Montgomery v. Jimmy's Tire & Auto Ctr.

• Decision Date: 29 September 1989
• Docket Number: No. 87-1365.,87-1365.
• Parties: George MONTGOMERY, Appellant, v. JIMMY'S TIRE & AUTO CENTER, INC., Appellee.
• Court: D.C. Court of Appeals

Page 1025

566 A.2d 1025

George MONTGOMERY, Appellant, v. JIMMY'S TIRE & AUTO CENTER, INC., Appellee.

No. 87-1365.

District of Columbia Court of Appeals.

Argued May 2, 1989.

Decided September 29, 1989.

George Montgomery, pro se.

Shari L. Cohen, with whom Lorin H. Bleecker, was on the brief, for appellee.

Before NEWMAN and TERRY, Associate Judges, and PRYOR, Senior Judge.

TERRY, Associate Judge:

The issue in this appeal is whether the trial court erred in imposing sanctions under Superior Court Rule 11 on appellant George Montgomery. Mr. Montgomery, an attorney, represented American Fleet Service, Inc. (AFS), Daniel Smith, the president of AFS, and Albert Smith, Daniel's son and an AFS employee, in a breach of contract action. Because we are unable to discern from the record whether or how the trial court exercised its considerable discretion, we remand the case for a hearing. We direct the court, on remand, to make findings of fact which support the conclusion that sanctions are required (if indeed they are required). The court should also explain why it ordered sanctions in the amount that it did. We recognize that after holding a hearing, the court may conclude that the imposition of sanctions in this case is unwarranted, or that it may decide to alter the amount or type of sanctions it originally imposed in light of what we say in this opinion. If it so concludes or decides, it may enter an appropriate order.¹

I

The underlying litigation in this case appears to have been a run-of-the-mill contract dispute. Appellee filed a complaint in the Superior Court alleging that AFS was indebted to it on a contract for goods and services. In an answer signed by Albert Smith, AFS's shop manager, and appellant Montgomery, AFS's attorney, AFS denied that it had contracted with appellee or was indebted to it. Thereafter appellee moved for summary judgment. The court granted appellee's motion, apparently in the belief that it was unopposed. Two weeks later, however, the order granting the motion was vacated. The parties had in fact agreed to extend AFS's time for filing a response to the motion, but, because of an error in the Clerk's Office, the consent praecipe reflecting that agreement had not been filed or docketed after the Clerk's Office received it.

AFS then filed an opposition, signed by Montgomery, to the motion for summary judgment. In this opposition AFS asserted that it had neither purchased nor received merchandise from appellee, and that the recipient of the goods and services was a separate and distinct entity, Eastern Cab Company, Inc. AFS also alleged that many of the items purchased by Eastern had proven to be defective and had been returned, but that no credits had been given to Eastern. Additionally, AFS submitted a schedule of assets and liabilities filed by Eastern in bankruptcy proceedings, which listed appellee as one of Eastern's creditors.

Ruling that appellee's motion for summary judgment was "not properly supported," and unable to conclude that no issues of fact remained for trial, Judge Weisberg denied the motion for summary judgment. Appellee then moved for reconsideration, and AFS filed an opposition signed by Montgomery and by Daniel Smith. After Judge Weisberg denied the motion for reconsideration, appellee served its first set of interrogatories on AFS, to which AFS filed answers signed by Daniel Smith.

Several weeks later Judge Mitchell, the pretrial judge, sua sponte ordered Mr. Montgomery to pay $100.00 to appellees' counsel as a sanction for failing to appear at a pretrial conference. That order was vacated, however, after Montgomery filed a motion to reconsider.

On the scheduled trial date, Montgomery requested a continuance on behalf of AFS on the ground that the two witnesses he intended to call, Albert and Daniel Smith, were unavailable to testify. Judge Rufus King, the Calendar Control judge, denied the motion. The case was then sent to Judge Salzman for trial, but he recused himself on Montgomery's motion. The case was reassigned to Judge Suda, but he too recused himself on Montgomery's motion. Finally, the case went back to Judge King for trial. Richard Colburn, appellee's president and chief executive officer, testified that appellee had provided goods and services to AFS. He also testified that invoices reflecting AFS's indebtedness to appellee had been signed by Albert Smith, and that AFS owed appellee $22,287.35.² AFS, because its witnesses did not appear for trial, put on no defense. The trial lasted less than an hour, and at the end of it Judge King entered judgment for appellee in the amount of $22,287.35, plus interest and costs. AFS did not appeal from the judgment.

