Court Opinion

ID: 9928202
Source: CourtListenerOpinion
Date Created: 2024-01-30 23:00:24.696711+00
Date Added: 2024-06-11T09:50:34.580798
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 21-1774

                     NICHOLAS L. TRIANTOS,

                     Plaintiff, Appellant,

                               v.

GUAETTA & BENSON, LLC; AUDREY G. BENSON; PETER V. GUAETTA; SARAH
                         T. FITZPATRICK,

                     Defendants, Appellees,

  DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Morgan
Stanley ABS Capital I Inc. Trust 2004-HE4, Mortgage Pass-Through
Certificates, Series 2004-HE4; SELECT PORTFOLIO SERVICING, INC.;
COUNTRYWIDE HOME LOANS, INC.; BANK OF AMERICA, N.A.; NEW CENTURY
                      MORTGAGE CORPORATION,

                          Defendants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
               FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. William G. Young, U.S. District Judge]

                             Before

                  Gelpí, Lynch, and Rikelman,
                        Circuit Judges.

    Nicholas L. Triantos, pro se.

     John F. Gallant, with whom Nancy A. Morency and Gallant &
Ervin, LLC were on brief, for appellees.
January 30, 2024

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            RIKELMAN, Circuit Judge.       After Deutsche Bank National

Trust Company foreclosed on and sold his home, Nicholas Triantos

sued various parties, including the law firm that represented the

bank in the foreclosure sale and three of its individual partners.

The district court dispensed with the suit on a motion to dismiss,

and we affirmed.       The law firm and its partners then moved for

sanctions against Triantos under Federal Rule of Civil Procedure

11.   The district court granted the motion and ordered Triantos to

pay $10,000 in attorneys' fees and $32.00 in costs.           Because the

court imposed sanctions under Rule 11 without following the rule's

procedural requirements, we reverse and vacate the order.

                               I. BACKGROUND

            In 2014, several years after Triantos defaulted on his

mortgage,   Deutsche    Bank   conducted   a   foreclosure   sale    of    his

property.      On   February    17,   2017,    Triantos   filed     suit   in

Massachusetts state court, alleging that Deutsche Bank had no

authority to execute the sale because the mortgage had not been

validly assigned to it.        Along with various mortgage lenders and

servicers, Triantos named Guaetta & Benson, LLC ("G&B"), the law

firm that handled the foreclosure sale on Deutsche Bank's behalf,

and three of its partners as defendants.

            Deutsche Bank removed the suit to federal court, where

Triantos filed an amended complaint that contained eight causes of

action under both state and federal law.        G&B then moved to dismiss

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the complaint for failure to state a claim under Federal Rule of

Civil Procedure 12(b)(6), as did the other defendants.                         The

district court granted the motions and dismissed the case on

September 21, 2017.           Triantos appealed.

              Two    months    later,    G&B   moved   for   sanctions   against

Triantos and his former state court lawyer, Michael McCardle.

Although G&B filed separate motions under both Federal Rule of

Civil Procedure 11 and its state law equivalent, the federal motion

erroneously cited state procedural principles.                The district court

stayed these motions pending the outcome of the appeal on the

merits.   After we affirmed the district court's dismissal of the

suit, G&B renewed its sanctions motions in 2020.

              On September 15, 2021, the district court held a hearing

on the renewed motions, at which Triantos appeared pro se.                     His

former lawyer, McCardle, against whom G&B also moved for sanctions,

did not attend the hearing and indeed had never made any appearance

in the federal action.          See Triantos v. Guaetta & Benson, LLC, 52

F.4th 440, 446 (1st Cir. 2022) ("Triantos I").                  At the hearing,

the   court    did    not     endeavor   to    determine     whether   Rule   11's

procedural requirements had been met as to Triantos or McCardle.

Instead, the court pressed Triantos to explain why his claims

against G&B did not warrant sanctions.             When Triantos attempted to

explain   why       the   claims   in    the   complaint     were   sufficiently

meritorious to escape sanctions, the court mistook his explanation

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for an effort to relitigate the case and rejected the theory out

of hand, suggesting that our decision to affirm the Rule 12(b)(6)

dismissal foreclosed Triantos's argument.              The court then entered

a one-line docket entry granting $10,000 in attorneys' fees and

$32.00   in    costs   as   a   sanction    pursuant   to   Federal   Rule   11.

