Opinion
No. 22-1266
07-13-2023
Emily Boscoe CHUNG, Plaintiff - Appellant, v. Timothy J. LAMB; Timothy J. Lamb, P.C., Defendants - Appellees. Karen A. Hammer, Attorney - Appellant.
Karen A. Hammer, Hammer-Law, Boulder, Colorado, for Plaintiff - Appellant/Attorney - Appellant. Franz Hardy, Gordon & Rees LLP, Denver, Colorado, for Defendants - Appellees.
Appeal from the United States District Court for the District of Colorado (D.C. No. 1:14-CV-03244-DDD-KLM)
Karen A. Hammer, Hammer-Law, Boulder, Colorado, for Plaintiff - Appellant/Attorney - Appellant. Franz Hardy, Gordon & Rees LLP, Denver, Colorado, for Defendants - Appellees. Before HARTZ, MATHESON, and McHUGH, Circuit Judges. HARTZ, Circuit Judge.
After a prior remand to the district court, we review the propriety of that court's revised award of attorney fees under 28 U.S.C. § 1927, which permits monetary sanction when an attorney has unreasonably and vexatiously multiplied the proceedings. Appellant Karen Hammer claims that the district court failed to make the findings necessary to support an award under § 1927, failed to abide by the statutory requirement that a court award only excess fees incurred because of the sanctioned attorney's multiplication of proceedings, and failed to apply the law of the case. She also argues that the court erred in striking a surreply that she filed without leave. With one exception, we see no merit in these arguments. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm except to remand for one reduction in the fee award.
I. BACKGROUND
Emily Boscoe Chung (Boscoe) was the sole named plaintiff in a Fair Debt Collection Practices Act (FDCPA) suit against lawyer Timothy Lamb and his professional corporation. Karen Hammer declared herself to be Boscoe's attorney on the original complaint and thereafter in that suit. But before filing the FDCPA litigation in the United States District Court for the District of Colorado, Boscoe and Hammer had signed an agreement (the Engagement Letter) with two provisions central to the present dispute. First, Boscoe assigned to Hammer "the right to pursue all claims against Tim Lamb and his firm," and, second, Boscoe and Hammer agreed that Hammer's representation of Boscoe ended when they "reached the agreement." Aplt. App. at 105-06. Hammer prevented Lamb from discovering these terms for more than three years after she filed suit. When Hammer eventually produced the unredacted Engagement Letter, Lamb moved for summary judgment, arguing that because of the assignment Hammer was the real party in interest, and that by filing suit under Boscoe's name Hammer had violated Fed. R. Civ. P. 17(a), which requires that an action be "prosecuted in the name of the real party in interest." The district court agreed and granted summary judgment in Lamb's favor.
The original complaint referred to Plaintiff as "Boscoe," and the parties and courts in these proceedings have generally referred to her in like manner.
As part of its Rule 17(a) analysis in the summary-judgment order, the court explained why Hammer should not be permitted to belatedly substitute herself as the plaintiff, providing four "examples of the extraordinary energy Ms. Hammer has expended in attempting to conceal herself as the real party in interest." Boscoe Chung v. Lamb, No. 14-CV-03244-WYD-KLM, 2018 WL 6429922, at *7 (D. Colo. Nov. 14, 2018). First, Hammer moved to strike the real-party-in-interest affirmative defense raised in Lamb's answer to the complaint, arguing that it had no factual basis even though she knew the Engagement Letter proved otherwise. Second, Hammer objected to Lamb's motion to disqualify her as Boscoe's attorney even though the Engagement Letter had ended the representation. Third, she resisted producing the unredacted Engagement Letter for 23 months after Lamb formally requested its production, making it available to him only after he filed two motions to compel. Finally, she delayed Lamb's attempts to depose Boscoe.
