Allen v. Utley

129 F.R.D. 1, 1990 U.S. Dist. LEXIS 488, 1990 WL 3865
CourtDistrict Court, District of Columbia
DecidedJanuary 17, 1990
DocketCiv. A. No. 88-0545 (CRR)
StatusPublished
Cited by9 cases

This text of 129 F.R.D. 1 (Allen v. Utley) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. Utley, 129 F.R.D. 1, 1990 U.S. Dist. LEXIS 488, 1990 WL 3865 (D.D.C. 1990).

Opinion

CHARLES R. RICHEY, District Judge.

The extensive litigation in this case arose out of a dispute over two joint bank accounts that decedents Mr. and Mrs. King had with one of the defendants American Security Bank (“ASB”), which resulted in ASB’s refusing to honor one check in the amount of $20. By prior Order filed August 19, 1988, the Court granted summary judgment for ASB, then the only remaining defendant, and on appeal the United States Court of Appeals for this Circuit affirmed. The Court now has before it motions by ASB and other, previously dismissed, defendants for sanctions under Rule 11 of the Federal Rules of Civil Procedure or, in the alternative, for attorney’s fees and costs. Having carefully considered the parties’ papers and the overall flavor of this litigation, the Court will grant the defendants’ motions and impose Rule 11 sanctions against the plaintiff and her attorney.1

I. Background Facts

One of the defendants, Margie A. Utley, was the court-appointed conservator of the person of Mr. King before he died. She learned that Mrs. King was refusing to authorize payment of Mr. King’s nursing home costs and was threatening to withdraw all of the money (totalling about' $80,-000) from their two ASB joint accounts and move to West Virginia. To protect Mr. King’s interest in the accounts, Ms. Utley asked ASB whether she could withdraw any of the funds on Mr. King’s behalf. When ASB called Mrs. King she reiterated her threat of withdrawing all of the funds.

Due to these conflicting demands, ASB froze the joint accounts pending an agreement between the two sides as to how the funds should be handled. The signature cards which the Kings had executed to set up their accounts as joint tenancies provided that, when faced with conflicting demands, ASB could require the signature of both joint tenants as a condition of withdrawal. However, instead of implementing the freeze by automatically refusing to honor all single-signature checks drawn upon the Kings’ two accounts, ASB evaluated each check individually and dishonored [3]*3only one check signed by Mrs. King in the amount of $20.

Proceeding individually and as the personal representative of Mrs. King’s estate, Mrs. King’s daughter Gloria Jackson Allen sued ASB, Ms. Utley, and at least seven other defendants. The gravamen of her “Complaint for Wrongful Death, Breach of Contract, Pain and Suffering, Conversion, Negligence, Establishment of a Constructive Trust on Personal and Real Property and for Personal Injuries, and for Punitive Damages” was the surprising claim that ASB’s actions in freezing the Kings’ joint accounts killed Mrs. King. Almost four months after the Complaint was filed, the Court granted the plaintiff’s motion to dismiss all of the defendants (most of whom were relatives of the plaintiff’s decedent) except ASB.2

II. Analysis

It is now well-established that the signature of an attorney on a pleading or motion “constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper [and] 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.” Fed.R.Civ.Proc. 11 (emphasis added). As this language indicates, courts nowadays must in most instances apply the more stringent objective test of reasonableness under the circumstances at the time as opposed to the older subjective inquiry regarding counsel’s good faith or lack thereof. See 1983 Advisory Committee Notes to Amended Rule 11; Westmoreland v. CBS, 770 F.2d 1168, 1177 (D.C.Cir.1985). After the 1983 amendment, it is

[n]o longer ... enough for an attorney to claim that he acted in good faith, or that he personally was unaware of the groundless nature of an argument or claim. For the language of the new Rule 11 explicitly and unambiguously imposes an affirmative duty on each attorney to conduct a reasonable inquiry into the viability of a pleading before it is signed. Simply put, subjective good faith no longer provides the safe harbor it once did.

Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 253 (2d Cir.1985) (emphasis added).

Moreover, when Rule 11 is violated, a court “shall impose upon the person who signed, 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 ..., including a reasonable attorney’s fee.” Fed.R.Civ. Proc. 11 (emphasis added). The district court is accorded wide discretion in determining whether factual reasons exist that require Rule 11 sanctions, “[f]or the district court has tasted the flavor of the litigation and is in the best position to make these kinds of determinations.” Westmoreland, 770 F.2d at 1174. The flavor of this litigation has left such a bitter taste in the Court’s mouth that it has no choice but to hold that sanctions are appropriate.

The way in which Ms. Allen and Mr. Ifill litigated this lawsuit is unsatisfactory in many respects, but their repeated failures to conduct anything approaching reasonable pre-filing inquiries and recognize that their claims were not well grounded in fact or law provide the. bases for the Court’s decision to impose sanctions. The plaintiff’s case was an unlikely marriage of a breach of contract and a wrongful death claim, in which two factual issues—the contents of the Kings’ signature cards with ASB and the actual cause of Mrs. King’s death—played very important roles. The plaintiff’s failures were particularly egregious with respect to these two crucial issues.

[4]*4 A. The Signature Cards

One of the plaintiff’s main arguments was that ASB breached its contracts of deposit with Mrs. King by wrongfully freezing the two joint accounts she and her husband held. However, the plaintiff filed this suit without ever examining—or even attempting to examine—the signature cards Mrs. King and her husband executed to open the accounts. Thus, the plaintiff brought a breach of contract action without first reading the contract! While the legal relationship between the plaintiff’s decedent and ASB was also governed, as this Court and the Court of Appeals both recognized, by applicable District of Columbia (“DC”) Code provisions, the signature cards constituted the contracts of deposit upon which the plaintiff based her claim. The signature cards the Kings signed state that the depositors may withdraw funds individually “except in the event of conflicting demands of depositors the Bank may require all signatures” (emphasis added).

Under any set of circumstances, an objectively reasonable inquiry prior to filing this breach of contract action would have begun with—or at least included—an examination of these crucial signature cards, which delineated the contractual relationship between the Kings and ASB to the extent they did not conflict with applicable DC or federal law. Whether Ms.

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Bluebook (online)
129 F.R.D. 1, 1990 U.S. Dist. LEXIS 488, 1990 WL 3865, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-utley-dcd-1990.