Triantos, again appearing pro se, now seeks review of this order.1

                                 II. DISCUSSION

                                      A. Rule 11

              Rule 11(b) of the Federal Rules of Civil Procedure

provides that, "[b]y presenting to the court a pleading, written

motion, or other paper," an attorney or unrepresented party makes

certain certifications.          Fed. R. Civ. P. 11(b).        For example, an

attorney who files a complaint or motion warrants that "(1) it is

not being presented for any improper purpose," and "(2) the claims,

defenses, and other legal contentions [in the relevant filing] are

warranted by existing law or by a nonfrivolous argument for

extending,      modifying,       or     reversing   existing    law    or    for

establishing new law."          Fed. R. Civ. P. 11(b)(1)-(2).

              To enforce compliance with Rule 11(b), courts may impose

sanctions on parties who violate it.           See Fed. R. Civ. P. 11(c)(1)

     1 After Triantos appealed the sanctions order, the district
court ordered him to pay a $15,000 bond to cover the costs of
appeal. In its brief, G&B urged us to dismiss this appeal because
Triantos had not yet paid the bond. Because Triantos subsequently
paid the bond, however, we do not address this argument.

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("If, after notice and a reasonable opportunity to respond, the

court determines that Rule 11(b) has been violated, the court may

impose an appropriate sanction on any attorney, law firm, or party

that violated the rule or is responsible for the violation.").

Sanctions may be initiated by the court or an opposing party's

motion.   Fed. R. Civ. P. 11(c)(2)-(3).            Regardless of how the

process starts, any "order imposing a sanction must describe the

sanctioned conduct and explain the basis for the sanction."                 Fed.

R. Civ. P. 11(c)(6) (emphasis added).

          When a party moves for sanctions, it must follow certain

additional procedural requirements.             The motion "must be made

separately   from   any    other,"   and   it   "must   be   served   [on    the

offending attorney or unrepresented party] under [Federal Rule of

Civil Procedure] 5, but it must not be filed or be presented to

the court if the challenged paper, claim, defense, contention, or

denial is withdrawn or appropriately corrected within 21 days after

service or within another time the court sets."              Fed. R. Civ. P.

11(c)(2) (emphasis added).

          Together, these provisions provide a "safe harbor" for

attorneys, law firms, or parties accused of sanctionable conduct

by their opponent.        See Fed. R. Civ. P. 11 advisory committee's

note to 1993 amendment.          As the plain language of the rule

indicates, these requirements are mandatory rather than suggested.

"[T]he object of the safe harbor is to allow a party to privately

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withdraw   a    questionable     contention     without    fear    that     the

withdrawal will be viewed by the court as an admission of a Rule

11 violation."       Young v. City of Providence ex rel. Napolitano,

404 F.3d 33, 39 (1st Cir. 2005).          Accordingly, "a party seeking

sanctions must follow a two-step process" in every case.              Ridder

v. City of Springfield, 109 F.3d 288, 294 (6th Cir. 1997).            First,

"[t]he party seeking sanctions must serve the Rule 11 motion on

the opposing party at least twenty-one days before filing the

motion with the district court, and [second,] sanctions may be

sought   only   if   the   challenged    pleading    is   not   withdrawn    or

corrected within twenty-one days after service of the motion."

Brickwood Contractors, Inc. v. Datanet Eng'g, Inc., 369 F.3d 385,

389 (4th Cir. 2004) (en banc) (emphasis added).

           Because an attorney or unrepresented party must have the

opportunity     to   "withdraw   or   correct   a   challenged    submission"

before their opponent can file a motion for sanctions with the

court, the safe-harbor provisions necessarily limit when a party

may move for sanctions.      See In re Pennie & Edmonds LLP, 323 F.3d

86, 89 (2d Cir. 2003).      Of critical importance here, once a court

has evaluated and ruled on the challenged filing, the attorney or

unrepresented party can no longer withdraw it.             For this reason,

"a party cannot delay serving its Rule 11 motion until conclusion

of the case (or judicial rejection of the offending contention)."

Fed. R. Civ. P. 11 advisory committee's note to 1993 amendment.