Lamb then moved for attorney fees under 28 U.S.C. § 1927, which provides:
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.The court denied the motion without prejudice pending disposition of Hammer's appeal of the summary judgment. After we dismissed that appeal, see Chung v. Lamb (Lamb I), 794 F. App'x 773 (10th Cir. 2019), Lamb renewed his sanctions motion. The district court granted the motion, ruling that the four examples identified in the summary-judgment order constituted sanctionable conduct and awarding Lamb attorney fees of $32,884.64. Hammer appealed.
On appeal we "focus[ed] our analysis on two questions. First, did the district court err when it found Ms. Hammer's conduct sanctionable under § 1927? If not, second, did the court err when it determined the amount of the sanctions?" Chung v. Lamb (Lamb II), No. 20-1278, 2021 WL 4852417, at *3 (10th Cir. Oct. 19, 2021) (unpublished). Our standard of review for the first question was deferential: "We will not disturb a district court's factual findings about an attorney's conduct unless they lack a reasonable basis." Id. We therefore "easily reject[ed]" Hammer's arguments that "the district court erred in finding her conduct sanctionable under § 1927." Id. We concluded: "The record supports the findings that, in committing the four sanctioned actions, Ms. Hammer acted dishonestly, unreasonably, and vexatiously. So we will not disturb those findings." Id. (emphasis added).
Answering the second question, however, we held that the court had applied the wrong standard in calculating the attorney-fee award. We explained: "The [$32,884.64 award] compensated Mr. Lamb for 'fees incurred related to the' sanctioned conduct. But § 1927 does not authorize sanctions to compensate fees merely related to unreasonable and vexatious conduct. The statute is narrower, authorizing sanctions to compensate excess fees incurred because of the offending attorney's sanctionable action." Id. at *4 (citation and further internal quotation marks omitted). We therefore "vacate[d] the sanctions order, and remand[ed] the case for further proceedings consistent with [our] decision." Id. at *5.
Lamb renewed his motion for attorney fees a second time, and the district court issued a second sanctions order. It determined that "[t]he finding that [Hammer's] pattern of conduct was sanctionable was left undisturbed by the Tenth Circuit," so it "need not rehash that conduct here." Chung v. Lamb, No. 1:14-cv-03244-DDD-KLM, 2022 WL 3908888, at *1 (D. Colo. July 29, 2022). It then analyzed what the proper award amount should be and ordered Hammer to pay Lamb $13,392.66. It also struck a surreply in opposition to the motion that Hammer had filed without leave, holding that no surreply was warranted because Lamb's reply brief raised no new argument or material or, as an alternative reason to reject the surreply, because Hammer's new argument in the surreply—that Lamb was not entitled to collect attorney fees because those fees had been paid by his insurer rather than directly by him—was meritless.
II. DISCUSSION
We review for abuse of discretion an award of sanctions under § 1927. See Hamilton v. Boise Cascade Express, 519 F.3d 1197, 1202 (10th Cir. 2008). We apply the same standard of review to the decision to strike a surreply. See Green v. New Mexico, 420 F.3d 1189, 1196 (10th Cir. 2005); Beaird v. Seagate Tech., Inc., 145 F.3d 1159, 1164 (10th Cir. 1998). "[U]nder the abuse-of-discretion standard, a trial court's decision will not be disturbed unless the appellate court has a definite and firm conviction that the lower court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances." Mid-Continent Cas. Co. v. Vill. at Deer Creek Homeowners Ass'n, Inc., 685 F.3d 977, 981 (10th Cir. 2012) (original brackets and internal quotation marks omitted). Contrary to Hammer's contention in her brief, as the appellant she bears the burden of showing error in the fee award. See In re Syngenta AG MIR 162 Corn Litig., 61 F.4th 1126, 1205 (10th Cir. 2023) ("Appellants have not met their burden of showing that the [attorney] fee award amounted to a harmful abuse of discretion."); Hernandez v. Starbuck, 69 F.3d 1089, 1093 (10th Cir. 1995) ("Because the appellant comes to the court of appeals as the challenger, he bears the burden of demonstrating the alleged error and the precise relief sought.").
