Court Opinion

ID: 2976227
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:48:29.611781+00
Date Added: 2024-06-11T15:36:22.902192
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 08a0082n.06
                             Filed: January 28, 2008

                                              Case No. 06-2333

                              UNITED STATES COURT OF APPEALS
                                   FOR THE SIXTH CIRCUIT

 SANDRA K. PARROTT,                                           )
                                                              )
            Plaintiff-Appellant,                              )
                                                              )        ON APPEAL FROM THE
                   v.                                         )        UNITED STATES DISTRICT
                                                              )        COURT FOR THE EASTERN
 TROY CORLEY,                                                 )        DISTRICT OF MICHIGAN
                                                              )
            Defendant-Appellee.                               )
                                                              )
 _______________________________________                      )

BEFORE: BATCHELDER and MOORE, Circuit Judges; BUNNING*, District Judge.

        DAVID L. BUNNING, District Judge. This appeal arises out of litigation between Sandra

K. Parrott and Troy Corley. Plaintiff’s counsel, Jon D. Kreucher, appeals the district court’s order

imposing sanctions on him pursuant to 28 U.S.C. § 1927. Kreucher argues that the district court

abused its discretion by imposing sanctions based on erroneous assessments of the law and the

evidence. We disagree and affirm the judgment of the district court.

                                             I. BACKGROUND

        Defendant publishes “CorleyGuides,” books that highlight free and fun activities in large

cities. Parrott v. Corley, No. 05-74552, 2006 WL 2471943, at *1 (E.D. Mich. Aug. 24, 2006).

        *
         The Honorable David L. Bunning, United States District Judge for the Eastern District of Kentucky, sitting
by designation.
062333.nfp.wpd

Plaintiff began working with Defendant in November of 2004, authoring “write-ups” to be used in

the Orange County CorleyGuide. Id. On December 17, 2004, the parties entered into a contract

whereby Plaintiff agreed to contribute at least 350 write-ups for inclusion in Free New York City:

The Ultimate Guide to the Big Apple. Id. Relevant to this appeal, the contract contained an

arbitration clause, which provided that “[a]ll disputes or claims arising out of or relating to this

Agreement, or breach thereof, shall be settled by arbitration.” Id.

         On December 1, 2005, Attorney Kreucher filed a verified complaint on behalf of his client,

Sandra K. Parrott. Id. at *2. In her amended complaint, Plaintiff alleged claims for: (1) breach of

contract; (2) unjust enrichment; (3) tortious interference with Plaintiff’s prospective business

relationships; (4) statutory infringement of Plaintiff’s copyrights; (5) unfair trade practice in violation

of the Lanham Trade-Mark Act; (6) idea misappropriation; and (7) conversion. Id. Plaintiff sought

both money damages and injunctive relief. Id. Defendant filed a motion to compel arbitration and

to dismiss or, in the alternative, to stay proceedings. Id. Defendant also moved for sanctions. Id.

         The day before the hearing on Defendant’s motion, Plaintiff, through her counsel, voluntarily

dismissed her Amended Complaint. Id. Thus, the only part of the motion that was left for the

district court to address was Defendant’s request for sanctions under 28 U.S.C. § 1927. Id. After

the hearing, the district court entered an order imposing sanctions on Kreucher. Id. at 3. Kreucher

filed a Motion for Relief from Order, J.A. at 110-28, which was denied by the district court, Dist.

Ct. Doc. Entry #29. This appeal follows.

                                            II. ANALYSIS

         The imposition of sanctions pursuant to 28 U.S.C. § 1927 is reviewed for an abuse of

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062333.nfp.wpd

discretion. Ridder v. City of Springfield, 109 F.3d 288, 298 (6th Cir. 1997) (citing In re Ruben, 825
F.2d 977, 984 (6th Cir. 1987)). See also Jones v. Cont’l Corp., 789 F.2d 1225, 1229 (6th Cir. 1986).

Section 1927 provides:

         Any attorney or other person admitted to conduct cases in any court of the United
         States or any Territory thereof 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.

“An attorney is liable under § 1927 solely for excessive costs resulting from the violative conduct.”

