                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-9-2004

Beam v. Bauer
Precedential or Non-Precedential: Precedential

Docket No. 03-1874




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Recommended Citation
"Beam v. Bauer" (2004). 2004 Decisions. Paper 284.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/284


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                     PRECEDENTIAL           O’NEILL,* District Judge.

 THE UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT               (Filed September 9, 2004)
         ___________
                                     Donald A. Bailey, Esq.
      Nos. 03-1874, 03-2194          4311 North 6th Street
           ___________               Harrisburg, PA 17110
                                     Counsel for Appellant
        BEVERLY BEAM,
                 Appellant,          Melinda B. Kaufmann, Esq.
                                     Stock & Leader
                v.                   221 West Philadelphia Street
                                     Susquehanna Commerce Center
   MARC BAUER; GLENN W .             East Building
   ZEHNER; CAPITAL AREA              York, PA 17404
 INTERMEDIATE UNIT; SCOTT            Counsel for Appellees Bauer, Zehner,
 DOWNEY; ROGER MORRISON;             Capitol, and Downey
    DAVID L. GRAYBILL;
     MICHAEL SWEGER                  Kathryn L. Simpson, Esq.
                                     Mette, Evans & Woodside
           ___________               3401 North Front Street
                                     P.O. Box 5950
                                     Harrisburg, PA 17110-0950
 ON APPEAL FROM THE UNITED           Counsel for Appellee Morrison
   STATES DISTRICT COURT
 FOR THE MIDDLE DISTRICT OF          Spero T. Lappas, Esq.
       PENNSYLVANIA                  Melanie L. Erb, Esq.
                                     Serratelli, Schiffman, Brown & Calhoun
    (D.C. Civil No. 02-cv-01797)     2080 Linglestown Road
   District Judge: The Honorable     Suite 201
                   Sylvia H. Rambo   Harrisburg, PA 17101-9445
                                     Counsel for Appellees Graybill and
           ___________               Sweger

   Submitted Under Third Circuit
           LAR 34.1(a)
         January 30, 2004            *H onorable Thomas N. O’Neill, Jr.,
                                     Senior District Judge for the United
                                     States District Court for the Eastern
BEFORE: NYGAARD and FUENTES,         District of Pennsylvania, sitting by
       Circuit Judges, and           designation.
                ___________                            dismissed. The District Court dismissed
                                                       Beam’s first lawsuit for failure to state a
                 OPINION                               claim upon which relief could be granted.
                ___________                            We affirmed. Beam v. Downey, 54 Fed.
                                                       Appx. 113 (3d Cir. 2002). But, while the
                                                       first case was pending on appeal, Beam
NYGAARD, Circuit Judge.
                                                       filed a second suit. The second suit added
    Judge Sylvia Rambo, of the United                  additional defendants, a few new legal
States District Court for the M iddle                  theories, but still contained nothing of
Dis tri c t o f P e n n s yl v a n i a, f o u nd       substance or merit.             In its opinion
plaintiff/appellant’s claim to be barred by            explaining the dismissal order, the District
the res judicata doctrine; she further                 Court found that Beam’s second complaint
concluded that the suit was frivolous, and             was “intended to harass, cause unnecessary
then dismissed it. She also imposed Rule               and needless increase in the cost of
11 sanctions on plaintiff’s attorney, Don              litigation, . . . that factual contentions have
Bailey, who was also appellant’s counsel               no evidentiary support . . . that the claims
on appeal. On Beam’s appeal challenging                and legal contentions . . . are not warranted
the dismissal and the sanctions, counsel               by existing law nor by non-frivolous
failed to offer any argument, facts, or law            argument for the extension, modification,
to show that the claim was not frivolous,              or reversal of existing law or for the
or that the Court had in some way erred.               establishment of new law.” Memorandum
H e n c e , w e affirmed, conclud ing                  and Order of the District Court (Mar. 25,
additionally in our opinion that the appeal            2003). The District Court also ordered
was also frivolous. Appellees now ask                  Beam’s attorney, Don Bailey, and his law
that we award damages pursuant to                      firm to pay Rule 11 sanctions to the
Federal Rule of Appellate Procedure 38, to             appellees. These findings and conclusions
compensate them for the financial loss                 were fully supported by the record, so we
they incurred defending the dismissal                  affirmed. Beam v. Bauer, 88 Fed. Appx.
order. The request presents us with three              523 (3d Cir. 2004).
issues: Should we award damages? If so,
                                                           The decision whether to appeal from an
in what amount? And, against whom? We
                                                       order of the District Court is not a matter
will award damages in the amounts
                                                       to be taken lightly by either a losing party
requested by the various appellees under
                                                       or her counsel. An appeal is not just the
Rule 38, and against counsel for appellant.
                                                       procedural next step in every lawsuit.
    A brief procedural history of this, and            Neither is it an opportunity for another
an earlier lawsuit filed by Beam, is both              “bite of the apple,” nor a forum for a
instructive and germane to the issue in this           losing party to “cry foul” without legal or
motion. Beam has twice brought lawsuits                factual foundation. An appeal is a serious
that the District Court summarily                      matter because it is a claim of error by the


