Court Opinion

ID: 9481232
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:11:58.125686+00
Date Added: 2024-06-11T17:48:10.231816
License: Public Domain

O’SCANNLAIN, Circuit Judge,
dissenting:
Respectfully, I dissent.
I
“It is now clear that the central purpose of Rule 11 is to deter baseless filings in the District Court and thus, consistent with the Rule Enabling Act’s grant of authority, streamline the administration and procedure of the federal courts.” Cooter & Gell v. Hartmarx Corp., — U.S. --, 110 S.Ct. 2447, 2454 (1990); see also Pavelic & LeFlore v. Marvel Entertainment Group, — U.S. -, 110 S.Ct. 456, 460, 107 L.Ed.2d 438 (1989) (Marshall, J., dissenting) (“One of the fundamental purposes of Rule 11 is to strengthen the hand of the trial judge in his [or her] efforts to police abusive litigation practices and to provide him [or her] sufficient flexibility to craft penalties to each case.”). Management of complex litigation often depends on the power of the trial court to sanction attorney behavior in those rare instances where it is necessary to do so. In my view, Rule 11 sanctions played a crucial role in this blockbuster case ably managed by Judge Stot-ler, who used her authority with appropriate discretion.
The Supreme Court has recognized that the district court is in the best position to determine the propriety of Rule 11 sanctions. “A district court’s ruling that a litigant’s position is well grounded and legally tenable for Rule 11 purposes is ... fact-specific.” Id. at 2460. Moreover, “[d]eference to the determination of courts on the front lines of litigation will enhance these courts’ ability to control the litigants before them.” Id.
This case well illustrates the propriety of these principles. As of April 1989, the sixty-seven-page docket sheet in this case reflected over 2,300 entries. The present litigation is anything but “streamlined.” Moreover, one cannot help but note the irony underlying this entire litigation. The FSLIC essentially charges that John L. Mo-linaro (and, to some extent, Kimberleigh Ferm) has spent years creating trails of paper to hide his fraudulent dealings while director of Ramona Savings & Loan. The paper war seems to have continued in the district court and has apparently enlisted some of the attorneys in its frenzy.1 Seldom has this court’s need to reinforce the “front lines of litigation” — the district court — been more apparent than in the present case.
With the foregoing in mind, I turn to the merits of the appeal by Michael T. Morris-sey, Ferm’s attorney, and his law firm, against whom the sanctions were imposed.2
*741II
Our court has identified two separate and independent grounds for the imposition of Rule 11 sanctions. First, sanctions “must be imposed on the signer of a paper if either a) the paper is filed for an improper purpose, or b) the paper is ‘frivolous.’ ” Townsend v. Holman Consulting Corp., 914 F.2d 1136, 1140 (9th Cir.1990) (emphasis added). Although I suspect that Ferm’s counsel may have violated both prongs of Rule 11, the district court considered primarily the frivolousness prong.3 In any event, the district court was correct; the filing was frivolous and Morrissey, for having signed it, was properly sanctioned.4
A
Ferm’s counterclaim and cross-claim was sanctionable as an unjustifiable (and therefore frivolous) collateral attack on the district court’s earlier orders, including specifically the March 7 order. When.FSLIC moved on February 1, 1988 for an order allowing it to take possession of the monies, placed in the court clerk’s custody, Ferm specifically opposed the motion on the ground that $489,000 of the funds were her separate property. The district court in its March 7 order considered, and rejected, Ferm’s opposition. Ferm’s counterclaim and cross-claim coming .three weeks later is a blatant attempt to obtain indirectly what was clearly denied her directly.5
We have consistently upheld the imposition of sanctions based upon a party’s attempts to relitigate the same issue before a district court. In Pipe Trades Council, Local 159 v. Underground Contractors Ass’n, 835 F.2d 1275 (9th Cir.1987), we upheld sanctions imposed upon a party who filed a repetitious motion, albeit styled as a “different” type of motion. See id. at 1280-81; see also Stewart v. American Int’l Oil & Gas Co., 845 F.2d 196, 201 (9th Cir.1988) (imposing sanctions upon a party for filing a third-party complaint which was not only frivolous but “nearly identical” to an earlier action).
B
The substantive counts in Morrissey’s filing for Ferm are equally baseless.
*7421
The claim that the FSLIC conspired fraudulently to convey Ferm’s money is “wacky, sanctionably so.” See Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 1080 (7th Cir.1987), cert. dismissed, 485 U.S. 901, 108 S.Ct. 1101, 99 L.Ed.2d 229 (1988). FSLIC’s efforts to satisfy its own judgments cannot be “conspiracy” as a matter of law. A civil conspiracy is an agreement by two or more persons to perform a wrongful act, or to achieve a lawful result through unlawful means. See Pestin v. Squires, 156 Cal.App.2d 240, 319 P.2d 405, 409 (1958). The acts of which Ferm complained were performed pursuant to the express orders of the district court, with notice to Ferm and all other parties below. Its conduct could not possibly have been “wrongful” or “unlawful” as a matter of law in those circumstances. See Western State Bank v. Grumman Credit Corp., 564 F.Supp. 9, 19 (D.Mont.1982), aff'd, 701 F.2d 187 (9th Cir.1983) (distribution of proceeds to secured creditor not conspiracy because not illegal).
