277 F.3d 791 (5th Cir. 2002), 00-60153, Whitehead v Food Max of Mississippi Inc.

Docket Nº:00-60153
Citation:277 F.3d 791
Party Name:BENNIE WHITEHEAD; ET AL., Plaintiffs, v. FOOD MAX OF MISSISSIPPI, INC.; ET AL., Defendants. KMART CORPORATION, Defendant-Appellee, v. PAUL S. MINOR, Appellant.
Case Date:January 11, 2002
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 791

277 F.3d 791 (5th Cir. 2002)

BENNIE WHITEHEAD; ET AL., Plaintiffs,

v.

FOOD MAX OF MISSISSIPPI, INC.; ET AL., Defendants.

KMART CORPORATION, Defendant-Appellee,

v.

PAUL S. MINOR, Appellant.

No. 00-60153

United States Court of Appeals, Fifth Circuit

January 11, 2002

Page 792

Appeal from the United States District Court for the Southern District of Mississippi

Before POLITZ and BARKSDALE, Circuit Judges, and FALLON,[*] District Judge.

POLITZ, Circuit Judge:

Paul S. Minor appeals an order imposing sanctions for his execution of a judgment at a Kmart retail store. Concluding that the trial court erred in its interpretation and application of Rule 62(f) of the Federal Rules of Civil Procedure, we reverse.

BACKGROUND

A woman and her daughter were abducted from Kmart's parking lot. The offenders raped the victim while holding her child at knife-point. In a jury trial plaintiffs successfully sued Kmart. Their counsel was the appellant, Paul Minor. Kmart moved for a new trial, a remittitur, and a stay under Fed. R. Civ. P. 62(b) pending disposition of its motions. The district court denied these motions and three days later Minor obtained a Writ of Execution and Fieri Facias from the Clerk of Court. Accompanied by newspaper and television reporters Minor went to the local Kmart establishment with two federal marshals and sought execution on the writ by seizing money assets in the store's registers and safe. The district court, informed of Minor's steps to execute the judgment, instructed the Marshals' office to cease and desist pending a telephone conference that afternoon. At the conference, the court directed Kmart to submit a bond so that all matters would be stayed pending appeal. Kmart agreed, and also filed its Notice of Appeal, Motion for Stay of Execution of Judgment Pending Appeal, and Amended Motion for Approval of Supersedeas Bond.

Thereafter, Kmart moved for sanctions under Rule 11(b), 11(c)(1)(B), and 28 U.S.C. § 1927, supporting its motion by citing Rule 62(f) of the Federal Rules of Civil Procedure which provides that a judgment debtor is entitled to a stay as would be accorded the debtor had the action been maintained in state court. Kmart claimed that Rule 62(a) of the Mississippi Rules of Civil Procedure provides for an automatic ten-day stay following the denial of a motion for a new trial. It claimed that Minor's actions in executing the judgment contravened that Rule. While Kmart's motion for sanctions was pending, we affirmed as to the liability of Kmart but remanded for a new trial on damages.

The district court thereafter granted Kmart's motion for sanctions, finding that Minor "was seeking to embarrass [Kmart] . . .when, in fact, there was no basis whatsoever in fact or in law for the actions taken on August 21, 1997." The court found no basis for Minor's actions because it concluded that Kmart enjoyed an automatic stay under federal Rule 62(f) and

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Mississippi Rule 62(a). The trial court relied on the language of Rule 62(f) which says that a judgment debtor is entitled to such stay as would be accorded in state court, and noted that Mississippi Rule 62(a) would have given Kmart an automatic stay until ten days after the court ruled on its motion for a new trial. The trial court determined that Minor "failed to make a reasonable inquiry into the law governing execution of judgments." Minor appeals this order granting sanctions.

ANALYSIS

We review a district court's decision to invoke Rule 11 under an abuse of discretion standard,1 giving great deference to an order imposing sanctions because "the district court is better situated than the court of appeals to marshal the pertinent facts and apply the fact-dependent legal standard mandated by Rule 11."2 Even under this deferential standard, however, a court abuses its discretion when its "ruling is based on an erroneous view of the law or on a clearly erroneous assessment of the evidence."3 We conclude that the trial court erred in its interpretation of Rule 62(f) and that Minor's conduct complied with the mandates of Rule 11.

