Samuelu Masalosalo, a Minor, by Paepae Masalosalo, His Mother and Guardian Ad Litem, and Paepae Masalosalo v. Stonewall Insurance Company

718 F.2d 955, 37 Fed. R. Serv. 2d 1146, 1983 U.S. App. LEXIS 15921

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 20, 1983
• Docket: 82-4696
• Status: Published

Opinions

EUGENE A. WRIGHT, Senior Circuit Judge:

Two principal issues are presented by this appeal. First, does the filing of a notice of appeal from an entry of summary judgment divest the district court of jurisdiction to award attorneys’ fees? Second, was the assessment of attorneys’ fees here an abuse of discretion?

FACTS

In the underlying diversity suit, the Masalosalos sued Stonewall Insurance for damages based on unfair claims settlement practices following an accident involving Samuelu Masalosalo. The district court granted summary judgment for the defendant. That judgment was affirmed by this court by unpublished decision. Masalosalo v. Stonewall Insurance Co., 703 F.2d 576 (9th Cir.1983).

Following notice of appeal from the summary judgment, Stonewall moved for assessment of attorneys’ fees and costs against Ryan, the Masalosalos’ attorney. The motion was granted on November 17, 1982 and fees of $4,586.06 were allowed. Ryan appeals from that order.

DISTRICT COURT JURISDICTION

The effective filing of a notice of appeal transfers jurisdiction from the district court to the court of appeals with respect to all matters involved in the appeal. Griggs v. Provident Consumer Discount Co., - U.S. -, 103 S.Ct. 400, 402, 74 L.Ed.2d 225 (1982) (per curiam). That rule of exclusive appellate jurisdiction is a creature of judicial prudence, however, and is not absolute. Hoffman v. Beer Drivers & Salesmen’s Local Union No. 888, 536 F.2d 1268, 1276 (9th Cir.1976). It is designed to avoid the confusion and inefficiency of two courts considering the same issues simultaneously. 9 J. Moore, B. Ward & J. Lucas, Moore’s Federal Practice 11203.11 at 3-44 n. 1 (2d ed. 1983).

The issue before us is whether a district court acts beyond its jurisdiction in awarding attorneys’ fees after a notice of appeal has been filed and before this court has issued its mandate. It is an issue of first impression in this circuit.

The first circuit court to consider it concluded that insofar as the attorneys’ fee award depends upon an assessment of the merits, the award must be made before the appeal is noticed or after remand. Wright v. Jackson, 522 F.2d 955, 957 (4th Cir.1975). The court cited the policy against piecemeal appeals as support for its decision. Id. at 957.

The two other circuits that have been confronted with the issue have concluded that an appeal from the merits does not foreclose an award of attorneys’ fees by the district court. Terket v. Lund, 623 F.2d 29, 34 (7th Cir.1980) (dictum) (42 U.S.C. § 1988 fees); Loctite Corp. v. Fel-Pro, Inc., 667 F.2d 577, 584 (7th Cir.1981) (following Terket; fees for misconduct in patent suit); Overnite Transportation Co. v. Chicago Industrial Tire Co., 697 F.2d 789, 793 (7th Cir.1983) (fees under 28 U.S.C. § 1927, for vexatious suit); Obin v. District No. 9 of the International Association of Machinists & Aerospace Workers, 651 F.2d 574, 583-84 (8th Cir.1981) (fees under 42 U.S.C. § 2000e-5(k) and for bad faith acts). We agree with those courts.

The Supreme Court has approved implicitly the award of attorneys’ fees after an appeal has been taken. In White v. New Hampshire Department of Employment Security, 455 U.S. 445, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982), the Court held that the 10-day limitation on motions to amend judgment under Federal Rule of Civil Procedure 59(e) does not apply to motions for attorneys’ fees awards. The Court there said,

And of course the district court can avoid piecemeal appeals by promptly hearing and deciding claims to attorney’s fees. Such practice normally will permit appeals from fee awards to be considered together with any appeal from a final judgment on the merits.