Moreover, Ferm’s conspiracy claim is substantively groundless on its face. The purpose of the stipulation for the transfer between New Trend and FSLIC was, obviously, to satisfy .partially FSLIC’s judgment against Molinaro. The fact of Moli-naro’s ownership of these funds and FSLIC’s entitlement thereto was already resolved by the district court against Ferm. Ferm’s attempt to recharacterize the district court’s rulings as a “conspiracy” by FSLIC is frivolous beyond doubt. See Agnew v. Parks, 172 Cal.App.2d 756, 343 P.2d 118, 123 (1959) (“in a civil conspiracy no cause can arise if one had a legal right to do the act complained of”).
2
The irony in Ferm’s abuse of process claim should be self-evident. To prevail in an abuse of process, one must show that the defendant had an ulterior motive, and performed a willful act to misuse the process to gain a collateral advantage over that person. See Slaughter v. Legal Process & Courier Serv., 162 Cal.App.3d 1236, 1247, 209 Cal.Rptr. 189, 195 (1984). For Ferm to have prevailed on this claim, Ferm would have had to set forth facts that FSLIC intentionally and with the purpose of taking advantage of Ferm used the process in a way that was improper in the regular course of proceedings.
FSLIC served its writ of execution to obtain assets held in the name of “John Cook,” Molinaro’s alias, to satisfy partially its outstanding judgments against Molina-ro. A writ of execution is the proper method of enforcing judgments. Fed.R.Civ.P. 69(a); Cal.Code Civ.Proc. §§ 699.010-699.-080. The district 'court properly found that Ferm could not, in good faith, plead an ulterior motive on FSLIC’s part in the service of its writ of execution because its motive was to satisfy an outstanding judgment under relevant law. See Ion Equip. Corp. v. Nelson, 110 Cal.App.3d 868, 876-77, 168 Cal.Rptr. 361, 364-65 (no abuse of process by a party’s use of a writ of execution, even if issuance of writ was improper, as no ulterior motive could be inferred).
3
The conversion and trespass claims which Morrissey made for Ferm are also frivolous. Conversion is an act of willful interference with personal property, without lawful justification, such that a person entitled thereto is deprived of the use and possession of the personal property. See De Vries v. Brumback, 53 Cal.2d 643, 647, 2 Cal.Rptr. 764, 767, 349 P.2d 532, 535 (1960). It is not sufficient that the party claiming possession is an owner of the property; she must also have a right to immediate possession. See Hartford Finan. Corp. v. Burns, 96 Cal.App.3d 591, 598, 158 Cal.Rptr. 169, 172 (1979). Moreover, an action for conversion will not lie if the person in possession has a right to the property superior to that of the person claiming conversion. See Stan Lee Trading, Inc. v. Holtz, 649 F.Supp. 577, 580 (C.D.Cal.1986); Silverstein v. Kohler & Chase, 181 Cal. 51, 54, 183 P. 451 (1919).
• The claims of conversion were without foundation for all of these reasons. Ferm could not, in good faith, argue that FSLIC *743acted without “lawful justification” by serving the FBI with a writ of execution to obtain property held in the name of “John Cook,” Molinaro’s alias. It initiated this writ pursuant to final judgments against Molinaro granted by the district court. FSLIC had ample justification to execute on property concealed in safe deposit boxes under Molinaro’s assumed name in these circumstances. Ferm could not, without distorting facts already in the district court’s record and ignoring previous district court orders, claim that FSLIC willfully and voluntarily sought to deprive Ferm of property which it knew belonged to her.6
To state a claim for trespass to personal property, the person claiming trespass must establish an intentional interference by a person with physical possession of the property belonging to another, without justification or consent, proximately causing the damage. Rano v. Colonial Yacht Anchorage, 267 Cal.App.2d 84, 72 Cal.Rptr. 823, 827 (1968). Ferm’s claim for trespass' was irreparably deficient because Ferm could not plead and prove that FSLIC acted without legal justification in serving a writ of execution on the FBI as discussed above.
Ferm’s claim was also baseless because a trespass contemplates the interference with possession, not ownership, of personal property. See Allen v. McMillion, 82 Cal.App.3d 211, 218, 147 Cal.Rptr. 77, 83 (1978). As noted above, the subject assets were in Molinaro’s possession because they were held in a safe deposit box under his name alone. Accordingly, Molinaro was in possession of these assets at the time the FBI seized them. Even assuming some sort of trespass was committed, no party interfered with Ferm’s possession of personal property, and accordingly Ferm had no standing to bring a trespass claim. Her assertions to the contrary were nothing short of frivolous.
Ill
The Supreme court identified several drawbacks inherent in a non-deferential appellate review of a district court’s Rule 11 determinations, see Cooter & Gell, — U.S. at-, 110 S.Ct. at 2460, and each of these difficulties is present in the majority’s disposition today.
The majority disposition has the effect of “establishing circuit law in a most peculiar, second-handed fashion.” Id. It detracts from the district court’s “ability to control the litigants before them,” id., a particularly troublesome result here. Finally, and most significantly, the majority’s rationale seriously undercuts Rule ll’s deterrence objectives. See id. at 2454 (“Although the rule must be read in light of concerns that it will spawn satellite litigation and chill vigorous advocacy, any interpretation must give effect to the rule’s central goal of deterrence.”) (citation omitted).
Judge Stotler admirably and judiciously a-pplied Rule 11 in a measured manner in this thorny litigation. Our response should be approval and encouragement, not reversal, in this ongoing saga.
I would affirm the district court’s imposition of sanctions in all respects.