I. Federal Rule 62(f) and Mississippi Rule 62(a)

The district court based its ruling on the specific language of federal Rule 62(f) and the automatic stay authorized by Mississippi Rule 62(a). Rule 62(f) of the Federal Rules of Civil Procedure provides in pertinent part that:

[i]n any state in which a judgment is a lien upon the property of the judgment debtor and in which the judgment debtor is entitled to a stay of execution, a judgment debtor is entitled, in the district court therein, to such stay as would be accorded the judgment debtor had the action been maintained in the courts of that state.

The court noted in a footnote that this rule applied herein because Kmart was a judgment debtor against whose property the judgment operated as a lien and it was entitled to a stay of execution under Rule 62(a) of the Mississippi Rules of Civil Procedure. That rule provides as follows:

(a) Automatic Stay: Exceptions. Except as stated herein or as otherwise provided by statute or by order of the court for good cause shown, no execution shall be issued upon a judgment nor shall proceedings be taken for its enforcement until the expiration of ten days after the later of its entry or the disposition of a motion for a new trial....

The court determined that although Kmart did not move for a stay under either of these rules, it nonetheless enjoyed a ten-day stay under Rule 62(a) because such a stay applies automatically after the disposition of a motion for a new trial and federal Rule 62(f) states that a judgment debtor is "entitled" to any stay applicable in state court. A close reading of the rule, practical and policy considerations, and a review of the legal authority addressing this issue persuades us beyond peradventure that the trial court erred in its application of federal Rule 62(f).

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A. Plain Meaning of Rule 62(f)

Although Rule 62(f) provides that a judgment debtor is "entitled" to such stay as it would receive if the action were brought in state court, we must disagree with the district court that by this choice of language Congress sought to afford the protection of state staying provisions without requiring parties to file an appropriate motion with the court. The word "entitled" includes "to grant a legal right to or qualify for."4 Accordingly, Rule 62(f) bestows upon the federal litigant grounds for securing or claiming an applicable state law stay in the district court. We must conclude, however, that the Rule does not afford the protection of a stay applicable under state law, even if automatic in state court, unless the litigant asserts the rights by filing a proper motion.5

B. Policy Considerations

Sound policy protocols militate against enforcing state staying provisions in federal court without requiring the benefitting party to request such relief. Permitting a party to rely on a state procedural rule without affirmatively seeking its protection places federal trial judges in a precarious position. In addition to the obvious necessity of possessing a detailed knowledge of the federal rules, such an interpretation would require federal judges to master the intricate procedural rules and practice of the various states. The problems associated with this approach increase exponentially in diversity cases with complex choice-of-law issues. Cases invoking diversity jurisdiction could require an in-depth grasp of not only the law of the state in which a federal judge sits, but the law of any given state. After resolving the choice-of-law issues, the judge would have to scrutinize the law of the subject state to ensure that none of the court's orders violated an automatic stay provision instantly applicable through Rule 62(f), notwithstanding the fact that the benefitting party filed no motion identifying the relevant state rule, practice, or procedure. We deem it unwise and inappropriate and therefore decline to impose such a heavy and unnecessary burden upon our brethren in the district courts.6

C. Legal Authority

Our review discloses no legal authority supporting the proposition that a party enjoys protection under a state procedural rule, practice, or procedure applicable through Rule 62(f), without actively seeking such protection from the district court. Initially, the federal rules specifically provide that an application for an order by the court shall be by motion.7 The effect of a stay in this situation is indistinguishable from obtaining an order because it bars a successful litigant from taking any action on the judgment. Accordingly, a party must file a motion placing both the court and any adverse party on notice that a stay is sought.

An exhaustive review of the jurisprudence reveals no precedent holding that a party need not file a motion under Rule

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62(f). In Van Huss v. Landsberg,8 the Western District of Missouri heard appellant's motion to quash garnishments because Missouri state law provided for an automatic stay until the disposition of a motion for a new trial. While such a motion was pending plaintiff secured a writ of execution and caused summons of garnishee to issue. Appellant sought relief under federal Rule 62(f) but had not filed any motion with the court. The court stated:

At the outset, this Court believes that the defendant should have filed with the court, with notice to the plaintiff, a request for a stay under the provisions of Rule 62(f) if he sought that rule's protection. There are a number of reasons why such a procedure would seem necessary under this situation...

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