Rygg et al v. Hulbert et al
Filing
336
ORDER denying Reinertsen's 321 Motion for Sanctions by Judge James L. Robart.(RS)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
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CAROLYN RYGG, et al.,
Plaintiffs,
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ORDER ON MOTION FOR
SANCTIONS
v.
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CASE NO. C11-1827JLR
DAVID F. HULBERT, et al.,
Defendants.
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Before the court is Defendants Larry and Kaaren Reinertsens’ (“the Reinertsens”)
16 Motion for Sanctions against Plaintiffs Carolyn Rygg and Craig Dilworth (“the Ryggs”).
17 (Mot. (Dkt. # 321).) The Reinertsens move the court for an award of $102,306.25 in
18 attorney’s fees. This case was tried to a jury, which ultimately found in Defendants’
19 favor. In the American legal system, the general rule is that parties pay their own
20 attorneys’ fees. The Reinertsens argue that this case is an exception to that rule because
21 the claims made against them were not grounded in fact. The court does not agree for the
22 reasons explained below and DENIES the Reinertsens’ motion.
ORDER- 1
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I.
FACTUAL BACKGROUND
This case involves a property dispute between neighbors that has escalated into
3 multiple costly, protracted lawsuits in both state and federal court. In this iteration, the
4 Ryggs brought 50 claims against multiple defendants including the Reinertsens, their
5 attorneys, and numerous members of the Washington State Judiciary. (Am. Compl. (Dkt.
6 # 7).) The Ryggs alleged a vast conspiracy to deprive them of justice and property, to
7 invade their privacy, and to violate state and federal law. (See id.) The court dismissed
8 all but two of the Ryggs’ claims on a motion to dismiss. (7/16/12 Order (Dkt. # 104).)
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The two remaining claims were against the Reinertsens. (Id. at 52-55.) The
10 Ryggs alleged that the Reinertsens eavesdropped on their litigation strategies and invaded
11 their privacy using a bi-directional listening device that was set up inside the Reinertsens’
12 home. (Id.) The Reinertsens moved for summary judgment, claiming that the so-called
13 listening device was actually a telescope. (See 4/24/13 Order (Dkt. # 261).) The court
14 denied summary judgment, ruling that there were “factual disputes going to the core of
15 the Ryggs’ claims,” that there was an “equivocal record,” and that “the parties have
16 differing versions of the facts and . . . both parties support their version of the facts with
17 evidence.” (4/24/13 Order at 2, 9.) With summary judgment denied, the case proceeded
18 to a four-day trial by jury, at the conclusion of which the jury returned a verdict for the
19 Defendants, rejecting all of the Ryggs’ claims. Shortly thereafter, the Reinertsens moved
20 for attorney’s fees, citing Federal Rule of Civil Procedure 11, Washington Civil Rule 11,
21 and RCW 4.84.185.
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ORDER- 2
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II.
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ANALYSIS
This is not the first time Defendants in this case have moved for an award of
3 attorney’s fees as a sanction against the Ryggs. (See 9/21/12 Order (Dkt. # 147).) After
4 the motion to dismiss, three defendants moved for sanctions. (See id.) The court denied
5 sanctions to all Defendants for various reasons, but set forth the standard that applies on a
6 Rule 11 motion. (See id. at 4-6.)
7 A.
Rule 11 Standard
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Federal Rule of Civil Procedure 11 requires (1) that claims not be brought for an
9 improper purpose, (2) that claims be warranted by existing law or by a non-frivolous
10 argument for extending, modifying, reversing, or establishing new law, and (3) that
11 factual contentions have evidentiary support or will likely have such support after a
12 reasonable opportunity for further investigation or discovery. Fed. R. Civ. P. 11(b). A
13 party may move for Rule 11 sanctions subject to several procedural requirements,
14 including a 21-day grace period known as the Rule 11 “safe harbor.” Fed. R. Civ. P.
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15 11(c)(2); Fed. R. Civ. P. 11 advisory committee’s note. See Winterrowd v. Am. Gen.
16 Annuity Ins., 556 F.3d 815, 826 (9th Cir. 2009).
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Rule 11 sanctions involve a two-prong inquiry. A court should inquire (1)
18 whether the complaint and the claims advanced are legally or factually ‘baseless’ from an
19 objective perspective, and (2) whether the attorney has conducted ‘a reasonable and
20 competent inquiry’ before signing, filing, and pursuing those claims. Christian v. Mattel,
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The parties dispute whether the safe harbor provision was satisfied here, but the court
22 finds it unnecessary to decide this issue, finding that sanctions are not warranted anyway.
