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    Home Indemnity Company v. Arapahoe Drilling Company, Inc., 5 F.3d 546, 10th Cir. (1993)

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    This document summarizes a court case involving sanctions imposed on an insurance company, Home Indemnity. The district court imposed sanctions under Rule 11 and 28 U.S.C. 1927 for filing a motion for summary judgment, finding the motion had no merit. Home Indemnity had previously litigated issues around unpaid insurance premiums before the New Mexico Department of Insurance and courts, which ruled against it. The appeals court affirmed the sanctions, finding the district court sufficiently explained its reasons and did not abuse its discretion in imposing sanctions given Home Indemnity's lack of factual and legal basis to re-litigate issues already decided.

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    Home Indemnity Company v. Arapahoe Drilling Company, Inc., 5 F.3d 546, 10th Cir. (1993)

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    This document summarizes a court case involving sanctions imposed on an insurance company, Home Indemnity. The district court imposed sanctions under Rule 11 and 28 U.S.C. 1927 for filing a motion for summary judgment, finding the motion had no merit. Home Indemnity had previously litigated issues around unpaid insurance premiums before the New Mexico Department of Insurance and courts, which ruled against it. The appeals court affirmed the sanctions, finding the district court sufficiently explained its reasons and did not abuse its discretion in imposing sanctions given Home Indemnity's lack of factual and legal basis to re-litigate issues already decided.

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    Filed: 1993-08-27 Precedential Status: Precedential Citations: 5 F.3d 546 Docket: 92-2123

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    This document summarizes a court case involving sanctions imposed on an insurance company, Home Indemnity. The district court imposed sanctions under Rule 11 and 28 U.S.C. 1927 for filing a motion for summary judgment, finding the motion had no merit. Home Indemnity had previously litigated issues around unpaid insurance premiums before the New Mexico Department of Insurance and courts, which ruled against it. The appeals court affirmed the sanctions, finding the district court sufficiently explained its reasons and did not abuse its discretion in imposing sanctions given Home Indemnity's lack of factual and legal basis to re-litigate issues already decided.

    Copyright:

    Public Domain
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    Download as pdf
    24 views5 pages

    Home Indemnity Company v. Arapahoe Drilling Company, Inc., 5 F.3d 546, 10th Cir. (1993)

    Uploaded by

    Scribd Government Docs
    This document summarizes a court case involving sanctions imposed on an insurance company, Home Indemnity. The district court imposed sanctions under Rule 11 and 28 U.S.C. 1927 for filing a motion for summary judgment, finding the motion had no merit. Home Indemnity had previously litigated issues around unpaid insurance premiums before the New Mexico Department of Insurance and courts, which ruled against it. The appeals court affirmed the sanctions, finding the district court sufficiently explained its reasons and did not abuse its discretion in imposing sanctions given Home Indemnity's lack of factual and legal basis to re-litigate issues already decided.

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    of 5

    5 F.

    3d 546
    NOTICE: Although citation of unpublished opinions remains unfavored,
    unpublished opinions may now be cited if the opinion has persuasive value on a
    material issue, and a copy is attached to the citing document or, if cited in oral
    argument, copies are furnished to the Court and all parties. See General Order of
    November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or
    further order.

    HOME INDEMNITY COMPANY, Plaintiff-Appellant,


    v.
    ARAPAHOE DRILLING COMPANY, INC., DefendantAppellee.
    No. 92-2123.

    United States Court of Appeals, Tenth Circuit.


    Aug. 27, 1993.
    1

    Before BALDOCK and KELLY, Circuit Judges, and CAUTHRON,** District


    Judge.

    ORDER AND JUDGMENT1


    2

    After examining the briefs and appellate record, this panel has determined
    unanimously that oral argument would not materially assist the determination
    of this appeal. See Fed.R.App.P. 34(a); 10th Cir. R. 34.1.9. The case is
    therefore ordered submitted without oral argument.

    Plaintiff-appellant Home Indemnity Company (Home) appeals from the district


    court's order imposing sanctions pursuant to Fed.R.Civ.P. 11 and 28
    U.S.C.1927. Because the district court did not abuse its discretion, we affirm.

    Home provided workers' compensation insurance to Arapahoe Drilling


    Company, Inc. (Arapahoe) from February1, 1981, to February1, 1986.
    Thereafter, it filed suit against Arapahoe in the United States District Court for
    the District of New Mexico, claiming that it was due $90,254 in unpaid
    premiums. Arapahoe counterclaimed, alleging that it had been overcharged
    $153,748 based on a misclassification of job codes under the policy. Arapahoe
    also claimed that Home impermissibly discriminated among its insureds.