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Indeed, courts have held that Rule 11 sanctions cannot be sought

in the precise circumstances of this case: after the court has

dismissed the complaint.        See Barber v. Miller, 146 F.3d 707, 710-

11 (9th Cir. 1998); see also Ridder, 109 F.3d at 297 (holding that

party "g[ave] up the opportunity to receive an award of Rule 11

sanctions . . . by waiting to file the motion until after the entry

of summary judgment"); Hunter v. Earthgrains Co. Bakery, 281 F.3d

144, 152 (4th Cir. 2002) ("[T]he 'safe harbor' provisions of Rule

11(c)(1)(A) preclude the serving and filing of any Rule 11 motion

after conclusion of the case.").

                    B. Reaching the Errors on Appeal

          Before addressing the procedural errors below, we pause

to explain our rationale for reaching them.              The only discussion

by the parties of the procedural defects was at oral argument

before us and in Rule 28(j) letters filed shortly thereafter.

Ordinarily,    in   this    situation,    we    would   consider   Triantos's

procedural objections to the sanctions order to be waived.                See

Sparkle Hill, Inc. v. Interstate Mat Corp., 788 F.3d 25, 29-30

(1st Cir. 2015) (explaining that our "customary practice" is to

deem arguments not raised in a party's opening brief waived).

However, we find that the particular circumstances of this case do

not "require a robust application of waiver."             Id. at 29.

          To   begin,      we   view   Triantos,   a    transactional   lawyer

without any litigation experience who is not a member of the

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foreclosure bar, as functionally equivalent to a pro se litigant.

And although "the right of self-representation is not 'a license

not to comply with relevant rules of procedural and substantive

law,'" Eagle Eye Fishing Corp. v. U.S. Dep't of Com., 20 F.3d 503,

506 (1st Cir. 1994) (citation omitted), we "endeavor, within

reasonable limits, to guard against the loss of pro se claims due

to technical defects," Boivin v. Black, 225 F.3d 36, 43 (1st Cir.

2000).    Thus, we give Triantos some leeway in interpreting the

scope of his arguments on appeal.

           Next, our ordinary concern about allowing a litigant to

"[s]andbag[]" the opposing party by raising new arguments outside

of its opening brief is simply not implicated here.   Sparkle Hill,

788 F.3d at 29.     After Triantos raised his procedural objections

at oral argument, he offered to submit a 28(j) letter on the issue.

In its responsive 28(j) letter, G&B argued that it had complied

with Rule 11's procedural requirements, although it did not cite

any federal law supporting its position.        Thus, G&B was not

"deprive[d] . . . of an opportunity to respond in writing on the

issue."   See id.

           Finally, we note that Triantos's recognition of the

procedural errors was likely made possible by our decision in

Triantos I, 52 F.4th 440, reversing the sanctions order against

McCardle on procedural grounds.      In the district court, G&B's

motion for sanctions erroneously cited Massachusetts procedural

                                  - 9 -
law, which may have started the entire process off on the wrong

foot.2    Moreover, the district court did not mention Rule 11's

procedural requirements at any point during the motion hearing or

in its sanctions order.         This is therefore not a case where

Triantos's opening brief on appeal failed to "challeng[e] express

grounds   upon   which   the   district   court   prominently   relied   in

entering judgment."       Sparkle Hill, 788 F.3d at 30.          Instead,

neither G&B nor the district court recognized or grappled with

Rule 11's procedural requirements at any point in this litigation.

Under these unique circumstances, we find that Triantos did not

waive his procedural arguments by failing to raise them in his

opening brief.

                         C. Plain Error Review

           Although Triantos did not waive his procedural arguments

on appeal, we must nonetheless consider the effect of his failure

to raise such arguments in opposition to G&B's sanctions motion

below.    When a party fails to raise an argument to the district

court, we consider that argument forfeited and review only for

plain error.     See Diaz-Seijo v. Fajardo-Vélez, 397 F.3d 53, 55

(1st Cir. 2005). Although plain error is a demanding hurdle rarely

     2 In fact, based on state law, G&B suggested that a party may
move for sanctions under Rule 11 only "[o]nce a defendant
establishes that a complaint lacks merit and obtains summary
judgment or dismissal of an action." As we explained above, the
precise opposite is true: Once an action is dismissed, a party may
no longer move for sanctions under Rule 11.

