Bay State Towing Co. v. Barge American 21 (O.N. 517472)

899 F.2d 129, 16 Fed. R. Serv. 3d 582, 1990 U.S. App. LEXIS 4630, 1990 WL 34644
CourtCourt of Appeals for the First Circuit
DecidedMarch 30, 1990
DocketNos. 89-1042, 89-1155 and 89-1335
StatusPublished
Cited by17 cases

This text of 899 F.2d 129 (Bay State Towing Co. v. Barge American 21 (O.N. 517472)) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bay State Towing Co. v. Barge American 21 (O.N. 517472), 899 F.2d 129, 16 Fed. R. Serv. 3d 582, 1990 U.S. App. LEXIS 4630, 1990 WL 34644 (1st Cir. 1990).

Opinion

BREYER, Circuit Judge.

Bay State Towing Company, which owns a tugboat, sued New England Marine Services, which owns barges, claiming that New England owed it about $113,000 for tugboat towing for March, April, and May 1986 ($81,000 after deducting a fuel setoff of about $32,000). After a trial, the district court found that New England had no substantial defense; it awarded Bay State the $81,000 plus interest of about $19,000 (running from July 1, 1986, to the time of judgment); and it imposed a sanction against New England, amounting to $20,-000 in attorneys’ fees, for having filed an improper “opposition” to Bay State’s summary judgment motion.

The district court noted that Rule 11 of the Federal Rules of Civil Procedure says:

The signature of an attorney or party [on a filed paper] constitutes a certificate by the signer that the signer has read the ... paper; that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact ... 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.

Fed.R.Civ.P. 11 (emphasis added). It pointed out that the “opposition,” which Jared Stamell, New England’s counsel, signed, said there were four “issues of material fact,” namely:

A. Whether plaintiff’s bills to defendants correctly set forth the reasonable charges for towage services actually provided to defendants....
B. Whether plaintiff has given defendants credit for the about $250,000 paid to plaintiff....
C. Whether plaintiff has given defendants credit for the about $45,000 in fuel sales defendants made to plaintiff....
D. Whether plaintiff padded bills submitted to defendants in May 1986 just before starting the lawsuit.

It also pointed out that Jared Stamell’s wife, Susan Frank, who is a principal officer of New England, filed an attached affidavit in which she said that she believed

the amounts claimed for standby time, weather delays, and to move a barge from one location to another are unreasonable.

It concluded that Stamell and Frank either did not believe any of this, or would not have believed it if they had made “reasonable inquiry.” The court added that Sta-mell and Frank had filed the “opposition” to “cause unreasonable delay.”

Rule 11 also says that:

If a ... 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, motion, or other paper, including a reasonable attorney’s fee.

Accordingly, the district court imposed a sanction consisting of a $20,000 attorney’s fee.

New England appeals this sanction. We have reviewed the record. In our view, that record adequately supports the district court’s determination.

I

Liability

In its initial June 1986 complaint, Bay State said that New England owed it $113,000 for barge towing services. New England answered, denying the liability, and added that Bay State owed it $45,000 for fuel. Bay State then filed its summary judgment motion, admitting that it owed New England $32,000 for fuel, while adding that New England indisputably owed [131]*131it the remaining (approximately) $81,000. (Bay State also asked for $10,500 interest.) New England’s response, which we quoted above, asserted 1) billing (i.e., bookkeeping) inaccuracies; 2) failure properly to credit $250,000 in payments; 3) $45,000 owed for fuel; and 4) bill padding. We have read the record to determine whether the appellants complied with Rule ll’s requirement that they have a belief “formed after reasonable inquiry” that these factual claims are true. In our view, the district court acted well within its legal powers in deciding that they did not.

That the appellants did not, or should not (after reasonable inquiry) have believed the first three of the “response’s” claims is demonstrated by the fact that the record, which includes pleadings, a trial transcript, a Rule 11 hearing transcript, and numerous affidavits and other documents, contains nothing to suggest why, or how, a person could have believed any such thing. The evidence shows that Bay State owed New England $32,000 for fuel, not $45,000, and there is nothing to the contrary. There is nothing to suggest that the $250,000 in payments had anything to do with the matter. There is no evidence of bookkeeper confusion or inaccuracy of invoices. Indeed, we have examined the specific invoice amounts that Bay State listed in its complaint; we have compared them with the bookkeeping invoice figures that New England conceded were accurate (i.e., represented the invoice amounts) at trial; the figures are the same. There is no evidence of the bookkeeper confusion that appellants assert in their brief. The Rule 11 hearing offered the appellants an opportunity to present any additional factual information that might have led them to form a reasonable belief that the first three statements in their “response” were accurate. We can find no such additional information. The best support we can find for New England is that Mr. Stamell, at the end of the trial, asked the parties to stipulate that his wife, Susan Frank, would testify that “her books and records show reductions which were agreed to by Bay State ... in the amount of $7,981," were she present (she was having a baby at the time). But the record indicates that the $81,000 already reflected all the reductions Bay State agreed to, and nothing in the record suggests that the $7,981 reflects an additional reduction, or that anyone ever thought it did. That is to say, New England nowhere clearly contended (or produced evidence supporting the contention) that Bay State had promised to reduce the $81,000 further.

The fourth factual assertion in the “response” — bill padding — is more difficult. Although New England seemed simply to abandon its first three claims, it made clear throughout the pretrial proceedings that it would make a factual defense showing that the bookkeeper’s invoices did not reflect the services that New England provided, that is to say, that its bills were “padded.” In addition to asserting this claim (backed by Susan Frank’s affidavit) in New England’s summary judgment “opposition,” Mr. Stamell, seventeen months later, wrote a letter to the district court, in which he said that the “figure on defendant’s books [i.e., the amount owed] is about $65,000 [not $81,000], and we will show at trial that a substantial reduction to this figure is required because plaintiff padded the bills.” He reiterated this statement in letters to Bay State’s attorneys. He did not tell Bay State, however, just which invoices New England thought were “padded,” or just why New England thought this, until the trial was under way.

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United States Court of Appeals, First Circuit
899 F.2d 129 (First Circuit, 1990)

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899 F.2d 129, 16 Fed. R. Serv. 3d 582, 1990 U.S. App. LEXIS 4630, 1990 WL 34644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bay-state-towing-co-v-barge-american-21-on-517472-ca1-1990.