Whitehead v. Food Max of Mississippi, Inc.

277 F.3d 791, 51 Fed. R. Serv. 3d 433, 2002 U.S. App. LEXIS 458, 2002 WL 3489

• Court: Court of Appeals for the Fifth Circuit
• Decided: January 11, 2002
• Docket: No. 00-60153
• Status: Published

Opinions

POLITZ, Circuit Judge:

Paul S. Minor appeals an order imposing sanctions for his execution of a judgment at a Kmart retail store. Concluding that the trial court erred in its interpretation and application of Rule 62(f) of the Federal Rules of Civil Procedure, we reverse.

BACKGROUND

A woman and her daughter were abducted from Kmart’s parking lot. The offenders raped the victim while holding her child at knife-point. In a jury trial plaintiffs successfully sued Kmart. Their counsel was the appellant, Paul Minor. Kmart moved for a new trial, a remittitur, and a stay under Fed.R.Civ.P. 62(b) pending disposition of its motions. The district court denied these motions and three days later Minor obtained a Writ of Execution and Fieri Facias from the Clerk of Court. Accompanied by newspaper and television reporters Minor went to the local Kmart establishment with two federal marshals and sought execution on the writ by seizing money assets in the store’s registers and safe. The district court, informed of Minor’s steps to execute the judgment, instructed the Marshals’ office to cease and desist pending a telephone conference that afternoon. At the conference, the court directed Kmart to submit a bond so that all matters would be stayed pending appeal. Kmart agreed, and also filed its Notice of Appeal, Motion for Stay of Execution of Judgment Pending Appeal, and Amended Motion for Approval of Superse-deas Bond.

Thereafter, Kmart moved for sanctions under Rule 11(b), 11(c)(1)(B), and 28 U.S.C. § 1927, supporting its motion by citing Rule 62(f) of the Federal Rules of Civil Procedure which provides that a judgment debtor is entitled to a stay as would be accorded the debtor had the action been maintained in state court. Kmart claimed that Rule 62(a) of the Mississippi Rules of Civil Procedure provides for an automatic ten-day stay following the denial of a motion for a new trial. It claimed that Minor’s actions in executing the judgment contravened that Rule. While Kmart’s motion for sanctions was pending, we affirmed as to the liability of Kmart but remanded for a new trial on damages.

The district court thereafter granted Kmart’s motion for sanctions, finding that Minor “was seeking to embarrass [Kmart] .. .when, in fact, there was no basis whatsoever in fact or in law for the actions taken on August 21, 1997.” The court found no basis for Minor’s actions because it concluded that Kmart enjoyed an automatic stay under federal Rule 62(f) and Mississippi Rule 62(a). The trial court relied on the language of Rule 62(f) which says that a judgment debtor is entitled to such stay as would be accorded in state court, and noted that Mississippi Rule 62(a) would have given Kmart an automatic stay until ten days after the court ruled on its motion for a new trial. The trial court determined that Minor “failed to make a reasonable inquiry into the law governing execution of judgments.” Minor appeals this order granting sanctions.

ANALYSIS

We review a district court’s decision to invoke Rule 11 under an abuse of discretion standard,¹ giving great deference to an order imposing sanctions because “the district court is better situated than the court of appeals to marshal the pertinent facts and apply the fact-dependent legal standard mandated by Rule 11.”² Even under this deferential standard, however, a court abuses its discretion when its “ruling is based on an erroneous view of the law or on a clearly erroneous assessment of the evidence.”³ We conclude that the trial court erred in its interpretation of Rule 62(f) and that Minor’s conduct complied with the mandates of Rule 11.

I. Federal Rule 62(f) and Mississippi Rule 62(a)

The district court based its ruling on the specific language of federal Rule 62(f) and the automatic stay authorized by Mississippi Rule 62(a). Rule 62(f) of the Federal Rules of Civil Procedure provides in pertinent part that:

[i]n any state in which a judgment is a lien upon the property of the judgment debtor and in which the judgment debt- or is entitled to a stay of execution, a judgment debtor is entitled, in the district court therein, to such stay as would be accorded the judgment debtor had the action been maintained in the courts of that state.

The court noted in a footnote that this rule applied herein because Kmart was a judgment debtor against whose property the judgment' operated as a lien and it was entitled to a stay of execution under Rule 62(a) of the Mississippi Rules of Civil Procedure. That rule provides as follows:

(a) Automatic Stay: Exceptions. Except as stated herein or as otherwise provided by statute or by order of the court for good cause shown, no execution shall be issued upon a judgment nor shall proceedings be taken for its enforcement until the expiration of ten days after the later of its entry or the disposition of a motion for a new trial....

The court determined that although Kmart did not move for a stay under either of these rules, it nonetheless enjoyed a ten-day stay under Rule 62(a) because such a stay applies automatically after the disposition of a motion for a new trial and federal Rule 62(f) states that a judgment debtor is “entitled” to any stay applicable in state court. A close reading of the rule, practical and policy considerations, and a review of the legal authority addressing this issue persuades us beyond peradventure that the trial court erred in its application of federal Rule 62(f).

