Beland v. Danel

981 N.W.2d 833

Matthew BELAND, Plaintiff and AppellantandSarah M. Kyte, Interested Party and Appellant

v.Jeremiah DANEL, Jeremiah Danel, D.D.S., P.C., Defendants and Appellees

No. 20220057

Supreme Court of North Dakota.

Filed November 10, 2022

Tyler J. Morrow, Grand Forks, ND, for plaintiff and appellant Matthew Beland, and interested party and appellant Sarah M. Kyte.

Jennifer E. Albaugh and Matthew D. Kirschenmann, Fargo, ND, for defendants and appellees; submitted on brief.

Jensen, Chief Justice.

[¶1] Matthew Beland and Sarah Kyte appeal from an amended judgment entered after the denial of Beland's motion for a temporary restraining order and motion for sanctions against Jeremiah Danel and Jeremiah Danel, D.D.S., P.C., and the granting of Danel's motion for sanctions against Beland and Kyte. We affirm the amended judgment.

I

[¶2] Beland and his former spouse have shared joint legal custody over their two minor children since divorcing in 2015. Beland, with the assistance of his counsel, Kyte, filed an ex parte motion for a temporary restraining order along with a complaint seeking injunctive relief against Danel to stop dental services from being provided to Beland's children. The complaint also sought full disclosure of the children's dental records for services already received.

[¶3] Beland amended his complaint after the Minnesota court with jurisdiction over the family law proceedings granted Beland's former spouse temporary decision-making authority over the children's dental care, and subsequent to being notified by Danel that all dental services for Beland's children had been discontinued. The amended complaint sought assurances that Danel would not resume services for the children without Beland's express permission. Both parties filed motions for sanctions.

[¶4] The district court denied Beland's request for a temporary restraining order and injunctive relief, and granted Danel's motion for sanctions, finding that Beland and Kyte's commencement of litigation was done for the improper purpose of exercising control over Beland's former spouse's decisions, and usurping Minnesota family court proceedings in violation of N.D.R.Civ.P. 11(b)(1). The court also found Beland's claims lacked evidentiary support in violation of N.D.R.Civ.P. 11(b)(3). The court noted that N.D.R.Civ.P. 11(b)(2) was not violated because Beland and Kyte's request for dental records had merit.

II

[¶5] A district court's determination to award sanctions is reviewed for abuse of discretion. Puklich v. Puklich , 2022 ND 158, ¶ 16, 978 N.W.2d 668. "A court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, it misinterprets or misapplies the law, or when its decision is not the product of a rational mental process leading to a reasoned determination." Id. (quoting Toman Eng'g Co. v. Koch Constr., Inc. , 2022 ND 104, ¶ 17, 974 N.W.2d 680 ). "If there are any factual determinations relevant to the sanction issue, we review the trial court's findings under a clearly erroneous standard." Dietz v. Kautzman , 2004 ND 119, ¶ 15, 681 N.W.2d 437. "A finding of fact is clearly erroneous if there is no evidence to support it, or if, based on the entire record, [this Court is] left with a definite and firm conviction a mistake has been made." Broten v. Broten , 2017 ND 47, ¶ 10, 890 N.W.2d 847.

[¶6] Generally, under North Dakota law, each party is responsible for their own attorney's fees. Strand v. Cass Cty. , 2008 ND 149, ¶ 9, 753 N.W.2d 872. However, N.D.R.Civ.P. 11(b) allows a district court to sanction parties and award attorney's fees for specified violations of the rule. The rule requires pleadings (1) not be presented for an improper purpose, (2) be warranted by existing law or a nonfrivolous argument to change it, and (3) contain factual contentions, or (4) denials that have or will have evidentiary support after reasonable investigation. N.D.R.Civ.P. 11(b)(1)-(4).

When sanctioning a party, the district court should consider [1] "the culpability, or state of mind, of the party against whom sanctions are being imposed; [2] a finding of prejudice against the moving party, and the degree of this prejudice, including the impact it has on presenting or defending the case; and, [3] the availability of less severe alternative sanctions."

