Calaway v. Dickson

206 S.W.3d 807, 361 Ark. 346
Procedural entryThis page is a short order in Calaway v. Dickson. Read the opinion of the Court — 360 Ark. 463
Supreme Court of Arkansas·Decided April 7, 2005·No. 04-1091·Published

Opinion

Annabelle Clinton Imber, Justice.

Appellant Shane Calaway appeals the denial of sanctions against Appellee Barbara Dickson under Rule 11 of the Arkansas Rules of Civil Procedure. This case originated in the District Court of Union County, where then-plaintiff Calaway recovered a $4,000.00 judgment against Dickson. On September 30,2003, Calaway and Dickson were mailed a letter informing them of the verdict in their district court case, and the letter was filed with the clerk on October 1, 2003. On October 7,2003, Dickson filed a notice of appeal with the district court. Then on November 12, 2003, Dickson filed a notice of appeal with the Circuit Court ofUnion County. Both notices of appeal were signed by Dickson’s attorney, but neither was accompanied by a record of the district court proceedings.

On December 10, 2003, Calaway filed a pro se motion to dismiss the appeal on the ground that the appeal was not timely filed. Calaway subsequently retained an attorney, and, on February 11, 2004, he filed a supplemental brief. On March 17, 2004, Calaway’s attorney sent Dickson’s attorney a letter informing him that, because Dickson’s appeal was untimely filed, the circuit court did not have jurisdiction. Calaway’s attorney requested that Dickson’s attorney withdraw the appeal within twenty-one days or Calaway “would be seeking sanctions pursuant to Ark. R. Civ. P. 11.” Dickson did not withdraw the appeal.. On June 21, 2004, Calaway served Dickson with a motion for sanctions and filed the motion with the court. Following a hearing on June 25, 2004, the circuit court dismissed Dickson’s appeal because a certified record of the proceedings in the district court had not been, filed in accordance with the requirements of District Court Rule 9(b) (2004).1 At the hearing, the circuit judge noted that Calaway had filed a motion for Rule 11 sanctions and that Dickson’s attorney had not had an opportunity to answer. Calaway’s attorney responded that “I think he has 30 days and any stay on determining that is fine, Your Honor.” The judge did not, however, postpone the hearing and ultimately denied Calaway’s motion for sanctions. In its order, the circuit court concluded that the Rule 11 motion was not filed in a timely manner for the hearing and a good-faith basis existed for the complained of conduct. Calaway appeals the denial.

This case was certified to us from the court of appeals pursuant to Ark. R. Sup. Ct. 1-2(b)(6) (2004) as an issue involving the interpretation of Ark. R. Civ. P. 11. Certification is proper as this appeal presents an issue involving an interpretation of District Court Rule 9. Ottens v. State, 316 Ark. 1, 871 S.W.2d 329 (1994).

The sole point on appeal is whether the trial court abused its discretion in denying Calaway’s motion for Rule 11 sanctions. Under Rule 11, an attorney signing a pleading, motion, or other paper on behalf of a party constitutes a certificate that (1) the attorney made a reasonable inquiry into the facts supporting the document or pleading, (2) he or she made a reasonable inquiry into the law supporting that document to ensure that it is warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law, and (3) the attorney did not interpose the document for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation. Crockett & Brown, P.A. v. Wilson, 321 Ark. 150, 901 S.W.2d 826 (1995). When a violation of Rule 11 occurs, the Rule makes sanctions mandatory. Id. Whether a violation occurred is a matter for the court to determine, and this determination involves matters of judgment and degree. Id. Rule 11 is not intended to permit sanctions just because the court later decides that the lawyer was wrong. Instead, the trial court, in exercising its discretion under Rule 11, is expected to avoid using the wisdom of hindsight and should test the signor’s conduct by inquiring what was reasonable to believe at the time the pleading, motion, or other paper was submitted. Id. In denying Calaway’s motion for sanctions, the circuit court reasoned that the Rule 11 motion was not filed in a timely manner and that a good-faith basis existed for the complained of conduct. We review the trial court’s decision to deny sanctions under an abuse of discretion standard. Whetstone v. Chadduck, 316 Ark. 330, 871 S.W.2d 583 (1994).

In its order denying Calaway’s motion for sanctions, the circuit court found that “the motion was not filed in a timely manner for this hearing.” Arkansas Rule of Civil Procedure 11(b) requires that a motion for sanctions “shall be served as provided in Rule 5 but shall not be filed with or presented to the court unless, within 21 days after service of the motion (or other such period as the court may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.” Ark. R. Civ. P. 11(b). As Calaway violated the timing requirements of Rule 11 (b) by filing the motion with the court on the same day he served Dickson, we cannot say that the circuit court abused its discretion in denying the motion for sanctions.

While Calaway did send a letter to Dickson on March 17, 2004 (more than twenty-one days before the motion for sanctions was filed with the circuit court), that letter is not sufficient to discharge Calaway’s duties under Rule 11. In his motion for sanctions, Calaway argued that the letter complied with Ark. R. Civ. P.11, stating:

On or about March 17,2004, Calaway provided notice, as required by Ark. R. Civ. P. 11(b), to Dickson to provide her with her “21 day safe harbor” period to withdraw the appeal, this motion, as the appeal- was completely devoid of merit and frivolous, otherwise sanctions would be requested.

Notably, the letter did describe the specific conduct alleged to violate Rule 11 and was “served” by certified mail, an appropriate manner under Rule 5. However, although these are key requirements under Rule 11(b), the rule specifically requires that the motion be served.

Though this issue is one of first impression in Arkansas, the vast majority of federal courts interpreting Fed. R. Civ. P. 11 who have been faced with this question have held that informal notice, or anything short of service of the actual motion for sanctions, is not enough for compliance with Rule 11. 5A Wright & Miller Fed. Prac. & Proc. Civ. 3d § 1337.2 (2005). When faced with a situation remarkably similar to our case, the Ninth Circuit Court of Appeals held that multiple letters warning about the possibility of a Rule 11 motion were not enough for compliance with the safe-harbor provision. Barber v. Miller, 146 F.3d 707 (9th Cir. 1998). The federal appellate court noted that the requirement of service of a motion was deliberately imposed, with a recognition of the likelihood of other warnings, and quoted the Advisory Committee saying:

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Calaway v. Dickson, 206 S.W.3d 807, 361 Ark. 346 (Ark. 2005).

206 S.W.3d 807 (Calaway v. Dickson) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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