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Hansen v. U.S. Bank, National Association

United States District Court, D. Idaho

December 5, 2016

SHERRI HANSEN, AN INDIVIDUAL; A.R. MINOR CHILD; AND L.R. MINOR CHILD; Plaintiffs,
v.
U.S. BANK, NATIONAL ASSOCIATION; GREEN TREE FINANCIAL SERVICING, LLC; MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES, SERIES 1998-8; HAWLEY TROXELL ENNIS & HAWLEY LLP; and JOHN DOES 1-10; Defendants.

          MEMORANDUM DECISION AND ORDER

          B. Lynn Winmill Chief Judge

         INTRODUCTION

         Pending before the Court is Plaintiffs' counsel Troy Rasmussen's Motion for Relief from Judgment Pursuant to Rule 60(b) (Dkt. 38), which asks the Court for relief from its Order imposing Rule 11 sanctions against Mr. Rasmussen (Dkt. 37). The Motion is fully briefed and at issue. Having considered the submissions of the parties, the record, and the applicable law, the Court issues this Memorandum Decision and Order.

         BACKGROUND

         The underlying facts of this case and its procedural history are discussed in the Court's prior Memorandum Decision and Order dated September 4, 2015 (Dkt. 23). Accordingly, the Court provides background only to the extent necessary to resolve the pending Rule 60(b) Motion.

         Plaintiffs filed the Complaint in this matter on March 13, 2015. On April 1, 2015, Hawley Troxell-which, at the time, was acting as counsel for all Defendants-made demand upon Plaintiffs' counsel, Troy Rasmussen, to dismiss the Complaint within 21 days, pursuant to Federal Rule of Civil Procedure 11(c)(2). Mr. Rasmussen was notified that if he did not do as requested, Hawley Troxell would file a motion for sanctions with the Court. Hawley Troxell served Mr. Rasmussen with the motion and supporting memorandum in accordance with Rule 11(c)(2). Mr. Rasmussen never responded, and did not move to dismiss the Complaint. Instead, the case proceeded and Hawley Troxell, now representing itself pro se, filed a Motion for Summary Judgment on May 19, 2015. The remaining Defendants (the “Green Tree Defendants”) retained different counsel. They filed a Motion to Dismiss on April 14, 2015. This Court granted both Hawley Troxell's Motion for Summary Judgment and the Green Tree Defendants' Motion to Dismiss in an oral ruling on August 13, 2015. This ruling was explained further in a written Memorandum Decision and Order issued on September 4, 2015. Dkt. 23.

         On September 16, Defendants separately filed Motions for Sanctions against Plaintiffs' counsel Troy Rasmussen, pursuant to Rule 11. Dkts. 25, 26. The Defendants argued that the Complaint was frivolous and lacking in both legal basis and factual foundation. The Court granted Defendants' Motions for Sanctions in its April 11, 2016 Order. Dkt. 33. Therein, the Court indicated:

It is the Court's view that the most appropriate sanction-that is, one which is sufficient to deter Mr. Rasmussen and other attorneys from engaging in this type of conduct-is to require Mr. Rasmussen to pay the Defendants the reasonable attorney's fees incurred in defending against this frivolous suit. Defendants have submitted affidavits detailing all attorney's fees and costs which have been incurred by their clients in defending against this action, including those fees incurred in pursuing the motion for Rule 11 sanctions. Specifically, Hawley Troxell states that it has incurred $9, 735.76 in attorney's fees and costs, while counsel for the Green Tree Defendant reports incurring $25, 110.00.

Apr. 11, 2016 Order at 6-7, Dkt. 33. Also in that Order dated April 11, 2016, the Court granted Counsel time to “submit a response detailing any argument he may have that (1) the requested fees were not necessary to defend this action, or (2) the amount requested is more than necessary to deter repetition of this conduct” and to “include in his response information about his financial resources and ability to pay.” Id. at 8. Mr. Rasmussen filed a one-paragraph response on April 25, 2016. Dkt. 34. The Green Tree Defendants and Defendant Hawley Troxell filed separate replies. Dkts. 35, 36.

         On May 18, 2016, the Court ordered Mr. Rasmussen to pay sanctions in the amount of $34, 845.76. May 18 Order at 2, Dkt. 37. Of that total amount, Mr. Rasmussen was ordered to pay $9, 735.76 to Hawley Troxell Ennis and Hawley LLP, and $25, 110.00 to the law firm of Lukins and Annis, P.S. Id.

         Mr. Rasmussen now asks this Court, pursuant to Federal Rule of Civil Procedure 60(b), for Relief from that Order imposing sanctions.

         STANDARD OF LAW

         Under Federal Rule of Civil Procedure 60(b), a court may grant a party relief from a final judgment for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud, misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged; or (6) any other reason that justifies relief. Fed.R.Civ.P. 60(b).

         Counsel neglects to inform the Court which ground(s), of those set forth in subsections (1)-(6), he intends to assert. The Motion does not raise any arguments that indicate “mistake, inadvertence, surprise, or excusable neglect.” Nor does it allege that there is new evidence, fraud, a void judgment, or a judgment that has been satisfied, released, or discharged. Therefore, Mr. Rasmussen is left with Rule 60(b)(6).

         That catch-all provision of Rule 60(b)(6) should be used “sparingly as an equitable remedy to prevent manifest injustice and . . . only where extraordinary circumstances prevented a party from taking timely action or to prevent or correct an erroneous judgment.” Latshaw v. Trainer Wortham & Co., 452 F.3d 1097, 1103 (9th Cir. 2006). To receive relief under Rule 60(b)(6), a moving party must “show both injury and that circumstances beyond its control prevented timely action to protect its interests.” United States v. Alpine Land & Reservoir Co., 984 F.2d 1047, 1049 (9th Cir. 1993). “Neglect or lack of diligence is not to be remedied through ...


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