Hamilton v. Boise Cascade Exp.

• Decision Date: 17 March 2008
• Docket Number: No. 06-6308.,06-6308.
• Citation: 519 F.3d 1197
• Parties: Kameisha HAMILTON, Plaintiff-Appellant, and Valetta Taylor; Dorothy Lambe; Ajeenah Spriggs; Danielle Callaghan, Plaintiffs, v. BOISE CASCADE EXPRESS, a division of Boise Cascade Office Products, a corporation; Samantha Mohr, individually; Robert Harper, individually; Laurie Johnson, individually; Boise Cascade Office Products Corporation, Defendants-Appellees, Mark Hammons, Real Party in Interest-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

519 F.3d 1197

Kameisha HAMILTON, Plaintiff-Appellant, and Valetta Taylor; Dorothy Lambe; Ajeenah Spriggs; Danielle Callaghan, Plaintiffs, v. BOISE CASCADE EXPRESS, a division of Boise Cascade Office Products, a corporation; Samantha Mohr, individually; Robert Harper, individually; Laurie Johnson, individually; Boise Cascade Office Products Corporation, Defendants-Appellees Mark Hammons, Real Party in Interest-Appellant.

No. 06-6308.

United States Court of Appeals, Tenth Circuit.

March 17, 2008.

Mark Hammons (Tamara Gowens with him on the briefs), Hammons, Gowens & Associates, Oklahoma City, OK, for Appellants and for himself as real party in interest.

J. Alfred Southerland, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Houston, Texas (Jennifer L. Miscovich, Ogletree Deakins, Houston, and M. Richard Mullins, McAfee & Taft, P.C., Oklahoma City, OK, with him on the brief), for Defendants-Appellees.

Before KELLY, EBEL, and McCONNELL, Circuit Judges.

McCONNELL, Circuit Judge.

The district court found that Appellant, attorney Mark Hammons, "multiplied the[se] proceedings unreasonably, vexatiously, and recklessly" by filing a motion to enforce a settlement agreement that misstated opposing counsel's position without a reasonable basis, costing his opponents a needless expense of $7,974.20. It therefore levied a sanction in that amount against Mr. Hammons personally under 28 U.S.C. § 1927. Mr. Hammons appeals the award and amount of the sanction. We hold that the district court was within its discretion in finding Appellant's conduct objectively unreasonable and in determining the amount of the sanction as it did, and so affirm.

I. BACKGROUND

This matter has its origins in a race and gender discrimination suit filed against Boise Cascade Office Products Corporation (Boise) by five of its employees. Three of the plaintiffs eventually reached a settlement with Boise; two pressed on, only to have their claims rejected on summary judgment.¹ The plaintiffs were represented by the law firm of Hammons & Associates (now Hammons, Gowens & Associates), of Oklahoma City, Oklahoma.

Mr. Hammons was sanctioned by the district court for a motion to enforce a settlement agreement between Boise and one of the plaintiffs. In this motion, which had no good basis, he represented to the court that Boise's counsel, J. Alfred "Alf" Southerland, had stated that Boise would not pay on the settlement until all the settling plaintiffs returned whatever company documents they had in their possession. In reality, following the explicit terms of the settlement agreement, Boise was conditioning payment only on the plaintiffs' filing of a stipulation of dismissal of their suit. Boise did request its documents back under an independent clause of the settlement agreement, but it was Mr. Hammons firm that tried to tie together the issues of the documents, the stipulation, and the payment — demanding that Boise relinquish its claim to the documents before they would file the stipulation.

The settlement agreement at issue provided that the settling plaintiff, Valetta Taylor (a/k/a Valetta Taylor-Wright), must "sign and file with the Court a stipulation of dismissal with prejudice" of her discrimination claim against Boise "[p]rior to receipt of payment" on the settlement. Sealed App. 2. Additionally and independently, each was to return any Boise property "possessed by the Employee and all other documents and other items obtained through discovery during the course of this suit" to Boise's counsel "within thirty days of the execution" of their settlement agreements. Id. at 4. For nearly a month beginning in April 2006 Mr. Hammons's firm and Boise traded letters and emails in which the plaintiffs sought payment on Ms. Wright's settlement and Boise insisted, pursuant to the agreement, on the filing of her stipulation of dismissal before they would do so.

So, on May 3, 2006, Mr. Southerland wrote to Hammons's firm and, referring to the role of his co-counsel, made explicit: "We will fund upon your filing of the stipulation. Rick has the checks for distribution, and is simply awaiting notice of filing from the court." Id. at 44. Despite this and similar representations, Mr. Hammons's firm never filed the stipulation of dismissal. Instead, Mr. Hammons began to insist that Boise drop its demand for the return of its documents in exchange for Ms. Wright's filing of the stipulation.

