Davis v. Iowa Dist. Court for Scott Cnty.

• Decision Date: 08 May 2020
• Docket Number: No. 19-1008,19-1008
• Citation: 943 N.W.2d 58
• Parties: Cornelius DAVIS, Plaintiff, v. IOWA DISTRICT COURT FOR SCOTT COUNTY, Defendant.
• Court: Iowa Supreme Court

943 N.W.2d 58

Cornelius DAVIS, Plaintiff,

v.IOWA DISTRICT COURT FOR SCOTT COUNTY, Defendant.

No. 19-1008

Supreme Court of Iowa.

Filed May 8, 2020

Michael M. Sellers of Sellers, Galenbeck & Nelson, Des Moines, for plaintiff.

Michael A. Giudicessi and Susan P. Elgin of Faegre Drinker Biddle & Reath LLP, Des Moines, for defendant.

OXLEY, Justice.

The plaintiff in a lawsuit failed to personally attend a court-ordered pretrial settlement conference, despite pretrial orders and a local rule requiring his attendance. When the party failed to appear, the district court cancelled the conference and ordered the party and/or his attorney to pay expenses associated with one of the defendants’ attendance at the conference. The plaintiff filed a petition for writ of certiorari challenging the order, invoking our original jurisdiction.

On our review, we uphold the district court's inherent authority to order parties to personally appear at settlement conferences and its authority to sanction those who fail to comply with such orders. We also determine the district court did not abuse its discretion in finding the plaintiff in violation of its order and directing the specific sanction in this case. We therefore annul the writ.

I. Background Facts and Proceedings.

As the result of a peer-review investigation, Dr. Cornelius Davis, a heart surgeon, lost his clinical privileges to perform surgeries at Genesis Health Systems (Genesis) in Davenport. He sued Genesis in the Iowa District Court for Scott County, later adding as defendants Davenport Surgical Group (DSG) as well as two doctors from DSG and two doctors from Genesis, all of whom had participated in the peer-review investigation. Davis claimed the defendants wrongfully destroyed his reputation, employment contract, and career.

This case centers on a settlement conference that occurred as part of that underlying case. The seventh judicial district requires mandatory pretrial settlement conferences prior to any civil trial, as made clear by two pretrial orders entered in the underlying case. A January 25, 2018 trial-setting order set the date for the mandatory settlement conference and stated, "All parties with authority to settle must be present." Trial was continued, but another scheduling order, resetting the settlement conference for May 16, 2019, included the same declaration.

In addition, the seventh judicial district uses local rules termed "Guidelines of Practice and Administration" to assist in administering its courts. One such rule is rule 7.1, which explains, "All parties to the action shall attend the settlement conference, unless specifically excused by the settlement conference judge."

Prior to the scheduled settlement conference, the defendants moved for summary judgment. Consequently, on May 8, 2019, defendant DSG requested permission to be excused from the settlement conference. The district court denied the motion, noting, "Settlement conferences are mandatory for all parties in our district. Although a motion for summary judgment is pending, DSG remains a party and must attend. In addition, the Court expects all parties to negotiate in good faith."

A court attendant contacted Davis's counsel the day before the settlement conference about continuing the conference based on the pending summary judgment motion. Davis's counsel insisted the conference could be productive and should go forward, yet failed to inform the court his client would not be attending in person. Nor did he seek clarification of the court's recent order requiring all parties to be present and negotiate in good faith.

The conference went forward as scheduled. Genesis and DSG each appeared at the settlement conference with their counsel and a party representative. Dr. Joseph Lohmuller, one of the named defendants and an employee of DSG, attended the settlement conference as the party representative for DSG. He was authorized to settle on behalf of DSG as well as himself and the other DSG-employed defendant-doctor, who did not personally attend. Jason Enzler, in-house counsel for Genesis, attended the settlement conference with authority to settle on behalf of Genesis and its employee-doctors. The Genesis doctors named as individual defendants, Drs. Augelli and Kovach, did not appear in person.¹

Davis did not attend the settlement conference. Instead, he was represented by his attorneys, Michael Sellers and Trent Nelson. Davis's counsel informed the district court that Davis was in surgery in Texas that day but was available by phone. The district court refused to hold the conference without Davis present and asked whether the defendants would like to make an oral motion for sanctions. DSG did, requesting $4000, which represented Dr. Lohmuller's lost income of $1500 and DSG's attorney fees and mileage of $2500. Genesis also requested $500 in attorney fees.

