Court Opinion

ID: 4259983
Source: CourtListenerOpinion
Date Created: 2018-03-30 18:00:32.444702+00
Date Added: 2024-06-11T14:27:02.257451
License: Public Domain

FILED
                                                                    United States Court of Appeals
                                         PUBLISH                            Tenth Circuit

                          UNITED STATES COURT OF APPEALS                  March 30, 2018

                                                                       Elisabeth A. Shumaker
                                 FOR THE TENTH CIRCUIT                     Clerk of Court
                             _________________________________

AUTO-OWNERS INSURANCE
COMPANY, a Michigan corporation,

       Plaintiff Counter Defendant –
       Appellee,
                                                            No. 16-1348
v.                                                 (D.C. No. 1:14-CV-03417-LTB)
                                                              (D. Colo.)
SUMMIT PARK TOWNHOME
ASSOCIATION, a Colorado corporation,

       Defendant Counterclaimant.

------------------------------

WILLIAM C. HARRIS; DAVID J.
PETTINATO,

       Appellants.

–––––––––––––––––––––––––––––––––––

AUTO-OWNERS INSURANCE
COMPANY, a Michigan corporation,

       Plaintiff Counter Defendant –
       Appellee,
                                                            No. 16-1352
v.                                                 (D.C. No. 1:14-CV-03417-LTB)
                                                              (D. Colo.)
SUMMIT PARK TOWNHOME
ASSOCIATION, a Colorado corporation,

       Defendant Counterclaimant –
       Appellant.
                       _________________________________
                                     ORDER
                        _________________________________

Before TYMKOVICH, Chief Judge, BRISCOE, and BACHARACH, Circuit Judges.
                 _________________________________

       These matters are before us, sua sponte, to withdraw and amend the decisions

issued in these appeals originally on March 23, 2018. Those original opinions are hereby

VACATED, and the attached revised opinions shall issue effective the date of this order

and with a filing date of today. The Clerk is directed to issue and distribute the amended

opinions accordingly.

                                             Entered for the Court

                                             ELISABETH A. SHUMAKER, Clerk

                                             2
                                                                                   FILED
                                                                       United States Court of Appeals
                                           PUBLISH                             Tenth Circuit

                             UNITED STATES COURT OF APPEALS                   March 30, 2018

                                                                          Elisabeth A. Shumaker
                                 FOR THE TENTH CIRCUIT                        Clerk of Court
                                 _________________________________

AUTO-OWNERS INSURANCE
COMPANY, a Michigan
corporation,

            Plaintiff Counter Defendant-
            Appellee,

v.                                                              No. 16-1348

SUMMIT PARK TOWNHOME
ASSOCIATION, a Colorado
corporation,

            Defendant Counterclaimant.

------------------------------

WILLIAM C. HARRIS; DAVID J.
PETTINATO,

            Appellants.
                                 _________________________________

                         Appeal from the United States District Court
                                 for the District of Colorado
                               (D.C. No. 1:14-CV-03417-LTB)
                                 _________________________________

George A. Vaka, Vaka Law Group, Tampa, Florida (Michael L. Hutchinson
and Kathleen M. Byrne, Treece Alfrey Musat, P.C., Denver, Colorado, on
the briefs), for Appellants.

Terence M. Ridley (Michael L. O’Donnell, Evan Bennett Stephenson, and
Cedric D. Logan, with him on the brief), Wheeler Trigg O’Donnell LLP,
Denver, Colorado, for Plaintiff Counter Defendant-Appellee.
                      _________________________________
Before TYMKOVICH, Chief Judge, BRISCOE, and BACHARACH,
Circuit Judges.
                 _________________________________

BACHARACH, Circuit Judge.
                  _________________________________

      Mr. William Harris and Mr. David Pettinato are two attorneys who

represented Summit Park Townhome Association. While representing

Summit Park against its insurer, the two attorneys were sanctioned for

failing to disclose information. In this appeal, the attorneys challenge the

sanctions based on five arguments:

      1.     The district court lacked authority to require the disclosure
             requirements.

      2.     The attorneys did not violate the court’s disclosure
             requirements.

      3.     The district court awarded attorneys’ fees beyond the scope of
             an earlier sanctions order.

      4.     The district court’s award of attorneys’ fees resulted in a
             deprivation of due process.

      5.     The amount of attorneys’ fees awarded was unreasonable.

      We affirm. Regardless of whether the district court had authority to

require the disclosures, the attorneys were obligated to comply. They did

not, and the district court acted reasonably in issuing sanctions,

determining the scope of the sanctions, and calculating the amount of the

sanctions.