ORDER- 3
1 Inc., 286 F.3d 1118, 1127 (9th Cir. 2002) (quoting Buster v. Greisen, 104 F.3d 1186,
2 1190 (9th Cir. 1997)). In other words, it is not enough that an attorney conducted an
3 insufficient factual investigation before filing the complaint; to be frivolous, the
4 complaint must also be, from an objective perspective, legally or factually baseless. See
5 In re Keegan Mgmt. Co., 78 F.3d 431, 434-35 (9th Cir. 1996). In assessing whether the
6 filing of a particular paper was frivolous under Rule 11, the court should not consider the
7 ultimate failure on the merits or the subjective bad faith of the signing attorney, but rather
8 whether the position taken was “legally unreasonable” or “without factual foundation.”
9 Zaldivar v. City of L.A., 780 F.2d 823, 831 (9th Cir. 1986), overruled on other grounds by
10 Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 399-405 (1990). Rule 11 is an
11 extraordinary remedy, one to be exercised with extreme caution. Conn v. Borjorquez,
12 967 F.2d 1418, 1421 (9th Cir. 1992) (quoting Operating Eng’rs Pension Trust v. A-C
13 Co., 859 F.2d 1336, 1345 (9th Cir. 1988)).
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Applying Rule 11 To This Case
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This case is different from the ordinary Rule 11 case because the Ryggs’ claims
16 survived not only a motion to dismiss, but also a motion for summary judgment. In an
17 ordinary case, “most claims that would warrant an award of attorney’s fees [because they
18 are] truly frivolous, unreasonable, or without foundation . . . will not survive summary
19 judgment.” Lamboy-Ortiz v. Ortiz-Velez, 630 F.3d 228, 242 (1st Cir. 2010) (citations and
20 internal quotation marks omitted). This is because, to overcome a summary judgment
21 motion, a plaintiff must introduce evidence that creates a genuine dispute of material fact
22 as to the substance of her claims, i.e., a dispute that “could be resolved in favor of either
ORDER- 4
1 party and has the potential of affecting the outcome of the case.” Id. The plaintiff’s
2 ability to make such a showing “surely reflects on the question of whether the claim was,
3 at the time, clearly frivolous, unreasonable, or without foundation.” Id.
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Indeed, the Advisory Committee Note to Rule 11 states that: “[I]f a party has
5 evidence with respect to a contention that would suffice to defeat a motion for summary
6 judgment based thereon, it would have sufficient ‘evidentiary support’ for purposes of
7 Rule 11.” Fed. R. Civ. P. 11 advisory committee’s note. Ninth Circuit case law bears out
8 this principle, holding that denial of a motion to dismiss or a motion for summary
9 judgment suggests that claims were not entirely without merit. Jensen v. Stangel, 762
10 F.2d 815, 818 (9th Cir. 1985) (citing Hughes v. Rowe, 449 U.S. 5, 15-16 (1980)). And as
11 other circuits have held, where denial of summary judgment rested on the merits, not on a
12 procedural point, there is nothing to “dispel the natural inference that denial of summary
13 judgment was based on a determination of the adequacy of support for plaintiffs’ claims
14 at the time of the summary judgment ruling.” Lamboy, 630 F.3d at 242-43.
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The Ryggs’ eavesdropping and invasion of privacy claims survived not only a
16 motion to dismiss, but summary judgment as well. The court specifically found that there
17 were “factual disputes going to the core of the Ryggs’ claims,” that there was an
18 “equivocal record,” and that “the parties have differing versions of the facts and . . . both
19 parties support their version of the facts with evidence.” (4/24/13 Order at 2, 9.)
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Based on this and on the court’s extensive familiarity with this case, the court
21 cannot conclude that the Ryggs’ allegations against the Reinertsens were “legally or
22 factually ‘baseless’ from an objective perspective,” see Christian, 286 F.3d at 1127, or
ORDER- 5
1 that the positions they took were “legally unreasonable” or “without factual foundation,”
2 see Zaldivar, 780 F.2d at 831. The court is mindful that Rule 11 is an extraordinary
3 remedy to be exercised with extreme caution and DENIES the Reinertsens’ motion for
4 sanctions under Federal Rule of Civil Procedure 11. Conn, 967 F.2d at 1421.