    On September 26, 1989, Home and Arapahoe filed a stipulation with the New
    Mexico Department of Insurance, agreeing to submit to the jurisdiction of the
    department of insurance "the issues set forth in the ... Amended Complaint ...,
    Amended Answer ... and Counterclaim, and Reply to Counterclaim filed in the
    cause entitled Home Indemnity Company v. Arapahoe Drilling Company, Inc."
    Appellee's Supp.App. at 18. The federal court action was stayed pending
    resolution of the administrative proceeding.

    In a series of stipulations, the parties agreed that if Home incorrectly classified


    Arapahoe's "tool pushers," the insurer would owe Arapahoe $143,991 for
    overcharges. If, however, Arapahoe's tool pushers were properly classified,
    Arapahoe would owe Home $90,254 for the unpaid premiums. Id. at 20-22.
    The attorneys for each side acknowledged that such amounts were undisputed
    in their opening statements before the administrative officer. See id. at 25-26.

    After a hearing, the superintendent of insurance issued an order finding that


    Home had improperly classified the tool pushers, resulting in an overpayment
    of $143,991 in workers' compensation premiums. The order also found no
    evidence of improper discrimination. Home appealed this decision to the New
    Mexico State Corporation Commission, claiming that it should have been
    awarded the overdue premium of $90,254. The commission affirmed the
    judgment of the superintendent of insurance. This ruling was appealed to the
    New Mexico state district court, but was dismissed as untimely. Home then
    appealed to the New Mexico Court of Appeals.

    While the case was pending on appeal, Home filed a motion for summary
    judgment in the federal district court, claiming that its entitlement to the
    $90,254 in unpaid premiums had not been at issue before the department of
    insurance and remained unresolved. In its reply brief, Home also argued that
    even if the issue of the unpaid premiums had been before the department of
    insurance, the department had no jurisdiction to decide a contract dispute.

    The district court denied Home's motion for summary judgment and dismissed
    the case with prejudice. In doing so, the court made the following remarks:

    10

    I absolutely cannot comprehend Mr. Biehler's statements that this was not
    litigated in front of the Insurance Commission. He asks specifically for a
    finding that they owed him $90,000, and he argues jurisdiction. He submitted
    himself to that jurisdiction. Everything that's asked in this lawsuit has been
    decided by the State. It's up on appeal in the State. It's a State matter now.
    There's nothing left to litigate in this Court.

    11

    .... He litigated that. He lost. He now comes back here and asks me to relitigate
    it. I'm not going to relitigate it. The matter is moot.

    ....
    12
    13

    Dismissing a case does not deny Rule 11 sanctions. The Court retains
    jurisdiction for that part. I also call to defendant's counsel 28 USC 1927 as a
    possible avenue. This matter has been totally litigated. There's nothing left for
    me to do except dismiss it, which I will do.

    14

    Appellant's App., Ex. A to doc. 95.

    15

    Arapahoe thereafter submitted a motion for sanctions, requesting those amounts


    incurred in responding to Home's motion for summary judgment in the amount
    of $3,808.06. After a hearing, the court reiterated its belief that "there was no
    merit whatsoever to the [summary judgment] motion" and awarded $3,808.06
    in sanctions under Fed.R.Civ.P. 11 and 28 U.S.C.1927. This appeal followed.

    16

    Home argues that the district court erred in imposing sanctions because (1) it
    failed to make specific findings and conclusions, and (2) sanctions were
    unwarranted. We review the district court's decision to impose sanctions under
    an abuse of discretion standard. O'Connor v. R.F. Lafferty & Co., 965 F.2d 893,
    903 (10th Cir.1992)(28 U.S.C.1927 and Rule 11); Coffey v. Healthtrust, Inc.,
    955 F.2d 1388, 1393 (10th Cir.1992)(Rule 11).

    17

    When a court imposes sanctions under 28 U.S.C.1927 or Fed.R.Civ.P. 11, "it


    must sufficiently express the basis for the sanctions imposed to identify the
    excess costs reasonably incurred by the party to whom they will be due."
    Braley v. Campbell, 832 F.2d 1504, 1513 (10th Cir.1987). Specific findings
    allow the court to identify the costs arising from the objectionable conduct,
    afford the sanctioned party notice and an opportunity to respond, and permit an
    appellate court to review the district court's decision. Id.

