Danielson-Holland v. Standley and Associates

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT March 12, 2013
Elisabeth A. Shumaker
Clerk of Court
ALYSSA DANIELSON-HOLLAND;
JAY HOLLAND,
Plaintiffs-Appellants,
No. 12-1021
v. (D.C. No. 1:09-CV-01474-RPM-MJW)
(D. Colo.)
STANDLEY AND ASSOCIATES, LLC.,
Defendant-Appellee.
ORDER AND JUDGMENT*
Before ANDERSON and BALDOCK, Circuit Judges, and BRORBY, Senior Circuit
Judge.
Alyssa Danielson-Holland and her attorney in the district court, Craig Ehrlich,
appeal from the court’s order granting costs and attorney’s fees to Standley and
Associates, LLC.1 We affirm.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
1
The appellants’ brief states that Jay Holland is not an appellant, even though
the notice of appeal listed him as an appellant.
BACKGROUND
In the first amended complaint, Ms. Danielson-Holland and her husband Jay
Holland asserted several claims against Standley under the Fair Debt Collection
Practices Act, 15 U.S.C. §§ 1692 et seq. Standley moved for summary judgment.
The magistrate judge recommended that summary judgment be granted on all claims
except the claim that Standley violated § 1692d(2) when its employee allegedly used
abusive language during a telephone call in order to collect a debt.
Ms. Danielson-Holland asserted that the employee told her to “get a job,” after she
told him that she was a stay-at-home mother. Standley disputed that this occurred.
The magistrate judge recommended that because there was a disputed issue of fact
whether the debt collector used abusive language with Ms. Danielson-Holland, this
claim should be allowed to proceed. The district court adopted the magistrate judge’s
recommendation.
The abusive-language claim was tried before a jury. During trial, the district
court denied Standley’s motions for a directed verdict, which were presented at the
close of both parties’ cases. The jury found that Ms. Danielson-Holland did not
prove a violation of § 1692d(2).
Thereafter, Standley sought attorney’s fees and costs. The district court
awarded Standley attorney’s fees of $9,350.00 against Mr. Ehrlich under 28 U.S.C.
§ 1927, finding that he “proceed[ed] to trial without plausible evidence to support the
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claim made.” Aplt. App., Vol. I, at 186. Also, the court awarded Standley costs of
$1,862.30 against Ms. Danielson-Holland under Fed. R. Civ. P. 54(d).
JURISDICTION
We asked the Hollands to address whether they have standing to appeal the
award of attorney’s fees when the district court imposed fees solely against
Mr. Ehrlich, who did not file a notice of appeal. The notice of appeal stated that the
Hollands intended to appeal the award of attorney’s fees and costs to Standley. It did
not name Mr. Ehrlich as an appellant or mention him, apart from his signing the
notice of appeal as counsel. But it is clear that he intended to appeal, because the
notice of appeal stated that the appeal was from the award of attorney’s fees and
costs and the attorney’s fees were imposed only on Mr. Ehrlich. See Fed. R. App. P.
3(c)(4) (“An appeal must not be dismissed . . . for failure to name a party whose
intent to appeal is otherwise clear from the notice.”); Laurino v. Tate, 220 F.3d 1213,
1218 (10th Cir. 2000) (holding notice of appeal provided sufficient notice of
counsel’s intent to appeal where notice stated appeal was from order sanctioning
attorney). Accordingly, we conclude that we have jurisdiction to consider an appeal
by Mr. Ehrlich.
ATTORNEY’S FEES
Mr. Ehrlich argues that the district court misapplied the principles governing
imposition of attorney’s fees sanctions under § 1927 when the court decided that he
proceeded to trial without plausible evidence to support the abusive-language claim.