5 C.
Other Grounds for Sanctions
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The Reinertsens also move for sanctions under Washington Superior Court Civil
7 Rule (CR) 11 and RCW 4.84.185. Civil Rule 11 resembles its federal counterpart, and
8 forms a basis for sanctions where an attorney advances claims that (1) are not well
9 grounded in fact; (2) are not warranted by existing law; or (3) are not warranted by a
10 good faith argument for altering existing law or establishing new law. CR 11. To avoid
11 being swayed by the benefit of hindsight, a trial court should impose sanctions only when
12 it is patently clear that a claim has absolutely no chance of success. Skimming v. Boxer,
13 82 P.3d 707, 711 (Wash. Ct. App. 2004). Likewise, under RCW 4.84.185, a trial court
14 may award attorney’s fees to the prevailing party if the action was “frivolous and
15 advanced without reasonable cause.” RCW 4.84.185. A lawsuit is “frivolous” under
16 RCW 4.84.185 if, when considering the action in its entirety, it cannot be supported by
17 any rational argument based in fact or law. Dave Johnson Ins., Inc. v. Wright, 275 P.3d
18 339, 355 (Wash. Ct. App. 2012).
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In light of the above discussion, neither of these standards is met here. The court
20 concludes that CR 11 and RCW 4.84.185 do not apply here for the same reasons Federal
21 Rule of Civil Procedure 11 does not apply: the Ryggs’ claims against the Reinertsens
22 survived a motion to dismiss and a summary judgment motion, and the court cannot
ORDER- 6
1 conclude that they were wholly frivolous, advanced without reasonable cause, or
2 unsupported by rational argument. See RCW 4.84.185; see also Dave Johnson Ins., 275
3 P.3d at 355. At no point in the litigation was it “patently clear” that the Ryggs’ claims
4 had “absolutely no chance of success.” See Skimming, 82 P.3d at 711. For example, at
5 the summary judgment stage, the court concluded there was evidence to support the
6 Ryggs’ claims and that it was appropriate for the case to proceed to trial. (4/24/13 Order
7 at 2, 9.) Nothing changed before trial to alter this state of affairs. Accordingly, the court
8 DENIES the Reinertsens’ motion for sanctions under CR 11 and RCW 4.84.185.
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The court can discern only one other possible basis for sanctions. Under 28
10 U.S.C. § 1927, an attorney may be required to personally satisfy excess costs, expenses,
11 and fees if that attorney “multiplies the proceedings in any case unreasonably and
12 vexatiously.” 28 U.S.C. § 1927. In many ways, this case is a prime candidate for
13 sanctions under this section. The Ryggs have filed 35 motions in this case since the
14 court’s ruling on the original motion to dismiss. (See Dkt. ## 109-10, 141, 146, 165, 168,
15 170, 184, 197, 201-02, 209-12, 215-16, 218, 226-27, 229, 249, 254, 264-67, 292, 294,
16 298, 309-10, 320, 330-31.) Many of these motions have been meritless and unnecessary.
17 In addition, Defendants were forced to file three additional motions to quash improperly18 requested discovery. (See Dkt. ## 182, 189, 195.) By any standard, the court could
19 justify sanctioning the Ryggs’ counsel based on this multiplication of proceedings.
20 However, sanctions under 28 U.S.C. § 1927 are not appropriate in this case for a simple
21 reason: the Reinertsens did not need to respond to the vast majority of the Ryggs’ filings,
22 so those filings cost the Reinertsens nothing. Of the 35 motions brought by the Ryggs,
ORDER- 7
1 the Reinertsens filed responses to seven: a Motion to Stay (Dkt. # 184), a Motion for
2 Summary Judgment (Dkt. # 229), a Motion to Reveal Ghost Writer (Dkt. # 249), a
3 Motion to Supplement the Record (Dkt. # 254), Motions in Limine (Dkt. # 264), a
4 Motion to Amend (Dkt. # 265), and a Motion for Judicial Estoppel (Dkt. # 320). This is a
5 reasonable number of motions for a case that went all the way to trial. Accordingly, the
6 court cannot justify sanctioning the Ryggs’ attorney under 28 U.S.C. § 1927.
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III.
CONCLUSION
For the foregoing reasons, the court DENIES the Reinertsens’ motion for
9 sanctions (Dkt. # 321).2
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Dated this 18th day of July, 2013.
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JAMES L. ROBART
United States District Judge
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The Ryggs, in their response to this motion, cross-move for sanctions against the
Reinertsens under Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, and the court’s inherent
22 power. This cross-motion, to the extent it is procedurally appropriate, is meritless and is denied.
ORDER- 8
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