                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 14-1560
                        ___________________________

    David M. Meyer and Nancy R. Meyer Trust UTA Dated October 13, 2006

                        lllllllllllllllllllll Plaintiff - Appellant

                                            v.

                          U.S. Bank National Association

                       lllllllllllllllllllll Defendant - Appellee
                                      ____________

                    Appeal from United States District Court
                     for the District of Nebraska - Lincoln
                                 ____________

                           Submitted: February 12, 2015
                               Filed: July 6, 2015
                                 ____________

Before RILEY, Chief Judge, LOKEN and SMITH, Circuit Judges.
                              ____________

LOKEN, Circuit Judge.

      In June 2003, David and Nancy Meyer signed a revolving credit note and
revolving credit agreement and later signed a series of term notes and term loan
agreements to obtain loans from U.S. Bank to finance their swine production
business. In October 2006, the Meyers transferred all their business assets to a
revocable trust, The David M. Meyer and Nancy R. Meyer Trust (the Trust), naming
themselves as Grantors and Trustees. The revolving credit loan went into default on
July 1, 2008. U.S. Bank agreed not to exercise its default rights. The lending
relationship continued until the Meyers withheld proceeds from the sale of collateral
(hogs); U.S. Bank commenced a replevin action; and the Meyers filed for Chapter 11
bankruptcy protection in August 2010.

       In September 2011, the Meyers, individually, sued U.S. Bank in the District of
Nebraska, alleging breach of contract, fraud, violations of the Nebraska Uniform
Deceptive Trade Practices Act, and unjust enrichment. The district court granted
summary judgment dismissing all claims, and we affirmed. Meyer v. U.S. Bank Nat’l
Ass’n, 715 F.3d 703 (8th Cir. 2013) (Meyer I). The Trust then commenced this action
in state court, alleging that U.S. Bank tortiously interfered with the Trust’s
contractual relations with a feed supplier. U.S. Bank removed the action, promptly
filed a motion for summary judgment, and later sought Rule 11 sanctions. The
district court1 granted summary judgment and imposed a $5,000 sanction against the
Trust and its attorneys. The Trust appealed. U.S. Bank moved for additional
sanctions under Rule 38 of the Federal Rules of Appellate Procedure, arguing the
appeal is frivolous. We affirm the district court’s rulings. We conclude the appeal
was not frivolous but was frivolously argued. We deny an award of attorneys’ fees
but grant double costs as a Rule 38 sanction.

                                   I. The Merits

      In Meyer I, the Meyers’ claims centered on their allegation that U.S. Bank
forged their signatures on a document acknowledging a change in the loan agreement
terms, which made them appear less creditworthy, forcing the loan into default. To
obtain credit extensions, the Meyers were then coerced into signing forbearance
agreements releasing U.S. Bank from liability for the forgery. Ultimately, U.S. Bank


      1
        The Honorable Laurie Smith Camp, Chief Judge, United States District Court
for the District of Nebraska.

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refused to extend the maturity date again, forcing the Meyers into bankruptcy. Their
damage claims included “a loss of performance by the Meyer herd as a result of feed
deprivation used by U.S. Bank in further leverage against the Meyers to comply with
all demands made by U.S. Bank.” We affirmed the grant of summary judgment
dismissing these claims because, when the Meyers failed to pay the amount due on
their loan when it matured, U.S. Bank “was under no obligation to extend the
maturity date yet again. Whatever the accuracy of [U.S. Bank’s creditworthiness
calculation], the Meyers had failed to comply with the revolving credit agreement,
and the Bank was entitled to enforce its rights.” 715 F.3d at 705.

       In this action, the Trust alleged that it is “the independent entity solely
responsible for running” the Meyers’ swine business. When the loan matured by
reason of the forged debt-acknowledgment, U.S. Bank used “feed deprivation tactics”
-- refusing to wire money to the Trust’s feed supplier -- to force the Meyers to sign
forbearance agreements, conduct that tortiously interfered with the Trust’s
relationship with the feed supplier. U.S. Bank moved for summary judgment, arguing
the Trust’s claims were barred by judicial estoppel and res judicata and submitting
extensive documentation from Meyer I and the Meyers’ bankruptcy proceedings. The
district court granted summary judgment, concluding that the determinations in
Meyer I “that the Meyers defaulted on their revolving credit agreement with the
Bank; the Bank was under no obligation to forbear; and the Bank was free to enforce
its rights . . . are res judicata” in this action. Consequently, the complaint “fails to
state a claim [of tortious interference] upon which relief can be granted, because it
describes no ‘unjustified intentional act of interference’ on the part of the Bank.”2




      2
        Under Nebraska law, the elements of a claim for tortious interference with a
business relationship or expectancy include proof of “an unjustified intentional act
of interference on the part of the interferer.” Steinhausen v. HomeServs. of Neb.,
Inc., 857 N.W.2d 816, 831 (Neb. 2015).

