IN RE ESTATE OF BAYERS, 00-715.

• Decision Date: 22 March 2001
• Docket Number: No. 00-715.,00-715.
• Citation: 21 P.3d 3,2001 MT 49
• Parties: In the Matter of the ESTATE OF Shirley L. BAYERS, a Protected Person.
• Court: Montana Supreme Court

21 P.3d 3

2001 MT 49

In the Matter of the ESTATE OF Shirley L. BAYERS, a Protected Person.

No. 00-715.

Supreme Court of Montana.

Submitted on Briefs February 8, 2001.

Decided March 22, 2001.

Rehearing Denied April 19, 2001.

Philip P. McGimpsey, Billings, MT, for Appellant.

David A. Duke, Billings, MT, for James Bennett.

Damon L. Gannett, Gannett Law Firm, Billings, MT, for Guardian Ad Litem for Shirley Bayers.

William J. Mattix, Crowley Law Firm, Billings, MT, for Guardian Judy Trenka.

John T. Jones, Nancy Bennett, Moulton, Bellingham, Longo & Mather, Billings, MT, for Respondent. Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 The Thirteenth Judicial District Court, Yellowstone County, assessed $1,500.00 in attorney fees as a sanction against Philip P. McGimpsey (McGimpsey) for unreasonably and vexatiously multiplying legal proceedings, pursuant to § 37-61-421, MCA. McGimpsey appeals this sanction. We affirm and remand with instructions.

FACTUAL BACKGROUND

¶ 2 First Interstate Bank (Conservator) is the court-appointed Conservator of the Estate of Shirley L. Bayers (Bayers), who is incapacitated due to Alzheimer's disease. McGimpsey purports to be Ms. Bayers' private attorney, claiming Bayers hired him after conservatorship proceedings were underway. When McGimpsey began expressing an interest in participating in matters involving Bayers' estate, Conservator became concerned about the extent of McGimpsey's involvement in Bayers' affairs. Conservator's attorney therefore wrote to him requesting a copy of any legal documents he had that may have been executed by Bayers. McGimpsey responded, saying he could provide only "an abstract" of his attorney-client agreement with Bayers, and declining to make any further disclosures, citing the attorney-client relationship.

¶ 3 On February 16, 2000, following a hearing on Conservator's annual accounting at which McGimpsey was present, the District Court informed McGimpsey that Conservator was statutorily entitled to the documents it had requested from him. The District Court then instructed Conservator to put its request in writing. The next day, counsel for Conservator sent McGimpsey a letter, once again, requesting documents he possessed having to do with Bayers' affairs. This letter asked McGimpsey to provide:

[C]opies of any estate plans you have for Shirley L. Bayers, including, but not limited to: any wills; powers of attorney; trusts of which she is a settler; and any contract, transfer, or joint ownership arrangement with provisions for payment or transfer of benefits or interest at her death of another. In the event that you have knowledge of any estate plans that are not in your possession, please provide the name and address of the person in possession of those documents.

The letter went on as follows:

Furthermore, any person taking actions based upon a Durable Power of Attorney is accountable to the conservator. See Mont. Code Ann. § 72-5-501(2). Thus, in the event that you are taking direction from or have an attorney client relationship with any person claiming to be Ms. Bayers' agent or attorney-in-fact under a Durable Power of Attorney for Shirley L. Bayers, please provide a copy of any engagement or retention letters as well as copies of all bills or account statements for services provided under the Durable Power of Attorney.

If you choose not to provide the requested information within ten days, the conservator will be forced to seek the Court's intervention. In the event the conservator is required to file a motion with the Court, the conservator will seek sanctions in the form of attorneys' fees and costs. (Emphasis in original.)

