Disability Support Alliance et al v. Heartwood Enterprises, LLC

Filing 80

ORDER: IT IS HEREBY ORDERED that Defendant's Renewed Motion for Attorney's Fees and Nontaxable Costs 72 is GRANTED in part and DENIED in part. (Written Opinion) Signed by The Hon. Paul A. Magnuson on 7/25/2018. (LLM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Disability Support Alliance, and Eric
Wong,

Civ. No. 15-529 (PAM/FLN)

Plaintiffs,
v.

ORDER

Heartwood Enterprises, LLC,
Defendant.
This matter is before the Court on Defendant Heartwood Enterprises,
LLC’s renewed Motion for Attorney’s Fees and Nontaxable Costs. In addition,
the Eighth Circuit Court of Appeals directed this Court to rule on a similar Motion
Heartwood raised in that court. Defendant seeks attorney’s fees from Plaintiffs
generally under federal and state civil-rights laws, and from Plaintiffs’ former
counsel individually under 28 U.S.C. § 1927.
Defendant’s Motion is a renewal of a Motion that the Court denied without
prejudice pending appeal. (Docket No. 67.) While the initial Motion was fully
briefed, Plaintiffs did not respond to the renewed Motion. However, an attorney
for Plaintiffs’ former counsel Paul Hansmeier, who has been suspended from the
practice of law, filed a response to the Motion as it relates to the fees sought
directly from Mr. Hansmeier (Docket No. 76), as well as a notice of supplemental
authority in support of Mr. Hansmeier’s position. (Docket No. 77.) The response
specifically disclaims any intent to represent Plaintiffs’ interests in this matter

(Docket No. 76 at 1 n.1), and thus the Motion is unopposed as to Plaintiffs.
Finally, despite the Court’s Order that any reply be filed by June 11, 2018 (Docket
No. 74), Heartwood did not file a reply until June 15, 2018. 1
DISCUSSION
Heartwood moves for an award of attorney’s fees and costs under the
Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12205 and 28 C.F.R. §
36.505, the Minnesota Human Rights Act (“MHRA”), Minn. Stat. § 363A.33,
subd. 7, and Fed. R. Civ. P. 54(d). In addition, Heartwood seeks its fees and costs
from Plaintiffs’ former attorney under 28 U.S.C. § 1927. The award of fees and
costs under the ADA, the MHRA, the Federal Rules, and § 1927 is discretionary,
not mandatory.
A.

Prevailing Party Award
An award of attorney’s fees against a plaintiff bringing a civil-rights claim,

including claims under the ADA and MHRA, is appropriate if the claim “was
frivolous, unreasonable, or groundless” or if “the plaintiff continued to litigate
after it clearly became so.” Christiansburg Garment Co. v. E.E.O.C., 434 U.S.
412, 422 (1978). Heartwood argues that Plaintiffs knew as early as the Rule 26(f)
conference in March 2015 that the removal of the architectural barriers they
challenged was not “readily achievable” under the ADA, and thus that their claims
were groundless.

1

Given Defendant’s untimely filing, the Court will not consider Defendant’s
contention that Plaintiffs’ submission of supplemental authority was also untimely.
2

The “readily achievable” issue was the subject of Heartwood’s Motion for
Summary Judgment, as well as its Motion to Strike, the full background of which
is found in the Court’s Order granting the Motions. (Docket No. 47.) Although
the Court cannot condone Plaintiffs’ lack of diligence in discovery, and indeed has
sanctioned Plaintiffs for their untimely, insufficient disclosures, the Court is
reluctant to impose additional sanctions for what is essentially a factual dispute.
Heartwood’s representation to Plaintiffs in March 2015 that it did not believe that
barrier removal was readily achievable does not mean that Plaintiffs had no basis
for continuing the lawsuit. Rather, it was Plaintiffs’ duty to determine whether
Heartwood’s representation was correct. And while Plaintiffs’ counsel did not
undertake the investigative process that is to be expected of litigants challenging
architectural barriers, the Court will not in this situation hold his clients
accountable for that failure. In this case, the award of attorney’s fees and costs
under the ADA, MHRA, and Rule 54(d) is not appropriate.
B.

§ 1927
Heartwood asks in the alternative that the Court hold Mr. Hansmeier

personally liable for the fees and costs it incurred in this matter. An attorney “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.” 28 U.S.C. § 1927.
The question under § 1927 is whether “the attorney’s conduct, viewed objectively,
manifests either intentional or reckless disregard of her duties to the Court.”
3

Quasius v. Schwan Food Co., No. 08cv575, 2010 WL 3218591, at * 2 (D. Minn.
Aug. 13, 2010) (Ericksen, J.).
As noted in the Order granting Heartwood’s Motion for Summary
Judgment, Mr. Hansmeier utterly failed in his duties to the Court with regard to
the untimely and insufficient declaration of his brother, submitted in a last-ditch
effort to avoid summary judgment on the readily-achievable issue. (Docket No.
47 at 6.) Mr. Hansmeier’s decision to ignore his client’s discovery burdens and
his attempt to circumvent the Federal Rules certainly manifests “intentional or
reckless disregard” of his duties to the Court.

The Court finds that Mr.

Hansmeier’s conduct is precisely the type of unreasonable and vexatious litigation
tactics that § 1927 is meant to address.
Heartwood asks the Court to determine that Mr. Hansmeier is responsible
for the full amount of its attorney’s fees and costs, which in its initial
memorandum amounted to nearly $80,000, and have no doubt increased during
Plaintiffs’ appeal. Imposing the entire amount of Heartwood’s fees and costs,
however, is not appropriate in this instance. Again, although the Court does not
condone Mr. Hansmeier’s conduct, neither is the conduct so egregious to warrant
imposition of the full amount of Heartwood’s fees. Rather, the Court finds that
Mr. Hansmeier should personally pay $5,000 toward Heartwood’s attorney’s fees
and nontaxable costs under § 1927, as a sanction for the dereliction of his duties to
the Court.

4

CONCLUSION
Accordingly, IT IS HEREBY ORDERED that Defendant’s Renewed
Motion for Attorney’s Fees and Nontaxable Costs (Docket No. 72) is GRANTED
in part and DENIED in part, and Plaintiffs’ former attorney Paul Hansmeier is
personally liable for payment of $5,000 toward the attorney’s fees Defendant
incurred in this matter.

s/ Paul A. Magnuson

Dated: July 25, 2018

Paul A. Magnuson
United States District Court Judge

5