Donaldson v. Clark

• Citation: 819 F.2d 1551
• Decision Date: 24 June 1987
• Docket Number: No. 85-8270,85-8270
• Parties: , 8 Fed.R.Serv.3d 1 Jurldine A. DONALDSON, Plaintiff-Appellant, v. Paul V. CLARK, et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1551

819 F.2d 1551

56 USLW 2029, 8 Fed.R.Serv.3d 1

Jurldine A. DONALDSON, Plaintiff-Appellant, v. Paul V. CLARK, et al., Defendants-Appellees.

No. 85-8270.

United States Court of Appeals, Eleventh Circuit.

June 24, 1987.

James W. Howard and R. David Ware, Atlanta, Ga., for plaintiff-appellant.

Charles R. Adams III, Ft. Valley, Ga., for Clark.

Alvin McDougald, Ft. Valley, Ga., for Harris.

Kathryn Allen, Asst. Atty. Gen., Atlanta, Ga., for Wilcox.

Gregory Homer, Ft. Valley, Ga., for Wilder.

Katherine M. Kalish, Macon, Ga., for Shelley.

Appeal from the United States District Court for the Middle District of Georgia.

Before RONEY, Chief Judge, GODBOLD, TJOFLAT, HILL, FAY, VANCE, KRAVITCH, JOHNSON, HATCHETT, ANDERSON, CLARK, and EDMONDSON, Circuit Judges.

GODBOLD, Circuit Judge:

I. BACKGROUND

The court took this case en banc to consider procedures and standards for the imposition of sanctions under Rule 11, Fed.R.Civ.P., as amended in 1983. ¹ This case arose as a consequence of a suit in Georgia state court in which Jarrell Donaldson sought a divorce from his wife Jurldine Donaldson. While the divorce case was pending, Jurldine Donaldson filed suit under 42 U.S.C. Sec. 1983 in the U.S. District Court, M.D. Georgia, alleging that various persons conspired under color of state law to unlawfully expedite the divorce proceedings, terminate her marriage, and prevent her from visiting and perhaps reconciling with her husband, thereby depriving her of rights under the Fourth and Fourteenth Amendments without due process of law. The complaint sought various forms of relief including actual and compensatory damages, punitive damages, injunctive relief against the pending divorce action and against further harassment by defendants, and costs and attorneys' fees. Defendants filed motions to dismiss and for an award of attorneys' fees.

On February 21, 1985 a hearing was held on the motions to dismiss. The focus of the hearing shifted away from the question of whether the allegations in the complaint stated a claim for relief and toward the question of whether there was any factual basis for those allegations. Near the end of the hearing the court said:

Now, since the Court has entertained matters outside the record, these motions to dismiss will be considered as motions for summary judgment. Either of you may supplement the record within one week, if you wish to do so.

The court asked counsel for Jurldine to submit personal financial statements for himself, his law partners and his client and advised that these statements were for use in the event the court decided to impose sanctions under Rule 11.

All defendants submitted affidavits, one on February 22 and the others on February 26-28, denying participation in the conspiracy. On March 1 plaintiff submitted an affidavit in response to defendant Judge Wilcox's affidavit and plaintiff's counsel submitted an affidavit in support of plaintiff's response to motions for attorneys' fees and in response to all Rule 11 issues. The affidavit of plaintiff's counsel stated that the factual allegations in the complaint were supported by admissible evidence and that the legal arguments were supported by authority.

On March 29 the district court granted summary judgment on behalf of defendants and held that despite ample opportunity to demonstrate that the complaint was well grounded in fact, plaintiff's counsel had failed to proffer such support. The court found that sanctions were warranted under Rule 11 and ordered counsel to pay to the clerk a fine of $500 and to reimburse the defendants for all attorneys' fees and expenses reasonably incurred in defending the action, these amounts to be determined by the court on submission of affidavits by defense counsel. Donaldson v. Clark, 105 F.R.D. 526 (M.D.Ga.1985).

On appeal a panel of this court reversed the summary judgment and the Rule 11 sanctions. Donaldson v. Clark, 786 F.2d 1570 (11th Cir.1986). ² The court voted the case en banc, thereby vacating the panel opinion.

II. FINALITY OF JUDGMENT AND FAILURE TO COMPLY WITH RULE 56

NOTICE REQUIREMENTS

We adopt the rendition of the facts and the procedural history set out in the panel opinion at 786 F.2d 1571-74.

We agree with the panel that the district court's decision was appealable as a final judgment on the merits and adopt its holding on that issue. Id. at 1574-75.

