Properties v. Strand

Golden Meadows Properties, LC, aka Golden Meadows Properties, LLC, Plaintiff and Appellee,

v.Michael W. Strand and Cari Allen, Defendants and Appellants.

Case No. 20090867-CA

2011 UT App 76

UTAH COURT OF APPEALS

FILED: March 17, 2011

MEMORANDUM DECISION

Second District, Farmington Department, 070700488

The Honorable Thomas L. Kay

Attorneys: Michael W. Strand and Cari Allen, Centerville, Appellants Pro Se

James C. Swindler, Salt Lake City, for Appellee

Before Judges Davis, McHugh, and Voros.

McHUGH, Associate Presiding Judge:

¶1 Michael W. Strand and Cari Allen appeal the trial court's order imposing rule 11 sanctions against them and the trial court's order overruling their objections to the form and substance of the rule 11 order.¹ We affirm.

BACKGROUND

¶2 On August 30, 2007, Golden Meadows Properties, LC (Golden Meadows) sued Strand and Allen for unlawful detainer of a residence in Bountiful, Utah. The trial court entered summary judgment in favor of Golden Meadows on July 15, 2008, which we affirmed on appeal. See Golden Meadows Props., LC v. Strand, 2010 UT App 257, ¶ 31, 241 P.3d 375 (mem.). After the entry of summary judgment, Strand and Allen moved to disqualify the trial judge under rule 63 of the Utah Rules of Civil Procedure. Strand and Allen argued that Judge Glen R. Dawson should have recused himself because, almost twenty years before serving as the trial judge in this matter, he was an Assistant U.S. Attorney who represented the Internal Revenue Service in an action against one of Strand's businesses (the IRS litigation). Strand and Allen simultaneously moved for relief from judgment under rule 60(b) of the Utah Rules of Civil Procedure based on the allegations of bias in the motion to disqualify. As required by rule 63(b)(2), Judge Dawson certified the motion to disqualify to Associate Presiding Judge Thomas L. Kay, who denied it as both untimely and without merit. Acting in reliance on Judge Kay's ruling, Judge Dawson then denied the rule 60(b) motion on the merits. This court affirmed both the 60(b) ruling and the denial of the rule 63 motion in Golden Meadows Properties, LC v. Strand, 2010 UT App 258, ¶ 9, 241 P.3d 371 (mem.).

¶3 One week after Strand and Allen filed their postjudgment motions, Golden Meadows served a motion for sanctions against each of them and their counsel pursuant to rule 11 of the Utah Rules of Civil Procedure. In support of its request for sanctions, Golden Meadows identified nineteen factual contentions made without evidentiary support in the following four documents filed by Strand and Allen: (1) the rule 60(b) motion; (2) the memorandum in support of the rule 60(b) motion; (3) the motion to disqualify; and (4) Strand's affidavit in support of the rule 60(b) motion and motion to disqualify. Golden Meadows sought sanctions in the amount of $6100, whichwas based upon an affidavit from Golden Meadows' counsel setting forth the attorney fees incurred as a result of the offending papers filed with the court. After the twenty-one days allowed by rule 11 to correct or withdraw the challenged statements elapsed on November 18, 2008, see Utah R. Civ. P. 11, Golden Meadows filed the rule 11 motion. Subsequently, Strand and Allen's counsel withdrew and paid Golden Meadows $2500 to settle the rule 11 motion as to himself only. On September 1, 2009, Judge Kay conducted a hearing on the rule 11 motion and ordered Strand and Allen to pay the $3600 balance of attorney fees as a sanction for violating the rule.² The present appeal challenges both the form and substance of the rule 11 order.

ISSUES AND STANDARDS OF REVIEW

¶4 To begin, Strand and Allen appeal from the denial of their objection to the form of Judge Kay's rule 11 order, arguing that the order fails to set forth explicit factual findings as required by rule 11. "[T]he interpretation of a rule of procedure is a question of law that we review for correctness." Brown v. Glover, 2000 UT 89, ¶ 15, 16 P.3d 540.

¶5 Next, Strand and Allen challenge Judge Kay's findings of fact and his conclusion that a rule 11 violation occurred. Finally, they appeal the amount of sanctions imposed. In Barnard v. Sutliff, 846 P.2d 1229 (Utah 1992), the Utah Supreme Court announced a three-tier approach to review the imposition of rule 11 sanctions: "(1) findings of fact are reviewed under the clearly erroneous standard; (2) legal conclusions are reviewed under the correction of error standard; and (3) the type and amount of sanction to be imposed is reviewed under an abuse of discretion standard." Morse v. Packer, 1999 UT 5, ¶ 10, 973 P.2d 422 (citing Sutliff, 846 P.2d at 1234-35). "A factual finding is deemed clearly erroneous only if it is against the clear weight of the evidence" when viewed in light of the entire record. Pennington v. Allstate Ins. Co, 973 P.2d 932, 937 (Utah 1998) (internal quotation marks omitted). This approach recognizes that "[d]ecisions regarding rule 11 sanctions are best left in the hands of the trial court." Archuleta v. Galetka, 2008 UT 76, 1 7, 197 P.3d 650.