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He asserts that because the court denied Standley’s motion for summary judgment on
the claim and twice denied Standley’s motions for a directed verdict, allowing the
case to go to the jury, the court necessarily decided that there was a plausible factual
basis for proceeding to trial. By allowing the claim to proceed, he contends it was
inappropriate for the court to impose sanctions on him for continuing to pursue a
claim with the court’s permission. Also, he contends that the claim was plausible in
law because Ms. Danielson-Holland had alleged that Standley’s employee violated
§ 1692d(2) by using abusive language.
“We review an award of sanctions under § 1927 only for an abuse of
discretion.” Hamilton v. Boise Cascade Express, 519 F.3d 1197, 1202 (10th Cir.
2008). “But we review de novo any statutory interpretation or other legal analysis
underlying the district court’s decision concerning attorneys’ fees.” Steinert v. Winn
Grp., Inc., 440 F.3d 1214, 1221 (10th Cir. 2006) (internal quotation marks omitted).
Under § 1927, “[a]ny attorney . . . who so multiplies the proceedings in any
case unreasonably and vexatiously may be required by the court to satisfy personally
the excess costs, expenses, and attorney’s fees reasonably incurred because of such
conduct.” Section 1927 focuses on whether an attorney’s conduct “imposes
unreasonable and unwarranted burdens on the court and opposing parties.” Braley v.
Campbell, 832 F.2d 1504, 1510 (10th Cir. 1987) (en banc). “Sanctions under § 1927
are appropriate when an attorney acts recklessly or with indifference to the law.
They may also be awarded when an attorney is cavalier or bent on misleading the
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court; intentionally acts without a plausible basis; [or] when the entire course of the
proceedings was unwarranted.” Dominion Video Satellite, Inc. v. Echostar Satellite
L.L.C., 430 F.3d 1269, 1278 (10th Cir. 2005) (alteration in original) (citation
omitted) (internal quotation marks omitted). An attorney is expected to exercise
judgment. See Braley, 832 F.2d at 1512. We will not “excuse objectively
unreasonable conduct.” Hamilton, 519 F.3d at 1202; see also Riddle & Assocs., P.C.
v. Kelly, 414 F.3d 832, 835 (7th Cir. 2005) (“If a lawyer pursues a path that a
reasonably careful attorney would have known, after appropriate inquiry, to be
unsound, the conduct is objectively unreasonable and vexatious.” (internal quotation
marks omitted)). An attorney must “regularly re-evaluate the merits” of claims and
“avoid prolonging meritless claims.” Steinert, 440 F.3d at 1224.
Applying these legal standards to the facts of this case, we conclude the
district court did not abuse the court’s discretion in awarding Standley attorney’s fees
against Mr. Ehrlich. Although Ms. Danielson-Holland’s deposition testimony
persuaded the magistrate judge and the district court that the abusive-language claim
should proceed, Mr. Ehrlich should have realized upon careful continual
re-evaluation of the claim as he prepared for trial that he lacked evidence,
particularly telephone records, supporting her assertion and testimony.
Ms. Danielson-Holland was unable during trial to answer questions about details of
the allegedly abusive telephone call, including when it occurred, even though the
case was filed two years before trial and despite having been questioned about the
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call during her deposition. Indeed, there was no evidence, apart from
Ms. Danielson-Holland’s testimony, to support a finding that a Standley employee
made a telephone call using abusive language. Mr. Ehrlich therefore either failed to
properly prepare for trial or the evidence did not exist to establish the call occurred.
In either case, he proceeded to trial when he should have known there was no basis to
proceed. In addition, during trial, the district court noted that Mr. Ehrlich was
pursuing the smallest claim after all other claims had been dismissed and that the
court did not know why he was pursuing it.2 Based on these facts, Mr. Ehrlich
objectively vexatiously and unreasonably multiplied the proceedings at Standley’s
expense. See Hamilton, 519 F.3d at 1203.
