Court Opinion

ID: 9883610
Source: CourtListenerOpinion
Date Created: 2023-10-06 01:56:54.813217+00
Date Added: 2024-06-11T07:48:25.314835
License: Public Domain

OPALA, Chief Justice,
with whom KAUGER, Justice, joins, dissenting.
Today the court holds that the sanction provisions of 12 O.S.Supp.1987 § 20111 are *254not invocable against the law firm (or professional corporation) of the individual lawyer whose signature on a court document was found to be in violation of the statute. I cannot accede to this pronouncement. In my view, when the signing lawyer is found to have violated § 2011, the law firm entity is prima facie jointly and severally liable unless it shows, by clear and convincing proof, that the violation stems from an act that lies outside the scope of its relationship with the signer.2
I.
THIS COURT IS NOT BOUND BY PAVELIC3
The court’s opinion closely tracks that of the U.S. Supreme Court in Pavelic & LeFlore v. Marvel Entertainment Group,4 which held that Rule 11, F.R.Civ.P., does not authorize a court to impose sanctions against a culpable lawyer’s law firm.5 Although the pedigree of our § 2011 clearly is traceable to Rule 11, Pavelic is not binding on this court. It came after Oklahoma’s adoption of the Rule 11 sanction provisions now embodied in § 2011. This court is hence free to interpret § 2011 differently. Had the federal high court placed its gloss on that rule before § 2011 came to be enacted in Oklahoma, we would have been bound today by the Court’s Pavelic pronouncement.6
II.
THE TERMS OF § 2011 ARE INVOCABLE AGAINST A SIGNER’S LAW FIRM
Section 2011 requires “at least one attorney of record in his individual name ” to sign “[ejvery pleading, motion, and other paper.” (Emphasis added.) Also, it is the “signature of an attorney ” which “constitutes a certificate by him that he has read the pleading, motion, or other paper....” Although no specific reference is made to the signer’s law firm, § 2011 mandates that sanctions be imposed “upon the person who signed.” (Emphasis added.) I construe this operative phrase to include “a juridical person on whose behalf the document is signed.”7 I hence align myself with the Rule 11 construction by Justice Marshall in his dissent from Pavelic. There, he observed that “one can reasonably assume that the word ‘person’ indicates more than just natural persons, encompassing partnerships and professional corporations as well.”8
The goals of § 2011 support this construction. Three of the Rule 11 objectives noted by Marshall, J., in the Pavelic dissent *255are accountability, deterrence and enforcement flexibility. Each is served by making law firms subject to § 2011 liability:
“[a] * * * [Individual accountability may be heightened when an attorney understands that his carelessness or maliciousness may subject both himself and his firm to liability. The concern that a person take direct responsibility for each paper is not disserved by holding the law firm responsible in cases where the district court determines that both are blameworthy. * * *
“[b] * * * [DJeterrence might best be served by imposing sanctions on the signer’s law firm in an attempt to encourage internal monitoring. * * *
“[c] * * * The judge who observes improper behavior and who is intimately familiar with the facts of a case should be able to fashion the penalty that most effectively deters future abuse. * * * " 9
in.
THE LAW FIRM SHOULD BE PRIMA FACIE LIABLE FOR ITS LAWYER’S LITIGATION-RELATED MISCONDUCT
There are three distinct remedial tracks to enforce a lawyer’s accountability for practice-related misdeeds: bar discipline, legal malpractice redress and sanctions. Professional discipline for ethical breaches affects the lawyer qua licensee. It is always imposed on a strictly individual basis and only by this state’s Supreme Court.10 Sanctions for litigation-related misconduct, whether they possess a compensatory or punitive aspect, affect the lawyer’s pocketbook. The effect of reparation for malpractice is similar to that of sanctions.
The liability I would impose upon law firms for a § 2011 violation by an associated practitioner is comparable to their exposure for a member’s tortious conduct.11 The professional corporation or partnership should be jointly and severally liable with the errant signer, unless it shows, by clear and convincing evidence, that the offending individual acted beyond the scope of his (or her) professional relationship. I would not hold non-culpable individual shareholders or partners personally liable for § 2011 sanctions.12
I would hence reverse the trial court’s order denying the appellant’s “motion for sanctions” and remand this cause for a meaningful inquiry into the signer’s relationship with the law firm at the time critical to the misconduct for which sanctions stood imposed.

. The pertinent terms of 12 O.S.Supp.1987 § 2011 are:
“Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address and Oklahoma Bar Association identification number shall be stated. * * * The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. * * * If a pleading motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall im*254pose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee.” (Emphasis added.)

. An arrangement between a law firm (or professional corporation) and one of its members may allow the individual lawyer to carry on professional activities outside the course of the entity’s business.

. Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989).

. See supra note 3.

. Before Pavelic, the circuits disagreed over whether Rule 11 authorizes sanctions against a lawyer or entity other than the signer. See, e.g., Robinson v. National Cash Register Co., 808 F.2d 1119, 1130 (5th Cir.1987) (answering the question in the negative); Calloway v. Marvel Entertainment Group, 854 F.2d 1452, 1479 (2nd Cir. 1988) (holding in the affirmative), reversed by the Court in Pavelic, supra note 3. In two other cases, where the issue does not appear to have been presented, sanctions against the law firm were upheld. See Mars Steel Corp. v. Continental Bank N.A., 880 F.2d 928 (7th Cir. 1989); E.E. O.C. v. Milavetz and Associates, P.A., 863 F.2d 613 (8th Cir. 1989).

. See Matter of Estate of Speake, 743 P.2d 648, 650 (Okl.1987), where this court held that "[¡Judicial interpretation by a court of last resort impressed on adopted legislation before its reception cannot be changed by jurisprudence of the receiving state.”

. Pavelic & LeFlore v. Marvel Entertainment Group, supra note 3, 493 U.S. at-,-, 110 S.Ct. at 460 (Marshall, J., dissenting).

. Pavelic & LeFlore v. Marvel Entertainment Group, supra note 3, 493 U.S. at-,-, 110 S.Ct. at 461 (Marshall, J., dissenting).

. Pavelic & LeFlore v. Marvel Entertainment Group, supra note 3, 493 U.S. at-,-, 110 S.Ct. at 461-462 (Marshall, J., dissenting).

. State ex rel. Okl. Bar Ass'n v. Raskin, 642 P.2d 262, 265-266 (Okl.1982); see also Winters v. City of Oklahoma City, 740 P.2d 724, 729-730 (1987) (Opala, J., concurring in part and dissenting in part).

. See First Bank & Trust Co. v. Zagoria, 250 Ga. 844, 302 S.E.2d 674, 676 (1983), where the court held that a lawyer holding himself out as a law firm member "will be liable not only for his own professional misdeeds but also for those of the other members of his firm,” whether the firm be a partnership or a professional corporation.

.Courts that have discussed the liability of a lawyer’s professional corporation for the tort of the individual member generally have held the corporation liable to the extent of its assets. There is disagreement on whether lawyers who did not participate in the actionable wrong may be held personally liable. Annot. Liability of professional corporation of lawyers, or individual members thereof, for malpractice or other tort of another member, 39 A.L.R.4th 556, 557.