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       On appeal, the Trust does not challenge the district court’s decision on the
merits. Rather, seizing on the court’s statement that the complaint failed to state a
claim upon which relief can be granted, the Trust argues the court erred procedurally
by going beyond the Trust’s well-pleaded claim of tortious interference in granting
U.S. Bank a Rule 12(b)(6) dismissal. Though the procedural principle is sound, the
contention in this case is not merely without merit, it is frivolous. U.S. Bank
explicitly moved for summary judgment and submitted supporting documents that the
court considered without objection. The district court’s Memorandum and Order
stated that it was granting summary judgment and identified the documents from
Meyer I and the Meyers’ bankruptcy proceedings on which the court was relying.
When the Trust moved for reconsideration, arguing the court had failed to construe
the complaint liberally and accept all allegations as true, the district court denied the
motion in a second Memorandum and Order, explaining that its “grant of summary
judgment in favor of the Bank was governed by Fed. R. Civ. P. 56 because the Court
considered matters outside the pleadings, and all parties were given an opportunity
to present material pertinent to the motion.” There was no procedural error. The
court’s grant of summary judgment is affirmed.

                              II. The Rule 11 Sanction

       The district court granted U.S. Bank’s motion for sanctions, concluding the
Trust’s tortious interference claim violated Rule 11(b)(2) and (3) of the Federal
Rules of Civil Procedure. The claim was frivolous and vexatious because, while
brought in the name of the Trust, under Nebraska law “a trust is not a legal
personality” and the trustees -- here, the Meyers, the unsuccessful plaintiffs in Meyer
I -- were “the proper person[s] to sue or be sued on behalf of such trust.” Back Acres
Pure Trust v. Fahnlander, 443 N.W.2d 604, 605 (Neb. 1989). The court imposed a
$5,000 sanction against the Trust and its attorneys, jointly and severally.




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       On appeal, the Trust argues that its claim was not frivolous. Because trusts
have been allowed to appear as separate entities in other Nebraska and Eighth Circuit
cases, the claim was based upon a reasonable extension of existing law and was not
“so baseless as to warrant Rule 11 sanctions.” Exec. Air Taxi Corp. v. City of
Bismarck, 518 F.3d 562, 571 (8th Cir. 2008). In addition, the Trust asserts, U.S.
Bank waived any objection to the claim being brought in the name of the Trust by
removing the action and seeking a disposition on the merits. U.S. Bank replies that
a sanction was properly imposed because the two actions arose out of the same
nucleus of operative facts, the Meyers pursued the claims individually in Meyer I, the
Meyers as trustees and grantors of the revocable Trust controlled the Trust’s ability
to assert its claim in either action, and therefore the Trust and its attorneys “had to
know” that this action was barred by Meyer I.

       “We review the district court’s imposition of sanctions for abuse of discretion,”
giving “substantial deference to the district court’s determination as to whether
sanctions are warranted because of its familiarity with the case and counsel
involved.” Willhite v. Collins, 459 F.3d 866, 869 (8th Cir. 2006); see Cooter & Gell
v. Hartmarx Corp., 496 U.S. 384, 405 (1990). We have repeatedly approved
sanctions in cases where plaintiffs attempted to evade the clear preclusive effect of
earlier judgments. See Willhite, 459 F.3d at 869; Prof’l Mgmt. Assocs., Inc. v.
KPMG LLP, 345 F.3d 1030, 1032-33 (8th Cir. 2003); Landscape Props., Inc. v.
Whisenhunt, 127 F.3d 678, 682-84 (8th Cir. 1997); King v. Hoover Group, Inc., 958
F.2d 219, 223 (8th Cir. 1992). In this case, the Meyers repackaged their prior
unsuccessful lawsuit under a different cause of action, using their revocable Trust as
plaintiff and filing the action in state court. The contention that the Trust was the
owner and operator of the Meyers’ swine production business was contradicted by
filings in Meyer I and in the Meyers’ bankruptcy proceeding. Other evidence in the
record confirmed that they operated the business and dealt personally with its lender
and vendors. The circumstances, though unusual, are not unlike those in Kountze ex
rel. Hitchcock Found. v. Gaines, 536 F.3d 813, 819 (8th Cir. 2008), where we

                                          -5-
affirmed the imposition of sanctions when a son asserted virtually identical claims as
those unsuccessfully asserted by his father, a co-trustee. We conclude that the district
court did not abuse its discretion in imposing a monetary sanction that was
significantly less than the attorneys’ fees and expenses incurred by U.S. Bank in
defending the suit. See Fed. R. Civ. P. 11(c)(4).

