Appeal from the Superior Court of the District of Columbia; (Hon. Gladys Kessler, Trial Judge)
Before Rogers, Chief Judge, and Farrell, Associate Judge, and Reilly, Senior Judge.
The opinion of the court was delivered by: Reilly
REILLY, Senior Judge : Before us is an appeal from two separate post-judgment orders awarding attorney fees in the total amount of $585 to appellees which became final after such judgment was affirmed by this court in Connors, Fiscina, Swartz & Zimmerly v. Rees, et al., 599 A.2d 47 (D.C. 1991). Our examination of the record reveals no error in the first order granting $250 in attorney fees to the movants, but provides no support for the second order awarding $335. We reverse the latter, affirm the first fee award, and remand to the trial court for entry of an amended order.
The underlying action in this matter resulted in a judgment entered by Judge Kessler of the Superior Court after a bench trial, in a suit brought by the appellee law firm ("CFSZ") against its former "managing partner," Dean Swartz, Thomas Rees, and his law firm, alleging tortious interference with contracts between CFSZ and its clients, and also alleging defamation by Swartz. In a lengthy memorandum opinion, the trial court found against the plaintiffs on the claim for tortious interference with clients, *fn1 but held that certain statements in a letter sent by Swartz to a married couple (clients of CFSZ) amounted to defamation. Accordingly, the court entered a judgment against Swartz for $10,000 in damages ($2500 compensatory, $7500 punitive).
An appeal was filed by CFSZ from the finding that neither Swartz's actions nor that of Rees and his law firm amounted to tortious interference with client relationships. Swartz cross-appealed from the judgment against him. As we have noted, neither appeal was successful.
The dispute which culminated in the appeal now before us began when Swartz sought to stay the judgment against him pending appeal. As a condition for granting such stay, the trial court, on May 15, 1989, ordered the posting of a supersedeas bond, in the amount of $10,000 to be "deposited in an interest-bearing escrow account, the details of which shall be agreed to between counsel." After Discussions with Robert Adler, counsel for CFSZ, Frederick Schwartz, counsel for Swartz, wrote his adversary that he had worked out an arrangement with a local bank for the establishment of an escrow account paying 8.5% interest. The letter, dated July 11, 1989, stated that if Adler would sign and return an enclosed signature card, Schwartz would deposit $10,000 on behalf of his client. Adler did so.
About five weeks later, Adler having discovered that no deposit had been made, wrote Schwartz threatening to draw the attention of the court to the matter and seek sanctions, unless a deposit was made within the next five business days (i.e., before September 1st). Schwartz apparently did not reply. On September 26, Adler filed a motion asking the court to "enter an Order requiring Defendant Swartz to Show Cause why he should not be held in Contempt of this Court's Order" mandating posting of supersedeas bond. The motion also requested that Swartz be ordered to pay CFSZ reasonable attorney fees and costs. When served with a copy of this motion, Swartz himself deposited the sum of $10,000 along with interest from mid-July, without waiting for his counsel to respond. This fact was drawn to the attention of the court in an opposition filed by Schwartz to the show cause motion, explaining that the "delay from mid-July" was "due to a technical problem." *fn2
The movants (CFSZ) responded by pointing out that the accrued interest deposited by Swartz covered only the period from mid-July when counsel agreed upon the bond posting procedure rather than from the date of the court order in May, thereby violating the agreement, and renewed its request for sanctions. Asserting that this pleading contained a misstatement as Adler had agreed to the mid-July interest date (memorialized in a letter from him to opposing counsel), Schwartz returned to the fray by requesting the imposition of sanctions (i.e., attorney fees) because the signer had violated Rule 11. *fn3 This document was submitted with the Adler letter attached. Adler then conceded that his statement was inadvertently inaccurate, but again urged the court to issue a show cause order.
On December 14, 1989, the trial court disposed of these motions without a hearing, by issuing a memorandum order holding the show cause motion moot because the requisite bond had been posted. Nevertheless the court granted attorneys' fees in the amount of $250 to CFSZ as "it would appear that the defendant only posted bond because the motion was filed." It denied the Schwartz request for Rule 11 sanctions, observing that the Adler letter to Schwartz was "not sufficiently clear to justify imposition of sanctions . . . given the insignificance of the allegation, the request is frivolous and is denied."
Not content to let the matter rest, Schwartz filed a motion requesting the court to reconsider not only its denial of his motion for sanctions, but also its award of attorney fees to the opposing party. He questioned the prior finding that the Adler letter was not sufficiently clear, pointing out that the court itself ultimately found that the parties had agreed that interest would run only from the July 15th date. He argued that the refusal to impose sanctions was error, citing Montgomery v. Jimmy's Tire & Auto Center, Inc., 566 A.2d 1025 (D.C. 1989).
With respect to the sanctions imposed for failure to comply promptly with the court's order on supersedeas, he explained that far from disobeying the court's order, he had acted in good faith. He stated that after he and opposing counsel had worked out the details of the escrow deposition in mid-July, he had tried to negotiate with the local lawyer for the insurance carrier of the co-defendant to put up the bond, because of its possible liability if the judgment against Swartz was allowed to stand. The motion to show cause had been filed by opposing counsel, while these negotiations were still in progress.
In arguing that the court was mistaken in finding that defendant would not have posted bond except for the show cause motion, Schwartz explained that the seeming disregard of the court's order was not intentional. He averred that far from making no effort to comply, he had undertaken (after the agreement on the bond posting procedure) to persuade counsel for the insurance carrier of the co-defendant to put up the bond because of its contingent liability for damages if the judgment against Swartz was allowed to stand. He had difficulty in reaching this lawyer because he was out of town, but was eventually advised to prepare a demand letter with a supporting memorandum of law concerning the carrier's liability. The show cause motion was filed before he could do this.
Opposing the reconsideration motion, CFSZ asserted that it had been untimely filed *fn4 -- a day late under Super. Ct. Civ. R. 59 (e) according to its computation -- and that the excuse for the delay (i.e., the negotiations with the insurance carrier) was "highly suspect," as Schwartz had never given such an explanation in his talks with Adler or in his original opposition to the show cause motion. Characterizing the motion as merely "another attempt to avoid compliance . . . frivolous," ...