455 U.S. at 454, 102 S.Ct. at 1168 (footnote omitted). This discussion anticipates decision of attorneys’ fees issues after an appeal on the merits has been taken, as it anticipates two separate appeals, which may be considered together.

The district court retained the power to award attorneys’ fees after the notice of appeal from the decision on the merits had been filed.¹ Recognition of that authority best serves the policy against piecemeal appeals. Terket, 623 F.2d at 34. Contra, Wright, 522 F.2d at 957. It will prevent hasty consideration of postjudgment fee motions. See Terket, 623 F.2d at 34. It will prevent postponement of fee consideration until after the circuit court mandate, when the relevant circumstances will no longer be fresh in the mind of the district judge. Id.

Recognition of continuing jurisdiction to award fees may prevent delay and duplication at the appellate level. If a district court decides a fee issue early in the course of a pending appeal on the merits, and the fee order is appealed, the appeals may be consolidated. Id.

Consolidation of the appeals here was prevented by the defendant’s delay in filing its motion for fees. It was filed 101 days after judgment was entered. We affirm the district court’s finding that the delay was not unreasonable. We suggest that district courts adopt local rules limiting the time for filing attorneys’ fees motions to avoid any inconvenience from significant delays. See Obin, 651 F.2d at 583.

PROPRIETY OF THE AWARD

The court found that Ryan “exhibited bad faith and abused the process of this court from the beginning of this case by filing a frivolous lawsuit.” On that basis, it assessed fees against Ryan. The authority upon which it relied in making the assessment is not specified.

The court has the inherent power to assess attorneys’ fees against counsel for abuse of judicial process or other bad faith conduct of litigation. Roadway Express, Inc. v. Piper, 447 U.S. 752, 765-66, 100 S.Ct. 2455, 2463-64, 65 L.Ed.2d 488 (1980). A finding of bad faith will be overturned only if clearly erroneous. Dogherra v. Safeway Stores, Inc., 679 F.2d 1293, 1298 (9th Cir.), cert. denied, - U.S. -, 103 S.Ct. 346, 74 L.Ed.2d 386 (1982).

Ryan brought a four million dollar suit on behalf of the Masalosalos, alleging unfair claims settlement. Under Hawaii law, the Masalosalos had no valid claim against Stonewall. The finding of bad faith was not clearly erroneous. Because the assessment was justified under the court’s inherent power, we need not consider the other possible sources of authority offered by Stonewall.

The district court did not engage in a detailed review of the factors used in computing the fee award. See Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975), cert. denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976). However, the record shows that the court considered those factors relevant to the award. See Rivera v. City of Riverside, 679 F.2d 795, 796-97 (9th Cir.1982), vacated on other grounds, - U.S. -, 103 S.Ct. 2421, 77 L.Ed.2d 1310 (1983).

The court discussed the reasonableness of the billing rate at length and indicated that it considered the nature of the services provided and the time involved. We are satisfied that the court did not abuse its discretion in fixing the amount. See Rivera, 679 F.2d at 797; Moore v. Jas. H. Matthews & Co., 682 F.2d 830, 839-41 (9th Cir.1982).

ATTORNEYS’ FEES ON APPEAL

Stonewall’s request for an attorneys’ fees award on appeal is denied. Ryan’s arguments on appeal, especially the jurisdictional argument, are not wholly without merit. Wood v. Santa Barbara Chamber of Commerce, Inc., 699 F.2d 484, 485 (9th Cir.1983).

AFFIRMED.

1 . In Culinary & Service Employees Union v. Hawaii Employee Benefit Administration, Inc., 688 F.2d 1228, 1229, 1232 (9th Cir.1982), we noted that the district court awarded attorneys’ fees after the notice of appeal had been filed. We held that we had no jurisdiction to review the fee award because no notice of appeal was filed from it. Id. We noted no jurisdictional defect in the fees award.