¶ 4 McGimpsey ignored Conservator's request. Accordingly, on April 24, 2000, Conservator filed a motion to compel McGimpsey to provide the requested information, together with a request for attorney fees necessitated by the motion. On April 27, 2000, McGimpsey responded with a letter threatening Conservator's counsel with Rule 11 sanctions if she did not withdraw the motion to compel. Among other things, McGimpsey stated:

[T]o put this in language that I'm hoping you'll understand, it is my profound and unwavering belief that your Motion and Brief were not written and filed after reasonable inquiry; are not well grounded in fact; and are not warranted by existing law or a good faith argument for the extension, modification or reversal of existing law .... (emphasis in original)

Before you fall too deeply in love with your current Motion, I would suggest that you secure a copy of (and very, very carefully read) the transcript from the Hearing of February 16, 2000. To analogize: Do you remember the scene from one of the Star Wars's movies where young Luke was being told to `feel the force; listen to his feelings?' Well ..., `read the transcript.' What you will magically find is that my well-prepared and surgically scripted remarks will put an end to you and Damon's [Guardian ad litem] continuous and unnecessary billing for `housekeeping matters.'... [I]f you're anxious to run with the tall dog litigators in your firm, or for that matter, you need productive billable hours, may I suggest that the following subject areas directed to the financial management of Shirley's account are ripe for the application of your considerable talent....

There followed a laundry list of complaints and criticisms of Conservator's handling of Bayers' estate.

¶ 5 On May 8, 2000, McGimpsey filed a motion to strike scandalous, immaterial and irrelevant content in Conservator's motion and brief. His motion was denied. On June 1, 2000, after the motion to compel was fully briefed, the District Court granted Conservator's motion to compel and for attorney fees. The District Court indicated in its order that if the amount of attorney fees was contested, a hearing would be held to determine the amount of fees to be awarded.

¶ 6 On June 7, 2000, McGimpsey filed a motion to alter or amend the District Court's order granting attorney fees. Conservator opposed the motion. The District Court denied McGimpsey's motion, and ordered a hearing on the amount of the sanction to be awarded, "unless the parties can agree to $1,000 in attorney fees being assessed." Conservator agreed to accept the District Court's suggestion. McGimpsey did not. A hearing on the amount of fees was therefore scheduled for July 27, 2000.

¶ 7 On July 18, 2000, McGimpsey filed a motion to vacate the hearing and moved to establish a discovery schedule regarding attorney fees. The District Court denied the motion at the beginning of the July 27, 2000 hearing. Conservator's counsel then testified as to her reasonable attorney fees incurred due to McGimpsey's conduct. On July 31, 2000, the District Court issued its order requiring McGimpsey to pay Bayers' estate $1,500.00 in attorney fees. McGimpsey filed another motion to alter or amend the order determining attorney fees. The District Court denied the motion on August 30, 2000. McGimpsey now appeals to this Court.

DISCUSSION

¶ 8 Did the District Court abuse its discretion by sanctioning McGimpsey $1,500.00 under § 37-61-421, MCA, for unreasonably and vexatiously multiplying the proceedings in District Court?

¶ 9 The District Court awarded fees to Conservator under § 37-61-421, MCA, which provides:

An attorney or party to any court proceeding who, in the determination of the court, multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorney fees reasonably incurred because of such conduct.

It is within a district court's discretion to award attorney fees under § 37-61-421, MCA. Rocky Mountain Ent. v. Pierce Flooring (1997), 286 Mont. 282, 301, 951 P.2d 1326, 1338. We review a district court's determination to grant attorney fees pursuant to § 37-61-421, MCA, for an abuse of discretion. Tigart v. Thompson (1990), 244 Mont. 156, 159-60, 796 P.2d 582, 584. This Court generally defers to the discretion of the district court regarding sanctions because it is in the best position to know whether parties are disregarding the rights of others and which sanction is most appropriate. McKenzie v. Scheeler (1997), 285 Mont. 500, 506, 949 P.2d 1168, 1172.

¶ 10 McGimpsey argues that the District Court erred in ordering him to pay fees under § 37-61-421, MCA, because in a civil action such as this one, all discovery and discovery disputes, including sanctions, must be governed by the Montana Rules of Civil Procedure, and not by § 37-61-421, MCA. He also argues that it was error for the District Court to sanction him because it made no findings of fact as to his unreasonable and vexatious conduct. Lastly, he asserts that Conservator totally failed to carry its burden of proof as to the amount of time its attorney spent due to his conduct.

¶ 11 Conservator counters that the issue before the District Court was not a discovery dispute because there was...