Boise refused, sticking by the agreement as Ms. Taylor had signed it. On May 11, Mr. Hammons wrote to Mr. Southerland with a draft copy of a motion he intended to file — the Motion to Enforce the Settlement Agreement whose factual allegations are the heart of this case. The motion was to request relief in the form of an order "direct[ing] the Defendants to comply with the agreement [i.e., pay up] without conditioning compliance with a return of documents being held by and for Hamilton and Callaghan." App. 66. Crucially, the motion was to aver:

Such settlement agreement has not been concluded because the Defendants have stated that they will not pay the settlement amount unless Ms. Taylor-Wright not only returns those Boise documents in her possession (there are none) but also causes to be returned those documents which are being held for the use of two non-settling Plaintiffs — Ms. Hamilton and Ms. Callaghan.

Id. at 62.

The next day, May 12, a Friday, Mr. Southerland faxed back a letter stating that "[t]he motion mischaracterizes Defendants' efforts to ensure that your clients comply with the terms of the settlement agreements, and conveniently ignores your firm's efforts — as late as last week — to unilaterally implement changes to the agreements executed by your clients...." Id. at 71. He asked that if Mr. Hammons filed his motion, he attach this letter.

At 4:17 PM that day, Mr. Hammons emailed back, again repeating his claim that Boise was trying to condition payment of the settlement funds on the return of the documents: "[W]e have told you that we will authorize a Stipulation of Dismissal but we have explained that we cannot do that when you have told us that you will still not issue the check until [settling plaintiffs] give up their documents." Id. at 73. At 4:51 PM, Mr. Hammons filed the Motion to Enforce, without changes but with Mr. Southerland's letter attached, and then went home.

Seven minutes later, after Mr. Hammons had left for the weekend, Mr. Southerland faxed back, explicitly denying Hammons's statement just quoted. The fax was copied to Mr. Hammons's personal email address. In it, Mr. Southerland explained that the stipulation of dismissal and the return of documents "are separate obligations," and remarked that it was in fact Mr. Hammons who "ha[d] conditioned payment upon the waiver of [Boise]'s right to obtain the return of documents. That was your choice and condition, not ours." Id. at 111. Mr. Hammons never bothered to read this fax, and he never withdrew his Motion to Enforce or sought to correct its incorrect claim that Boise had stated it was refusing to issue payment on the settlement until its documents were returned.

Boise cross-moved to enforce the settlement agreement, asking for the filing of the stipulation of dismissal before it would pay on the settlement, and seeking return of its documents. Boise also moved for sanctions against plaintiffs' counsel. The district court denied Mr. Hammons's motion, granted the cross-motion, and ordered Mr. Hammons to show cause why he should not be sanctioned "for attempting to mislead the court as to defendants' position on payment of the Taylor-Wright settlement and for unreasonably and vexatiously multiplying the proceedings by filing Plaintiff's Motion to Enforce the Settlement Agreement." Id. at 124, 126.

At a hearing August 3, 2006, Mr. Hammons was unable to point the court to anything in Boise's communications that could be taken as tying the return of the documents to payment of the settlement, except for the fact that "each time the issue of payment was mentioned simultaneously there was the statement demanding the return of the documents." Id. at 226. Even though his motion averred that Boise had "stated that they will not pay the settlement amount" until the documents were returned, Mr. Hammons admitted at the hearing that Boise had never made such a statement and allowed that his "choice of language on that was inappropriate." Id. at 229. He admitted that he would never have filed his motion had Boise's Friday-afternoon fax come sooner, acknowledged that he should have supplemented his motion after receiving it, and apologized for not having read it.

The district court held that Mr. Hammons's conduct merited sanction. Ruling orally at the hearing, the court found that

this entire motion and the representations in it certainly ... caused opposing counsel excessive costs and attorney's fees, and opposing parties excessive costs and attorney's fees, and has caused the Court a great many unnecessary hours spending [sic] trying to resolve this issue, when really the only legitimate dispute, it would appear, which the Court should have been involved in, was the return of the documents.

Id. at 282-83. Significantly, whereas the show cause order suggested that Mr. Hammons may have "attempt[ed] to mislead the court," the district court's ruling contained no such finding; rather, the court found simply that the statement was in error, and that counsel should have known it. The court stated that there wasn't "any question that any reasonable person, much less an attorney of [Mr. Hammons's] learned skills, ... could have interpreted the May 3rd letter and email" other than as stating that Boise would fund the settlement upon receipt of Ms. Taylor's stipulation of dismissal without regard to the documents. Id. at 281. "There could be no misinterpretation of their language." Id. Thus, when the judge followed up with a written opinion on August 9, 2006, he explained that "no...