Court Opinion

ID: 43624
Source: CourtListenerOpinion
Date Created: 2010-04-25 21:58:33+00
Date Added: 2024-06-11T17:17:03.635325
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
                   UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT                  July 6, 2006

                                                         Charles R. Fulbruge III
                            No. 05-10665                         Clerk
                          Summary Calendar

     GEORGE INGRAM III, et al.,

                                       Plaintiffs,

     TIMOTHY W. SORENSON; JEFF FORREST SMITH,

                                       Appellants,

                                  v.

     GLAST, PHILLIPS & MURRAY, A Professional Corporation; BUTLER
     & BINION LLP, DEMPSEY PRAPPAS; STEVEN CLAUSEN; FRED TUTHILL;
     LOUIS B. PAINE; RICHARD AVERY, Individually and as
     liquidating partner of Butler & Binion LLP,

                                       Defendants – Appellees.

          Appeal from the United States District Court
               for the Northern District of Texas
                         No. 04-cv-2129

Before HIGGINBOTHAM, BENAVIDES, and DENNIS, Circuit Judges.

PER CURIAM:*

     This saga began in 1997 when George Ingram III, who is not a

party to this appeal, retained the law firm of Appellee Butler &

Binion LLP.    By June of 1998, the firm discontinued legal services

because of nonpayment.      To collect the unpaid fees, the firm

initiated arbitration, pursuant to an agreement between it and

     *    Pursuant to 5TH CIR. R. 47.5, this Court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
Ingram. Before arbitration began, Ingram filed a legal malpractice

suit in state court against the firm and various attorneys who had

worked on his matters.       The state court stayed the suit and

compelled arbitration.     The dispute then was arbitrated over the

course of several years.    According to Appellants, the arbitration

proceeding was dismissed in 2004.        Several months thereafter,

Ingram filed a suit in federal court against Appellees.           Ingram

retained Appellants Jeff Smith and Timothy Sorenson to represent

him in this suit.        On the eve of scheduled depositions and

discovery   deadlines,   Ingram   voluntarily   dismissed   his   claims

against Appellees.

     Following dismissal, Appellees filed a motion for sanctions,

seeking recovery of their costs, fees, and expenses, totaling

approximately $200,000.    The district court ordered an evidentiary

hearing on the motion and ordered the parties to file and exchange

exhibit and witness lists prior to the hearing. Appellants did not

do so, but the court still permitted argument by Appellants.

Pursuant to 28 U.S.C. § 1927 (2000) and the court’s inherent

powers, the district court imposed sanctions of attorneys’ fees,

costs, and expenses against Ingram’s attorneys,, in the amount of

$184,360.93.   Smith and Sorenson, the Appellants, challenge the

imposition of sanctions.

     A district court’s sanction order, premised on 28 U.S.C.

§ 1927 and its inherent powers to impose sanctions, is reviewed for

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abuse of discretion.     Tollett v. City of Kemah, 285 F.3d 357, 363

(5th Cir. 2002). A court abuses its discretion to impose sanctions

when a ruling is based on an erroneous view of the law or on a

clearly erroneous assessment of the evidence.     Matta v. May, 118

F.3d 410, 413 (5th Cir. 1997).

      Appellants attempt to attack the award of sanctions for lack

of due process. “The fundamental requirement of due process is the

opportunity to be heard at a meaningful time and in a meaningful

manner.”     Mathews v. Eldridge, 424 U.S. 319, 333 (1976) (internal

quotation marks omitted).    Here, the court gave Appellants notice

of the evidentiary hearing and permitted each side one hour to

present proof, even allowing Appellants to present testimony though

they failed to produce witness or exhibit lists as was ordered by

the court.    The court not only afforded Appellants due process but

also arguably went beyond what is required.     See Merriman v. Sec.

Ins., 100 F.3d 1187, 1192 (5th Cir. 1996) (affirming the award of

sanctions despite the fact that the district court did not conduct

an evidentiary hearing because “due process does not demand an

actual hearing”).     Therefore, the court’s imposition of sanctions

was not in violation of due process.

     Turning to the substance of the hearing, the district court

provided lengthy and detailed reasons for imposing sanctions.    For

example, the evidence demonstrated that Ingram falsely reported a

large amount of personal wealth to Butler & Binion LLP and that

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Smith and Sorenson pursued the post-arbitration litigation knowing

that it was a “complete sham.”        Specifically, the court found that

(1) Appellees had established bad faith conduct, improper motive,

and reckless disregard of the duty owed to the court; (2) the

“proceedings were multiplied both unreasonably and vexatiously;”

(3) the case had “absolutely no basis;” and (4) “the entire case

[was] meritless and frivolous.”

       The district court articulated sufficient reasons for imposing

sanctions.    Section 1927 provides that “any attorney . . . who so

multiplies the proceedings in any case unreasonably and vexatiously

may be required by the court to satisfy personally the excess

costs, expenses, and attorneys’ fees reasonably incurred because of

such   conduct.”    28   U.S.C.   §    1927   (2000).   This   Court   has

interpreted the provision as requiring evidence of bad faith,

improper motive, or reckless disregard of the duty owed to the

court.    Edwards v. Gen. Motors Corp., 153 F.3d 242, 246 (5th Cir.

1998).    The court correctly found evidence of all three.             The

court’s findings also support the imposition of sanctions pursuant

to its inherent power.   Batson v. Neal Spelce Assoc., 805 F.2d 546,

550 (5th Cir. 1986) (“[F]ederal courts possess inherent power to

assess attorney’s fees and litigation costs when the losing party

has acted in bad faith, vexatiously, wantonly or for oppressive

reasons.”) (internal quotation marks omitted).

       AFFIRMED.

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