THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Berman v. Kolonia Town ,
6 FSM Intrm. 242 (Pohnpei 1993)
KOLONIA TOWN GOVERNMENT et al.,
CIVIL ACTION No. 1991-053
Andon L. Amaraich
Hearing: September 9, 1993
Decided: November 10, 1993
For the Plaintiff: Mary Berman, Esq. (in pro per)
P.O. Box 163
Kolonia, Pohnpei FM 96941
For the Defendant: Daniel J. Berman, Esq.
Rush, Moore, Craven, Sutton, Morry & Beh
2000 Hawaii Tower
745 Fort Street
Honolulu, HI 96813
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Civil Procedure ) Motions; Costs
When a plaintiff's motion is denied on the merits, the defendant may recover costs under FSM Civil Rule 54(d) if properly verified. Berman v. Kolonia Town, 6 FSM Intrm. 242, 244 (Pon. 1993).
Civil Procedure ) Sanctions
An attorney shall be sanctioned under FSM Civil Rule 11 when it is apparent to the Court that counsel had no arguable basis in fact or law in bringing a motion or pleading. Berman v. Kolonia Town, 6 FSM Intrm. 242, 245-46 (Pon. 1993).
Civil Procedure ) Sanctions
A motion will be regarded as frivolous if at the time of filing it offered no reasonable possibility of relief. Berman v. Kolonia Town, 6 FSM Intrm. 242, 246 (Pon. 1993).
Civil Procedure ) Sanctions
Although the language of FSM Civil Rule 11 directs that the court shall impose sanctions on an attorney when a violation of the rule has been shown, the nature and amount of penalty is left to the court's discretion. Berman v. Kolonia Town, 6 FSM Intrm. 242, 247 (Pon. 1993).
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ANDON L. AMARAICH, Associate Justice:
This matter came before the Court on defendant's Motion for Costs and Attorney's Fees pursuant to FSM Civil Rules 54 and 11. A hearing was held on the motion on September 9, 1993. For the reasons discussed in the following Memorandum, the request for costs is hereby denied and the request for attorney's fees as a sanction under Rule 11 is granted.
MEMORANDUM OF DECISION
On October 9, 1991 plaintiff-attorney Mary Berman filed a complaint in the Pohnpei trial division of this Court seeking, inter alia, relief from defendant Kolonia Town Government for imposing business license fees on plaintiff under a Kolonia ordinance. The claims against Kolonia Town encompassed issues of state law and FSM constitutional law. The trial division issued a written decision on April 20, 1992 stating that it would abstain on the claims against Kolonia Town to allow state court adjudication to proceed on the matter. A judgment to this effect was issued on May 12, 1992.
On September 18, 1992 Ms. Berman filed her complaint against Kolonia Town in Pohnpei State Court. On February 5, 1993 Ms. Berman filed a Motion to Reconsider in the FSM Supreme Court, directed at the trial division's decision of ten months earlier to abstain. The reason stated for bringing the motion was apparent delay in the state court proceedings. The relief requested by the motion was for this Court to reassume jurisdiction over the case from Pohnpei State Court and rule in plaintiff's favor on the constitutional issues.
On June 10, 1993 this Court denied the Motion to Reconsider. The Court stated as grounds for its denial that plaintiff had erroneously relied on FSM Civil Rule 60(b), which was inapplicable under the circumstances and posture of the case, and that no legal support could be found for plaintiff's proposition that the FSM Supreme Court may take back an abstained case because of presumed state court delay. Berman v. FSM Supreme Court, 6 FSM Intrm. 109, 113 (Pon. 1993).
The motion presently before the Court was then filed by defendant Kolonia Town seeking costs as the prevailing party pursuant to FSM Civil Rule 54, and sanctions against Ms. Berman under FSM Civil Rule 11. Specifically, defendant seeks attorney's fees as provided for in Rule 11 when the Court finds an attorney has violated the rule. The defendant charges plaintiff violated Rule 11 in two respects: (1) by filing a frivolous motion to reconsider and thus failing to meet the
Rule's requirement of reasonable inquiry; and (2) failure to serve a signed copy of the motion on defendant.
II. COSTS UNDER RULE 54
FSM Civil Rule 54(d) provides in relevant part that "costs shall be allowed as of course to the prevailing party unless the court otherwise directs." Where a case is dismissed, the prevailing party is the Defendant. 6 James W. Moore et al., Moore's Federal Practice ¶ 54.70 (2d ed. 1988). This is so even if the dismissal was voluntary by stipulation of the plaintiff. Mailo v. Twum-Barimah, 3 FSM Intrm. 411, 414 (Pon. 1988).
Plaintiff raises the argument that the awarding of costs under Rule 54(d) is discretionary with the Court. This is correct, however the presumption is that costs will be awarded if proven unless special mitigating circumstances make such an award unjust. Mailo, 3 FSM Intrm. at 414; Semes v. Continental Airlines, Inc. (II), 2 FSM Intrm. 200, 203 (Pon. 1986).