                                        2
I.   Mr. Harris and Mr. Pettinato were sanctioned for failing to
     comply with the disclosure order.

     This appeal grew out of an insurance dispute. Summit Park sustained

hail damage and filed a claim with its insurer, Auto-Owners Insurance

Company. The parties agreed that damage had occurred but disagreed on

the dollar amount of the damage. Auto-Owners sued for a declaratory

judgment to decide the value.

     Summit Park retained Mr. Harris and Mr. Pettinato, who successfully

moved to compel an appraisal based on the insurance policy. In the event

of an appraisal, the insurance policy required:

     [E]ach party will select a competent and impartial appraiser.
     The two appraisers will select an umpire. If they cannot agree,
     either may request that selection be made by a judge of a court
     having jurisdiction. The appraisers will state separately the
     value of the property and amount of loss. If they fail to agree,
     they will submit their differences to the umpire. A decision
     agreed to by any two will be binding.

Appellee’s Supp. App’x, vol. 1 at 123.

     Based on continuing disputes between the parties, Auto-Owners

asked the district court to resolve these disputes by ordering an “appraisal

agreement.” The court did so and ordered disclosure of facts potentially

bearing on the appraisers’ impartiality:

     An individual who has a known, direct, and material interest in
     the outcome of the appraisal proceeding or a known, existing,
     and substantial relationship with a party may not serve as an
     appraiser. Each appraiser must, after making a reasonable
     inquiry, disclose to all parties and any other appraiser any
     known facts that a reasonable person would consider likely to

                                      3
      affect his or her impartiality, including (a) a financial or
      personal interest in the outcome of the appraisal; and (b) a
      current or previous relationship with any of the parties
      (including their counsel or representatives) or with any of the
      participants in the appraisal proceeding . . . . Each appraiser
      shall have a continuing obligation to disclose to the parties
      and to any other appraiser any facts that he or she learns after
      accepting appointment that a reasonable person would consider
      likely to affect his or her impartiality.

Appellants’ App’x, vol. 1 at 245-46. The court warned: “Notice is given

that, if the court finds that the parties and/or their counsel have not

complied with this order, the court will impose sanctions against the

parties and/or their counsel pursuant to the court’s inherent authority.” Id.

at 248 (capitalization removed).

      Before the court imposed these requirements, Summit Park selected

Mr. George Keys as its appraiser. This selection led Auto-Owners to

express doubt about Mr. Keys’s impartiality. But Auto-Owners did not

object to Mr. Keys or move to compel further disclosures.

      Mr. Keys and the court-appointed umpire agreed on an appraisal

award of over $10 million, which was 47% higher than Summit Park’s own

public adjuster had determined. Auto-Owners then launched an

investigation, which culminated in an objection to Mr. Keys. In the

objection, Auto-Owners argued that Mr. Keys was not impartial and that

Summit Park had failed to disclose evidence bearing on his impartiality.

The district court credited these arguments, disqualifying Mr. Keys and

vacating the appraisal award.

                                       4
      With vacatur of the appraisal award, Auto-Owners moved for

sanctions against Mr. Harris and Mr. Pettinato, seeking attorneys’ fees and

expenses based on violation of the disclosure order. The district court

granted the motion, assessing sanctions against Mr. Harris and Mr.

Pettinato for $354,350.65 in attorneys’ fees and expenses.

II.   Mr. Harris and Mr. Pettinato were bound by the court’s
      disclosure order.

      Mr. Harris and Mr. Pettinato challenge the district court’s authority

to enter the disclosure order. But even if the court had exceeded its

authority, Mr. Harris and Mr. Pettinato would still have needed to comply

with the disclosure order. If the two attorneys believed that the order had

been unauthorized, they could have sought reconsideration or a writ; but

they could not violate the order. See Maness v. Meyers, 419 U.S. 449, 458

(1975) (“If a person to whom a court directs an order believes that order is

incorrect the remedy is to appeal, but, absent a stay, he must comply

promptly with the order pending appeal.”).