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cleared in civil cases, see Sparkle Hill, 788 F.3d at 30, we

conclude that this is the unusual case in which reversing and

vacating is warranted under this standard.3

          To prevail on plain error review, a litigant must show

that "(1) an error occurred (2) which was clear or obvious and

which not only (3) affected the [appellant's] substantial rights,

but also (4) seriously impaired the fairness, integrity or public

reputation of the judicial proceedings."    Id. (citation omitted).

This case easily satisfies the first two criteria because Rule 11

imposes mandatory procedural requirements that must be met before

a party may move for sanctions and before a district court may

impose any sanctions; none of those requirements was met here.   It

also satisfies the third criterion.      An error affects a party's

substantial rights if it "affected the outcome of the district

court proceedings."   United States v. Olano, 507 U.S. 725, 734

(1993).   The procedural errors affected Triantos's substantial

     3 Further, our decision here is not inconsistent with Nyer v.
Winterthur International, 290 F.3d 456 (1st Cir. 2002). In Nyer,
we upheld a well-reasoned sanctions order against plaintiffs' lead
trial counsel after declining to consider his belatedly raised
arguments based on Rule 11's safe-harbor requirements.      Id. at
460-62.   In that case, like here, Nyer had failed to raise his
safe-harbor argument to the district court.      Id. at 460.    We
concluded that no "excusatory circumstances" were present and thus
declined to review Nyer's new arguments under any standard on
appeal. Id. (quoting Corrada Betances v. Sea-Land Serv., Inc.,
248 F.3d 40, 44 (1st Cir. 2001)). By contrast, for the reasons we
have   explained,   the   facts   here  do   present   "excusatory
circumstances" justifying plain error review of Triantos's
procedural arguments.

                                - 11 -
rights here "because [he] was subjected to Rule 11 sanctions that

the district court was not empowered to impose."              Brickwood, 369

F.3d at 396.

          As    for    the   fourth    criterion,   we   conclude   that   the

"interests of justice would best be served" by remedying the

procedural failures in this case, in part because leaving the

district court's errors uncorrected would frustrate the "important

goals" embodied in Rule 11.           Id. at 398-99.     The 1993 amendments

to Rule 11, which introduced the safe-harbor provisions, were

intended to "reduce Rule 11's volume, formalize appropriate due

process considerations of sanctions litigation, and diminish the

rule's chilling effect."          Ridder, 109 F.3d at 294; see also

Brickwood, 369 F.3d at 397.       Allowing the sanctions order against

Triantos to stand when G&B did not even "attempt to comply with

the requirements of the safe-harbor provisions," and the district

court did not cite or grapple with these requirements, would

undermine these objectives.       Brickwood, 369 F.3d at 398.       Further,

Triantos's pro se status, combined with the district court's and

G&B's inattention to Rule 11's procedural requirements, leads us

to conclude that it would "be unjust for [Triantos] to bear the

full weight of the consequences of an unfamiliarity shared by all

involved."     Id.    Thus, although Triantos forfeited his procedural

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arguments by failing to raise them to the district court, we turn

to them now and reverse based on plain error.4

                    D. Procedural Errors Below

           We conclude that a string of procedural errors, both by

G&B and the district court, require reversing the sanctions order

here.    First, G&B served its motion on Triantos only after the

district court had dismissed the case.    That is simply too late

under Rule 11 because, by that point, Triantos could no longer

withdraw the objectionable complaint.     By waiting to serve its

sanctions motion until the district court had resolved the case,

G&B "g[ave] up the opportunity to receive Rule 11 sanctions."

Ridder, 109 F.3d at 297.

           Second, regardless of the first error, G&B also failed

to comply with Rule 11's safe-harbor requirements.   Despite G&B's

representations to the contrary at oral argument before us, the

record makes clear that G&B did not serve the motion for sanctions

upon Triantos at least twenty-one days prior to filing it with the

district court.   Instead, G&B filed the motion on the docket and

merely certified that Triantos "[was] being served under the

     4 We emphasize that our decision today, based on the unique
facts here and the mandatory procedural requirements of Rule 11,
should not be interpreted as carte blanche for pro se parties to
abdicate their responsibility to properly preserve arguments by
raising them in the first instance to the district court and then
arguing those issues in their opening brief before us.      And we
trust that our opinion will be helpful in highlighting for all
parties the mandatory nature of Rule 11's procedural requirements.

