Hansen et al v. U.S. Bank National Association et al

Filing 37

MEMORANDUM DECISION & ORDER It is ORDERED that Mr. Rasmussen pay a $9,735.76 sanction to the law firm of Hawley Troxell Ennis and Hawley LLP within 90 days of the date of this Order. It is further ORDERED that Mr. Rasmussen pay a $25,110.00 sanction to the law firm of Lukins & Annis, P.S. within 90 days of the date of this Order. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

SHERRI HANSEN, et al.,
Case No. 4:15-cv-00085-BLW
Plaintiffs,
MEMORANDUM DECISION AND
ORDER

v.
U.S. BANK, NATIONAL
ASSOCIATION, TRUSTEE OF THE
MANUFACTURED HOUSING
CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES,
SERIES 1998-8 TRUST; GREEN TREE
FINANCIAL SERVICING, LLC; AND
HAWLEY TROXELL ENNIS AND
HAWLEY LLP,
Defendants.

In its April 11, 2016 Order, the Court granted Defendants’ Motions for Sanctions
against Plaintiffs’ counsel Troy Rasmussen, pursuant to Rule 11. Dkt. 33. Therein, the
Court indicated:
It is the Court’s view that the most appropriate sanction—that is, one which
is sufficient to deter Mr. Rasmussen and other attorneys from engaging in
this type of conduct—is to require Mr. Rasmussen to pay the Defendants
the reasonable attorney’s fees incurred in defending against this frivolous
suit. Defendants have submitted affidavits detailing all attorney’s fees and
costs which have been incurred by their clients in defending against this
action, including those fees incurred in pursuing the motion for Rule 11
sanctions. Specifically, Hawley Troxell states that it has incurred $9,735.76
MEMORANDUM AND ORDER - 1

in attorney’s fees and costs, while counsel for the Green Tree Defendants
reports incurring $25,110.00. Mr. Rasmussen may respond to counsels’
affidavits by submitting any argument he may have that (1) the requested
fees were not necessary to defend this action, or (2) the amount requested is
more than necessary to deter repetition of this conduct.
Order, Dkt. 33, pp. 6–7.
Mr. Rasmussen filed a response on April 25, 2016. The Green Tree Defendants
filed a reply on April 27, 2016, and Defendant Hawley Troxell filed its own reply on May
2, 2016. For the reasons discussed below, the Court finds sanctions—only as against
Plaintiff’s counsel Troy Rasmussen—in the amount of $34,845.76 will sufficiently deter
him, as well as others, from engaging in similar conduct in the future. Of that total
amount, Mr. Rasmussen shall pay $9,735.76 to Hawley Troxell Ennis and Hawley LLP,
and $25,110.00 to the law firm of Lukins and Annis, P.S.
ANALYSIS
The Court has already determined that Rule 11 sanctions are warranted in this case
based on the filing of the Complaint. The remaining question is what amount is
reasonable and appropriate. Rule 11(c)(4) provides some guidance:
A sanction imposed under this rule must be limited to what suffices to deter
repetition of the conduct or comparable conduct by others similarly
situated. The sanction may include . . . an order directing payment to the
movant of part or all of the reasonable attorney’s fees and other expenses
directly resulting from the violation.
Fed.R.Civ.P. 11 (c)(4). Case law repeatedly reiterates that the primary purpose of Rule 11
sanctions is to deter sanctionable conduct going forward. Matter of Yagman, 796 F.2d
1165, 1183 (9th Cir.) (“[The] primary purpose of sanctions . . . is to deter subsequent
abuses.”). Under Rule 11, “[r]ecovery should never exceed those expenses and fees that
MEMORANDUM AND ORDER - 2

were reasonably necessary to resist the offending action.” Yagman, 796 F.2d at 1185.
“The measure to be used is not actual expenses and fees but those the court determines to
be reasonable.” Id. (quotation omitted). In the Rule 11 context, “the court must make
some evaluation of the fee breakdown submitted by counsel.” Yagman, 796 F.2d at 1185
(citing Toombs v. Leone, 777 F.2d 465, 472 (9th Cir.1985)). The Ninth Circuit has
indicated that “[t]he measure to be used is not actual expenses and fees but those the
court determines to be reasonable.” Id. (quotations omitted).
First, Hawley Troxell seeks an award of $9,735.76. This amount is inclusive of the
attorney fees incurred in responding to Plaintiffs’ complaint, preparing a dispositive
motion, and filing a motion for sanctions, plus costs. It appears as though four attorneys
worked on the case, each of which billed at hourly rates of $165.00 to $340.00. A total of
42.5 hours was expended.
Second, counsel for the Green Tree Defendants seeks an award of $25,110.00.
Again, this amount is inclusive of costs and fees incurred in defending this action—from
responding to the Complaint, to filing a dispositive motion, to filing the motion for
sanctions. One attorney worked on this matter and in doing so, billed 73.8 hours at the
hourly rate of $325.00. Counsel explains that he expended substantially more hours than
did Hawley Troxell because Mr. Rasmussen filed the present Complaint against the
Green Tree Defendants and their former legal counsel (Hawley Troxell), which created a
potential conflict of interest between them and necessitated that the Green Tree
Defendants hire independent counsel. Counsel for the Green Tree Defendants explains

MEMORANDUM AND ORDER - 3

further that he had to investigate the underlying facts and proceedings in the Teton
County District Court case—facts that Hawley Troxell was already familiar with.
Having carefully reviewed the hours worked, experience of the attorneys, hourly
rates, and the description of work performed, the Court is satisfied that the time and
amount charged is reasonable under the circumstances. Also of note is that both Hawley
Troxell and the Green Tree Defendants endeavored to resolve the case as quickly as
possible—they both filed dispositive motions within approximately two months of the
Complaint being filed.
Mr. Rasmussen did not take the opportunity to argue to the Court that (1) the
requested fees were not necessary to defend this action, or (2) the amount requested is
more than necessary to deter repetition of this conduct. Instead, Mr. Rasmussen’s
response is limited to a one-paragraph apology and a request that sanctions be imposed at
$1,000.00 per defendant. Mr. Rasmussen has not provided any explanation for his
conduct, or why a $3,000.00 sanction would effectively deter repetition of the type of
conduct displayed here. This lack of effort, coupled with the failure to substantively
respond to the Court’s order, does not instill confidence in the Court that a mere
$3,000.00 sanction would be sufficient here.
Instead, the Court finds that a $34,845.76 monetary sanction will be sufficient to
deter Mr. Rasmussen from filing similar claims in the future. Mr. Rasmussen is ordered
to pay this sanction within 90 days of this Order.

MEMORANDUM AND ORDER - 4

ORDER
IT IS ORDERED that Mr. Rasmussen pay a $9,735.76 sanction to the law firm of
Hawley Troxell Ennis and Hawley LLP within 90 days of the date of this Order.
IT IS FURTHER ORDERED that Mr. Rasmussen pay a $25,110.00 sanction to
the law firm of Lukins & Annis, P.S. within 90 days of the date of this Order.

DATED: May 18, 2016

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM AND ORDER - 5