                                                   2
District Court and an attack on the validity           (3d Cir. 1990) (citing the Advisory
of its order. Consequently, if the appeal is           Committee Note to Rule 38).
wholly lacking in merit, there are
                                                           The rationale of Rule 38 is simply that
consequences.      Appellant herein now
                                                       when parties suffer pecuniary loss by
must face them.
                                                       paying attorney fees to defend a valid
     Rule 38 states that “[i]f a court of              judgment against a frivolous appeal, they
appeals determines that an appeal is                   are as entitled to be awarded damages as is
frivolous, it may, after a separately filed            a victim seeking compensation for any
motion or notice from the court and                    other financial loss incurred by the acts of
reasonable opportunity to respond, award               a tortfeasor. It is a rule designed to make
just damages and single or double costs to             whole a party victimized by needlessly
the appellee.” Fed. R. App. P. 38. Of                  having to expend money for attorney fees
course, we recognize that not every claim              to protect a valid judgment from a baseless
dismissed as frivolous is frivolous.                   attack.     That is precisely what has
D i st r ic t C ourts oc casio nally err.              happened in this matter.
Nonetheless, we state with equal emphasis
                                                           Recently, when discussing Rule 38
that an appeal from a frivolous claim is
                                                       damages, we cautioned counsel that a
likewise frivolous. See A-Abart Elec.
                                                       finding by a District Court that a lawsuit is
Supply, Inc. v. Emerson Elec. Co., 956
                                                       frivolous should serve as notice to the
F.2d 1399, 1407 (7th Cir. 1992). It is
                                                       parties and their attorney to exercise
counsel’s responsibiliy to make the
                                                       caution, pause, and “devote additional
distinction.
                                                       examination to the legal validity and
     Although often mistakenly referred to             factual merit of his contentions.” Huck,
as both, an award under Rule 38 is neither             106 F.3d at 52. Here, despite many cues
a sanction nor a punishment. Huck v.                   from us and the District Court that her
Dawson, 106 F.3d 45, 52 (3d Cir. 1997)                 cause was wholly meritless, Beam and her
(“Rule 38 is not a sanctions provision.”).             counsel have persisted before the District
Nor is appellant’s intent a consideration.             Court and again before us. Additionally,
Appellant is like any other tortfeasor. It             as we noted in our opinion in Beam v.
does not matter whether she filed this                 Bauer, “[i]n her haste to file [this] lawsuit,
appeal out of malice, ignorance, or deceit;            Beam disregarded the then-pending appeal
it is the merit of her argument on appeal              before this Court. Beam would have been
that determines whether she carries the                well-advised to await our opinion, which
day. It is not a punitive provision.                   ultimately affirmed the result in the first
“Damages [under Rule 38] are awarded by                case.” 88 Fed. Appx. 523, 526 (3d Cir.
the court in its discretion . . . as a matter of       2004). Our affirmation of the District
justice to the appellee.” See Hilmon Co.               Court’s first dismissal was lost on counsel,
(V.I.) Inc. v. Hyatt Int’l, 899 F.2d 250, 253          who had already filed the second suit. Had
                                                       counsel been paying attention, our result

                                                   3
could have given him notice of the fact             damages upon counsel when a frivolous
that he had failed to discern on his own;           appeal stems from counsel’s professional
that his client’s claims were wholly                error. See Nagle v. Alspach, 8 F.3d 141,
without legal or factual substance. We              145 (3d Cir. 1993); see also A-Abart, 956
thus will award damages to appellees.               F.2d at 1407.
    In her response to the request for                 In Hilmon we set this standard:
damages, Beam does not raise an issue as
                                                       [A]ttorneys have an affirmative
to the propriety of the amount of damages
                                                       obligation to research the law and
requested. Moreover, because this is a
                                                       to determine if a claim on appeal
damage issue, and because there is neither
                                                       [has merit]. We conclude that if
anything shocking in the amount
                                                       counsel ignore or fail in this
requested, nor do the fees appear at all
                                                       obligation to their client, they do so
inflated, there is no need for us to raise an
                                                       at their peril and may become
issue as to the amount sua sponte. Simply
                                                       personally liable to satisfy a Rule
stated, appellees have incurred costs and
                                                       38 award. The test is whether,
expenses defending a valid judgment
                                                       following a thorough analysis of
against a frivolous appeal, and are entitled
                                                       the record and careful research of
to be made whole. Hence, we will award
                                                       the law, a reasonable attorney
damages in the amount expended by
                                                       would conclude that the appeal is
appellees.
                                                       frivolous.
    Having decided that both the claim for
                                                    Hilmon, 899 F.2d at 254.
fees and the statement ad damnum are
proper, we must determine whether to                    In this case it would have been obvious
place the responsibility for payment with           to a reasonable attorney that an appeal
Beam, her counsel, or both. Beam “had a             from the District Court’s order was
right to rely upon [her] attorney for sound         frivolous, unless he had law or facts to
advice.”     Hilmon, 899 F.2d at 254.               support a conclusion that the District Court
Although an unrepresented litigant should           judge had erred. By failing to appreciate
not be punished with damages for his                this, Beam’s counsel exposed himself to
failure to appreciate legal subtleties in           personal liability for Rule 38 damages.
legal arguments, Hughes v. Rowe, 449                Moreover, in his response to the motion
U.S. 5, 15 (1980), we have consistently             for damages, counsel presents no reason to
held represented clients, and specifically          conclude that the responsibility for the
their counsel, to a higher standard.                appeals lies anywhere but with him.
Moreover, because it would be unfair to             Hence, we conclude that it is appropriate
charge a damage award against a party               that counsel bear the burden of paying the
who has relied upon her counsel’s                   damages.
expertise in deciding whether to appeal,
we have routinely imposed Rule 38

                                                4
    Finally, counsel for Beam contends in
a motion to strike the appellees’ Rule 38
motion that Beam is entitled to an
evidentiary hearing. We disagree. In her
response to the motion for Rule 38
damages, Beam raises no evidentiary
issues that would indicate to us any need
for a hearing to find facts. We will deny
Beam’s motion to strike.
    In sum, and upon consideration of the
appellees’ motions, the appellant’s
opposition thereto, and a thorough review
of the record, we will award damages to
appellees’ in the amounts requested, all in
accord with the attached order.




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