruling was erroneous in any way. The judgment is accordingly Affirmed.