Ridder, 109 F.3d at 299. “A sanctioned attorney is thus required to personally satisfy the excess

costs attributable to his misconduct.” Red Carpet Studios Div. of Source Advantage, Ltd. v. Sater,

465 F.3d 642, 646 (6th Cir. 2006) (citing In re Ruben, 825 F.2d at 983).

         This Court set forth the standard for imposing fees under § 1927 in Shepherd v. Wellman, 313
F.3d 963, 969 (6th Cir. 2002), providing:

         [S]anctions may be awarded against an attorney who “multiplies the proceedings in
         any case unreasonably and vexatiously.” 28 U.S.C. § 1927. We construe
         “vexatiously multiplying proceedings” to include conduct where “an attorney knows
         or reasonably should know that a claim pursued is frivolous, or that his or her
         litigation tactics will needlessly obstruct the litigation of non-frivolous claims.”
         Jones v. Cont’l Corp., 789 F.2d 1225, 1232 (6th Cir. 1986). We have also held that
         § 1927 sanctions are appropriate where “an attorney has engaged in some sort of
         conduct that, from an objective standpoint, ‘falls short of the obligations owed by the
         member of the bar to the court and which, as a result, causes additional expense to
         the opposing party.’” Holmes v. City of Massillon, 78 F.3d 1041, 1049 (6th Cir.
         1996) (quoting In re Ruben, 825 F.2d 977, 984 (6th Cir. 1987)). Simple inadvertence
         and negligence are not grounds for imposing § 1927 sanctions. See Ridder v. City of
         Springfield, 109 F.3d 288, 298 (6th Cir. 1997).

         On the facts of this case, the Court cannot conclude that the district judge abused her

discretion by imposing sanctions for “unreasonably multipl[ying] the proceedings by contesting

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062333.nfp.wpd

Defendant’s motion to compel arbitration and simultaneously pursuing a motion for preliminary

injunction on claims it should have known were arbitrable” – conduct which clearly falls within the

parameters of the conduct prohibited by § 1927. Parrott, 2006 WL 2471943, at *3. The district

court was within its discretion to find that Plaintiff’s voluntary dismissal on the eve of the hearing

served as “evidence that Plaintiff’s counsel knew or should have known that resistance to arbitration

... was frivolous.” Id.

         Importantly, the district court did not merely “rubberstamp” the monetary sanction requested

by Defendant. Defendant’s counsel submitted an affidavit, requesting $10,345.77 in attorney fees

and costs. Id. The district court reviewed the affidavit and supporting documentation and concluded

that Defendant’s counsel “improperly included fees associated with settlement, review of complaints

and other issues unrelated to the excessive costs associated with the motion to compel arbitration and

response to Plaintiff’s motion for a preliminary injunction.” Id. After applying Defendant’s

counsel’s practice of reducing allowable attorney fees by 30 percent and paralegal or intern fees by

80 percent, the court approved $6,570.75 in sanctions ($3,812.50 in connection with Defendant’s

motion to compel arbitration and $2,758.25 in connection with Defendant’s response to Plaintiff’s

motion for preliminary injunction). Id. The district court refused to award any excess costs, citing

the absence of documentation supporting such a request. Id. This detailed analysis evidences the

pains the district court took to arrive at an appropriate monetary sanction and undermines any

suggestion that the district court abused its discretion by imposing sanctions on Kreucher.

         Kreucher made various other arguments on appeal, only a few of which warrant further

comment. For example, he argues that his actions fall exclusively within the conduct proscribed by

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    062333.nfp.wpd

    Rule 11. However, the Court finds that the district court was well within its discretion to impose

    sanctions under § 1927. Nothing required the district court to construe Defendant’s motion for

    sanctions as a request for Rule 11 sanctions, as opposed to § 1927 sanctions. Plaintiff’s counsel also

    argues that his due process rights were violated by the imposition of sanctions.1 This argument lacks

    merit. “[B]efore the imposition of sanctions, the attorney must be given notice and an opportunity

    to be heard.” Cook v. Am. Steamship Co., 134 F.3d 771, 775 (6th Cir. 1998) (citing Roadway

    Express Inc. v. Piper, 447 U.S. 752, 767 (1980)). The notice provided by the district court in this

    case did not violate Kreucher’s due process rights. Kreucher argued his case in writing and at a

    hearing which specifically addressed the issue of sanctions.

                                                    III. CONCLUSION

1            For the foregoing reasons, we AFFIRM the judgment of the district court imposing sanctions

2   pursuant to 28 U.S.C. § 1927.

3   \\ca6cin4\unpub\Published\08a0082n-06.txt

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             1
               To the extent that Kreucher argues that his due process rights were violated and that the district court erred in
    its statutory interpretation, the applicable standard of review is de novo. See Anmex, Inc. v. United States, 367 F.3d 530,
    533 (6th Cir. 2004).

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