A. Findings of Sanctionable Conduct
Hammer first argues that the district court erred in applying § 1927 because it failed "to exercise its discretion to make a determination . . . that Hammer's conduct qualified for sanction under Section-1927 [sic] (despite this Court vacating in its entirety th[e] prior [district-court] order)." Aplt. Br. at 13. See Braley v. Campbell, 832 F.2d 1504, 1513 (10th Cir. 1987) (en banc) ("When a court imposes sanctions under 28 U.S.C. § 1927 . . . , it must sufficiently express the basis for the sanctions imposed to identify the excess costs reasonably incurred by the party to whom they will be due."). We can summarily reject this argument. Our prior decision clearly affirmed the district court's determination that Hammer's conduct justified sanctions under § 1927. Our reversal was based solely on that court's application of the wrong standard in assessing the sanction. There was no need for the court to reassess whether counsel's conduct deserved sanction.
All our citations are to the corrected brief filed on April 14, 2023.
B. Propriety of Fees Awarded
Hammer next argues that the attorney-fee award was improper because it was not tailored to compensate only for excess fees incurred as a result of her sanctionable conduct—that is, it did not accurately determine how the work of Lamb's attorneys was multiplied by that conduct. As we did in our prior attorney-fee decision in this case, see Lamb II, 2021 WL 4852417, at *3, we begin by stating the applicable standard: For a § 1927 award to be proper "there must be a causal connection between the objectionable conduct of counsel and multiplication of the proceedings, such that the conduct resulted in proceedings that would not have been conducted otherwise." Baca v. Berry, 806 F.3d 1262, 1268 (10th Cir. 2015) (brackets and internal quotation marks omitted). This in mind, we take in turn Hammer's challenges to the amount of the award.
Hammer first asserts that the second sanctions order mistakenly awarded $5,254.58 in fees resulting from Lamb's attorneys' work responding to "Hammer's entire motion-to-strike [sic]" Lamb's affirmative defenses. Aplt. Br. at 65. Hammer's motion challenged all 17 affirmative defenses, not just the real-party-in-interest defense, which Lamb designated as his second affirmative defense. Since the only sanctionable challenge was a small fraction of the total number of challenges, Hammer contends that most of the work responding to the motion to strike cannot be compensated under § 1927. The argument has force, and a reduction in fees is in order. We note that a part of the fees awarded for work on the motion to strike included (1) $1,261.19 for "summarizing defense[s] 1-11 and applicable legal authority" and (2) $1,142.21 for "summarizing defense[s] 12-17 and applicable legal authority." Aplt. App. at 237. The $1,142.21 paid for work specifically regarding defenses 12-17 cannot be a result of Hammer's sanctionable objection to the second defense and must be stricken from the attorney-fee award.
Beyond this, however, we cannot say that the court abused its discretion. Determination of attorney-fee awards "should not result in a second major litigation," and in calculating such awards district courts "need not, and indeed should not, become green-eyeshade accountants. The essential goal . . . is to do rough justice, not to achieve auditing perfection." Fox v. Vice, 563 U.S. 826, 838, 131 S.Ct. 2205, 180 L.Ed.2d 45 (2011) (internal quotation marks omitted). Further, while we are within our proper and comfortable domain in ensuring that the district court applied the proper legal standard, when it comes to details of a fee award there is "hardly . . . a sphere of judicial decisionmaking in which appellate micromanagement has less to recommend it." Id. We therefore "do not require the district court to identify and justify every hour allowed or disallowed" and instead require only that its "determination appear[ ] reasonable in light of the complexity of the case, the number of strategies pursued, and the responses necessitated by the other party's maneuvering." Auto-Owners Ins. Co. v. Summit Park Townhome Ass'n, 886 F.3d 863, 873 (10th Cir. 2018). A gestalt approach seems especially appropriate here since the fees were relatively modest in amount (particularly compared to the value of attorney and court time required to litigate the fee with precision), a fair amount of Lamb's response to the motion to strike concerned general matters rather than arguments that specific defenses should not be stricken, and a concession by Hammer on the real-party-in-interest defense may have mooted the other defenses, making Lamb's detailed responses to the motion to strike those defenses unnecessary. The district court's determination appears to us as within the bounds of permissible choice.
