Court Opinion

ID: 4186225
Source: CourtListenerOpinion
Date Created: 2017-07-14 13:01:15.710957+00
Date Added: 2024-06-11T07:47:21.792915
License: Public Domain

Case: 17-10068   Date Filed: 07/14/2017   Page: 1 of 8

                                                      [DO NOT PUBLISH]

          IN THE UNITED STATES COURT OF APPEALS

                  FOR THE ELEVENTH CIRCUIT
                    ________________________

                          No. 17-10068
                      Non-Argument Calendar
                    ________________________

                D.C. Docket No. 1:14-cv-00586-WSD

ELAINE ARMSTEAD

                                                                   Plaintiff,

SANDRA FINCH,

                                                      Respondent-Appellant,

                                versus

ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY,

                                                        Defendant-Appellee,

WEBB, ZSCHUNKE, NEARY, & DIKEMAN, LLP,

                                                                  Defendant.

                    ________________________

             Appeal from the United States District Court
                for the Northern District of Georgia
                   ________________________

                           (July 14, 2017)
              Case: 17-10068     Date Filed: 07/14/2017    Page: 2 of 8

Before ED CARNES, Chief Judge, JORDAN and ROSENBAUM, Circuit Judges.

PER CURIAM:

      Attorney Sandra Finch represented Elaine Armstead in Armstead’s lawsuit

against Allstate Property & Casualty Insurance Company. In the weeks leading up

to trial, Finch, on Armstead’s behalf, filed a motion in limine to exclude or strike

the deposition testimony of Allstate’s fact witness Mark Gould. Allstate filed a

response in opposition that, among other things, described what happened during

Gould’s deposition, which it supported by citing the deposition transcript and

Gould’s affidavit. The transcript showed that during the deposition Finch handed

Gould page-by-page photographs of a document titled “Steamatic Guide to

Restoration Services” (an outdated company document) and that when Gould

asked Finch where she had found that document, Finch refused to answer. Gould

in his affidavit stated that he “got very upset when it became apparent [that Finch]

had obtained the document from my office without my permission.”

      The photographs of the Steamatic Guide were not the only photographs

Finch showed Gould during his deposition. At one point she handed Gould a

photograph of the inside of his office, but refused to explain where she had gotten

the picture. Gould accused Finch of trespassing, at which point Finch responded,

“I caution you on defaming me, because if you defame me, I can promise you it

will not be good.”

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      On July 1, 2016, the district court entered an order denying Armstead’s

motion in limine and instructing Finch to “file, on or before July 5, 2016, a sworn

affidavit stating, in detail, how and under what circumstances she obtained the

photographs of Mr. Gould’s office and the Steamatic Guide in question.” Finch

responded to that order on July 5 by filing objections based on lack of notice, due

process, and relevance. On July 6 the district court entered an order overruling

Finch’s objections and instructing her to file the affidavit “on or before 5:00 p.m.

EST today, July 6, 2017” because “the matters required to be addressed in the

affidavit may impact the admission of evidence at trial.” Finch did not file the

affidavit by that deadline.

      The next morning (July 7), the district court held a pretrial conference.

Finch and Allstate’s counsel attended, and Finch explained that she was traveling

by plane when the district court entered its July 6 order and was unable to file her

response by the 5:00 deadline. Finch stated that she needed additional time to

respond to the court’s order and that she objected to that order on due process

grounds, explaining that “I really don’t understand what the complaint is or what it

is that I’m responding to.” The district court clarified that Finch was to file an

affidavit providing the source of the photographs because that information “may

well impact the admissibility” of those documents at trial. The district court then

told Finch that she would be permitted “a little more time today to provide the

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information.” At 5:07 that evening, after Finch had not filed the affidavit, the

district court entered an order directing her to show cause why it should not hold

her in contempt and impose sanctions for failing to follow its July 1 and July 6

orders.

      On July 11, after the first day of trial had ended, the district court held a

hearing on its show cause order and, at that hearing, Finch argued for the first time

that she had not filed the affidavit based on her Fifth Amendment right against

self-incrimination. The district court did not impose sanctions at that hearing and

scheduled a second sanctions hearing to give Finch time to retain counsel to

represent her in the matter. At the second sanctions hearing Finch, through her

attorney, reiterated that she had not filed the affidavit based on her Fifth

Amendment right.

      A few days after that second hearing, the district court entered an order

finding that Finch had acted in bad faith by refusing to comply with its July 1 and

July 6 orders. It decided to exercise its inherent power to sanction Finch by

ordering her to pay Allstate’s attorney’s fees incurred by its participation in and

preparation for both the pretrial conference (nearly all of which was spent

discussing Finch’s failure to comply with the July 1 and July 6 orders) and the first

sanctions hearing. The court ordered Allstate to submit to it the amount of

attorney’s fees it had incurred in connection with those two hearings. Allstate

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submitted the calculation of its attorney’s fees, and the district court entered an

order directing Finch to pay Allstate $1,548 in attorney’s fees. This is Finch’s

appeal of the district court’s orders imposing sanctions based on her non-

compliance with its July 1 and July 6 orders.