We also adopt that part of the panel opinion holding that the district court erred in granting defendants' motions for summary judgment, converted from motions to dismiss, without giving the non-moving party ten days notice that the motions were to be so converted. Id. at 1575-76. In addition to the authority cited by the panel on this issue we also note that:

It is clearly the law in this circuit that whenever a district judge converts a 12(b)(6) motion to dismiss into one for summary judgment by considering matters outside the pleadings the judge must give all parties ten-days notice that he is so converting the motion. Herron v. Beck, 693 F.2d 125, 126 (11th Cir.1982); Underwood v. Hunter, 604 F.2d 367, 369 (5th Cir.1979).

Property Management & Investments, Inc. v. Lewis, 752 F.2d 599, 605 (11th Cir.1985). Failure to give such notice "will result in reversal and a remand." Id. at 606. Although Rule 56 does not require that an oral hearing be held on a summary judgment motion, the non-moving party should be informed of the date as of which the court will consider the motion. See Moore v. State of Florida, 703 F.2d 516, 519 (11th Cir.1983). The purpose of the ten-day requirement is to notify the parties that the court may dispose of the case by summary judgment so that "the non-moving party will have an opportunity to marshal its resources and ... rebut[ ] the motion for summary judgment with every factual and legal argument available." Id. ³

We therefore reverse the district court's order granting summary judgment in favor of defendants and remand the case for further proceedings.

III. SANCTIONS UNDER RULE 11

Our holding that the summary judgment in favor of defendants must be reversed compels us also to reverse the imposition of sanctions against plaintiff's counsel under Rule 11. Although the timing of sanctions rests in the discretion of the trial judge, "it is anticipated that in the case of pleadings the sanctions issue under Rule 11 normally will be determined at the end of the litigation, and in the case of motions at the time when the motion is decided or shortly thereafter." Advisory Committee Note to Rule 11, as amended in 1983 (hereafter "Advisory Committee Note"). Because we have held that the district court failed to give plaintiff's counsel the full ten-day period to submit material in opposition to the converted summary judgment motions, the district court should wait until counsel has had such an opportunity before deciding whether to impose Rule 11 sanctions. If the court does consider imposing sanctions under Rule 11, the following standards and procedures should guide it in deciding whether sanctions are appropriate and what they should be.

Rule 11 was amended in 1983 to provide (underlinings indicate additions and brackets deletions in the 1983 amendments):

The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief [there is good ground to support it; and that it is not interposed for delay] 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 to cause unnecessary delay or needless increase in the cost of litigation.

Fed.R.Civ.P. 11. This language "stresses the need for some prefiling inquiry into both the facts and the law to satisfy the affirmative duty imposed by the rule." Advisory Committee Note. Rule 11 as amended is intended to "reduce frivolous claims, defenses or motions" and to deter "costly meritless maneuvers," thus avoiding unnecessary delay and expense in litigation. Report of the Judicial Conference Committee on Rules of Practice and Procedure, app. C (Mar. 9, 1982) (letter from Judge Walter Mansfield, Chairman, Advisory Committee on Civil Rules), reprinted in 97 F.R.D. 190, 192 (1983); see also Advisory Committee Note. Rule 11 sanctions are designed to "discourage dilatory or abusive tactics and help to streamline the litigation process by lessening frivolous claims or defenses." Pin v. Texaco, Inc., 793 F.2d 1448, 1455 (5th Cir.) (quoting Advisory Committee Note), reh'g denied, 797 F.2d 977 (1986) (en banc).

Rule 11 as amended incorporates an objective standard. See Hashemi v. Campaigner Publications, Inc., 784 F.2d 1581, 1583 (11th Cir.1986); Pin, 793 F.2d at 1455; Eavenson, Auchmuty & Greenwald v. Holtzman, 775 F.2d 535, 540 (3rd Cir.1985). The standard for testing conduct under amended Rule 11 is "reasonableness under the circumstances," a standard "more stringent than the original good-faith formula." Advisory Committee Note. ⁴ The Advisory Committee Note reminds courts to "avoid using the wisdom of hindsight" and to "test the signer's conduct by inquiring what was reasonable to believe at the time the pleading, motion, or other paper was submitted." Id. What constitutes a reasonable inquiry

may depend on such factors as how much time for investigation was available to the signer [and] whether he had to rely on a client for information as to the facts underlying the pleading, motion, or other paper; whether the pleading, motion, or other paper was based on a plausible view of the law; or whether he depended on forwarding counsel or another member of the bar.

Id. With respect to the scope of appellate review, we find that the following approach is the correct one: Whether (1) factual or (2) dilatory or bad faith reasons...