In the instant case, plaintiff's motion for reconsideration was denied on the merits. Clearly the defendant is the prevailing party within the meaning of Rule 54(d). However, the defendant has not demonstrated what costs were incurred in defending against plaintiff's motion. Defendant's original motion for costs and fees did not include a schedule or invoice of costs, although counsel stated in his affidavit that a detailed accounting was attached as an exhibit. At the hearing on the present motion, defendant's counsel produced an account expense sheet. However, this list of costs bears dates of various expenses from October 23, 1991 through February 2, 1992. None of these expenses can be attributed to plaintiff's motion for reconsideration because that motion was not filed until February 1993. Therefore, the request for costs must be denied for lack of verification.
III. RULE 11 SANCTIONS
In the past this Court has sanctioned attorneys by virtue of the Court's inherent authority to maintain order in proceedings and to discipline attorneys. This Court has not previously invoked FSM Civil Rule 11, however, as a grounds for sanction in any reported case. Since I am presented with a case of first impression through a motion specifically requesting application of Rule 11, I must first determine the relevant standard against which alleged violations of the rule are to be tested.
The present FSM Civil Rule 11 was amended in 1991. Both the earlier version of our Rule and the present version were adopted virtually verbatim from Rule 11 of the United States Federal Rules of Civil Procedure (Fed. R. Civ. P. 11). The U.S. rule was amended in 1983, and our Rule 11 as revised followed the same substantive changes that had been made to Fed. R. Civ. P. 11 in the United States.
Since this Court has not previously analyzed FSM Civil Rule 11 and since it tracks the U.S. rule, it is appropriate to look to United States cases interpreting the rule for guidance, particularly with respect to the standard of attorney conduct mandated therein. Plaintiff and defendant agree that Rule 11 punishes attorneys who sign pleadings or motions that are filed merely for vexatious or dilatory purposes. Plaintiff argues, however, that the rule stops there while defendant asserts that the rule also includes an objective standard of reasonable diligence in ensuring that every paper an
attorney signs has an arguable basis in fact and law.1
While the pre-1983 version of the American Rule 11 (and the pre-1991 version of the FSM Rule) contemplated sanctioning attorneys only under a subjective "bad faith" standard, the overwhelming majority of federal circuit courts in the United States agree that the amended version of the rule explicitly extends the reach of sanctions to include instances where it is clear that an attorney failed to research the facts and law competently before filing a motion or pleading. See e.g., Lancellotti v. Fay, 909 F.2d 15, 18-19 (1st Cir. 1990); Doering v. Union County Bd. of Chosen Freeholders, 857 F.2d 191, 194 (3d Cir. 1988); INVST Fin. Group, Inc. v. Chem-Nuclear Sys., Inc., 815 F.2d 391, 401 (6th Cir. 1987); Cabell v. Petty, 810 F.2d 463, 466 (4th Cir. 1987); Robinson v. National Cash Register Co., 808 F.2d 1119, 1127 (5th Cir. 1987); Burkhart ex rel. Meeks v. Kinsley Bank, 804 F.2d 588, 589-90 (10th Cir. 1986); Zaldivar v. City of Los Angeles, 780 F.2d 823, 831 (9th Cir. 1986); Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 253 (2d Cir. 1985).
Therefore, under the amended Rule 11, the range of circumstances under which an attorney may be sanctioned is broader than merely acting in bad faith for purposes of harassment or delay. The Zaldivar court explains the new objective standard this way:
The pleader, at a minimum, must have a "good faith argument" for his or her view of what the law is, or should be. A good faith belief in the merit of a legal argument is an objective condition which a competent attorney attains only after "reasonable inquiry." Such inquiry is that amount of examination into facts and legal research which is reasonable under the circumstances of the case. Of course, the conclusion drawn from the research undertaken must itself be defensible. Extended research alone will not save a claim that is without legal or factual merit from the penalty of sanctions.
Zaldivar, 780 F.2d at 831.
The Advisory Committee Notes to Fed. R. Civ. P. 11 also make clear that the amended rule does not pertain only to a finding of subjective bad faith by the signing attorney. Specifically, the Advisory Committee explains that "the expanded nature of the lawyer's certification in the fifth sentence2 of amended Rule 11 recognizes that the litigation process may be abused for purposes other than delay. . .this [new] standard is more stringent that the original good-faith formula and thus it is expected that a greater range of circumstances will trigger its violation." Fed. R. Civ. P. 11 advisory committee's note.