Heinle v. Heinle , 2010 ND 5, ¶ 30, 777 N.W.2d 590 (quoting Dronen v. Dronen , 2009 ND 70, ¶ 52, 764 N.W.2d 675 ). See also

Ringsaker v. ND Workers Comp. Bureau , 2003 ND 122, ¶ 13, 666 N.W.2d 448. In denying sanctions, a district court may consider whether the motioning party moved early in the proceedings to strike or dismiss their opponent's claim. Strand , at ¶ 20.

III

[¶7] Beland and Kyte assert the district court abused its discretion in imposing sanctions against them. They argue the court erroneously found Beland's action was not initiated for a just and proper purpose, erred in finding Beland's factual allegations did not have evidentiary support, erred in imposing sanctions sua sponte, erred by failing to consider all of the factors outlined in Heinle , and the sanctions were not reasonably proportionate to the conduct. Kyte also argues the court failed to provide sufficient findings to impose the attorney's fees award against her as Beland's attorney.

A

[¶8] Beland and Kyte argue the district court erred in finding that Beland's continued pursuit of injunctive relief, after Danel had provided notice he would no longer provide dental services to the children, was neither just nor proper. They argue because Danel could have re-commenced services for the children at any point, prospective restraint was just and proper. They further argue the claim seeking the temporary restraining order was confirmed as being just and proper when the court denied Danel's motion to dismiss and subsequently held an evidentiary hearing. Finally, they contend the court acknowledged the claim for injunctive relief was just and proper when it refused to impose sanctions under N.D.R.Civ.P. 11(b)(2) after finding request for records had merit.

[¶9] While Beland and Kyte are correct that the district court denied Danel's motion to dismiss, held an evidentiary hearing, and initially noted that the request for records had some merit, they ignore other findings made by the court. The court expressly noted that the primary reason for sanctions was because "Beland and his attorney both had access to ... evidence prior to [the hearing]" that was not previously presented to the court. Once the court evaluated the additional evidence presented at the hearing, it found Beland and Kyte should have known they would not succeed on the asserted claims and further found the litigation was initiated "for the improper purpose of attempting to obtain through Danel DDS information, access, and control over his children's orthodontic care that he could not obtain through the Minnesota divorce court[.]" The court found that Beland knew from the outset of the action that he would not be able to identify any records he had not received. The court made specific findings regarding Beland's extensive, and disruptive, prelitigation demands for records from Danel, and ultimately found Beland had received all of the treatment records prior to initiating the action against Danel. The court did not misapply the law, there is evidence in the record to support the court's finding, and after a review of the record, we are not left with a definite and firm conviction a mistake has been made. The court's finding that Beland's action was not brought for a just and proper purpose is not clearly erroneous.

B

[¶10] Beland and Kyte argue the district court erred in finding Beland's allegations did not have evidentiary support. Specifically, the court found "there is such a complete absence of actual facts regarding Beland's ongoing litigation and continued pursuit of orthodontic records when they had been provided previously, that a reasonable person could not have thought that a court would render judgment in Beland's favor." This finding was made after the court provided extensive findings regarding Beland's numerous demands for the production of records from Danel, extensive findings on Danel's compliance with those demands, and Beland's inability to identify documents he demanded but did not receive. It also followed the court's finding that Beland and Kyte were aware Danel had stopped providing dental services to the children. The court did not misapply the law, there is evidence in the record to support the court's finding, and after a review of the record we are not left with a definite and firm conviction a mistake has been made. The court's finding that Beland's allegations did not have evidentiary support is not clearly erroneous.

C

[¶11] Beland and Kyte argue the district court erred by imposing sanctions sua sponte, without notice or an opportunity to respond, asserting the court's sanctions were premised on Beland's failure to prevail, premised on documents submitted during the evidentiary hearing, and initiated on the court's own motion. Beland and Kyte's arguments are contrary to the record.

[¶12] The sanctions were imposed under N.D.R.Civ.P. 11. Rule 11(c)(2) which reads as follows:

(2) Motion for Sanctions. A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion, brief, and other supporting papers must be served under Rule 5, but must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. The respondent must have 10 days after a motion for sanctions is filed to serve and file an answer brief and other supporting papers. If warranted, the court may award to the prevailing party the reasonable expenses, including attorney's fees, incurred for the motion.

Danel served a Rule...