Yeh v. Hnath
| Docket Number | 21-FM-0737 |
| Decision Date | 25 May 2023 |
| Parties | Marianna YEH, Appellant, v. Gary HNATH, Appellee. |
| Court | D.C. Court of Appeals |
Aaron Marr Page was on the brief for appellant.
Sogand Zamani, Washington, DC, was on the brief for appellee.
Before Beckwith, Easterly, and Deahl, Associate Judges.
Marianna Yeh sued Gary Hnath in Superior Court for a divorce, asserting that the two were in a common-law marriage. Mr. Hnath successfully moved for summary judgment and sought sanctions against Ms. Yeh in the form of attorneys’ fees. Citing Super. Ct. Dom. Rel. R. 11 and the court's inherent authority, the Superior Court granted Mr. Hnath's sanctions motion and ordered Ms. Yeh to pay over $70,000 in fees. On appeal to this court, Ms. Yeh challenges the sanction award as procedurally barred under Rule 11 and otherwise an abuse of the court's discretion to sanction parties for bad-faith litigation. We agree on both grounds and reverse.
The following facts derive from the record or were found by the trial court and are uncontested by the parties. Ms. Yeh and Mr. Hnath began a romantic relationship sometime in 2006, while Mr. Hnath was married to another woman. The two purchased a condo in D.C. together, held under both of their names as tenants by the entirety—a form of property reserved for married couples1 —and Ms. Yeh relocated from Canada to move in with Mr. Hnath. Mr. Hnath and his first wife divorced in 2008, as his relationship with Ms. Yeh continued.
In the years that followed, Ms. Yeh and Mr. Hnath maintained what was by all appearances a serious relationship. Mr. Hnath listed Ms. Yeh (with her signed approval) on various employer benefit forms and medical records as his "domestic partner," and the two jointly held a sizable investment account. In 2014, the two jointly purchased a luxury car, and in 2016, they purchased a house in D.C. together as joint tenants in fee simple. Both parties presented evidence from friends, relatives, and acquaintances who variously characterized their understanding of the parties’ relationship, with descriptions ranging from dating to spousal.
The two never formally registered a domestic partnership2 or undertook a marriage ceremony, however, and after intermittent "off and on" periods they permanently separated in 2017 or 2018. Mr. Hnath formally married another woman in October 2018, and in early 2019 he stopped making payments on the mortgages and car loans that he shared with Ms. Yeh. At least one of the property mortgages went into default and entered foreclosure proceedings with the mortgage lender, and in August 2019 Mr. Hnath sued Ms. Yeh to partition their jointly owned properties and thereby force their sales.
Ms. Yeh subsequently filed the complaint underlying this case in November 2019, requesting absolute divorce to dissolve what she alleged was a common-law marriage between herself and Mr. Hnath that began in August 2008.3 In her complaint, she alleged that Mr. Hnath had consented to spousal support payments including the payments on their mortgages. Apparently as a result of Ms. Yeh's divorce action, Mr. Hnath's suit for partition was dismissed. After Mr. Hnath filed an answer to the divorce complaint, the parties engaged in discovery through 2020 and (because proceedings were significantly delayed due to the COVID-19 pandemic) into 2021.
On January 5, 2021, Mr. Hnath moved to compel discovery and requested sanctions for Ms. Yeh's failure to provide him with a transcript of her October 2018 deposition in an unrelated case in which she had sued a former employer for sexual harassment and other claims. In this transcript, Ms. Yeh stated at one point that she was not married and later that Mr. Hnath had previously been her "domestic partner ... [f]rom December 2006 to sometime in ... the middle of 2017." Ms. Yeh also therein answered detailed questions about her intimate relationship with another man that occurred around 2015. After Mr. Hnath finally obtained a copy of the transcript from a source other than Ms. Yeh, he emailed Ms. Yeh on January 20, 2021,4 demanding that she withdraw her complaint and declaring he would seek sanctions if she did not do so by noon the following day. As the basis for this demand, Mr. Hnath cited Ms. Yeh's sworn statements that she did not consider herself married to Mr. Hnath when she sat for the deposition in 2018. The email did not have a draft motion for sanctions attached. Nothing in the record indicates that Ms. Yeh responded or that Mr. Hnath took any action the following day.