A. Plain Meaning of Rule 62(f)

Although Rule 62(f) provides that a judgment debtor is “entitled” to such stay as it would receive if the action were brought in state court, we must disagree with the district court that by this choice of language Congress sought to afford the protection of state staying provisions without requiring parties to file an appropriate motion with the court. The word “entitled” includes “to grant a legal right to or qualify for.”⁴ Accordingly, Rule 62(f) bestows upon the federal litigant grounds for securing or claiming an applicable state law stay in the district court. We must conclude, however, that the Rule does not afford the protection of a stay applicable under state law, even if automatic in state court, unless the litigant asserts the rights by filing a proper motion.⁵

B. Policy Considerations

Sound policy protocols militate against enforcing state staying provisions in federal court without requiring the benefitting party to request such relief. Permitting a party to rely on a state procedural rule without affirmatively seeking its protection places federal trial judges in a precarious position. In addition to the obvious necessity of possessing a detailed knowledge of the federal rules, such an interpretation would require federal judges to master the intricate procedural rules and practice of the various states. The problems associated with this approach increase exponentially in diversity cases with complex choice-of-law issues. Cases invoking diversify jurisdiction could require an in-depth grasp of not only the law of the state in which a federal judge sits, but the law of any given state. After resolving the choice-of-law issues, the judge would have to scrutinize the law of the subject state to ensure that none of the court’s orders violated an automatic stay provision instantly applicable through Rule 62(f), notwithstanding the fact that the benefitting party filed no motion identifying the relevant state rule, practice, or procedure. We deem it unwise and inappropriate and therefore decline to impose such a heavy and unnecessary burden upon our brethren in the district courts.⁶

C.Legal Authority

Our review discloses no legal authority supporting the proposition that a party enjoys protection under a state procedural rule, practice, or procedure applicable through Rule 62(f), without actively seeking such protection from the district court. Initially, the federal rules specifically provide that an application for an order by the court shall be by motion.⁷ The effect of a stay in this situation is indistinguishable from obtaining an order because it bars a successful litigant from taking any action on the judgment. Accordingly, a party must file a motion placing both the court and any adverse party on notice that a stay is sought.

An exhaustive review of the jurisprudence reveals no precedent holding that a party need not file a motion under Rule 62(f). In Ven Huss v. Landsberg,8 the Western District of Missouri heard appellant’s motion to quash garnishments because Missouri state law provided for an automatic stay until the disposition of a motion for a new trial. While such a motion was pending plaintiff secured a writ of execution and caused summons of garnishee to issue. Appellant sought relief under federal Rule 62(f) but had not filed any motion with the court. The court stated:

At the outset, this Court believes that the defendant should have filed with the court, with notice to the plaintiff, a request for a stay under the provisions of Rule 62(f) if he sought that rule’s protection. There are a number of reasons why such a procedure would seem necessary under this situation. But, without determining the question of the necessity of such a motion, this Court will rale on the merits of this motion to quash.⁹

While mere dicta, these comments confirm our reading of the plain language of Rule 62(f) and the conclusion that there must be a motion to secure a stay under state law. Further, in White v. Phillips,¹⁰ the Northern District of Georgia rejected appellee’s claim that Rule 62(f) applied automatically, giving appellant a stay under state law and requiring him to post a supersedeas bond. The court’s language was unambiguous: “The Court finds that Fed.R.Civ.P. 62(f) does not serve to automatically stay the execution of a judgment in the absence of a request for a stay by the appellant, even in a case such as the instant one in which under the state law a stay would be automatic.” ¹¹

This interpretation is amply supported by the secondary authorities addressing the issue. In Wright & Miller’s learned treatise on civil procedure, the authors opine: “Even though the stay may be automatic in state practice, in federal court a party who seeks the protection of a stay under Rule 62(f) should file with the court, with notice to the plaintiff, the request for the stay.”¹² While the authors footnote this sentence to Van Huss, their inclusion of this rale reaffirms that the legal authorities considering this issue unanimously interpret Rule 62(f) to require a party to file a motion before enjoying the benefits of a stay.

Our reading of the rule, extensive review of the legal authorities, and consideration of the practical policy ramifications, disclose no persuasive reason for holding that a party may enjoy a state law stay under Rule 62(f) without filing a motion seeking such relief from the court. Accordingly, we conclude and hold that Rule 62(f) did not operate to grant Kmart the claimed automatic stay.