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Court's     ECF    Certificate       of     Service    filing    system."          This

certification, of course, does not suffice to satisfy Rule 11.

Under the rule, G&B was required to serve its motion upon Triantos

at least three weeks before it filed it with the court, not at the

same time.        G&B also attached a letter to its motion in which it

had advised Triantos and McCardle that it planned to pursue

sanctions if Triantos did not withdraw the complaint.                          But this

letter could not have triggered the safe-harbor period.                          As we

already explained when we rejected this exact same argument in our

decision reversing the sanctions order against McCardle, "informal

notice is not a substitute" for service of the actual motion.

Triantos I, 52 F.4th at 447.

            Rule     11    "sets    forth    inflexible    rules       governing    the

circumstances under which Rule 11 sanctions may be sought and

granted."     Brickwood, 369 F.3d at 394; see also Lamboy-Ortiz v.

Ortiz-Vélez, 630 F.3d 228, 244-45 (1st Cir. 2010) (reversing

sanctions order because the moving party's failure to comply with

Rule 11's mandatory requirements "disqualif[ied] Rule 11 as a

basis" for the district court's decision).                     The district court

therefore committed reversible procedural error by granting G&B's

motion    despite         G&B's    failure     to     comply    with     the     rule's

requirements.

            Finally, the district court overlooked its own Rule 11

duties.      The district court's sanctions order consisted of a

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one-line docket entry "awarding attorneys' fees in the amount of

$10,000 and fees in the amount of $32.00."         This order does not

"describe the sanctioned conduct and explain the basis for the

sanction," as is required by the rule's clear mandate.          Fed. R.

Civ. P. 11(c)(6).     Such deficiencies make it difficult for us to

conduct meaningful appellate review.           G&B's underlying motion

advanced various theories for why Triantos should be sanctioned

keyed to different counts in the complaint.         Without an adequate

explanation from the district court, we cannot discern which of

Triantos's causes of action it found sanctionable or why.

            At oral argument, G&B suggested that we can and should

infer the district court's reasoning from the totality of the

record, including the complaint and the court's comments at the

motion hearing.     We decline to do so for two reasons.       First, we

are required to interpret Rule 11 according to its plain meaning,

see Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 391 (1990), and

subsection (c)(6) explicitly requires that any sanctions order

imposed under Rule 11 include a description of the offending

conduct and an explanation for the sanction.           Fed. R. Civ. P.

11(c)(6).      Second,   this   procedural     requirement   serves   the

important purposes of "promot[ing] the rational exercise of trial

court   discretion       in     the     utilization    of     Rule     11

and . . . facilitat[ing] effective appellate review."         5A Charles

Alan Wright & Arthur R. Miller, Federal Practice & Procedure

                                      - 15 -
§ 1337.3 (4th ed. 2023).        Thus, we will not "comb through the

accusing parties' pleadings and briefs filed in the district court

and   the   transcript   of . . . oral    argument . . . in      order    to

locate . . . facts that might constitute sufficient grounds for

the imposition of Rule 11 sanctions."          Shirvell v. Gordon, 602 F.

App'x 601, 606 (6th Cir. 2015) (first and second alterations in

original) (quoting Elsman v. Standard Fed. Bank, 46 F. App'x 792,

801 (6th Cir. 2002)).        Instead, the onus falls upon the party

moving for sanctions, and the district court, to ensure that any

sanctions order adequately explains its basis.

                             III. CONCLUSION

            The   district   court   plainly   erred   by   granting   G&B's

sanctions motion when (1) G&B served its motion on Triantos long

after the district court already had dismissed the offending

complaint, and (2) in any event, G&B had not met its obligation

under Rule 11's safe-harbor provisions to serve the motion on

Triantos twenty-one days prior to filing it with the court.              The

district court also erred by imposing sanctions without describing

in its order the sanctionable conduct or explaining the basis for

its decision.

            Accordingly, we reverse and vacate the order.

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