Court Opinion

ID: 3032760
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:48:25.764374+00
Date Added: 2024-06-11T11:48:16.405613
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 03-1402
                                   ___________

Gardenia Gordon,                        *
                                        *
             Appellant,                 *
                                        * Appeal from the United States
      v.                                * District Court for the Western
                                        * District of Missouri.
Unifund CCR Partners,                   *
                                        *
             Appellee.                  *
                                   ___________

                             Submitted: September 11, 2003

                                  Filed: October 10, 2003
                                   ___________

Before MORRIS SHEPPARD ARNOLD, BEAM, and BYE, Circuit Judges.
                         ___________

BEAM, Circuit Judge.

       The district court imposed sanctions against Gardenia Gordon's counsel
(Appellant) following the dismissal of this case. Because Unifund did not request
Rule 11 sanctions in a separate motion and did not follow the twenty-one day safe
harbor rule set forth in Federal Rule of Civil Procedure 11(c)(1)(A), we hold that the
district court abused its discretion in granting sanctions.
I.    BACKGROUND

       On November 27, 2000, the district court ordered Gordon to show cause why
this case should not be dismissed for failure to prosecute because the docket had no
record of service on Defendants. Gordon responded to the order on November 28,
2000, attaching proof of service on defendant Unifund, stating that Unifund had filed
an answer, and acknowledging that Gordon had been unable to serve defendant Kort.
Then, on December 11, 2000, Gordon filed a motion for default judgment based upon
information that the district court docket showed no record of Unifund's answer.

       Unifund filed a responsive pleading to Gordon's motion for default on
December 26, 2000, arguing that it had answered, and attaching an August 21, 2000,
date-stamped copy of that answer as an exhibit. In that same pleading, Unifund also
sought sanctions against Appellant for filing and/or refusing to withdraw his motion
for default. In support of its request, Unifund attached correspondence between the
parties demonstrating that Appellant previously received a copy of Unifund's answer
and thus had no basis for filing the motion for default. Unifund's answer had never
appeared on the clerk's docket. Unifund later discovered that although the clerk's
office received the pleading, the clerk inadvertently filed it in another case. Unifund
attached copies of correspondence between it and Appellant demonstrating that
Appellant was well aware of the potential "mix up," and that Unifund repeatedly
asked Appellant to withdraw the motion or face sanctions.

      In response, Appellant maintained that he had no other choice but to file the
motion for default judgment because the file-stamped copy of Unifund's answer that
he received was not proof of filing. Serving opposing counsel does not suffice as
timely filing, and the district court had no record of filing. Appellant argued he was
"simply playing by the rules."

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       The district court recognized that the clerk misfiled the answer and that
Appellant had sufficient proof of such misfiling. The district court further concluded
that Appellant was aware of the clerical error and had no reason to question the
validity of the date-stamped answer by filing the motion for default. Because the
correspondence between the parties' attorneys illustrated that Appellant engaged in
dilatory tactics by filing the motion for default, the district court granted Unifund's
request for sanctions. After the case was dismissed well over one year later, the court
ordered Appellant to pay a monetary sanction and attorneys' fees totaling $4,700, with
one-half paid to Unifund and one-half paid to Legal Aid.

II.   DISCUSSION

       Pursuant to the plain language of Federal Rule of Civil Procedure 11(c)(1)(A),
party-initiated motions for sanctions "shall be made separately from other motions or
requests and shall describe the specific conduct." Further, the motion is to be served
pursuant to federal service requirements, but not filed with or presented to the court
"unless, within 21 days after service of the motion (or such other period as the court
may prescribe), the challenged . . . allegation . . . is not withdrawn or appropriately
corrected." Id.

      The rule provides that requests for sanctions must be made as a separate
      motion, i.e., not simply included as an additional prayer for relief
      contained in another motion. . . . These provisions are intended to
      provide a type of "safe harbor" against motions under Rule 11 in that a
      party will not be subject to sanctions on the basis of another party's
      motion unless, after receiving the motion, it refuses to withdraw that
      position or to acknowledge candidly that it does not currently have
      evidence to support a specified allegation.

Fed. R. Civ. P. 11, Advisory Committee Notes (1993 Amendments) (emphasis
added).

                                         -3-
       In this case, Appellant filed his motion for default judgment on December 11,
2000. On December 15, 2000, Unifund e-mailed Appellant, stating that if the motion
for default judgment was not withdrawn, Unifund would request appropriate fees
under Rule 11. Unifund made a final attempt to persuade Appellant to withdraw the
motion for default judgment in a letter dated December 20, 2000, and requested Rule
11 sanctions on December 26, 2000, in its memorandum in reply to Appellant's
motion for default judgment. Unifund did not, as Rule 11(c)(1)(A) requires, serve
Appellant with a copy of its proposed Rule 11 motion, providing Appellant notice to
withdraw the challenged motion twenty-one days prior to Unifund's filing of a motion
with the court. Nor did Unifund file its motion for sanctions separately as required
by Rule 11(c)(1)(A). Unifund merely requested sanctions in its responsive
memorandum to the pending motion for default, which it filed on December 26, 2000,
only eleven days after its initial threat of sanctions to Appellant.

       We review a district court's decision to impose Rule 11 sanctions for an abuse
of discretion. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990) (noting
that an abuse would be established if the court based its ruling on an erroneous view
of the law or on a clearly erroneous assessment of the evidence). Here, the district
court based its ruling upon an erroneous view of the procedural requirements under
Rule 11.

       Unifund failed to comply with Rule 11's procedural requirements. MHC Inv.
Co. v. Racom Corp., 323 F.3d 620, 623 (8th Cir. 2003) (recognizing that party-
initiated motions under Rule 11 must comply with the "safe harbor" provisions);
VanDanacker v. Main Motor Sales, Co., 109 F. Supp. 2d 1045, 1055 (D. Minn. 2000)
(rejecting Rule 11 sanctions when defendants sent only warning letters to the non-
movant's counsel). Unifund's "request" for sanctions was not made separately from
other motions or requests and Unifund did not serve a prepared motion on Appellant
prior to making any request to the court. As a result, Appellant was not afforded the
benefit of the twenty-one day "safe harbor" provision allowing him the opportunity

                                        -4-
to withdraw his allegedly frivolous pleading.1 "To stress the seriousness of a motion
for sanctions and to define precisely the conduct claimed to violate the rule, the
revision provides that the 'safe harbor' period begins to run only upon service of the
motion." Fed. R. Civ. P. 11, Advisory Committee Notes (1993 Amendments).

      While we certainly do not wish to condone any dilatory tactics utilized by
Appellant in this case, we are unable to overlook Unifund's procedural deficiencies.
The district court's awarding of sanctions against Appellant in contravention of the
explicit procedural requirements of Rule 11 was an abuse of discretion.

III.   CONCLUSION

      Unifund's request for sanctions in this case was procedurally deficient. We
reverse and vacate the order of the district court, directing that any payment made by
Appellant be refunded accordingly.
                       ______________________________

       1
        The district court did not impose sanctions sua sponte. The district court
clearly "granted" Unifund's motion for sanctions in its June 12, 2001, order. Further,
the court did not issue an order to show cause why sanctions should not be imposed
or give Appellant an opportunity to respond before the imposition of sanctions, as
Federal Rule of Civil Procedure 11(c)(1)(B) would require if the court had initiated
the sanctions. Fed. R. Civ. P. 11, Advisory Committee Notes (1993 Amendments).

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