Caldwell v. Cummings

2001 WY 106, 33 P.3d 1138, 2001 WL 1359994
CourtWyoming Supreme Court
DecidedNovember 6, 2001
Docket00-283
StatusPublished
Cited by15 cases

This text of 2001 WY 106 (Caldwell v. Cummings) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Caldwell v. Cummings, 2001 WY 106, 33 P.3d 1138, 2001 WL 1359994 (Wyo. 2001).

Opinion

HILL, Justice.

[T1] The attorney for Appellant, Owl Lumber, Inc. (Owl Lumber), challenges the jurisdiction of the district court to have entertained, and then granted, Appellees, Martha Clark Cummings and Lisa Vice, motion for sanctions under W.R.C.P. 11(c)(1)(A). 2

[¶ 2] We will reverse the order of the district court and remand with directions that the order imposing sanctions be vacated.

ISSUES

[¶ 8] Owl Lumber states this issue:

1. Whether the district court had jurisdiction over Appellees MOTION FOR SANCTIONS where Appellees had failed to comply with W.R.C.P. Rule 11(c)(1)(A)1 [sic ]. m

Appellees rephrase the issue thus:

1. The sole issue in this case is whether or not the District Court committed error when considering Appellees Motion for Judgment on the Pleadings, Memorandum in Support of Motion and Letter of May 21, 1999, as sufficient compliance with Wyoming Rule of Civil Procedure 11(c)(1)(A) such as to justify the sanctions imposed by this Court [ste ] against counsel for the Appellant [Owl Lumber] in this matter.

FACTS

[¶ 4] We note at the outset that the provisions of the parallel federal rule and Wyoming's rule are identical.

[¶ 5] On May 14, 1999, Owl Lumber filed its complaint for breach of contract and unjust enrichment. The complaint alleged that Mereil Construction (Mereil) entered into a contract with Appellees to construct one residence and to remodel a second property. Under that contract, the Appellees agreed to pay for goods and materials used in the contract work. Mereil received $5,152.78 in goods from Owl Lumber to do the work. Owl Lumber further alleged that Mereil had not paid for the goods in accordance with the contract between Mercil and Owl Lumber. Owl Lumber also alleged that the Appellees were unjustly enriched by receipt of goods provided by Owl Lumber to Mereil.

[¶ 6] On May 24, 1999, Appellees filed a motion for judgment on the pleadings, with respect to the unjust enrichment claim, based on our decision in Bowles v. Sunrise Home Center, Inc., 847 P.2d 1002, 1004-5 (Wyo.1993). In their brief, Appellees assert that the pleading was adequate to put Owl Lumber on notice of its Rule 11 claim. Mereil filed an answer to the complaint, putting Owl *1141 Lumber to its proof and filing a counterclaim against the Appellees for the sum of $25,739.84 (which included amounts owed by Mereil to Owl Lumber).

[¶ 7] On July 19, 1999, the district court entered judgment on the pleadings in favor of Appellees upon a stipulation of the parties. On January 11, 2000, Appellees filed a motion for sanctions. Appellees noted that, by letter dated March 5, 1999, they had advised Owl Lumber that its claim against them was specious (making no mention of W.R.C.P. 11, but rather referring to Wyo. Stat. Ann. § 29-1-311 (LexisNexis 2001), which provides for damages and/or penalties for the filing of false or frivolous liens). Owl Lumber answered that letter indicating it was going ahead with the claim. On May 21, 1999, after the complaint was served on Appellees, they wrote another letter to Owl Lumber and this time advised that they would be seeking sanctions under W.R.C.P. 11.

[¶ 8] On May 12, 2000, the district court issued a decision letter imposing sanctions against counsel for Owl Lumber and subsequently entered an order awarding attorney's fees to counsel for Appellees in the amount of $1,197.82. On July 11, 2000, a "Settlement Agreement and Mutual Release" was filed in the district court, memorializing an agreement reached between Appellees and Mereil that Appellees would remit $3,000.00, payable to Mereil, Owl Lumber, and JADECO. On July 18, 2000, an Agreement for Confession of Judgment was filed in the district court, which provided that Mereil would pay $5,000.00 to Owl Lumber.

[¶ 9] We take note that the pleadings also appear to establish that there were telephone calls concerning this issue between the attorneys involved in this case, but we do not view those calls as adding anything meaningful to the resolution of this case.

DISCUSSION

[110] When construing rules of civil procedure, which are virtually identical to their federal counterparts, pertinent federal authority interpreting those rules is persuasive in our review process. PanAmerican Mineral Services v. KLS, 916 P.2d 986, 989 (Wyo.1996). With respect to the rule at issue here, Charles Alan Wright and Arthur R. Miller have summarized the pertinent authority as follows:

When the opposing party moves for sanctions, a "safe harbor" provision gives the party and attorneys against whom sanctions are sought the opportunity to withdraw the challenged paper. The opposing party must serve the sanctions motion according to the requirements of Rule 5 but may not file or present the motion to the court unless, within twenty-one days, the allegedly improper document is not corrected or withdrawn. Otherwise, the motion will be rejected. According to the Advisory Committee, this will encourage the withdrawal of improper papers since litigants will no longer be exposed to sanctions upon withdrawal of the challenged paper.
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The safe harbor period begins upon service of the sanctions motion, but "counsel are expected to give informal notice" of the potential violation before preparing the sanctions motion. A party's failure to give advance notice may result in a denial of its motion for sanctions.
After the court has entered judgment or dismissed claims, service of the sanctions motion and subsequent filing of the motion with the court may not comply with the safe harbor provision. If service was delayed until after the judgment, the motion will be rejected as the party served is unable to withdraw the improper papers or otherwise rectify the situation.
The rule also requires that a motion for Rule 11 sanctions be made separately from other motions. Thus, a party cannot include a Rule 11 motion in a motion to dismiss, a motion for summary judgment, or any other motion. Failure to comply with this requirement will result in denial of the motion.
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The Supreme Court in Cooter & Gell v. Hartmarx Corporation held that an appeals court should apply an abuse-of-discretion standard of review to all aspects of a Rule 11 determination. The Court rea *1142 soned that deferential review would promote Rule 11's purpose of streamlining the judicial process and discouraging satellite litigation. In addition, the standard was consistent with the standard selected by the Court in Pierce v. Underwood, for review of district court determinations of the United States position under Equal Access to Justice Act suits. However, the Court also said that legal errors by the district court constitute an abuse of discretion.

5A. Charles Alan Wright & Arthur R.

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Bluebook (online)
2001 WY 106, 33 P.3d 1138, 2001 WL 1359994, Counsel Stack Legal Research, https://law.counselstack.com/opinion/caldwell-v-cummings-wyo-2001.