Giebelhaus v. Spindrift Yachts
| Decision Date | 10 July 1991 |
| Docket Number | No. 90-55502,90-55502 |
| Citation | 938 F.2d 962 |
| Parties | , 19 Fed.R.Serv.3d 1364 Sam GIEBELHAUS; Charlotte Giebelhaus, Plaintiffs-Appellants, v. SPINDRIFT YACHTS; R. Anthony Bell; World Trader Yachts, Inc.; John Frederick Roberts; Elizabeth Marlene Roberts, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
David N. Ramras, Phoenix, Ariz., for plaintiffs-appellants.
Keith Zakarin, San Diego, Cal., for defendants-appellees.
Appeal from the United States District Court for the Southern District of California.
Before TANG, REINHARDT and WIGGINS, Circuit Judges.
Sam and Charlotte Giebelhaus appeal from the district court's order denying their motion for Fed.R.Civ.P. 11 sanctions against attorney Lawrence Kaye. Kaye represented World Trader Yachts, Inc., John Roberts, and Elizabeth Roberts, named defendants in the Giebelhauses' suit asserting ownership of a yacht named "Bonus Baby". This court has jurisdiction pursuant to 28 U.S.C. Sec. 1291, and we affirm the judgment of the district court.
In July, 1986, the Giebelhauses entered a written agreement with Spindrift Yachts for the purchase of a yacht, later named "Bonus Baby". The yacht was to be built in Taiwan and shipped to the United States for delivery to the Giebelhauses. By June 1987, when the yacht was constructed and ready for shipment, Spindrift contacted World Trader Yachts, Inc. ("WTY"), and sought financing for the yacht. On July 14, 1987, WTY arranged for the issuance of a letter of credit for the purchase price of the yacht in favor of the Taiwanese yacht builder. The yacht arrived in the United States on July 20, 1987, and was placed in Spindrift's possession.
Anthony Bell, the proprietor of Spindrift, fled the country in November 1987, apparently because of his involvement in fraudulent activities. The Giebelhauses took possession of the yacht, and, on December 17, 1987, they filed a complaint in federal district court seeking to establish their ownership of the yacht. Named defendants included Spindrift, WTY, and John and Elizabeth Roberts, the proprietors of WTY. Spindrift withdrew any possible claim to the yacht, and therefore, the dispute centered on the competing ownership interests of the Giebelhauses, WTY, and the Roberts. During the course of pre-trial litigation, WTY and the Roberts claimed, through their attorney Lawrence Kaye, that they were the owner of the yacht. At the time, Kaye was a partner with the law firm Lillick & McHose. After various pre-trial motions, the Giebelhauses, WTY, and the Roberts reached a settlement under which WTY and the Roberts consented to the entry of judgment in favor of the Giebelhauses in exchange for $25,000. On November 8, 1989, the district court, pursuant to the parties' settlement agreement, entered On October 30, 1989, the Giebelhauses filed a motion for Rule 11 sanctions against attorney Kaye. They argued that WTY and the Roberts had no factual or legal basis for asserting an ownership interest in the yacht. Although his name appeared on them, Kaye never personally signed the pleadings upon which the Giebelhauses based their Rule 11 motion. The pleadings were instead signed by a Lillick & McHose associate who was not named in the motion. The Giebelhauses sought sanctions totalling $180,000, the approximate amount of their attorney fees. On November 27, 1989, Kaye filed his opposition and requested sanctions against the Giebelhauses for the filing of a frivolous Rule 11 motion. The district court heard oral argument on the Rule 11 motions and, on January 18, 1990, filed an order denying both sanction motions. The Giebelhauses appeal.
judgment in favor of the Giebelhauses.
This court reviews a district court's denial of Rule 11 sanctions for an abuse of discretion. Cooter & Gell v. Hartmarx Corp., --- U.S. ----, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359 (1990); Townsend v. Holman Consulting Corp., 914 F.2d 1136, 1143 (9th Cir.1990). In the instant case, it is unclear whether the district court denied the Giebelhauses' motion on the merits, finding that the ownership position advanced by WTY and the Roberts was not improper, or on legal grounds, finding that Kaye was not subject to Rule 11 sanctions. 1 Our decision rests on legal grounds.
Rule 11 provides in pertinent part:
Every pleading ... shall be signed by at least one attorney of record in the attorney's individual name.... The signature of an attorney ... constitutes a certificate by the signer that the signer has read the pleading ... [and] that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law.... If a pleading ... 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....
