Bryant v. Joseph Tree, Inc.
| Decision Date | 28 May 1992 |
| Docket Number | No. 57401-4,57401-4 |
| Citation | 119 Wn.2d 210,829 P.2d 1099 |
| Court | Washington Supreme Court |
| Parties | Elaine J. BRYANT, and the marital community of Elaine J. Bryant and Frederick A. Bryant, wife and husband, Plaintiffs, v. JOSEPH TREE, INC.; Gerald L. Bopp; Halo Homes, Inc.; King West Mortgage Corp.; Irrevocable Trust of Frederick A. Bryant and Elaine J. Bryant; Wendy L. Bryant, individually and in her official capacity as trustee of the Irrevocable Trust of Frederick A. Bryant and Elaine J. Bryant; Duo, Inc.; Barry's Builders, Inc.; Halo International, Inc.; Alliance Construction, Inc.; Frederick A. Bryant Management Corp.; G.F.T. Associates; Droit, Inc.; Halo Haven, Inc.; Jerry Sebranke; and David C. Jensen, individually and in his official capacity as trustee of the "John Doe" Trust, Petitioners, Benjamin S. Houge, Defendant, Morris H. Rosenberg, Stuart P. Koch, and Marilyn R.S. Sellers, Respondents. |
Eugene N. Bolin, Jr., Seattle, for petitioners.
Edwards, Sieh, Wiggins & Hathaway, P.S., Malcolm L. Edwards, Howard M. Goodfriend, Catherine W. Smith, Seattle, for respondents Rosenberg and Koch.
Sirianni & Youtz, Stephen J. Sirianni, Seattle, for respondent Sellers.
Bryan P. Harnetiaux, Gary N. Bloom, Daniel E. Huntington, Spokane, amicus curiae for petitioners on behalf of Washington State Trial Lawyers Ass'n JOHNSON, Justice.
This case requires review of two instances of Civil Rule 11 (CR 11) attorney sanctions. The trial court imposed CR 11 sanctions against the three respondent attorneys: Marilyn Sellers, Morris Rosenberg and Stuart Koch. The Court of Appeals reversed these sanctions and imposed CR 11 sanctions on the petitioners' attorney, Eugene Bolin, Jr. The petitioners, Joseph Tree, Inc., et al. (Joseph Tree), seek review of both of these determinations. We affirm the Court of Appeals reversal of the sanctions imposed against the three respondents. We also affirm the Court of Appeals imposition of sanctions on Bolin.
In July 1985, Elaine Bryant filed a dissolution petition against her husband of 30 years, Fred Bryant. Mrs. Bryant obtained a restraining order preventing her husband from transferring community assets.
The Bryants later reconciled, but then separated again. Elaine Bryant commenced a new legal separation action. Marilyn Sellers acted as Mrs. Bryant's attorney. Sellers served Fred Bryant with interrogatories in order to discover the extent of the Bryants' marital community holdings. Fred Bryant refused to answer these interrogatories, citing religious reasons for his refusal.
Mrs. Bryant and Sellers then began reviewing financial statements and researching public records in an effort to determine the extent of the Bryants' assets. They discovered evidence that Fred Bryant had made numerous transfers of community real property to the various petitioners for little or no consideration. Some of these transfers were made while the restraining order was in effect. The petitioners include various corporations in which Fred Bryant has an interest; Gerald Bopp, who was Fred Bryant's attorney; corporations in which Bopp had a substantial interest or involvement; the Bryants' daughter Wendy; an irrevocable trust of which Wendy Bryant is trustee; and various business associates and church members.
Sellers and Mrs. Bryant presented this information to the family law court commissioner. They obtained an order from the commissioner authorizing Mrs. Bryant to commence an action against the parties to whom Fred Bryant allegedly transferred the marital community assets.
Sellers obtained the aid of Morris Rosenberg, another lawyer in her firm, and associated Stuart Koch. The three attorneys signed and filed a complaint on behalf of both Mrs. Bryant and the Bryants' marital community. In this complaint, they sought to invalidate the transfers of property made to the petitioners by Fred Bryant. Mrs. Bryant also signed the complaint.
The petitioners presented a motion for a more definite statement in response to this complaint. A superior court judge granted their motion, ordering that Mrs. Bryant and her attorneys identify the transferred assets, designate the county in which the property was located, and provide the approximate date of each transfer.
Mrs. Bryant's attorneys then filed an amended complaint. The petitioners moved to dismiss the amended complaint, asserting that Mrs. Bryant and her attorneys had not complied with the order for a more definite statement. A second superior court judge, Judge Huggins, heard this motion and dismissed the amended complaint without prejudice.