Based on the weight of U.S. case law and intent of the drafters of Fed. R. Civ. P. 11, as well as the choice by this Court to adopt the 1983 amended version, I am persuaded that sanctions
under FSM Civil Rule 11 must be levied whenever it is obvious that an attorney had no arguable basis in fact or law in bringing a motion or pleading. That the FSM has fewer legal libraries and experienced practicing attorneys than the United States, where the rule originated, is of no consequence in choosing to hold attorneys to a standard of reasonable inquiry into facts and law pertinent to a case. The purpose of the rule, avoiding abuse of the litigation process, is as valid here as in any other jurisdiction.
Having determined the standard to apply, the issue then before me is whether the particular conduct or neglect by counsel in this case may appropriately trigger sanctions under the Rule. The question may be phrased: Did the plaintiff have a colorable claim in her Motion for Reconsideration, supported by a plausible, good faith legal argument? I conclude that she did not.
The Motion for Reconsideration requested this Court to take back a case over which it no longer had jurisdiction. The trial court's ruling of April 20, 1992 and subsequent judgment of May 12, 1992 stated that the Court was abstaining from deciding plaintiff's claims against Kolonia Town Government in favor of state court adjudication. Abstention means that a court relinquishes its jurisdiction over the case or certain claims therein.3 No authority exists for plaintiff's proposition that this Court could reassume jurisdiction over an abstained case or claims from state court because of alleged delay in conducting proceedings.
As this Court's June 10, 1993 order stated, plaintiff misapplied the principal case she cited in support of her motion, Gimnang v. Yap, 5 FSM Intrm. 13 (App. 1991). Furthermore, I find unpersuasive plaintiff's argument that the wording of the trial court's April 20, 1992 order was ambiguous as to the procedure to follow in pursuing any remaining claims under the FSM Constitution. First, the order stated that "plaintiff may raise at a later time, however, the allegation that the ordinance violates the FSM Constitution if that is still necessary after disposition by the state court." Berman v. Pohnpei, 5 FSM Intrm. 303, 307 (Pon. 1992) (emphasis added). Clearly the last clause of that statement requires that there be a disposition of the case by the state court before plaintiff could even contemplate returning to this Court. The facts before me reveal that this prerequisite had not been satisfied at the time plaintiff filed her motion. Second, a reasonable reading of our Rules and basic inquiry into the meaning of abstention should lead an attorney to conclude that the quoted language above from the trial division's order is akin to a dismissal without prejudice, meaning that plaintiff could raise her constitutional claims again without risk of res judicata bar by filing a new complaint at a later time, in this case after state court ruling on the issues of state law. I find that this understanding of the Court's order should have been obvious from the language of the order itself and a basic knowledge of civil procedure. I therefore hold plaintiff accountable for filing a frivolous Motion to Reconsider in that she should have known the motion afforded no possibility of relief.
Because I find plaintiff sanctionable for bringing an unfounded motion I do not consider the second ground alleged as a violation of Rule 11, i.e. the failure to serve a signed copy of the plaintiff's motion on the defendant. However, the Court cautions plaintiff that it is erroneous to assume that signed and dated pleadings are only required to be filed with the Court and not opposing parties or counsel. Basic courtesy as well as our Rules dictate that all papers filed and
served bear an attorney's signature and the date of filing, as well as a completed certificate of service.
The only matter left to be decided is the amount of sanctions. I note that while the wording of Rule 11 mandates that the Court impose sanctions on attorneys when a violation of the rule is shown, discretion is afforded the Court to fashion the nature and amount of penalty it deems appropriate. See Cabell v. Petty, 810 F.2d at 466; Fed. R. Civ. P. 11 advisory committee's note ("The court, however, retains the necessary flexibility to deal appropriately with violations of the rule. It has the discretion to tailor sanctions to the particular facts of the case, with which it should be well acquainted."). The language of the rule specifically includes an award of reasonable attorney's fees as within the ambit of appropriate sanctions.
In this matter the defendant was obliged to expend $500 in attorney's fees to defend against the plaintiff's motion. This sum represents four hours' of the attorney's time at a rate of $125 per hour. I find that both the amount of time and rate documented are reasonable under the circumstances. It is appropriate to reimburse the defendant for legal fees that it should not have been forced to incur.
Costs against the plaintiff in this matter will not be allowed for failure of the defendant to document actual expenses to the Court's satisfaction. Plaintiff, however, is sanctioned under FSM Civil Rule 11 for bringing a motion lacking in legal basis. Plaintiff is hereby ordered to pay the sum of $500, representing reasonable attorney's fees in this matter, to the defendant.
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1. The defendant asserts, and the Court agrees, that focus is properly placed in this case on the clause in the third sentence of FSM Civil Rule 11 which reads: "that to the best of signer's knowledge, information, and belief formed after reasonable inquiry [the motion] 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 . . . ."
2. The fifth sentence of Fed. R. Civ. P. 11 corresponds to the third sentence of FSM Civil Rule 11 as amended in 1991.