    18

    "A district court's failure to make express findings does not require a remand if
    'a complete understanding of the issues may be had [from the record] without
    the aid of separate findings.' " Optyl Eyewear Fashion Int'l Corp. v. Style Cos.,
    760 F.2d 1045, 1051 (9th Cir.1985)(quoting Swanson v. Levy, 509 F.2d 859,
    861 (9th Cir.1975)). So long as the district court's findings and conclusions are
    sufficiently specific to allow us to "follow the path" taken by the district court,
    the imposition of sanctions may be upheld. Flip Side Prods., Inc. v. Jam Prods.,
    Ltd., 843 F.2d 1024, 1037 (7th Cir.) (quoting Brown v. Federation of State

    Medical Bds., 830 F.2d 1429, 1438 (7th Cir.1987)), cert. denied, 488 U.S. 909
    (1988).
    19

    Here, although the district court did not recite the specific language of the
    statutes, it clearly found that Home's act of filing the summary judgment
    motion "unreasonably and vexatiously" multiplied litigation and was not "well
    grounded in fact and ... warranted by existing law." 28 U.S.C.1927;
    Fed.R.Civ.P. 11. In its summary judgment ruling, the court found Home's
    statement that the unpaid premium issue was not before the insurance
    commission not to be well grounded in fact. In that same ruling, and later, after
    the hearing on sanctions, the court found Home's legal arguments in support of
    its motion to be meritless. Finally, the court found that because the premium
    issue had been completely litigated before the state tribunal, Home's attempt to
    relitigate the issue in federal court was unjustified. In other words, Home's
    motion unreasonably and vexatiously multiplied the proceedings. Because we
    are able to "follow the path" taken by the district court, its findings and
    conclusions are sufficiently specific.

    20

    We also reject Home's contention that the district court abused its discretion in
    imposing sanctions. Home's stipulations and pleadings clearly demonstrate that
    the issue of the allegedly overdue premiums was before the state administrative
    tribunal, the corporation commission, the New Mexico district court and the
    court of appeals. To later claim that this issue was not before these bodies was a
    blatant misrepresentation of fact.

    21

    Home's jurisdictional argument, raised for the first time in its reply brief in
    support of its motion for summary judgment, is similarly without merit.2 As
    stipulated by the parties, a determination whether the tool pushers were
    properly classified automatically resolved the overdue premium issue as well.
    Because the insurance commission clearly had jurisdiction to determine
    whether the tool pushers were properly classified, Home's argument has no
    basis in law.

    22

    Moreover, the insurance commission appears to be authorized to engage in


    contract interpretation to ensure that proper premiums are charged and
    collected. The commission is given broad authority to conduct examinations
    into all insurance matters to determine whether there have been insurance code
    violations. See N.M. Stat. Ann. 59A-2-8(E) (Michie 1992). The code, in turn,
    prohibits an insurer from collecting premiums in excess of the applicable
    classifications and legal rates, and provides that any contract provision that does
    not comply with the code must be "interpreted and applied [as if it were] in full
    compliance with the Insurance Code." N.M. Stat. Ann. 59A-18-21(B) (Michie

    1992); see also 59A-16-24(B) and 59A-17-8. For this reason, as well, Home's
    jurisdictional argument has no legal basis.
    23

    Finally, sanctions under 28 U.S.C.1927 are appropriate when an attorney seeks


    to resurrect matters already concluded. See, e.g., Limerick v. Greenwald, 749
    F.2d 97, 101-02 (1st Cir.1984)(attorney sanctioned for bringing repetitive
    motions which sought to relitigate matters already adjudicated); Knorr Brake
    Corp. v. Harbil, Inc., 738 F.2d 223, 228 (7th Cir.1984)(counsel may be
    sanctioned for repeating arguments previously rejected). Because Home's
    motion for summary judgment was unwarranted in fact and law, and
    duplicative of matters previously decided, the district court did not abuse its
    discretion in imposing sanctions.

    24

    Arapahoe's motion for sanctions under Fed. R.App. P. 38 and 28 U.S.C.1927 is


    DENIED, and the judgment of the United States District Court for the District
    of New Mexico is AFFIRMED.

    **

    Honorable Robin J. Cauthron, District Judge, United States District Court for
    the Western District of Oklahoma, sitting by designation

    This order and judgment has no precedential value and shall not be cited, or
    used by any court within the Tenth Circuit, except for purposes of establishing
    the doctrines of the law of the case, res judicata, or collateral estoppel. 10th Cir.
    R. 36.3

    Because Home's argument was first raised in its reply brief, and did not go to
    the jurisdiction of the district court, the court was under no obligation to
    address the argument on its merits. See, e.g., Boone v. Carlsbad
    Bancorporation, Inc., 972 F.2d 1545, 1554 n.6 (10th Cir.1992); Comeau v.
    Rupp, 762 F.Supp. 1434, 1451 (D.Kan.1991)

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