Mr. Ehrlich cites Medtronic Navigation, Inc. v. BrainLAB Medizinische
Computersysteme GmbH, 603 F.3d 943, 954-55 (Fed. Cir. 2010),3 to support his
argument that because the district court denied summary judgment and two motions
for a directed verdict, it was objectively reasonable to pursue the abusive-language
claim. Medtronic, a patent case, is procedurally and factually dissimilar and
therefore distinguishable. In that case, after the district court had denied the
2
The district court’s compliment to counsel for expeditiously submitting the
case does not convince us that Mr. Ehrlich did not act unreasonably and vexatiously
or that he pursued a claim with a plausible basis. See Steinert, 440 F.3d at 1223(discussing timeliness of request for § 1927 sanctions and noting court may recognize
applicability of § 1927 only after end of litigation).
3
Both parties mistakenly refer to Medtronic as a Tenth Circuit case. We
recognize, however, that both Medtronic and this case were before the same district
court.
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defendants’ summary judgment motions in full and two motions for judgment as a
matter of law (JMOL), the jury found in favor of the plaintiff. Id. at 950. Following
trial, the district court granted a new motion for JMOL, which the Federal Circuit
affirmed. Id. at 951-52. Defendants then sought attorney’s fees under § 1927 and
patent law. The district court granted fees, but the Federal Circuit reversed. The
Federal Circuit determined that fees were not warranted because the evidence was
sufficient to go forward with the trial, and the attorney did not prolong the
proceedings by going to trial. Id. at 957, 965.
In contrast, in this case, the summary judgment decision significantly
diminished the number of pending claims to one, the abusive-language claim. The
evidence supporting that claim actually was insufficient to go forward. Nonetheless,
Mr. Ehrlich improperly prolonged the case proceedings. Cf. id. at 954 (“Absent
misrepresentation to the court, a party is entitled to rely on a court’s denial of
summary judgment and JMOL, as well as the jury’s favorable verdict, as an
indication that the party’s claims were objectively reasonable and suitable for
resolution at trial.”).
Mr. Ehrlich also argues that the district court failed to sufficiently explain the
imposition of § 1927 sanctions against him. A court must give reasons for imposing
a sanction, but we do not require the court to discuss the court’s decision at length.
See Hamilton, 519 F.3d at 1204; see also Braley, 832 F.2d at 1513 (requiring district
court to provide basis for imposing § 1927 sanctions). The district court imposed the
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sanction in the amount of Standley’s attorney’s fees incurred after the entry of
summary judgment. Stating it had considered the evidence presented to support the
abusive-language claim, the court found that Mr. Ehrlich decided to go to trial
without plausible evidence to support that claim. While the court’s discussion was
brief, we conclude it was sufficient for us to understand the court’s basis for
imposing the sanction.
COSTS
Ms. Danielson-Holland argues that the district court improperly imposed costs
under Rule 54(d) when costs may only be awarded under § 1692k(a)(3) upon a
finding that her claims were brought in bad faith and for the purpose of harassment.
The Supreme Court recently held that § 1692k(a)(3) does not preclude courts from
imposing costs under Rule 54(d). Marx v. Gen. Revenue Corp., No. 11-1175,
2013 WL 673254, at **2, 6, 10 (U.S. Feb. 26, 2013). Accordingly, we conclude that
the district court properly imposed costs under Rule 54(d).
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CONCLUSION
The judgment of the district court is affirmed.4
Entered for the Court
Stephen H. Anderson
Circuit Judge
4
In the last sentence of its brief, Standley requests fees and costs on appeal. We
deny the request for fees because it is conclusory and because Standley cites no
authority supporting a request for fees. Further, if Standley seeks fees under
Fed. R. App. P. 38, it has failed to comply with the separate motion requirement.
Costs will be assessed as set forth in Fed. R. App. P. 39.
Ms. Danielson-Holland asks us to strike all parts of Standley’s brief that do not
contain proper record cites or which refer to documents not included in the appendix
and to strike the addendum to Standley’s brief. In light of our disposition of this case
based on the appendix provided by Mr. Ehrlich and Ms. Danielson-Holland, we deny
the request as moot.
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