      There is “impressive authority for the proposition that an order

issued by a court with jurisdiction over the subject matter and person must

be obeyed by the parties until it is reversed by orderly and proper

proceedings.” United States v. United Mine Workers, 330 U.S. 258, 293

(1947). The parties agree that the district court had jurisdiction over the

subject matter and parties; thus, the attorneys and parties bore an

                                      5
obligation to comply in the absence of an appellate challenge. See United

States v. Beery, 678 F.2d 856, 866 (10th Cir. 1982) (“Since the court

entering these orders had jurisdiction over both the subject matter and [the

defendant], [the defendant] was bound by these orders until reversed or

otherwise set aside . . . .”); see also GTE Sylvania, Inc. v. Consumers

Union of U.S., Inc, 445 U.S. 375, 386 (1980) (applying “the established

doctrine that persons subject to an injunctive order issued by a court with

jurisdiction are expected to obey that decree until it is modified or

reversed, even if they have proper grounds to object to the order”). In light

of the duty to comply, violation of the order could trigger sanctions. See

United Mine Workers, 330 U.S. at 294 (quoting Howat v. Kansas, 258 U.S.
181, 190 (1922)). 1

                                    * * *

1
      In United Mine Workers, the Supreme Court observed:

            It does not follow, of course, that simply because a
      defendant may be punished for criminal contempt for
      disobedience of an order later set aside on appeal, that the
      plaintiff in the action may profit by way of a fine imposed in a
      simultaneous proceeding for civil contempt based upon a
      violation of the same order. The right to remedial relief falls
      with an injunction which events prove was erroneously issued.
330 U.S. at 294-95. But Mr. Harris and Mr. Pettinato have raised no
argument based on this language. Thus, we need not consider whether this
language would affect the validity of the sanctions against Mr. Harris and
Mr. Pettinato.

                                      6
       Regardless of whether the district court had authority to issue the

disclosure order, Mr. Harris and Mr. Pettinato

           bore an obligation to comply in the absence of an appellate
            challenge and

           could be sanctioned for noncompliance.

III.   Mr. Harris and Mr. Pettinato violated the disclosure order.

       The district court concluded that the two attorneys had violated the

disclosure order. Challenging this conclusion, Mr. Harris and Mr. Pettinato

make two arguments:

       1.   The district court misinterpreted the term “impartial.”

       2.   Mr. Harris and Mr. Pettinato disclosed sufficient information
            about Mr. Keys.

Both arguments fail.

       A.   Standard of Review

       We ordinarily review sanctions under the abuse-of-discretion

standard. Russell v. Weicker Moving & Storage Co., 746 F.2d 1419, 1420

(10th Cir. 1984) (per curiam). But Mr. Harris and Mr. Pettinato urge a

legal error consisting of misinterpretation of the term “impartial.” For the

challenge involving the meaning of “impartial,” we engage in de novo

review. Hamilton v. Boise Cascade Express, 519 F.3d 1197, 1202 (10th

Cir. 2008). We otherwise confine our review to the abuse-of-discretion

standard.

                                       7
      B.    Mr. Harris and Mr. Pettinato failed to disclose information
            specified in the disclosure order.

      The district court required disclosure of

           the appraiser’s “financial or personal interest in the outcome of
            the appraisal,”

           any “current or previous relationship” between the appraiser
            and Summit Park’s counsel, and

           any other facts subsequently learned that “a reasonable person
            would consider likely to affect” the appraiser’s impartiality.

Appellants’ App’x, vol. 1 at 245-46.

      1.    Mr. Harris and Mr. Pettinato did not disclose the extent of
            their relationships with Mr. Keys.

      Regardless of whether the district court had correctly defined

“impartial,” the disclosure order itself was clear in what was required. For

example, the order expressly required disclosure of the attorneys’ current

or previous relationships with the appraiser. The failure to disclose this

information constituted a sanctionable violation regardless of the court’s

interpretation of the word “impartial.”