Nine days later, on January 29, 2021, Mr. Hnath filed a motion entitled as a "Verified Motion for Summary Judgment and for Sanctions." Regarding the request for sanctions, the pleading provided a paragraph summary of the factual basis for such a request, alleging Ms. Yeh had filed her complaint to harass Mr. Hnath and his new wife and that her suit was frivolous in light of the evidence, but it contained no corresponding legal argument. Instead Mr. Hnath stated that his sanctions request, which he indicated would be sought under Rule 11 and the court's inherent authority, would "be presented in a subsequent motion more fully." After further briefing and a hearing regarding whether summary judgment in favor of Mr. Hnath was warranted, the trial court issued a two-page order on February 27, 2021, and granted judgment to Mr. Hnath, stating that a detailed order would follow. In the same order the court held Mr. Hnath's motion5 for sanctions in abeyance, stating that it would schedule a hearing "in due course."
The Superior Court subsequently issued a March 23, 2021, order explaining its reasoning for granting summary judgment to Mr. Hnath. The court determined that Ms. Yeh had failed to present any evidence of an express, present-tense mutual agreement between herself and Mr. Hnath that they were married, a requisite element of a common-law marriage in the District as set out in Gill v. Nostrand , 206 A.3d 869, 875 (D.C. 2019). The court also reasoned that Ms. Yeh's shifting allegations of the date the marriage began, her own repeated contemporaneous representations that she and Mr. Hnath were "domestic partners," and the lack of evidence of their reputation in the local community as a married couple all weighed against her claim. Lastly, the court observed that Ms. Yeh would have needed to establish that she and Mr. Hnath reaffirmed their intent to be married once the legal impediment of Mr. Hnath's first marriage had been removed, but found that she had failed to do so.6
On April 28, 2021—two months after the court granted summary judgment—Mr. Hnath filed a standalone motion for sanctions in the form of attorneys’ fees, again citing both Super. Ct. Dom. Rel. R. 11 and the court's inherent sanctions authority. Mr. Hnath reiterated his assertions that Ms. Yeh had filed her suit for the bad-faith purposes of harassment and delay as evidenced by the fact that her claims lacked evidentiary basis, and that she had litigated her claim in a bad-faith manner. Ms. Yeh opposed the motion. She argued that Mr. Hnath was not entitled to Rule 11 sanctions because he had not formally served her with a standalone sanctions motion at least 21 days before filing, as required under Rule 11(c)(2). Ms. Yeh denied any improper purpose in filing her divorce suit, asserted she had held a bona fide if misguided belief that she had been in a common-law marriage, and pointed to the evidence she had proffered supporting that belief; Ms. Yeh further argued that she lacked the financial resources to pay the requested fees.
The court further reasoned that "[n]ot only did [Ms. Yeh] initiate this claim under questionable circumstances, but the litigation tactics used throughout this case appear to have been used to conceal important discovery documents," specifically her 2018 deposition transcript from her separate lawsuit for sexual harassment.8 Ms. Yeh timely appealed the sanctions order.
In general, parties before the District's courts are responsible for paying the costs and fees that their own attorneys incur during the course of litigation, a practice known as the "American rule." Synanon Found., Inc. v. Bernstein , 517 A.2d 28, 35, 37 (D.C. 1986). This rule aims to avoid chilling possibly meritorious actions, whereas a fee-shifting default might deter a party from ever initiating a claim for fear of being stuck with an unpayable bill should they lose. See id. at 36. We permit departures from the American rule, however, under limited circumstances where the court orders a party to pay their opponent's fees as a sanction for misconduct. See id. at 36-37. Some of these circumstances are defined by c...
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