. The procedural posture of this ongoing litigation is complicated, at best. Ferm was not initially named as a party in FSLIC’s original complaint. When FSLIC amended its complaint on June 1, 1987, however, Ferm was added as a party. On October 28, 1987, the district court issued a preliminary injunction against Ferm, restraining her from transferring assets during the pendency of the action. Ferm has separately appealed this order.
There appear to be perhaps a dozen appeals which have been filed in this court arising out of this litigation. For example, see FSLIC v. Ferm, 909 F.2d 372 (9th Cir.1990); FSLIC v. Molinaro, 901 F.2d 1490 (9th Cir.1990); FSLIC v. Molinaro, 889 F.2d 899 (9th Cir.1989); FSLIC v. Ferm, 881 F.2d 1083 (9th Cir.1989) (memorandum disposition). And, of course, as the parties well know, this litigation is still going strong in Judge Stotler's court today.

. Of course, sanctions against the law firm must be reversed, as Rule 11 sanctions may be imposed only upon the signer of a pleading or paper, and not upon the attorney’s law firm. See Pavelic & LeFlore, — U.S. at-, 110 S.Ct. at 458-59.

. Notably, at the hearing concerning the motion for sanctions, Judge Stotler indicated that “it also appears that there may be even improper purpose in it’s [sic] [the cross-claim and counterclaim] bringing."

. The majority and I are not in complete disagreement on all aspects of this case. First, the majority’s implicit insinuation that the district court’s order granting sanctions was less than lucid is correct. However, a lack of lucidity, while disfavored, will not automatically require reversal of sanctions. Cf. Teamsters Local Union No. 760 v. United Parcel Serv., Inc., 921 F.2d 218 (9th Cir.1990) (affirming imposition of sanctions, even where appellate review was "severely hampered by the fact that the district court’s order awarding sanctions did not discuss, the relevant substantive law"). Here, the order’s lack of specificity is not fatal, since the district court set forth its reasoning in great detail at the motion hearing prior to entering its summary order.
I also agree with the majority that Ferm’s sovereign immunity argument, standing alone, is not sanctionable. Indeed, the district court made it very clear at the motion hearing that sovereign immunity was not the basis for the imposition of sanctions. Indeed, the district court did not pursue the sovereign immunity issue with counsel, focusing primarily on the preclusive effect of her prior orders.

.The majority’s contention that the district court never resolved the ownership issues is attenuated, at best. Ferm specifically opposed the FSLIC’s motion to permit it to take possession of the funds in the clerk’s custody, claiming that $489,000 of these funds were hers. To say that the district court did not resolve this question is to say that the court simply disregarded Ferm's opposition. Rather, the record reveals that the district court carefully considered, and rejected, Ferm’s claim.
In fact, in awarding sanctions the district court noted that it "necessarily looked” to the earlier orders and proceedings in the case. Judge Stotler stated:
All these claims have pretty mu[ch] been litigated before. The order directing payments of money is presently on appeal, and I believe this is an impermissible collateral attack on a final judgment, and it is barred by collateral estoppel. And I think it’s clear, this fact. And for this reason I think sanctions are appropriate.
Judge Stotler obviously thought that she had rendered a judgment with respect to the funds. FSLIC, in its motion, thought there had been an adjudication. Even Ferm, for having appealed from the very order directing payment of the disputed funds, must have thought that a final decision had been made.

. The district court held Molinaro in civil contempt for, inter alia, his concealment of $212,-000, and $66,000 in cash and an estimated $100,-000 to $200,000 in gold, diamonds, and jewelry in a safe deposit box at the Los Gatos Wells Fargo Bank. This contempt order necessarily found that Molinaro owned these assets. It could not have held him in contempt for concealing the assets of another person.