      The district court could reasonably find that the two attorneys had

failed to disclose the extent of their relationships with Mr. Keys. For

example, the attorneys failed to disclose that

           other attorneys in their law firm (the Merlin Law Group) had
            worked with Mr. Keys on appraisals for at least 33 clients,

           Merlin attorneys had represented Mr. Keys on various matters
            for over a decade,

                                       8
          Merlin’s founder and Mr. Keys had co-founded a Florida
           lobbying operation, whose “number one goal [was] to protect
           policyholders and the public adjusting profession,” Appellee’s
           Supp. App’x, vol. 4 at 812, and

          Merlin attorneys had served as the incorporator and registered
           agent for one of Mr. Keys’s companies. 2

     Mr. Harris and Mr. Pettinato argue that their disclosures were

sufficient. They made two disclosures:

2
      The district court also pointed out that Mr. Harris and Mr. Pettinato
had failed to disclose a contingent-fee cap in Mr. Keys’s original contract.
Auto-Owners asked Mr. Harris in writing for all “drafts, additions,
amendments and/or revisions” of the agreement with Mr. Keys. Appellee’s
Supp. App’x at 828. Mr. Harris responded that he would bring a copy of
the agreement, implying that no other drafts existed. Id. at 827.

      Mr. Harris furnished the final version of the agreement, leading
Auto-Owners to ask Summit Park’s former president whether the agreement
had ever been revised. He responded: “Not to my knowledge.” Id. at 800.
Mr. Harris and Mr. Pettinato later excused this statement on the ground
that the former president had not been involved in the discussions with Mr.
Keys regarding his contract. But Mr. Harris and Mr. Pettinato were
intimately involved in those discussions, and Mr. Harris—who was
accompanying the former president at the time—said nothing to correct the
false statement. Instead, Mr. Harris and Mr. Pettinato waited until after
completion of the appraisal to disclose the existence of a prior version of
Mr. Keys’s agreement.

      With this disclosure, Auto-Owners learned that Mr. Keys had earlier
worked under a contingent-fee cap, which raised his maximum fee based on
the total amount recovered by Summit Park. This information revealed
another false statement by Mr. Harris himself. While the contingent-fee
cap had been in place, Mr. Harris represented to Auto-Owners that Mr.
Keys had “no financial interest in the claim.” Id. at 327. This
representation was false: at the time, the contingent-fee cap created a
financial interest by allowing Mr. Keys to earn a greater fee based on the
amount of the appraisal. Auto-Owners had no way of learning that the
representation was false, however, until Mr. Harris eventually disclosed
the existence of an earlier version of the agreement.

                                      9
      1.    “Mr. Keys does not have any significant prior business
            relationship with [Merlin], Summit Park, or C3 Group. Mr.
            Keys has acted as a public adjuster and/or appraiser on behalf
            of policyholders that [Merlin] has represented in the past,
            however, this obviously does not affect his ability to act [as] an
            appraiser in this matter.” Appellant’s App’x, vol. 2 at 292.

      2.    “Mr. Keys has acted as a public adjuster and/or appraiser on
            behalf of policyholders that [Merlin] has represented in the
            past. Mr. Keys has no financial interest in the claim, and has no
            previous relationship with the policyholder in this matter.” Id.
            at 298.

In addition, Mr. Keys disclosed:

      I do not have a material interest in the outcome of the Award
      and have never acted either for or against Summit Park
      Townhome Association. My fee agreement is based upon hourly
      rates plus expenses… I do not have any substantial business
      relationship or financial interest in [Merlin]. There have been
      cases where both [Merlin] and Keys Claims Consultants acted
      for the same insured but under separate contracts.

Id. at 307-08.

      Mr. Harris and Mr. Pettinato make two defenses of their disclosures:

      1.    They disclosed enough information about Mr. Keys’s
            impartiality.

      2.    Mr. Harris and Mr. Pettinato lacked personal knowledge about
            the undisclosed facts.

These arguments fail.

      First, the district court acted within its discretion in concluding that

Mr. Harris and Mr. Pettinato had failed to disclose the extent of their

relationships with Mr. Keys. The two attorneys disclosed only that Mr.

Keys had worked as an appraiser on behalf of Merlin’s clients, and Mr.

                                      10
Keys stated that he lacked a substantial business relationship with Merlin.

The district court could reasonably find that these disclosures had failed to

provide meaningful information about the extent of the relationships

between the two attorneys and Mr. Keys.

      Second, Mr. Harris and Mr. Pettinato cannot avoid sanctions based

on their asserted lack of knowledge about Mr. Keys’s contacts with other

Merlin attorneys. Mr. Harris and Mr. Pettinato knew about some of the

contacts, as reflected in Mr. Pettinato’s description of his firm’s

connection with Mr. Keys: “Both Mr. Keys and his staff have assisted me

as well as my firm in resolving an untold number of large multi-million

dollar losses to an amicable resolution and settlement to the policyholders’

benefit and satisfaction.” Appellee’s Supp. App’x, vol. 4 at 704. In

addition, however, Mr. Harris and Mr. Pettinato bore an obligation to make

“a reasonable inquiry.” Appellant’s App’x, vol. 2 at 245. In light of this

obligation, Mr. Harris and Mr. Pettinato could not profess ignorance while

failing to inquire about contacts with other Merlin attorneys.