      We review for an abuse of discretion the district court’s imposition of

sanctions under its inherent power. See Sciarretta v. Lincoln Nat’l Life Ins. Co.,

778 F.3d 1205, 1212 (11th Cir. 2015). A district court abuses its discretion when it

“applies an incorrect legal standard, applies the law in an unreasonable or incorrect

manner, follows improper procedures in making a determination, or makes

findings of fact that are clearly erroneous,” or when it “misconstrues its proper

role, or ignores or misunderstands the relevant evidence.” Id. (quotation marks

omitted) (alterations omitted). “Courts have the inherent power to police

themselves and those appearing before them,” and “[t]he key to unlocking that

inherent power is a finding of bad faith.” Id. “Once unlocked, the power carries

with it the authority to assess attorney’s fees as a sanction for bad faith conduct.”

Id.

      Finch first contends that because she had a good faith basis for asserting her

Fifth Amendment right, the district court erred in finding that she acted in bad faith

by refusing to comply with its July 1 and July 6 orders. Although Finch raised

objections to those orders, she did not assert her Fifth Amendment privilege at that

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time. She instead brought up her Fifth Amendment right at the sanctions hearings

as an after-the-fact reason for not filing the affidavit.

      If Finch wished to assert her Fifth Amendment right as a basis for not

complying with the July 1 and July 6 orders, she should have claimed her Fifth

Amendment privilege at the time she was instructed to file the affidavit. See

Minnesota v. Murphy, 465 U.S. 420, 434, 104 S. Ct. 1136, 1146 (1984) (noting

“[t]he general rule that the [Fifth Amendment] privilege must be claimed when

self-incrimination is threatened”). Instead, Finch objected to the July 1 and July 6

orders on other grounds (which the district court overruled) and then sat silently

while the July 7 deadline passed. The district court’s decision to sanction Finch

did not, as she contends, “effectively penaliz[e] [her] for the exercise of her Fifth

Amendment privilege.” It was instead based on her failure to either comply with

or timely raise a valid objection to complying with the July 1 and July 6 orders.

      Finch also contends that the district court erred in finding that Finch’s failure

to file the required affidavit constituted bad faith because the court failed to make

specific findings of the conduct that warranted sanctions. “We review a court’s

finding of bad faith, and the subsidiary factual findings that go into it, only for

clear error.” Sciarretta, 778 F.3d at 1213. “Under clear error review, we will

reverse only if after viewing all the evidence, we are left with the definite and firm

conviction that a mistake has been committed.” Id. (quotation marks omitted).

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The district court’s order imposing sanctions found that Finch “acted in bad faith

when she repeatedly and flagrantly disregarded [its] orders” without providing

“adequate justification or explanation.” The district court made specific findings

of bad faith and it did not clearly err in finding that Finch acted in bad faith by

failing to either comply or timely justify not complying with its orders.1

       Finally, Finch contends that the district court abused its discretion by

imposing sanctions because it failed to give her sufficient notice of its intent to

sanction her and failed to provide a legal basis for imposing sanctions. See

Chambers v. NASCO, Inc., 501 U.S. 32, 50, 111 S. Ct. 2123, 2136 (1991) (“A

court must, of course, exercise caution in invoking its inherent power, and it must

comply with the mandates of due process . . . .”). Before the first sanctions

hearing, the district court ordered Finch to show cause why she should not be held

in contempt and sanctioned for not complying with its July 1 and July 6 orders.

During the first sanctions hearing the district court made clear both the factual and

legal basis for which it was considering imposing sanctions. At that hearing the

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          Finch also contends that the district court erroneously failed to take into account
Allstate’s egregious conduct during discovery, which is what led to the “need to disprove
Gould’s testimony without the benefit of full discovery” and her need to “get to the truth . . . in a
situation where [her client] was deprived of discovery.” But Finch was not sanctioned for
allegedly sneaking into Gould’s office. She was sanctioned for refusing to file an affidavit after
the court more than once ordered her to do so. For that reason, Allstate’s conduct during
discovery is not relevant to whether Finch acted in bad faith by refusing to file the court ordered
affidavit.
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district court told Finch that she needed to show cause why she should not be

sanctioned for specific conduct:

      In [the July 1 order] I required Ms. Finch to provide certain
      information about the acquisition of materials that were used during a
      deposition. The information that was required to be provided is set
      out on page 34 of the order, . . . and the information was required to
      be provided in a sworn affidavit, stating in detail how and under what
      circumstances she obtained the photographs of Mr. Gould’s office and
      the Steamatic guide in question . . . . She did not provide the
      information as originally required in the July 1, 2016 order, nor did
      she provide me information as she was told she was required in the
      Court’s subsequent order. And then, further, during the pretrial
      conference that we had just a couple of days ago, she told me that she
      intended to file a response to the order, and she has failed to do that.
      In an order scheduling the second sanctions hearing, the district court stated

that it was holding that hearing “to determine whether the Court should exercise its

inherent power, and, if it should, what sanctions are appropriate.” Finch’s

statement that “[t]he District court failed to notify [her] of a) the conduct that is

subject to sanction; or b) the legal basis for said sanctions” is false.

      AFFIRMED.

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