Hammer's next challenge relates to Lamb's motion to disqualify Hammer as Boscoe's attorney. The district court did not include in its sanction the attorney fee for preparing the motion because this work preceded the sanctionable offense—namely, the inclusion of an illegitimate argument in Hammer's response to the motion. But Hammer's response to the motion should have acknowledged that she was not Boscoe's attorney, thereby making it unnecessary for Lamb to reply to the response. The court therefore awarded Lamb all attorney fees for preparing the reply. Hammer argues that this was inappropriate because the court found sanctionable only one part of her response: her contention that she should not be disqualified because Boscoe should be able to retain counsel of her choice. We reject Hammer's argument. The district court acted well within its discretion. See id. at 872 ("If [defense counsel] had not violated the disclosure order, [plaintiff] would not have had to move for sanctions, seek attorneys' fees and expenses, and complete other work. As a result, the district court could reasonably consider these litigation expenses as the product of the two attorneys' misconduct.").
Hammer also contends that the court erred in awarding fees for the work on discovery because it "failed to cite facts supporting" the precise number of hours billed as a result of the sanctioned conduct—namely, Hammer's tardy production of the Engagement Letter. Aplt. Br. at 76. Hammer is correct that the billing records of Lamb's attorneys are not sufficiently detailed to show precise times for the work necessitated by the sanctionable conduct. But the court could properly excuse the lack of detail because the billing records were not prepared with the foresight that some of the work was being caused by such conduct. Lamb suggested, and the district court adopted as reasonable, that 20% of the time devoted to discovery was caused by the sanctionable conduct. Hammer does not argue that the 20% figure was an unreasonable approximation. Her only argument questioning that figure is simply that any percentage reduction was arbitrary. See Aplt. Br. at 53 ("Why did Defendants choose 20% recovery rather than 8%?"). We see no abuse of discretion. Such rough estimates are appropriate in attorney-fee cases where timekeeping was excusably imprecise. See Jane L. v. Bangerter, 61 F.3d 1505, 1510 (10th Cir. 1995) ("Where the documentation of hours is inadequate, the district court may reduce the award accordingly. We hold that the district court's 35% reduction of the hours requested fell within its realm of discretion." (citation and internal quotation marks omitted)).
Finally, Hammer argues that the fees the court awarded for attorney work on Boscoe's deposition were not a result of the sanctionable offense—Hammer's delay of the deposition—but rather of Lamb's own delay of the deposition. But Hammer has failed to identify any attorney fees awarded as a sanction that are tied to delays caused by Lamb's attorneys. Her defense to the award of the fees instead appears to be that she, not Lamb, sought to expedite Boscoe's deposition through an oral motion to compel it, while Lamb sought delay. That defense is belied by the record. After Hammer had repeatedly opposed any deposition of Boscoe, the court ordered Hammer to provide Lamb a date on which Boscoe could be deposed. Even after the parties complied with this order and scheduled the deposition, however, it remained unclear whether Hammer would seek a protective order preventing or limiting the deposition. Most important is the context in which Hammer purportedly sought to expedite the deposition. Hammer made her oral motion to compel, her sole demand for a prompt deposition, at a hearing on the day before Boscoe's deposition had been scheduled, and only after being made aware that the attorney of Lamb's who would be taking the deposition had a scheduling conflict and that the deposition would therefore have to be postponed. The court denied Hammer's motion.
Additionally, we note a billing entry by Lamb's attorneys for $71.33 on September 9, 2016, for "Drafting Motion for Extension to take Plaintiff's Deposition," Aplt. App. at 242, but the motion to extend the deposition deadline was unopposed and it is uncertain whether it was precipitated by Hammer's obstruction of deposition scheduling. Hammer has not satisfied her burden to show that the district court abused its discretion in including this figure in the sanctions award.