      In these circumstances, the district court acted within its discretion

in finding a failure to disclose the extent of the relationships between the

two attorneys and Mr. Keys.

                                      11
      2.    Mr. Harris and Mr. Pettinato distort the effect of the
            district court’s definition of “impartial.”

      The district court required disclosure not only of the appraiser’s

relationship with counsel but also of known facts that a reasonable person

would consider likely to affect the appraiser’s impartiality. This part of the

disclosure requirement was tied to the court’s definition of the term

“impartial.”

      Mr. Harris and Mr. Pettinato focus on the court’s definition of

“impartial,” arguing that it was wrong and that the court failed to

adequately inform Mr. Harris and Mr. Pettinato of the scope of their

obligations. But in the disclosure order itself, the court stated what it

meant by “impartial”: “An individual who has a known, direct, and

material interest in the outcome of the appraisal proceeding or a known,

existing, and substantial relationship with a party may not serve as an

appraiser.” Id. at 245. Because the court stated precisely what it meant by

“impartial,” Mr. Harris and Mr. Pettinato knew what was required. And as

we have discussed, Mr. Harris and Mr. Pettinato could not disobey the

order even if the court had based the disclosure requirements on a

misguided definition of “impartial.” 3

3
      The district court ultimately held not only that the undisclosed facts
would likely affect a reasonable person’s consideration of Mr. Keys as
impartial (requiring disclosure), but also that Mr. Keys was ineligible to
serve as an appraiser because of his partiality (requiring vacatur of the

                                      12
      3.    The district court reasonably found a violation of the
            disclosure order tied to this test of “impartial.”

      Based on this definition, the district court required disclosure of any

facts that a reasonable person would view as likely to affect the appraiser’s

impartiality. Mr. Harris and Mr. Pettinato argue that evidence of an

appraiser’s advocacy was unlikely to affect the appraiser’s impartiality.

See Owners Ins. Co. v. Dakota Station II Condominium Ass’n, 2017 WL
3184568, at *4 (Colo. App. July 27, 2017), cert. granted, 2018 WL 948601

(Colo. Feb. 20, 2018). For the sake of argument, let’s assume that Mr.

Harris and Mr. Pettinato are right. Still, the district court could reasonably

view Mr. Keys’s undisclosed prior statements as likely to affect his

impartiality based on a known, direct, and material interest in the outcome.

      For example, in a presentation to a group of public adjusters in

Florida, Mr. Keys taught participants how to “harvest the claim money”

from an insurer during an appraisal. Appellants’ App’x, vol. 2 at 342. And

one of Mr. Keys’s companies maintains a website stating: “Our purpose is

simple: To shift the balance of power from the insurer to the policy holder

. . . .” Appellee’s Supp. App’x, vol. 4 at 729. The district court could

appraisal award). In vacating the appraisal award, the court expanded upon
its definition of “impartial.” Vacatur of the appraisal award led to
sanctions against Summit Park but not against Mr. Harris or Mr. Pettinato.
These two individuals were sanctioned for violating the disclosure order,
not selecting a biased appraiser.

                                      13
reasonably view these undisclosed statements as proof of a material

interest in an outcome favoring the policyholder over the insured.

      Evidence also suggests that Mr. Harris and Mr. Pettinato were aware

of Mr. Keys’s bias. For example, in an advertisement on Mr. Keys’s

website, Mr. Pettinato endorsed Mr. Keys, saying: “Both Mr. Keys and his

staff have assisted me as well as my firm in resolving an untold number of

large multi-million dollar losses to an amicable resolution and settlement

to the policyholders’ benefit and satisfaction.” Id. at 704. And a profile on

Merlin’s website reported that Mr. Keys “ha[d] dedicated his professional

life to being a voice for policyholders in property insurance claims.” Id. at

723. In this profile, Mr. Keys stated: “I was taught to always handle a

claim as if my momma was the insured.” Id.