        In its Reply Brief, the Trust argued for the first time that the district court was
without power to impose a Rule 11 sanction for the filing of a frivolous complaint in
state court. Consistent with their pattern of misrepresenting facts and law to this
court, the Trust’s attorneys failed to disclose that all the cases they cited in support
of this contention predated a 1993 amendment to Rule 11(b) clarifying that sanctions
may be imposed for “later advocating” a state court complaint after the case is
removed. See Buster v. Greisen, 104 F.3d 1186, 1190 n.4 (9th Cir. 1997). By saving
this argument until their Reply Brief, counsel gave U.S. Bank no opportunity to help
the court by pointing out the crucial Rule 11 amendment. Because counsel’s
deception is relevant to the question whether to impose a Rule 38 sanction, we reject
the untimely contention as meritless, rather than declining to consider it.

                               IV. Appellate Sanctions

        On appeal, U.S. Bank moved for imposition of sanctions, seeking an award of
its full attorneys’ fees on appeal and double costs. U.S. Bank argued that the
“purported issues asserted by [the Trust] are based upon outright misstatements of the
district court’s orders.” The Trust’s attorneys responded, arguing the appeal raised
“serious and substantial issues and questions about whether the District Court had
erred in determining the invalidity of [the Trust’s] state court claim of tortious
interference.” Rule 38 of the Federal Rules of Appellate Procedure provides that a
court of appeals may “award just damages and single or double costs to the appellee”
if it determines an appeal is frivolous.



                                           -6-
       The Motion for Sanctions is flawed for an obvious reason not addressed by
either party -- the Trust’s appeal of the district court’s sanctions order, though
unsuccessful, was not frivolous. Discretionary orders imposing sanctions on a party
or its attorneys are often appealed and are given careful review by this court. For
example, in Kountze, we observed that “Rule 11 motions for sanctions involve fact-
intensive, close calls.” 536 F.3d at 819 (quotation omitted). Kountze was the only
case U.S. Bank cited in its appeal brief in which we upheld a relitigation sanction
imposed upon a different party. In the district court, U.S. Bank filed a motion for
sanctions, which the court granted. By asking the district court to impose a
discretionary remedy beyond dismissal of the Trust’s claim, U.S. Bank ensured it
would need to incur attorneys’ fees defending an appeal. The motion for a Rule 38
award of fees is denied.

        On the other hand, U.S. Bank’s Motion for Sanctions accurately described the
Trust’s appellate attack on the district court’s grant of summary judgment dismissing
the claim of tortious interference. As we have noted, the Trust did not argue the
merits on appeal. Instead, it argued the district court procedurally erred in granting
a Rule 12(b)(6) dismissal. U.S. Bank correctly responded that the district court stated
clearly in its initial order that it was granting summary judgment, and then reaffirmed
in its denial of reconsideration that the “Court’s grant of summary judgment in favor
of the Bank was governed by Fed. R. Civ. P. 56.” Nonetheless, in its Reply Brief and
at oral argument, the Trust persisted in frivolously misrepresenting the district court’s
rulings. In addition, a new contention in the Trust’s Reply Brief flagrantly
misrepresented governing law. Thus, though not “frivolous as filed,” the Trust’s
appeal falls within the distressing category of “frivolous as argued.”3 “Frivolousness
is determined . . . not in the abstract but in relation to the arguments actually made by

      3
       “An appeal is . . . ‘frivolous as argued’ when an appellant has not dealt fairly
with the court, has significantly misrepresented the law or facts, or has abused the
judicial process by repeatedly litigating the same issue in the same court.” Abbs v.
Principi, 237 F.3d 1342, 1345 (Fed. Cir. 2001) (quotation omitted).

                                          -7-
the appellant.” Anderson v. Steers, Sullivan, McNamar & Rogers, 998 F.2d 495, 496
(7th Cir. 1993).

       Rule 38 sanctions may be imposed for appeals that are “frivolous as argued.”
The difficult question is whether to impose a sanction in this case. U.S. Bank does
not deserve even a partial grant of its attorneys’ fees on appeal; most of its brief
unnecessarily reargued the merits of the district court’s ruling when the Trust raised
only a frivolous procedural issue on appeal. However, an appeal that is frivolous as
argued “imposes costs not only upon the party forced to defend it, but also upon the
public whose taxes supporting this court and its staff are wasted on frivolous
appeals.” Abbs, 237 F.3d at 1346 (quotation omitted). In these circumstances, we
conclude that an award of double costs on appeal is an appropriate Rule 38 sanction.

      The judgment of the district court is affirmed, with double costs awarded to
appellee U.S. Bank.
                    ______________________________




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