The next day, the district court granted the motion as to Dr. Lohmuller and DSG but denied it as to Genesis. The court denied Genesis's motion for sanctions because Genesis substituted its in-house counsel as counsel-of-record the morning of the settlement conference without obtaining advance approval from the court or informing Davis. It further noted that, because of Davis's absence, "the Court was unable to conduct a settlement conference in this case. As a result, both the settlement conference and the trial will need to be continued." The court cited local rule 7.1 and the orders setting the settlement conference as authority that Davis violated a court order by not attending the conference. The district court ordered

that the plaintiff, Cornelius Davis, and/or his counsel, Michael M. Sellers, shall pay a monetary sanction to Davenport Surgical Group in the sum of $1500 and to its attorney, Susan P. Elgin in the sum of $2500. The sanction shall be paid within 30 days of the entry of this order.

In response, Davis filed a "Motion to Rescind Sanction." In that motion, Davis argued "[t]he imposition of sanctions in this matter is (1) inconsistent with the Iowa Rules of Civil Procedure[;] (2) inconsistent with the guidelines used to impose sanctions[;] and (3) arbitrary, as no party complied with all of the requirements of Rule 7.1." Sellers contended that Davis's failure to attend was rooted in mistake, not misconduct, and that he did not realize Davis was required to personally attend.

The district court denied Davis's motion to rescind sanction. It noted that, if Davis misunderstood he must be present at the settlement conference, he must have "misunderstood a number of court orders entered in this case." It also explained that rule 7.1 had been the rule in the seventh judicial district for twenty years. Further, the court noted it was "sympathetic that local customs can sometimes ambush out-of-district lawyers, [but] the Court simply does not see this as the case here." Ultimately, the court concluded,

The orders and guidelines are clear. The plaintiff failed to obey one or more scheduling orders that all parties with authority to settle must be present. The Court believes this language is sufficiently clear to constitute an order that the plaintiff be personally present unless excused by the Court.

It then concluded Iowa Rule of Civil Procedure 1.602 authorized the sanctions it ordered, noted DSG was harmed by attending the conference, and upheld the sanction. However, it removed the label "sanction" from its order.

On June 14, Davis filed a petition for writ of certiorari to this court. We granted the petition and stayed the sanction on July 15.

II. Standard of Review.

"The proper means to review a district court's order imposing sanctions is by writ of certiorari." Barnhill v. Iowa Dist. Ct. , 765 N.W.2d 267, 272 (Iowa 2009). "A writ of certiorari lies where a lower ... court has exceeded its jurisdiction or otherwise has acted illegally." State Pub. Def. v. Iowa Dist. Ct. , 747 N.W.2d 218, 220 (Iowa 2008) (quoting State Pub. Def. v. Iowa Dist. Ct. , 633 N.W.2d 280, 282 (Iowa 2001) ). "[O]ur review is for errors at law." Crowell v. State Pub. Def. , 845 N.W.2d 676, 687 (Iowa 2014). A lower court acts illegally when its "findings lack substantial evidentiary support, or when the court has not properly applied the law." State Pub. Def. , 747 N.W.2d at 220 (quoting Christensen v. Iowa Dist. Ct. , 578 N.W.2d 675, 678 (Iowa 1998) ). "When reviewing the district court's action, we ‘either sustain [the writ] or annul it. No other relief may be granted.’ " Ostergren v. Iowa Dist. Ct. , 863 N.W.2d 294, 297 (Iowa 2015) (alteration in original) (quoting Crowell , 845 N.W.2d at 682 ).

"We review a district court's order imposing sanctions ... for an abuse of discretion." First Am. Bank v. Fobian Farms, Inc. , 906 N.W.2d 736, 744 (Iowa 2018) (quoting Rowedder v. Anderson , 814 N.W.2d 585, 589 (Iowa 2012) ). "A district court abuses its discretion when it ‘exercises its discretion on grounds or for reasons clearly untenable or to an extent clearly unreasonable.’ " Id. (quoting Rowedder , 814 N.W.2d at 589 ).

III. Analysis.

Davis's challenge focuses on the enforceability of the seventh judicial district's local rule 7.1. Davis complains that the district failed to comply with the process for enacting local rules, such that the local rules are really just unenforceable guidelines buried on the district's website. He also challenges rule 7.1 as inconsistent with the Iowa Rules of Civil Procedure. Finally, he argues the district court abused its discretion in ordering sanctions under the circumstances.

A. The District Court's Inherent Authority. The district court's order was premised primarily on Davis's failure to comply with orders entered in his individual case rather than on local rule 7.1. Davis's criticisms of rule 7.1 ignore that the district court entered two separate pretrial orders setting a date for the settlement conference and expressly providing, "All parties with authority to settle must be present." When DSG asked to skip the settlement conference, ...