                                     * * *

      In sum, the district court did not abuse its discretion in finding that

Mr. Harris and Mr. Pettinato had violated the disclosure order.

      C.    Waiver

      Mr. Harris and Mr. Pettinato contend that Auto-Owners waived its

objection to the sufficiency of the disclosures by failing to object despite

knowledge of Mr. Keys’s relationship with Merlin and past expressions of

bias toward policyholders. We disagree. Auto-Owners had some knowledge

about Mr. Keys’s bias but did not know much of what had been withheld.

                                      14
Without full knowledge of the undisclosed information, Auto-Owners did

not waive its right to seek sanctions for nondisclosure.

IV.   The district court reasonably interpreted the scope of its
      sanctions order.

      In sanctioning the two attorneys, the court invoked 28 U.S.C. § 1927.

Under § 1927, an 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. Applying this statute

in the sanctions order, the court found that Mr. Harris and Mr. Pettinato

had unreasonably prolonged the proceedings:

      I note that Section 1927 indicates a purpose to compensate
      victims of abusive litigation practices, not to deter and punish
      offenders. With this purpose in mind, I reject Auto-Owners’
      request for fees for proceedings in this Court that relate to
      conducting the appraisal process and conducting the appraisal
      process itself because Auto-Owners would have incurred these
      fees regardless of Harris’ and Pettinato’s misconduct. I grant
      the request, however, as to Auto-Owners’ investigation into
      George Keys and its objections to his participation in the
      appraisal, as this work would not have taken place in the
      absence of Harris’ and Pettinato’s misconduct. The award shall
      be assessed against Harris and Pettinato jointly and severally.

Appellants’ App’x, vol. 3 at 607 (citations & internal quotation marks

omitted).

      Mr. Harris and Mr. Pettinato challenge the scope of this order. They

concede that the award covered Auto-Owners’ objection to Mr. Keys

                                     15
($186,705.50) and investigation of Mr. Keys ($33,805). But the attorneys

disagree with the inclusion of attorneys’ fees for

           Auto-Owners’ preparation of the motion for sanctions
            ($51,309.50),

           Auto-Owners’ preparation of the application for attorneys’ fees
            and expenses ($16,960.50), and

           Auto-Owners’ other related work ($61,662.50).

According to Mr. Harris and Mr. Pettinato, these activities fell outside of

the initial sanctions order. We disagree.

      In setting attorneys’ fees following the sanctions order, the district

court explained:

      Thus, viewed properly in its context, my award encompasses
      any fees incurred as a result of Harris’ and Pettinato’s
      misconduct. The fees requested by Auto-Owners for work on
      the third amended petition, the reservation of rights letter, and
      other matters described in the detailed billing records would
      not have been incurred but for Harris’ and Pettinato’s
      misconduct. I therefore conclude they are within the scope of
      the award.

Appellants’ App’x, vol. 3 at 671. We give deference to the district court’s

interpretation of its own order. See, e.g., Chi., Rock Island & Pac. R.R. v.

Diamond Shamrock Ref. & Mktg. Co., 865 F.2d 807, 811 (7th Cir. 1988)

(“We shall not reverse a district court’s interpretation of its own order

‘unless the record clearly shows an abuse of discretion.’” (quoting Arenson

v. Chicago Mercantile Exch., 520 F.2d 722, 725 (7th Cir. 1975))).

                                      16
     With such deference, we conclude that the district court reasonably

interpreted its prior sanctions order. The sanctions order had noted that

§ 1927 was designed “‘to compensate victims of abusive litigation

practices.’” Appellants’ App’x, vol. 3 at 607 (quoting Hamilton v. Boise

Cascade Express, 519 F.3d 1197, 1205 (10th Cir. 2008)). In light of this

purpose, the court interpreted its sanctions order against Mr. Harris and

Mr. Pettinato as encompassing all of the attorneys’ fees and expenses

resulting from violation of the disclosure order. Id. This interpretation was

reasonable.

     The sanctions order expressly included the investigation of and

objection to Mr. Keys. But the district court could reasonably interpret the

sanctions order to go beyond the investigation and objection. If Mr. Harris

and Mr. Pettinato had not violated the disclosure order, Auto-Owners

would not have had to move for sanctions, seek attorneys’ fees and

expenses, and complete other work. As a result, the district court could

reasonably consider these litigation expenses as the product of the two

attorneys’ misconduct. In these circumstances, it was reasonable for the

district court to conclude that the earlier sanctions order had encompassed

attorneys’ fees and expenses from the motion for sanctions, application for

attorneys’ fees and expenses, and related work involving the motion and

application.

