Gulf Underwriters Insurance Company v. Burris et al

Filing 93

ORDER denying defendants' 79 Motion for Attorney Fees. Pursuant to the Eighth Circuit's direction 72 , this action is DISMISSED WITH PREJUDICE. (Written Opinion). Signed by Judge John R. Tunheim on September 4, 2012. (DML)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
GULF UNDERWRITERS INSURANCE
COMPANY,
Plaintiff,
v.

Civil No. 08-1292 (JRT/JJK)

ORDER

LOWELL P. BURRIS, JOYCE P. BURRIS,
VERSA PRODUCTS, INC., AND
G AND L PRODUCTS, INC.,
Defendants.

Thomas A. Gilligan, Jr. and Nicholas J. O’Connell, MURNANE
BRANDT, PA, 30 East Seventh Street, Suite 3200, St. Paul, MN 55101,
for plaintiff.
Thomas F. Handorff, HANDORFF LAW OFFICES, P.C., 1660 South
Highway 100, Suite 500, St. Louis Park, MN 55416, for defendants Lowell
P. Burris and Joyce P. Burris.
Reversing this Court’s grant of summary judgment for Plaintiff Gulf Underwriters
Insurance Company (“Gulf”), the Eighth Circuit remanded with instructions to dismiss
this action with prejudice and invited the Court to entertain a motion for costs and
attorneys’ fees. (Op. at 10, Mar. 27, 2012, Docket No. 72.) Defendants Lowell P. Burris
and Joyce P. Burris moved under 28 U.S.C. § 1927 to recover the excess costs, expenses,
and attorneys’ fees stemming from Gulf’s allegedly unreasonable and vexatious conduct
in litigating this action. (Mot., June 1, 2012, Docket No. 79.) The Court will deny the
Burrises’ motion, and, pursuant to the Eighth Circuit’s direction, dismiss this action with
prejudice.

25

Sanctions under section 1927 are appropriate “when attorney conduct, viewed
objectively, manifests either intentional or reckless disregard of the attorney’s duties to
the court.” E.g., Lee v. First Lenders Ins. Servs., Inc., 236 F.3d 443, 445 (8th Cir. 2001)
(quotation marks and citation omitted).1 The Court finds no evidence in the record that
Gulf “unreasonably and vexatiously” multiplied these proceedings or that Gulf’s conduct
evinced an intentional or reckless disregard for its duties to the Court. Moreover, as the
Eighth Circuit recognized, under applicable Wisconsin law a declaratory judgment action
is a perfectly acceptable procedural avenue through which to seek resolution of a
coverage dispute where the insured was not joined in the underlying action. Fire Ins.
Exch. v. Basten, 549 N.W.2d 690, 696 (Wis. 1996) (“[W]e conclude that where the
insurance coverage involves a party not named in the underlying lawsuit, coverage may
be determined by utilization of either a bifurcated trial or a separate declaratory judgment
action.”). The Court finds that Gulf’s conduct in pursuing a declaratory judgment does
not merit sanctions under Section 1927.2

ORDER
Based upon the foregoing, the submissions of the parties, the arguments of counsel
and the entire file and proceedings herein, IT IS HEREBY ORDERED that Defendants’
1

“Any attorney or other person . . . who so multiplies the proceedings in any case
unreasonably and vexatiously may be required . . . to satisfy personally the excess costs,
expenses, and attorneys’ fees reasonably incurred because of such conduct.” 28 U.S.C. § 1927.
2

As the Court notes in its Order on Gulf’s motion to intervene in the liability case,
however, the Court reserves the possibility of exercising its inherent power at a later stage to
award fees in connection with the unexpected additional litigation of coverage issues in the wake
of the Eighth Circuit’s opinion.
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Joyce P. Burris and Lowell P. Burris motion for attorneys’ fees [Docket No. 79] is
DENIED. Pursuant to the Eighth Circuit’s direction [Docket No. 72], this action is
DISMISSED WITH PREJUDICE.

LET JUDGMENT BE ENTERED ACCORDINGLY
DATED: September 4, 2012
at Minneapolis, Minnesota.

____s/
____
JOHN R. TUNHEIM
United States District Judge

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