Court Opinion

ID: 9701966
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:47:27.778224+00
Date Added: 2024-06-11T18:21:31.609192
License: Public Domain

GILBERT, Justice
(concurring in part and dissenting in part).
I concur in the opinion of the majority, but I respectfully dissent from the majority’s conclusion as it relates to Von Hol-tum’s claim for attorney fees. I disagree with the basis of the court of appeals’ decision but would affirm on two other grounds. First, Von Holtum made an untimely request for attorney fees. Second, there is no basis in the record or in the law to use the trial court’s original sanction order as continuing notice for attorney fees when it only awarded dismissal of some counts without either granting or reserving judgment on attorney fees. The trial court did not observe the procedural safeguards required in Uselman and also entered contradictory findings. See Uselman v. Uselman, 464 N.W.2d 130, 144 (Minn.1990). Thus, the trial court abused its discretion. Such neglect of process does not effectuate the purpose of deterrence behind Minn. R. Civ. P. 11 and Minn.Stat. § 549.21 (1998).
The majority, acting as factfinder rather than as a reviewing court observing the abuse of discretion standard, finds that “sufficient required notice of [Von Holtum’s] intention to seek attorney fees as sanctions” had been given in their February 1996 motion. The majority finds support for its conclusion by holding that Uselman does not impose a duty on parties to give repeated notice throughout the litigation process. In the alternative, the majority states, “nevertheless, the notice provided by Von Holtum’s February 1996 motion cannot be seen as terminated before the court made a final determination on sanctions.”
We granted accelerated review in Usel-man primarily to address the question of the propriety of sanctions imposed against plaintiffs counsel because we found the issue to be of significance to both attorneys and litigants alike. See Uselman, 464 N.W.2d at 139. We felt that Uselman provided us with “an opportunity to explore the substantive and procedural intricacies of such awards.” Id. Nine years later, the principles of Uselman are even more significant to the practicing bar and litigants because the trial courts have carefully incorporated the reasoning of Usel-man in issuing awards for attorney fees. The majority now states that the trial court has “wide discretion” to award the type of sanctions it deems necessary. While it may be true that the trial court has some discretion in fashioning an appropriate sanction, Uselman also clearly put limits on this discretion. We require the court to seek out the “least severe sanction” and to observe certain procedural safeguards. Id. at 145. In concluding that notice was adequate, the majority opinion simply ignores how the trial court dealt with the initial motion for attorney fees and costs and what effect such action would have on the notice to the parties.
This new rule of law announced by the majority is contrary to what we held in Uselman:
Finally, it was incumbent upon the first pretrial judge to award sanctions at the time of the claimed abuse * * *. We observe that defendants collectively brought five motions for summary judgment or dismissal before trial and that, while the court narrowed the issues, it did allow the plaintiffs to proceed to trial. The party who survives these motions with the major claims intact should not be subject to sanctions after trial predicated on the surviving claims.
Id. at 144 (emphasis added).
A careful look at the facts in this case leads to the conclusion that “fair notice of *705both the possibility of a sanction and the reason for its proposed imposition” was not given and that “minimum procedural guidelines” were not followed. Id. at 143. Although Von Holtum initially sought attorney fees in a February 22, 1996 motion, the trial court did not grant fees at that time, nor did it reserve judgment on that issue. To the contrary, the trial court ordered dismissals, sanctions other than attorney fees, and was clearly mindful of the Uselman precedent. In its April 26, 1996 order, the court held that “under these circumstances, the court views its dismissal of the claims as the least restrictive sanction to effectuate Rule ll’s purpose of deterrence.” Even though attorney fees had been requested, the court failed to mention attorney fees or even reserve judgment on that issue.
On November 28, 1997, Von Holtum fíled a new notice of motion for attorney fees pursuant to Rule 11 and Minn.Stat. § 549.21 after the trial court process had ended, the court of appeals had affirmed a dismissal of the plaintiffs complaint, and we had denied review of that decision. This motion made absolutely no reference to the prior court disposition or the prior request for attorney fees.
The trial court’s January 29, 1998 decision to award sanctions must be viewed in the context of these prior proceedings. Focusing on the issue of notice, the trial court reasoned that “with the issuance of the order on these first dispositive motions, the plaintiffs were clearly put on notice as to the court’s concern for the need to back up the allegations of defamatory statements and related conduct by going beyond mere averments based on information and belief.” However, the April 26, 1996 order failed to mention attorney fees or even reserve judgment on that issue. Furthermore, from the parties’ perspective, the order clearly resolved all issues pending at that point in time relating to sanctions when the court characterized its dismissal of some of the counts as being the “ultimate sanction.”
Additionally, there was no award of attorney fees “at the time of the claimed abuse” in this case contrary to our Usel-man directive. Instead, the trial court waited 19 months to award fees after initially denying the attorney fees request. Then, it only did so based on a new motion by Von Holtum after the first round of the appellate process had been completed in August 1997.
As a part of the court’s award of sanctions, it also found that “[i]t is clear that the plaintiffs’ attorneys undertook significant efforts to determine the appropriateness of the litigation prior to the commencement thereof’ and held that those efforts would be considered “a factor in mitigation.” On the same date that the court awarded attorney fees, it also awarded costs pursuant to a companion order. In that memorandum order, the trial court held as follows:
The court does not suggest that the conduct of either at any time in such procedural disputes and the resultant numerous motions, countermotions and responsive motions, was by any measure inappropriate but notes that it not only increased each parties’ legal fees and as well increased expenses that are appropriately treated as disbursements.
While at the same time assessing attorney fees for the failure to reexamine positions during litigation, the court did not find any measures taken by the plaintiffs to be inappropriate. The sanction imposed is inconsistent with the findings of the court.
Rather than retaining jurisdiction or taking' the attorney fees request under advisement until the case had concluded, the trial court did just the opposite. The primary purpose of sanctions, deterrence, had been lost when all issues were fully adjudicated in the April 1996 order. As we stated in Uselman, “a policy of deter*706rence is not well served by tolerating abuses during the course of the action and then punishing the offender after the trial is at an end. The proper sanction assessed at the time of the transgression will ordinarily have some measure of deterrent effect on subsequent abuses and result in sanctions.” Id. at 143 (internal citations omitted). The requirement of fair notice of both the possibility of a sanction and the reason for its imposition has not been adhered to by the majority. Now, after losing an initial request for attorney fees and the “ultimate sanction” of dismissal has been awarded, a party may wait out the appellate process, and if successful, may then initiate a new motion for attorneys fees. Both the principles of deterrence and fair notice carefully articulated in Uselmcm have been eliminated in this context.