Barnhill v. Ia. Dist. Court for Polk County

• Decision Date: 01 May 2009
• Docket Number: No. 06-0163.,06-0163.
• Citation: 765 N.W.2d 267
• Parties: Kathryn S. BARNHILL, Plaintiff, v. IOWA DISTRICT COURT FOR POLK COUNTY, Defendant.
• Court: Iowa Supreme Court

765 N.W.2d 267

Kathryn S. BARNHILL, Plaintiff, v. IOWA DISTRICT COURT FOR POLK COUNTY, Defendant.

No. 06-0163.

Supreme Court of Iowa.

May 1, 2009.

As Corrected May 14, 2009.

Kathryn S. Barnhill of Barnhill & Associates P.C., West Des Moines, pro se.

Wade R. Hauser III of Ahlers & Cooney, P.C., Des Moines, for defendant.

STREIT, Justice.

An Iowa attorney brought a class-action lawsuit on behalf of homeowners against the manufacturer of roofing shingles and its president. The action asserted seven theories of recovery, most of which were based in contract. After the district court granted summary judgment in favor of the manufacturer and its president, the president requested sanctions against the attorney who filed the class action. The president argued sanctions were appropriate because the claims against him lacked merit both in law and in fact and cost him considerable expense to defend. The district court agreed and sanctioned the attorney $25,000. The attorney filed a petition for writ of certiorari challenging the court's sanction. The court of appeals found no error and annulled the writ. Because we conclude the district court did not abuse its discretion in imposing sanctions, we agree the writ should be annulled.

I. Facts and Prior Proceedings.

The underlying controversy in this case arose from allegations that Tamko Roofing Products, Inc. manufactured and sold defective roofing shingles that were installed on the class-action plaintiffs' homes or structures by Jerry's Homes, Inc. In 1998, Jerry's Homes, represented by attorney Kathryn Barnhill, filed suit against Tamko in the Iowa district court. The purpose of the lawsuit was to either compel Tamko to repair the roofs on over 400 houses built by Jerry's Homes or, in the alternative, recover sufficient damages for Jerry's Homes to make the repairs itself. Jerry's Homes asserted Tamko promised it would repair the damages to the shingles when problems first arose with the quality of the shingles. The case was removed to federal court based on diversity. Most of the claims were dismissed on summary judgment, including the claims for breach of express and implied warranty and fraud. A jury returned a verdict in favor of Jerry's Homes for $1.6 million on the promissory estoppel claim, but the court granted Tamko's post-trial motion to vacate the verdict. The district court's ruling was affirmed on appeal. See Jerry's Homes, Inc. v. Tamko Roofing Prods., Inc., 40 Fed.App'x 326 (8th Cir.2002).

In March 2001, Barnhill filed a class-action lawsuit in an Iowa district court against Tamko and David Humphreys, Tamko's president and CEO. The class consisted of people who had either directly or indirectly purchased the allegedly defective shingles, including through Jerry's Homes. Jerry's Homes itself was a representative plaintiff. The petition (after four amendments) asserted the following claims against Tamko and Humphreys: (1) breach of express warranty, (2) breach of implied warranty, (3) fraudulent misrepresentation, (4) negligent misrepresentation, (5) rescission due to impermissible liquidated damages, (6) rescission due to unconscionability of express warranty, and (7) violation of a Missouri statute prohibiting unfair business practices.¹ The petition asserted Humphreys "at all times relevant hereto directed and controlled the actions of [Tamko] with respect to the allegations herein." For the most part, the allegations made no distinction between Tamko and Humphreys.

Following discovery, the plaintiffs filed a motion for class certification, and defendants filed motions for summary judgment on every allegation of plaintiffs' petition. Before ruling on the summary judgment motions, the court certified the case as a class action against both defendants. We allowed a limited remand to permit the district court to rule on the pending motions for summary judgment. On remand, the district court dismissed six of the seven counts against Humphreys and a substantial part of the case against Tamko. In particular, the court dismissed the claims of Jerry's Homes and another plaintiff on grounds of res judicata. Fraudulent misrepresentation was the only claim remaining against Humphreys. The appeal then proceeded with the court of appeals affirming the dismissal of the six claims against Humphreys and reversing the district court's failure to grant summary judgment on the final claim of fraudulent misrepresentation. Sharp v. Tamko Roofing Prods., Inc., 695 N.W.2d 43, 2004 WL 2579638 (Iowa Ct.App.2004). At this point, all claims against Humphreys were dismissed on summary judgment. The district court subsequently granted summary judgment in favor of Tamko on the two remaining issues. The court of appeals affirmed the dismissal of these claims. Sharp v. Tamko Roofing Prods., Inc., No. 05-1372, 2006 WL 2873062 (Iowa Ct.App. Oct. 11, 2006).

