June 26, 2019

Archives for September 11, 2015

Tenth Circuit: Attorney Fee Award Appropriate as Sanction for Bad Faith Conduct

The Tenth Circuit Court of Appeals issued its opinion in Farmer v. Banco Popular of North America on Tuesday, June 30, 2015.

George Farmer, a licensed Colorado attorney, was personal representative of his father’s estate. Banco Popular demanded that Farmer pay off the entire amount of a $150,000 HELOC his late father obtained on his home. Eventually, Banco and Farmer reached a settlement agreement, where Banco would pay Farmer $30,000 and forgive some of the loan principal and Farmer would pay Banco  $137,380.94 in satisfaction of the HELOC. However, Farmer never signed the settlement agreement, and continued to vexatiously litigate terms of the agreement. Eventually, the dispute reached the Tenth Circuit, and the Circuit ordered the enforcement of the district court’s order for the parties to pay according to the terms of the settlement agreement. The Tenth Circuit admonished Farmer and directed the district court that it could exercise its authority in imposing punitive sanctions for further delays caused by Farmer.

When Banco returned to the district court to enforce the order, Farmer paid the $137,380.94, and Banco renewed its motion for attorney fees and costs under 28 U.S.C. § 1927. The district court awarded $41,461.76 in attorney fees and $11,617.77 in costs to Banco, excluding fees and costs related to Farmer’s first appeal, and Farmer appealed the district court’s order.

The Tenth Circuit first dismissed Farmer’s frivolous argument that the district court lacked subject matter jurisdiction over the matter following remand. Farmer’s first appeal was interlocutory, and the district court’s attorney fee judgment was a punitive sanction issued prior to final judgment. The district court thus retained jurisdiction over the matter on remand.

Farmer next argued that Banco waived its right to attorney fees in the settlement agreement. The Tenth Circuit, noting it doubted the parties anticipated the “tortuous” litigation that would follow, found the attorney fee and cost award was a punitive sanction and the court’s inherent power to fashion punitive sanctions for bad faith conduct was inherent and could not be waived by agreement of the parties. Reviewing the award itself for abuse of discretion, the Tenth Circuit found none. The tone and substance of Farmer’s motions suggested a deep disrespect for the court and its authority. Farmer’s conduct vexatiously multiplied the proceedings, implying bad faith. The Tenth Circuit found ample record justification for the punitive sanctions. Farmer requested the Tenth Circuit remand the matter to the district court for a detailed list of bad faith conduct pursuant to § 1927, but the Tenth Circuit declined to do so, finding that the district court’s sanctions were issued pursuant to its inherent authority and it need not list each instance of bad faith conduct.

The Tenth Circuit made slight reductions to the fee and cost award due to some of the fees and costs being performed for the appeal. The Circuit issued a final mandate that Farmer pay $40,246.76 in attorney fees and $10,577.77 in costs to Banco, and noted Banco could use any and all lawful means to ensure collection. The Tenth Circuit warned that “further prolongation of th[e] appeal” would result in the Tenth Circuit imposing its own sanctions on Farmer.

Tenth Circuit: Unpublished Opinions, 9/10/2015

On Thursday, September 10, 2015, the Tenth Circuit Court of Appeals issued one published opinion and one unpublished opinion.

United States v. Watson

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.