Fed.R.Civ.P. 11 (emphasis added). We have explained that district courts are entitled to apply Rule 11 vigorously to "curb [the] widely acknowledged abuse from the filing of frivolous pleadings." Zaldivar v. City of Los Angeles, 780 F.2d 823, 829 (9th Cir.1986). However, by its terms, Rule 11 limits the imposition of sanctions to "the person who signed" the pleadings. We must, as a threshold matter, determine whether Rule 11 sanctions apply to attorney Kaye, whose name appears only in type on the suspect pleadings. This is a legal question. While we review the district court's decision for an abuse of discretion, "[a] district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law...." Cooter & Gell, 110 S.Ct. at 2461.
The Supreme Court has explained that Rule 11 applies only to attorneys who personally sign suspect pleading. In Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989), the Court reviewed the imposition of sanctions against a law firm, Pavelic & LeFlore, for maintaining a forgery claim which had no basis in fact and which the firm's lawyers had failed properly to investigate. Id. 110 S.Ct. at 457. The pleadings at issue were signed as follows:
Pavelic & LeFlore
By /s/ Ray L. LeFlore
(A Member of the Firm)
Attorneys for Plaintiff The Court, interpreting the language of Rule 11, held that sanctions are only available against the individual signing attorney and not against the attorney's law firm. Id. 110 S.Ct. at 458-60; see also Hudson v. Moore Business Forms, Inc., 898 F.2d 684, 687 (9th Cir.1990) (). In determining that the Rule 11 duty was properly placed only on signing attorneys and that the duty was not subject to delegation, the Court explained:
The signing attorney cannot leave it to some trusted subordinate, or to one of his partners, to satisfy himself that the filed paper is factually and legally responsible; by signing he represents not merely the fact that it is so, but also the fact that he personally has applied his own judgment. Where the text [of Rule 11] establishes a duty that cannot be delegated, one may reasonably expect it to authorize punishment only of the party upon whom the duty is placed....
....
... The message thereby conveyed to the attorney, that this is not a "team effort" but in the last analysis yours alone, is precisely the point of Rule 11. Moreover, psychological effect aside, there will be a greater economic deterrence upon the signing attorney, who will know for certain that the district court will impose its sanction entirely upon him....
Pavelic & LeFlore, 110 S.Ct. at 459, 460 (emphasis in original).
In the instant case, the Giebelhauses seek Rule 11 sanctions against Kaye, the senior attorney at Lillick & McHose representing WTY and the Roberts. The suspect pleadings were signed only by a Lillick & McHose associate, Patricia Sieveke, as follows:
John Frederick Roberts and Elizabeth Marlene Roberts
Kaye contends that Pavelic & LeFlore directly controls and insulates him from Rule 11 exposure. The Giebelhauses argue that 1) Pavelic &...
To continue reading
Request your trial
-
Moore v. Local Union 569 of Intern. Broth. of Elec. Workers, s. 90-55557
...(9th Cir.1989). Finally, we review a district court's denial of Rule 11 sanctions for an abuse of discretion. Giebelhaus v. Spindrift Yachts, 938 F.2d 962, 964 (9th Cir.1991). Under the abuse of discretion standard, a reviewing court cannot reverse "unless it has a definite and firm convict......
-
Conterez v. O'DONNELL
...may appeal the sanctions' denial after there has been a final decision in the underlying lawsuit. Id., citing Giebelhaus v. Spindrift Yachts, 938 F.2d 962, 964 (9th Cir. 1991) (the court reviewed a post-judgment denial of Rule 11 sanctions against defendants' lawyer). In Chuidian v. Philipp......
- K.M. v. Lockheed Shipbuilding
- Maes v. Barrett & Hilp
-
Recovery of Attorney Fees and Costs in Colorado
...456 (1989) (Rule 11 contemplates sanctions against individual signing, not against attorney's law firm); Giebelhaus v. Spendthrift Yachts, 938 F.2d 962, 965 (9th Cir. 1991). But of. Glass v. Pfeffer, 849 F.2d 1261, 1267 (10th Cir. 1988) (appropriate to levy attorney fees under court's inher......
-
Sanctions in Federal Court: a Potential Minefield for Litigators
...240 (1975). 3. Business Guides v. Chromatic Communications Enter., 111 S.Ct. 922, 929 (1991). 4. Id. 5. Giebelhaus v. Spendthrift Yachts, 938 F.2d 962 (9th Cir. 1991) (typewritten name on pleading did not subject senior attorney to sanctions). 6. Business Guides, supra, note 3 at 931. 7. Za......