During the pendency of these appeals, Humphreys filed a motion for sanctions against all of the named plaintiffs and their attorney, Barnhill, pursuant to Iowa Code section 619.19 (2001) and Iowa Rule of Civil Procedure 1.413(1). He asserted: "None of the claims pursued by plaintiffs in this case against Humphreys were well grounded in fact or warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law."

The district court² found Barnhill violated rule 1.413 with respect to each and every claim against Humphreys, although it did not sanction her for the fraudulent misrepresentation claim. It sanctioned Barnhill and ordered her to pay Humphreys $25,000 of the nearly $150,000 he had incurred in attorneys' fees defending the case. In its order, the district court stated:

In summary, the pleadings and other documents filed by Barnhill in this case have in general such a confusing, convoluted, self-contradictory and elusively vague, ambiguous, indirect and constantly shifting quality as to compel the conclusion that the case was made up as it went along. It is as though Barnhill said whatever needed to be said at each step to just get past the moment, whether there was a legitimate basis for saying it or not. In the process, Barnhill has violated Rule 1.413(1).

Barnhill filed a petition for writ of certiorari. We transferred the case to the court of appeals, which annulled the writ. On further review, we do so as well.

II. Scope of Review.

We review a district court's decision on whether to impose sanctions for an abuse of discretion. Mathias v. Glandon, 448 N.W.2d 443, 445 (Iowa 1989). The proper means to review a district court's order imposing sanctions is by writ of certiorari. Id. Certiorari is a procedure to test whether a lower board, tribunal, or court exceeded its proper jurisdiction or otherwise acted illegally. Iowa R. Civ. P. 1.1401. "Relief through certiorari is strictly limited to questions of jurisdiction or illegality of the challenged acts." French v. Iowa Dist. Ct., 546 N.W.2d 911, 913 (Iowa 1996). Although our review is for an abuse of discretion, we will correct erroneous application of the law. Weigel v. Weigel, 467 N.W.2d 277, 280 (Iowa 1991). The district court's findings of fact, however, are binding on us if supported by substantial evidence. Zimmermann v. Iowa Dist. Ct., 480 N.W.2d 70, 74 (Iowa 1992).

III. Merits.

A. Rule 1.413. The district court found Barnhill committed numerous violations of Iowa Rule of Civil Procedure 1.413. That rule states in pertinent part:

Counsel's signature to every motion, pleading, or other paper shall be deemed a certificate that: counsel has read the motion, pleading, or other paper; that to the best of counsel's knowledge, information, and belief, formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or cause an unnecessary delay or needless increase in the cost of litigation. . . . If a motion, pleading, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of the reasonable expenses incurred because of the filing of the motion, pleading, or other paper, including a reasonable attorney fee.

Iowa Code section 619.19 is identical in substance.

The rule creates three duties known as the "reading, inquiry, and purpose elements." Weigel, 467 N.W.2d at 280. Each duty is independent of the others, and a breach of one duty is a violation of the rule. Harris v. Iowa Dist. Ct., 570 N.W.2d 772, 776 (Iowa Ct.App.1997). If a document is signed in violation of rule 1.413, the court is required to impose an appropriate sanction. See Mathias, 448 N.W.2d at 445 ("We are mindful the rule and statute directs the court to impose a sanction when it finds a violation.").

Compliance with the rule is determined as of the time the paper is filed. Weigel, 467 N.W.2d at 280. Counsel's conduct is measured by an objective, not subjective, standard of reasonableness under the circumstances. Id. at 281. "The test is `reasonableness under the circumstances,' and the standard to be used is that of a reasonably competent attorney admitted to practice before the district court." Id. (citations omitted) (quoting Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531, 1536 (9th Cir.1986)). The reasonableness of the signer's inquiry into the facts and law depends on a number of factors, including, but not limited to: (a) the amount of time available to the signer to investigate the facts and research and analyze the relevant legal issues; (b) the complexity of the factual and legal issues in question; (c) the extent to which pre-signing investigation was feasible; (d) the extent to which pertinent facts were in the...