Stipe v. First Interstate Bank of Polson

2005 MT 295, 125 P.3d 591, 329 Mont. 320, 2005 Mont. LEXIS 483
CourtMontana Supreme Court
DecidedNovember 23, 2005
Docket04-366
StatusPublished
Cited by4 cases

This text of 2005 MT 295 (Stipe v. First Interstate Bank of Polson) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stipe v. First Interstate Bank of Polson, 2005 MT 295, 125 P.3d 591, 329 Mont. 320, 2005 Mont. LEXIS 483 (Mo. 2005).

Opinions

JUSTICE WARNER

delivered the Opinion of the Court.

¶1 Vernon Stipe, Marvin Stipe, and Douglass Stipe (collectively Stipes) appeal from an order entered July 8,2003, awarding Defendant and Respondent First Interstate Bank of Poison (FIB) attorney fees and costs as a sanction because it was required to defend against discovery abuses by Stipes and their counsel.

¶2 Stipes raise several issues on appeal, including this Court’s jurisdiction to hear it, the timeliness of the appeal, and the merits of the award of attorney fees. However, all but one of these issues was decided on a motion to dismiss this appeal. By order issued on July 7, 2004, the Court concluded that the only issue properly before us on this appeal is the basis of the award of attorney fees against Stipes. Therefore, we restate the issues before us as follows:

¶3 1. Did the District Court err in granting FIB attorney fees as a sanction against Stipes without a specific hearing for this purpose?

¶4 2. Is there an adequate basis for the award of Rule 11, M.R.Civ.P., sanctions against Stipes?

¶5 We affirm.

¶6 This action was filed in December of 2002. No decision on the merits of Stipes’ claims has been made, and the process has clearly been delayed further by this appeal. Stipes’ complaint alleges FIB maliciously foreclosed a security interest on some of their ranch property. Stipes also allege that FIB intentionally inflicted emotional distress upon them. In its various orders throughout this litigation the District Court has found numerous facts, most of which are uncontested. The essential facts relevant to this appeal are stated below.

¶7 During the course of its factual investigation FIB met with a potential witness, Lisa Stipe. Ms. Stipe was in the process of dissolving her marriage to Plaintiff Marvin Stipe. Upon learning of the meeting between Lisa Stipe and FIB’s counsel, all of the Stipes refused to attend scheduled depositions. In conjunction with their refusal Stipes filed a motion for a protective order barring FIB from further communications with Lisa Stipe. FIB then filed a motion to compel discovery and a brief in support of its motion seeking an award of its [324]*324costs and attorney fees for being forced to secure a court order to take the depositions of Vernon Stipe and Marvin Stipe. FIB also sought costs associated with noticing and preparing for the depositions when the deponents failed to attend.

¶8 On June 6,2003, the District Court entered its order holding that there was no violation of the spousal privilege by counsel for FIB, denying FIB’s motion to compel and Stipes’ motion for protective order, and ordering the parties to immediately proceed with discovery.

¶9 On June 12,2003, FIB filed notices of depositions of Vernon Stipe and Douglass Stipe for June 25, 2003, and Martin Stipe for July 2, 2003. On June 12, 2003, Stipes moved for an injunction halting discovery, and also sought removal of FIB’s counsel for allegedly violating the spousal privilege. The basis for this motion was the same meeting between Lisa Stipes and FIB’s counsel that the District Court had already ruled was not improper. At a hearing on June 19, 2003, the District Court denied Stipes’ injunction application. The District Court also requested at the hearing that counsel for FIB submit an affidavit stating his attorney fees in responding to the motion. However, the judge said that attorney fees might be suspended if the litigation made progress. Counsel for FIB, as ordered, filed an affidavit on July 2, 2003, claiming fees in the amount of $11,741.

¶10 On June 23,2003, Stipes filed a Notice of Appeal from the District Court’s denial of their injunction request. This “first appeal” was from the Order entered on June 19,2003, denying Plaintiffs’ application for preliminary and final injunction. Stipes then unilaterally decided not to appear for their depositions scheduled for June 25, 2003, and July 2, 2003.

¶11 On July 8, 2003, the District Court entered a written order containing its reasoning for denying the application for injunctive relief. This order also awarded FIB attorney fees in the amount of $11,741 for abuse of the discovery process. The reasons for the award of attorney fees were set out in some detail, along with a statement of the reasons for the sanction, and a cogent legal analysis. The District Court, while it set an amount for the sanction, offered Stipes the opportunity to object to the amount.

¶12 On July 17, 2003, Stipes filed an objection to the amount of the attorney fee award. The objection was filed along with an extensive brief. Counsel for Stipes argued that the fee award was too large, that the determination of the amount of a reasonable fee required an evidentiary hearing, that fees should not be awarded based on what had occurred, and that the District Court did not have jurisdiction to [325]*325award fees because Stipes had appealed. Counsel for Stipes reiterated in some detail what had occurred and argued from these facts that the sanction was not justified. However, at no time was the argument made to the District Court that the sanction was improper because there had been no hearing at which a defense to the award could be made. FIB moved to strike Stipe’s objection to the award of attorney fees, and that was briefed. The District Court, recognizing that Stipes had a right to a hearing on the award of fees and that the case was on appeal to this Court, stayed the hearing pending resolution of the first appeal.

¶13 On December 3, 2003, Stipes moved to voluntarily dismiss the first appeal. FIB consented, and on December 11, 2003, this Court entered an order dismissing the first appeal. The case was then returned to the District Court.

¶14 Suffice it to say that there was substantial further litigation and discovery on the amount of attorney fees that should be awarded. However, the District Court steadfastly held to its order that Stipes were entitled to a hearing on the amount of reasonable attorney fees. Stipes did not argue to the District Court that the award of fees could not be sustained because no hearing had been conducted wherein they could present a defense to the sanction itself. Then, finally, after the District Court had scheduled and re-scheduled a hearing on the amount of the fees, the hearing was set for May 6, 2004. But Stipes moved to postpone the hearing yet again. FIB objected.

¶15 On May 4, 2004, Stipes’ counsel signed a document entitled “Notice of Withdrawal of Objection to Attorney Fees,” and filed it May 5, 2004, the day before the scheduled hearing. This notice stated that Stipes withdrew their objection to the amount of the fees, but “continue[d] to assert their other, legal objections to the Court’s award of attorney fees.” It is this withdrawal that is described in this Court’s order of July 7, 2004, wherein we denied FIB’s motion to dismiss this appeal.

¶16 After the withdrawal of the objection filed on May 5,2004, counsel for Stipes and FIB entered a separate stipulation, which was dated May 5,2004, and filed May 6,2004, to vacate the May 6 hearing on the attorney fee sanction. In this stipulation it was agreed that the hearing should be vacated, the amount of the attorney fee award was reasonable, and further that “Plaintiffs [Stipes] agree[d] to waive their right to object to the lack of an evidentiary hearing regarding the award of attorney fees and costs.” That same day, the District Court denied the motion to continue the hearing, but also vacated the [326]

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Related

Stockwell v. Windham
2009 MT 278 (Montana Supreme Court, 2009)
Byrum v. Andren
2007 MT 107 (Montana Supreme Court, 2007)
Stipe v. First Interstate Bank of Polson
2005 MT 295 (Montana Supreme Court, 2005)
Griswold v. Lagge
313 P.2d 1013 (Montana Supreme Court, 1957)

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Bluebook (online)
2005 MT 295, 125 P.3d 591, 329 Mont. 320, 2005 Mont. LEXIS 483, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stipe-v-first-interstate-bank-of-polson-mont-2005.