The petitioners then moved for sanctions against Mrs. Bryant and her three attorneys, alleging they had all violated CR 11 in signing and filing the original and amended complaints. This motion came before a third superior court judge, Judge Pechman (hereinafter the trial court). The parties argued this motion in three separate hearings at which no testimony was taken. The respondents submitted a memorandum and Elaine Bryant's affidavit in opposition to the motion for sanctions. In addition, the three attorneys each submitted declarations. The trial court found that Sellers, Koch and Rosenberg had violated CR 11, but that Mrs. Bryant had not.
The court also found that:
The drafting of the complaints, as well as the supporting data supplied by [Elaine Bryant's] Attorneys, was insufficient for the Court to make any determination as to the underlying merits of the cause of action.
Clerk's Papers, at 677. The petitioners submitted a fee request for almost $90,000 in connection with the two motions and the sanctions request. The trial court awarded the petitioners $40,000 in sanctions against Mrs. Bryant's lawyers: $15,000 each against Rosenberg and Koch, and $10,000 against Sellers.
One month after the trial court entered its order imposing CR 11 sanctions, Elaine and Fred Bryant obtained a decree of legal separation. Elaine Bryant was awarded all of the marital community's remaining assets and Fred Bryant was awarded all of the community's liabilities. Eugene Bolin, Jr., represented Fred Bryant in this action.
Rosenberg and Koch retained attorney Malcolm Edwards and appealed the CR 11 sanctions to the Court of Appeals. The petitioners cross-appealed the trial court's determination that Elaine Bryant did not violate CR 11. As a result, Edwards also agreed to represent Elaine Bryant in the appeal. Each of the three clients consented in writing to this joint representation. Sellers retained separate counsel and joined in the appeal.
On the day Joseph Tree's respondents' brief was due in the Court of Appeals, Bolin filed on Joseph Tree's behalf a 2-volume motion for the "immediate disqualification of Malcolm Edwards and Edwards & Barbieri from further participation in the instant appeal". Bolin also requested that independent counsel be appointed for the marital community because the appeal would create "additional liability" for the marital community. Bolin alleged in his motion that a conflict of interest precluded Edwards' joint representation of Rosenberg, Koch, Mrs. Bryant and the marital community. According to Bolin, Rosenberg's and Koch's strategy on appeal was to blame Elaine Bryant for any deficiencies in their pleadings. Bolin asserted that "Rosenberg and Koch are now deliberately aiding [Joseph Tree]" in its argument that the trial court erred in not sanctioning Elaine Bryant.
The Court of Appeals commissioner found that Edwards had complied with RPC 1.7, the rule which addresses when an attorney may or may not represent multiple clients in the same action. The commissioner also stated in his order:
It does not appear that a cross appeal has been filed by [Joseph Tree] relating to the marital community of Elaine J. Bryant and her husband....
The commissioner denied without prejudice Bolin's motion to disqualify Edwards and his law firm, thus allowing Bolin to renew his motion upon filing Joseph Tree's crossappellants' brief. The commissioner denied the respondents' request for sanctions against Bolin for filing the motion. Bolin requested and was granted permission to remove any materials he deemed appropriate from the record relating to his motion to disqualify. Bolin removed several hundred pages of documents from the record. These documents made reference to an unrelated confidential settlement agreement between the Bryants and four attorneys who are unrelated to this action.
Bolin later filed a brief on Joseph Tree's behalf which contained a cross appeal against Mrs. Bryant, but not against the Bryants' marital community. In response, Rosenberg and Koch requested in their reply brief that the Court of Appeals award them all of their fees on appeal under CR 11. They specifically cited the motion to disqualify as meriting sanctions under CR 11. Reply Brief of Appellant, at 12.
The Court of Appeals reversed the CR 11 sanctions imposed against Sellers, Rosenberg and Koch. The court determined that the trial court erred in imposing CR 11 sanctions without a finding that the complaints lacked a factual and legal basis. After reviewing the record, the court determined the complaints did have both a factual and legal basis, and were thus not the proper subject of CR 11 sanctions. The court also affirmed the trial court's decision not to impose sanctions against Elaine Bryant.
In addition, the Court of Appeals imposed CR 11 sanctions against Bolin for filing the motion to disqualify Edwards and his law firm. The court determined that the motion lacked a factual and legal basis, especially due to the fact that Bolin never filed a cross appeal against the marital community. The court awarded Rosenberg and Koch $2,980.70 in attorneys fees in connection with the motion to disqualify. The Court of Appeals denied Bolin's motion for reconsideration.
The petitioners seek review of the Court of Appeals reversal of sanctions against the respondents and the court's...
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