After AFS's time for noting an appeal had passed, appellee filed a motion for Rule 11 sanctions against AFS, the Smiths, and Mr. Montgomery. All of them opposed the motion in writing.³ Thereafter, without holding a hearing to determine whether sanctions were appropriate, and if so in what form and against whom, Judge Goodrich — who appears from the record to have had no previous contact with the case — granted appellee's motion for sanctions in the following three-paragraph order:

This matter having come before the Court upon the Plaintiff's Motion for Sanctions and Memorandum of Points and Authorities in support thereof, and it appearing to the Court that reasonable inquiry has not been made into the factual grounds supporting Defendant's Answer, Opposition to Plaintiff's Motion for Summary Judgment, Opposition to Plaintiffs Motion to Reconsider and Answers to Interrogatories, it is by this Court this 4th day of November, 1987:

ORDERED, that Plaintiff's Motion for Sanctions be, and the same is hereby GRANTED; and it is

FURTHER ORDERED, that Plaintiff be awarded $7905.00, payable jointly and severally, by the Defendant, its officers Daniel Smith and Albert Smith, and Defendant's attorney, George Montgomery, this sum being the amount of reasonable attorney's fees incurred by Plaintiff as a result of Defendant's conduct herein. (See 24 of Plaintiff's motion for sanctions.)

No findings of fact or conclusions of law accompanied the order, nor was there any explanation of why the sanctions were levied against Mr. Montgomery and his clients jointly and severally.

II

In 1985 Superior Court Civil Rule 11 was amended to track the language of the corresponding federal rule, Fed.R.Civ.P. 11, which was itself substantially amended in 1983. See Simpson v. Chesapeake & Potomac Telephone Co., 522 A.2d 880, 884 n. 3 (D.C. 1987). In pertinent part, the local rule provides:

The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion or other paper; 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 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. If a pleading, motion, or other paper is not signed, it shall be stricken unless it is signed promptly after the omission is called to the attention of the pleader or movant. If a pleading, motion, or other paper 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, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, including a reasonable attorney's fee.

The corresponding portion of the federal rule contains precisely the same language. When a local rule and a federal rule are identical, or nearly so, we will construe the local rule in a manner consistent with the federal rule to the extent possible under binding precedent, and we will look to federal court decisions interpreting the federal rule as persuasive authority in interpreting the local rule. Simpson, supra, 522 A.2d at 884 n. 4; Wallace v. Warehouse Employees Union No. 730, 482 A.2d 801, 807 (D.C. 1984); Vale Properties, Ltd. v. Canterbury Tales, Inc., 431 A.2d 11, 13 n. 3 (D.C. 1981). Therefore, most of the cases we cite in this opinion will be federal cases, since this court thus far has issued only two opinions dealing with the amended Rule 11, Simpson v. Chesapeake & Potomac Telephone Co., supra, and Stansel American Security Bank, 547 A.2d 990 (D. C. 1988), cert. denied, ___ U.S. ___, 109 S.Ct. 1746, 104 L.Ed.2d 183 (1989).

Under the amended Rule 11, "appropriate" sanctions are mandatory if a person signs and files a motion or other paper without making a reasonable pre-filing inquiry into the facts and law on which it is based, files it for an improper purpose, or, making an argument for a change in the law, fails to make that argument in good faith. See, e.g., Westmoreland v. CBS, Inc., 248 U.S.App.D.C. 255, 261-262, 770 F.2d 1168, 1174-1175 (1985), adopted by this court in Stansel v. American Security Bank, supra, 547 A.2d at 995-996; Eastway Construction Corp. v. City of New York, 762 F.2d 243, 253-254 (2d Cir. 1985), cert. denied, 484 U.S. 918, 108 S.Ct. 269, 98 L.Ed.2d 226 (1987); see also 2A J. MOORE, W. TAGGART & J. WICKER, MOORE'S FEDERAL PRACTICE §§ 11.02[2]-[3] (2d ed. 1987 & Supp. 1988-1989) (hereafter MOORE'S FEDERAL PRACTICE). As we said in Stansel:

[T]he trial court has broad discretion, in the first instance, to determine whether there has been a violation of the rule by a party or by counsel. Once such a violation is found, however, the court must impose "an appropriate sanction" under the rule; it has no discretion to refrain from sanctioning an offending party or attorney.

547 A.2d at 995-996 (emphasis in original).

The trial court's order imposes a substantial monetary sanction — almost...