To sum up, with the exception we have explained above—regarding the $1,142.21 fee for work responding to Hammer's motion to strike Lamb's affirmative defenses 12-17—the second sanctions award satisfactorily abided by the statutory requirement that a district court award only excess fees incurred because of sanctionable conduct. The court did not abuse its discretion in calculating the award.
C. Surreply
Another argument raised in Hammer's appellate briefs, although rather perfunctorily, is that the district court improperly struck her surreply in opposition to Lamb's renewed motion for attorney fees. The district court ruled that surreplies are ordinarily not permitted and Hammer had neither requested leave to file nor offered adequate grounds to justify one. Hammer had suggested two grounds: (1) Lamb's reply brief in support of the attorney-fee motion had raised new arguments; and (2) not until disclosures in the reply brief did Hammer know that all legal fees in the case had been paid by Lamb's insurer. The district court rejected the first ground because it perceived no new argument. And it rejected the second ground because the insurer's payment of legal fees had been disclosed before the reply brief. Further, the court said that even if the surreply was proper, it rejected Hammer's argument in the surreply that Lamb had not incurred any legal fees because all fees had been paid by his insurer.
We see no prejudicial error in the rejection of the surreply. We think that the district court probably got it right when it said that Lamb had made no new arguments in his reply in support of attorney fees and that he had disclosed his insurance coverage for attorney fees long before submission of his reply brief. But even if there was some uncertainty on that score, we agree with the district court that payment by the insurer is irrelevant to the sanction award.
Hammer contends that in permitting only an award of fees incurred because of sanctionable conduct, § 1927 requires that Lamb directly paid his attorney fees, so payment of those fees by the insurer forecloses the statutory sanction imposed on her. Our precedent is to the contrary. This is not the first time we have considered a claim that a party seeking recovery under a statute allowing a court to compensate for certain incurred fees must have himself paid those fees. Addressing attorney sanctions under Fed. R. Civ. P. 37(a)(5)(A), which requires that a party compelled by the court to disclose information during discovery "pay the movant's reasonable expenses incurred in making the motion [to compel], including attorney's fees," we refused to interpret incurred to mean that the party seeking fees "must actually have paid or owe the fee to qualify for reimbursement." Centennial Archaeology, Inc. v. AECOM, Inc., 688 F.3d 673, 681 (10th Cir. 2012). We observed that as generally construed by the courts in applying fee-shifting statutes and rules, "an 'attorney fee' arises when a party uses an attorney, regardless of whether the attorney charges the party a fee; and the amount of the fee is the reasonable value of the attorney's services." Id. at 679. Because payment arrangements can vary widely, "[w]hat the client pays or owes the attorney may not accurately reflect the reasonable value of the services." Id. Moreover, because "in common usage a fee is something incurred," the word incurred in a statute "adds nothing (except, perhaps, emphasis) when modifying the term attorney fee." Id. at 681. Thus, in interpreting fee-shifting statutes "courts should look to their statutory purposes rather than focusing on the inclusion of a word (incurred) that, in ordinary usage, would be read into the statute in any event." Id. at 682. "In light of the clear purposes of the fee-shifting provisions of Rule 37," we held that the movant for Rule 37 attorney fees was "entitled to an attorney-fee award even though its lawyers were working under a fixed fee." Id.
The purpose of § 1927 is "[t]o deter frivolous and abusive litigation and promote justice and judicial efficiency." Braley, 832 F.2d at 1510. This is closely analogous to the purpose of Rule 37, which is to " 'deter the abuse implicit in carrying or forcing a discovery dispute to court when no genuine dispute exists.' " Centennial Archaeology, 688 F.3d at 680 (quoting Fed. R. Civ. P. 37(a)(4) advisory committee's note to 1970 amendment). Further, "§ 1927 does not distinguish between winners and losers, or between plaintiffs and defendants. The statute is indifferent to the equities of a dispute and to the values advanced by the substantive law. It is concerned only with limiting the abuse of court processes." Roadway Express, Inc. v. Piper, 447 U.S. 752, 762, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980). It would make little sense if § 1927 could be employed to deter abuse of court process only if the party seeking fees was uninsured.