II. Order Imposing Sanctions

A lawyer routinely certifies that any representations made to the court are not being presented for any improper purpose, that the legal contentions are warranted by existing law or the non-frivolous argument for the extension, modification, or reversal of the same, and that any allegations have evidentiary support.¹³ In light of its interpretation of Rule 62(f), the trial court found that Minor failed to make a reasonable inquiry into the law governing execution of judgments before requesting the writ.¹⁴ The record does not support this finding. Minor did research the relevant case law and consulted secondary sources. His research revealed at least one case in which a district court seemingly approved of a similar execution at a Kmart store.¹⁵ In addition, the court found that Minor was “seeking to embarrass the defendant and call attention to himself as a tireless laborer of the bar attempting to obtain justice for his client when, in fact, there was no basis whatsoever in fact or in law for the actions taken on August 21, 1997.” While we recognize the discretion afforded to the district court in the imposition of sanctions, our interpretation of Rule 62(f) necessarily mandates reversal of the trial court’s order.

Initially, as noted above, because Kmart did not move for a stay under federal Rule 62(f), it did not enjoy a stay when Minor sought a Writ of Execution. We are aware of no dispositive authority mandating or even suggesting against the seeking of such a writ, and Minor’s conduct therefore cannot fairly be characterized as objectively unreasonable. Further, Kmart’s actions belie their current contention that they enjoyed a stay under Rule 62(f). Kmart moved for a Rule 62(b) stay pending the court’s ruling on the post trial motions, which would have been unnecessary if it already enjoyed a stay under Rule 62(f) because Mississippi Rule 62(a) prevents any execution on a judgment before “the expiration of ten days after the later of its entry or the disposition of a motion for a new trial.” While Kmart’s Rule 62(b) motion would protect against execution during the period after ten days but before the court’s ruling on the post-trial motions, we find its failure to reference Rule 62(f) until its motion for sanctions highly suspect. Accordingly, Kmart’s performance herein also persuades that Minor’s actions were not legally unreasonable.

Finally, we conclude that any embarrassment suffered by Kmart as a result of Minor’s methodology in executing the judgment at the store is insufficient to justify sanctions under Rule 11. Minor sought to execute on a final judgment for his client. He appropriately sought and obtained a Writ of Execution in accordance with the federal rules. Absent exceptional circumstances, the court should not read-an ulterior motive into a document filed for a legitimate purpose because “[i]t is not the role of Rule 11 to safeguard a defendant from public criticism that may result from the assertion of non-frivolous claims.”¹⁶ Rule 11 treats all filings in the same fashion, whether a complaint or a motion, and Minor’s decision to seek a writ of execution passes muster under that Rule.

Kmart’s complaint, stripped to essentials, is the manner of execution, accompanying the marshals with media representatives. Our decision is not to be taken as condoning the manner in which Minor executed his lawfully obtained writ. The intentional use of publicity for the purpose of embarrassing an adversary is patently inappropriate, but the decision as to any consequences that might flow from such behavior properly belongs in the hands of the Mississippi authorities and their judgment call as to proper professional performance and penalties for any failure thereof.

Because of our conclusion that a reversal is in order herein because Minor’s conduct was not legally unreasonable and therefore not sanctionable, we do not address Minor’s motion for a reversal based on the claim that Kmart inappropriately did not reveal the existence of insurance coverage.

III. Conclusion

Minor’s execution of the judgment at the Kmart store was not sanctionable under Rule 11. The district court’s order imposing sanctions, therefore, constituted an abuse of discretion and that order is REVERSED. The three pending motions filed by appellant on February 26, 2001 are, accordingly, DENIED as moot.

1 . Childs v. State Farm Mut. Automobile Ins. Co., 29 F.3d 1018 (5th Cir.1994).

2 . Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 402, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990).

3 . Matta v. May, 118 F.3d 410, 413 (5th Cir.1997).

4 . Black's Law Dictionary 553 (7th ed.1999).

5 . We note that the use of “entitled” in other federal rules supports this definition. For example, the rules require that a complaint contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).

6 . We note also that Rule 62(f) applies only if certain conditions are met. Requiring a party to file a motion affords the court the ability to analyze whether the movant presented sufficient facts to satisfy these conditions.

7 . Fed. R. Civ. P. 7(b)(1).

8 . 262 F.Supp. 867 (W.D.Mo.1967).

9 . Id. at 869.

10 . 88 F.R.D. 263 (N.D.Ga.1980).

11 . Id. at 265; See also United States v. Kurtz, 528 F.Supp. 1113, 1114 n. 2 (E.D.Pa.1981) (stating "[b]ecause defendant has not argued that he would be entitled under state law to a stay, the question of his rights under Rule 62(f) is not before us”).

12 . 11 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2907 (2d ed.1995).

13 . Fed. R. Civ. P. 11.

14 . The stay under Mississippi Rule 62(a) extended for ten days after the court ruled on Kmart's motion for a new trial. Minor sought, and received, the Writ of Execution only three days after the court’s ruling on Kmart's motion.

15 . See Moses v. K-Mart Corp., 922 F.Supp. 600 (S.D.Fla.1966).

16 . Sussman v. Bank of Israel, 56 F.3d 450, 459 (2d Cir.1995).