Dona Ana Savings & Loan Ass'n, F.A. v. Mitchell

829 P.2d 655, 113 N.M. 576
CourtNew Mexico Court of Appeals
DecidedApril 30, 1991
DocketNo. 12051
StatusPublished
Cited by18 cases

This text of 829 P.2d 655 (Dona Ana Savings & Loan Ass'n, F.A. v. Mitchell) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dona Ana Savings & Loan Ass'n, F.A. v. Mitchell, 829 P.2d 655, 113 N.M. 576 (N.M. Ct. App. 1991).

Opinion

OPINION

BIVINS, Judge.

Anthony Avallone (attorney) appeals the district court’s order imposing a $250 fine against him as a sanction for violating SCRA 1986, 1-011 (Cum.Supp.1990) (Rule 11). He raises three issues on appeal: (1) the district court lacked jurisdiction to impose Rule 11 sanctions, claiming that the sanctions proceeding was criminal in nature and no sworn statement or complaint was filed; (2) the findings were flawed for lack of a finding of subjective bad faith and no showing that the findings made were based on proof beyond a reasonable doubt; and (3) extrajudicial bias and prejudice deprived attorney of due process. We affirm.

When this case was first appealed, this court granted the district court’s motion to dismiss the appeal for lack of jurisdiction based on a defect in the notice of appeal. The supreme court granted certiorari to review the dismissal and reversed, remanding to this court to consider attorney’s appeal on the merits. Mitchell v. Dona Ana Sav. & Loan Ass’n, F.A., 111 N.M. 257, 804 P.2d 1076 (1991). In compliance with that decision, we now consider the merits.

Background.

Dona Ana Savings and Loan Association (the Association) sued Peggy Mitchell (Mitchell) to collect on a promissory note. Mitchell retained attorney to represent her, and attorney filed an answer to the complaint.

In the answer, attorney denied the complaint’s allegations that Mitchell failed and refused to make any payments due under the terms of the note, that the Association had elected to accelerate all sums secured under the note, that the unpaid principal was $8,034.87, and that late charges had accrued and continued to accrue. The answer also demanded proof of the amount owed.

The Association moved for summary judgment supported by the affidavit of an officer showing, among other things, the amounts due and that no payments had been made by Mitchell on the note. At the hearing on the motion, attorney stated that by filing the answer he was not claiming a meritorious defense, only that he wanted proof of the amount owed. He also indicated to the district court that a petition for bankruptcy would be filed on behalf of Mitchell by the end of the week, so not much would be accomplished at the summary judgment hearing.

On its own motion, the district court concluded the answer violated Rule 11 and assessed a fine of $250 against attorney. When the form of judgment was presented, attorney objected to the portion imposing sanctions and requested a hearing. He did not object to the award of judgment in favor of the Association. Judgment was then entered granting the Association summary judgment against Mitchell but reserving for another hearing the “issue as to whether the defendant’s answer was frivolous and filed for the purpose of delay, and whether sanctions should be imposed.” The district court issued a written order directing attorney to show cause why he should not be subjected to disciplinary action under Rule 11. That order was not accompanied by a sworn complaint.

A hearing was held on the order to show cause and, after requested findings of fact and conclusions of law had been submitted, the district court filed its decision and an order imposing sanctions on attorney. At the hearing, the district court judge remarked that attorney was always skirting the rules of procedure and ethics and that he had discussed attorney with another district judge who felt the same way.

I. Jurisdiction to Impose Sanctions.

Relying on State ex rel. Simpson v. Armijo, 38 N.M. 280, 31 P.2d 703 (1934), and Lindsey v. Martinez, 90 N.M. 737, 568 P.2d 263 (Ct.App.1977), attorney argues that the district court lacked jurisdiction because punishment by fine makes the proceeding criminal in nature and he was not provided a sworn, written statement of the charges as required for criminal contempt proceedings under SCRA 1986, 5-201(B). We reject this contention.

The imposition of a fine on an attorney under Rule 11, payable to the court, presents a case of first impression in New Mexico. Fines penalizing attorneys have frequently been held to be appropriate under the analogous federal rule. Annotation, Comment Note — General Principles Regarding Imposition of Sanctions under Rule 11, Federal Rules of Civil Procedure, 95 A.L.R.Fed. 107, § 9[b] (1989). Under the federal rule, appropriate sanctions for Rule 11 violations include reprimand, fines levied against the attorney or his client, notification of the disciplinary board, and the award of attorney’s fees and costs to the opposing party. See generally id.; W. Schwarzer, Sanctions Under the New Federal Rule 11 — A Closer Look, 104 F.R.D. 181 (1985). Although the federal rule differs in part from our Rule 11 in certain respects, we think it is clear that both versions permit the imposition of a fine as a sanction in appropriate cases.

While it is correct that some federal courts, in dealing with the comparable federal rule, have held that fines imposed under Rule 11 are essentially analogous to those imposed for criminal contempt, see 2A J. Moore, J. Lucas & G. Grotheer, Jr., Moore’s Federal Practice, 1111.02[4], text at n. 5 (2d ed. 1990) (hereinafter Moore’s), attorney has not cited us to any authority, and we have found none, that requires service of a sworn statement. Moreover, the authority of federal cases requiring criminal contempt proceedings when fines for Rule 11 violations are imposed has been criticized. Donaldson v. Clark, 786 F.2d 1570 (11th Cir.1986), cited in Moore’s and relied upon by defendant and other federal circuits, see, e.g., Cotner v. Hopkins, 795 F.2d 900 (10th Cir.1986) (also cited in Moore’s); Cheek v. Doe, 828 F.2d 395, 397 n. 2 (7th Cir.), cert. denied, 484 U.S. 955, 108 S.Ct. 349, 98 L.Ed.2d 374 (1987), was subsequently vacated, see Donaldson v. Clark, 794 F.2d 572, (11th Cir.1986) and then reheard en banc. See Donaldson v. Clark, 819 F.2d 1551 (11th Cir.1987).

On rehearing, the appellate court held that it is not necessary for a court to follow the procedures required in criminal contempt proceedings for every case involving Rule 11 sanctions, even where monetary sanctions are imposed. Donaldson v. Clark, 819 F.2d at 1559. Policy considerations and fundamental differences between a monetary sanction for a Rule 11 violation and an infraction for criminal contempt mandate against following criminal contempt procedures for Rule 11 violations.

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829 P.2d 655, 113 N.M. 576, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dona-ana-savings-loan-assn-fa-v-mitchell-nmctapp-1991.