ANALYSIS

I. Judge Kay's Rule 11 Order Is Supported by Adequate Findings of Fact.

¶6 "The law requires that a trial court make a series of specific factual findings as a predicate for concluding that [rule 11] has been violated...." Griffith v. Griffith, 1999 UT 78, ¶ 10, 985 P.2d 255. Indeed, rule 11 expressly requires that "[w]hen imposing sanctions, the court shall describe the conduct determined to constitute a violation of this rule and explain the basis for the sanction imposed." Utah R. Civ. P. 11(c)(3). Thus, the trial court's "findings on the record, or other appropriate explanation of the trial court's rationale," should be sufficient to "enable the appellate courts to apply the Sutliff standard." Morse, 1999 UT 5, ¶13 (emphasis added); see also Sutliff, 846 P.2d at 1234-35. Strand and Allen argue that Judge Kay did not make such explicit factual findings in the rule 11 order and therefore erred in rejecting their challenge to the form of the order. We disagree.

¶7 Rule 11(b) of the Utah Rules of Civil Procedure states that by filing papers with the court, an attorney or unrepresented party certifies to the best of his or her knowledge that "the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery." Utah R. Civ. P. 11(b)(3). Golden Meadows moved for sanctions under rule 11, claiming that Strand, Allen, and their counsel had made nineteen factual contentions in various papers filed with the court that were false and unsupported by any evidence. In its motion, Golden Meadows identified each of the inaccurate contentions and then explained the basis for its belief that sanctions under rule 11 were appropriate. Judge Kay expressly incorporated by reference the papers filed by Golden Meadows in connection with its rule 11 motion, as well as Golden Meadows' arguments and Judge Kay's own explanation of his reasoning during the rule 11 hearing. When considered together, these sources include adequate factual findings and an explanation of the basis for the sanction imposed. See id. R. 11(c)(3); see also id. R. 52(a) ("It will be sufficient if the findings of fact and conclusions of law are stated orally and recorded in open court following the close of the evidence or appear in an opinion or memorandum decision filed by the court."). While the job of an appellate court is made easier by the entry of findings and conclusions in a single written document, the absence of such is not fatal to the sanctions order. See Robertson's Marine, Inc. v. 14 Solutions, Inc., 2010 UT App 9, 1 12 n.3, 223 P.3d 1141 (explaining that appellate review is "'not limited to written findings, and [the appellate court] mayproperly examine findings expressed solely from the bench or contained in other court documents, such as memoranda'"(quoting Merriam v. Merriam, 799 P.2d 1172, 1177 (Utah Ct. App. 1990))); see also Keith Jorgensen's, Inc. v. Ogden City Mall Co., 2001 UT App 128, ¶ 31 n.7, 26 P.3d 872 (concluding that trial court's findings of fact in support of an award of attorney fees were sufficient where they incorporated by reference the prevailing party's affidavit and memorandum).

¶8 Golden Meadows' motion compares Strand and Allen's contentions about rulings made by Judge Dawson, which were offered to support their claim of bias, with the rulings the record reflects Judge Dawson actually made. For example, Golden Meadows provides factual information about the trial court proceedings that highlights the inaccuracies in the statements in Strand and Allen's offending papers that Judge Dawson: (1) forced Allen to represent Strand; (2) denied all of Strand's discovery requests and refused to amend the scheduling order; (3) struck all of the affidavits filed in opposition to Golden Meadows' motion for summary judgment; (4) refused to allow Strand to file affidavits; (5) demonstrated repeated hostility toward Strand; and (6) evicted Strand from his home without providing him an opportunity to be heard, conduct discovery, file motions, or otherwise represent himself.

¶9 In addition, Golden Meadows addressed Strand and Allen's allegations concerning Judge Dawson's service as an Assistant U.S. Attorney in the IRS litigation almost two decades before this matter was heard. With respect to the multiple statements in papers filed with the trial court alleging that Judge Dawson was biased as a result of the IRS litigation, Golden Meadows points to numerous documented instances in which Judge Dawson granted Strand and Allen leniency with respect to the procedural rules related to the present litigation, including providing temporary relief from the requirement to pay treble damages and allowing them additional time and discovery to prepare for trial. Golden Meadows also identifies information contained in the exhibits attached to...