                                     17
V.    The district court did not deprive the two attorneys of due
      process.

      Alternatively, Mr. Harris and Mr. Pettinato assert a deprivation of

due process based on an inability to respond to the district court’s

inclusion of litigation activities outside of the initial sanctions order. We

disagree. 4 Auto-Owners filed an application for attorneys’ fees, and Mr.

Harris and Mr. Pettinato had an opportunity to respond. In the response,

they could have objected to any of the attorneys’ fees being sought. This

opportunity supplied due process. See Resolution Tr. Corp. v. Dabney, 73
F.3d 262, 268 (10th Cir. 1995) (“[T]he opportunity to fully brief the issue

is sufficient to satisfy due process requirements.”); see also Auto-Owners

Ins. Co. v. Summit Park Townhome Ass’n, No. 16-1352, slip op. at 17-19

(10th Cir. Mar. 30, 2018) (to be published) (discussing a similar argument

made by Summit Park Townhome Association).

4
      Mr. Harris and Mr. Pettinato did not make this argument in district
court. Thus, Auto-Owners argues that the argument was forfeited. See
Richison v. Ernest Grp., 634 F.3d 1123, 1128 (10th Cir. 2011). Mr. Harris
and Mr. Pettinato disagree, contending that they had no contemporaneous
opportunity to object to the due-process violation because they learned of
it only when they received the district court’s written order. We may
assume, for the sake of argument, that Mr. Harris and Mr. Pettinato did not
forfeit their due-process challenge.

                                      18
VI.     The amount of attorneys’ fees awarded was reasonable.

        Mr. Harris and Mr. Pettinato also argue that the court awarded an

unreasonable amount of attorneys’ fees. We disagree.

        We review a determination of attorneys’ fees for an abuse of

discretion. See AeroTech, Inc. v. Estes, 110 F.3d 1523, 1528 (10th Cir.

1997). In applying the abuse-of-discretion standard, we consider whether

the district court’s determination appears reasonable in light of the

complexity of the case, the number of strategies pursued, and the responses

necessitated by the other party’s maneuvering. See Robinson v. City of

Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998). But we do not require the

district court to identify and justify every hour allowed or disallowed. See

Malloy v. Monahan, 73 F.3d 1012, 1018 (10th Cir. 1996).

        The district court closely reviewed the information in Auto-Owners’

request for fees, determining that most of the fee requests were reasonable

given

             the circumstances of the case,

             the hourly rates prevailing in the community, and

             the use of billing judgment.

        First, the district court concluded that it was reasonable for Auto-

Owners’ counsel to spend long hours because “Auto-Owners had over $30

million at stake” and the issues were complex. Appellants’ App’x, vol. 3 at

673-74. This conclusion was reasonable.
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      Second, the court considered the local market, the qualifications of

the attorneys, and the contentiousness of the litigation. These

considerations led the district court to find that the billing rates had been

reasonable. In our view, this finding was permissible under the record.

      Third, the court considered the use of billing judgment by Auto-

Owners’ counsel through concessions such as staffing with lower-billing

attorneys, declining to charge for all hours worked, and discounting hours

worked by paralegals and secretaries. 5 The district court acted reasonably

in considering these concessions.

      For these three reasons, we conclude that the district court did not

abuse its discretion in calculating the amount of the sanction

($354,350.65). 6

VII. Conclusion

      The district court did not err in sanctioning Mr. Harris and Mr.

Pettinato. Regardless of the validity of the disclosure order, compliance

was required in the absence of an appellate challenge. Mr. Harris and Mr.

Pettinato violated the order by failing to disclose information bearing on

5
      The district court ultimately reduced Auto-Owners’ fees by $1,098
for one duplicate entry and one vague entry.
6
      Alternatively, Mr. Harris and Mr. Pettinato urge reversal for more
specific findings. But the district court supported its award with detailed
findings. Mr. Harris and Mr. Pettinato do not say what other findings
should have been made.

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Mr. Keys’s impartiality. In light of this violation, the district court had the

discretion to sanction Mr. Harris and Mr. Pettinato and set a reasonable

amount. We therefore affirm the assessment of sanctions.

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