Court Opinion

ID: 9574050
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:01:56.969267+00
Date Added: 2024-06-11T12:44:00.123436
License: Public Domain

Judge GREENE
concurring in part and dissenting in part.
Rule 11
I agree with the majority that the trial court was without authority pursuant to the legal and factual sufficiency prongs of Rule 11 to impose as a sanction for filing the complaint that the plaintiffs and their attorney pay the defendants’ attorney’s fees. Whether the complaint complies with the legal and factual sufficiency prongs of Rule 11 is determined “as of the time it was signed,” Bryson v. Sullivan, 330 N.C. 644, 657, 412 S.E.2d 327, 333 (1992), and is not affected by subsequently occurring events. Therefore, because on 4 December 1986, the date the complaint was signed and filed, Rule 11 did not authorize an award of attorney’s fees *594as a sanction for violation of the Rule, Kohn v. Mug-A-Bug, 94 N.C. App. 594, 597, 380 S.E.2d 548, 550 (1989), the continued prosecution of the action beyond 1 January 1987 (effective date of amended Rule 11 permitting award of attorney’s fees) did not authorize such an award based on a violation of the legal or factual sufficiency prongs of Rule 11. However, the plaintiffs’ and their attorney’s continued prosecution of meritless claims after 1 January 1987 could support an attorney’s fee sanction under either the improper purpose prong of Rule 11 or “pursuant to the inherent power of the court.” Bryson, 330 N.C. at 658, 412 S.E.2d at 334; see also Chambers v. NASCO, Inc., --- U.S. ---, ---, 115 L.Ed.2d 27, 45 (1991) (trial court has inherent power to “assess attorney’s fees when a party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons’ ”).
Judge Llewellyn concluded that the plaintiffs and their attorney with an improper purpose signed and filed documents after I January 1987. More specifically, Judge Llewellyn determined that the papers and documents “were interposed for the improper purpose of attempting to circumvent a summary adjudication adverse to the [plaintiffs with respect to unwarranted claims . . . thereby causing unnecessary delay and needless increase in the cost to the Defendants of defending these claims.” Although this conclusion supports the order of sanctions, the order cannot be affirmed because the record does not reflect that plaintiffs were given any notice that sanctions were sought on the grounds of improper purpose. “[D]ue process requires that an alleged Rule 11 offender be given timely notice, not only that sanctions are being sought or considered, but of the bases for those sanctions. . . .” Taylor v. Taylor Products, Inc., 105 N.C. App. 620, 629, 414 S.E.2d 568, 575 (1992). The record reflects that defendants gave written notice only that they were seeking Rule 11 sanctions “upon Plaintiffs and counsel for the Plaintiffs for filing this action which fails to assert any claim supported by fact and law . . . .” Furthermore, the record does not reflect any advance notice from the trial court that it was considering imposition of sanctions under the improper purpose prong of Rule 11 or pursuant to its inherent powers. See Chambers, — U.S. at —, 115 L.Ed.2d at 48 (trial court must comply with due process when invoking inherent power); N.C.G.S. § 1A-1, Rule II (1990) (trial court may on its own initiative impose sanctions). Having given notice of their intention to seek sanctions under the factual and legal sufficiency prongs of Rule 11, and no notice *595having been given by the trial court to the contrary, defendants cannot now seek to sustain an order supported only under the improper purpose prong of Rule 11. Accordingly, I agree with the majority that the trial court’s Rule 11 order must be reversed.
N.C.G.S. § 6-21.5
I agree with the majority that the trial court was not without jurisdiction to order the payment of attorney’s fees pursuant to N.C.G.S. § 6-21.5. Under Rule 11, sanctions “may be imposed years after a judgment on the merits,” Chambers, — U.S. at —, 115 L.Ed.2d at 52, and I see no bases for requiring a different rule for the imposition of attorney’s fees under N.C.G.S. § 6-21.5.
However, I disagree with the majority that under N.C.G.S. § 6-21.5 “clients who presumably know nothing about the law can be sanctioned for factual and legal deficiencies.” There are two prerequisites to an award of attorney’s fees under N.C.G.S. § 6-21.5. First, the court must determine that the pleading contains no “justiciable issue of law or fact.” Second, the court must determine that the plaintiff should reasonably have been aware, at the time the complaint was filed, that the pleading contained no justiciable issue of law or fact or that the plaintiff persisted in litigating the case “after the point where [he] should reasonably have become aware that the pleading [he] filed no longer contained a justiciable issue.” Bryson, 330 N.C. at 665, 412 S.E.2d at 338 (affirming denial of attorney’s fees where plaintiffs’ claims rendered nonjusticiable); see also Sunamerica Fin. Corp. v. Bonham, 328 N.C. 254, 258, 400 S.E.2d 435, 438 (1991). Assuming that the complaint in this case did not contain justiciable issues of law or fact, the order nevertheless cannot be sustained because the trial court made no findings or conclusions on whether these plaintiffs should reasonably have been aware of these deficiencies at the time the complaint was filed or persisted in litigating the case after a point where they should have been aware of its deficiencies. I therefore would reverse the order of the trial court requiring the plaintiffs to pay attorney’s fees pursuant to N.C.G.S. § 6-21.5.
Rule 37
I agree with the majority and for the reasons asserted in the opinion that the trial court did not err in awarding attorney’s fees pursuant to Rule 37.