In interpreting § 1927 to apply to this case, we follow the Second Circuit, which has extended our holding in Centennial Archaeology to a § 1927 case where fees arising from sanctionable conduct were awarded to a party with pro bono counsel. See Liebowitz v. Bandshell Artist Mgmt., 6 F.4th 267, 287 (2d Cir. 2021) ("To condition liability under this Section based on the pro bono or compensated nature of the representation of the opposing party would strip the Section of its deterrent power in an important class of cases."). For these reasons, we reject Hammer's argument that § 1927 prohibited Lamb from recovering attorney fees unless he paid them himself.
Our disposition of this issue also disposes of Hammer's contention that Lamb's attorneys lied and violated Fed. R. Civ. P. 11(b)(3)—which requires attorneys to certify that their factual assertions have evidentiary support—when they claimed that Lamb had incurred attorney fees though he was insured.
D. Law of the Case
Finally, Hammer argues that the district court ignored the law of the case when it awarded attorney fees to Lamb even though Lamb's insurer paid his attorney fees. As best we can tell, she claims that once the court ruled that Boscoe could not pursue her FDCPA claim because she had assigned to Hammer all rights to relief under that statute, it was bound to similarly rule that Lamb could not pursue an award of attorney fees when his insurer had assumed the duty to pay those fees (and the fees had in fact been paid by the insurer). That claim has no merit.
"As most commonly defined, the [law-of-the-case] doctrine posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983). But the law of the case concerns only "the same issues in subsequent stages in the same case." Id. (emphasis added); see Been v. O.K. Indus., Inc., 495 F.3d 1217, 1224 (10th Cir. 2007). Where "[d]ifferent legally relevant factors are under consideration" or where "the relevant facts are different," the law of the case doctrine is inapplicable. Robbins v. Wilkie, 433 F.3d 755, 764, 765 n.2 (10th Cir. 2006) (internal quotation marks omitted), rev'd and remanded on other grounds, 551 U.S. 537, 127 S.Ct. 2588, 168 L.Ed.2d 389 (2007), and vacated, 497 F.3d 1122 (10th Cir. 2007); see In re Meridian Rsrv., Inc., 87 F.3d 406, 410 (10th Cir. 1996) ("the law of the case doctrine is inapplicable" where party claimed that a court's statements made in contexts unrelated to state attorney-fee statute were binding with respect to application of the statute; "the considerations involved in determining the applicability of the attorney fees statute differ from either circumstance described in the prior decision"); 18B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4478, at 628, 633 (3d ed. 2019) ("Actual decision of an issue is required to establish the law of the case" and "decision of one issue does not ordinarily imply decision of another."); Bryan A. Garner et al., The Law of Judicial Precedent 448 (2016) ("Unless and until a court addresses a point implicated by the dispute, whether raised by the parties or not, there is no law of the case to apply."); see also Fortis Corp. Ins., SA v. Viken Ship Mgmt. AS, 597 F.3d 784, 792 (6th Cir. 2010) (O'Connor, J., sitting by designation) ("The law of the case doctrine has no application where the issue in question was not previously decided"; the issue was not previously decided because "treating two entities as equivalent for jurisdictional purposes does not somehow mean they are the same" for the purposes of the Carriage of Goods by Sea Act (internal quotation marks omitted)).
Here, the two issues were (1) whether Boscoe was the real party in interest when she had no right to recover from the FDCPA lawsuit and (2) whether Lamb had incurred attorney fees for purposes of § 1927 when his insurer had paid the attorney. The factual predicates for the two issues were totally different, and so was the governing law. The law-of-the-case doctrine does not apply.
III. CONCLUSION
We AFFIRM the decision of the district court on all but the $1,142.21 portion of the award discussed above.