Standard of Review: Rule 11 Sanctions Imposed by Trial Court

Persels & Associates LLC v. Capital One Bank
C
OA PUB 2/14/2014 (Presiding Judge Clayton)
Daviess County, Trial Judge Joseph Castlen, III

CLAYTON, JUDGE: Persels & Associates, LLC appeal the Daviess Circuit Court’s findings and imposition of sanctions based on the trial court’s determination that the respondents violated Kentucky Rules of Civil Procedure (CR) 11. After careful consideration, we affirm.

Appellate review of a trial court’s actions related to CR 11 requires a multi-standard approach, that is, a clearly erroneous standard to the trial court’s findings in support of sanctions, a de novo review of the legal conclusion that a violation occurred, and an abuse of discretion standard on the type and/or amount of sanctions imposed. Clark Equipment Co., Inc. v. Bowman, 762 S.W.2d 417, 421 (Ky. App. 1988). 

The next issue consists of a de novo review of the legal issues involved in the determination that a violation has occurred under CR 11. We begin by observing that CR 11 does not provide substantive rights to litigants but is a procedural rule designed to curb abusive conduct in the litigation process. Lexington Inv. Co. v. Willeroy, 396 S.W.3d 309, 312 (Ky. App. 2013).

The legal questions are answered by CR 11 itself. The rule provides:

Every pleading, motion and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. A party who is not represented by an attorney shall sign his pleading, motion, or other paper and state his address. . . . The signature of an attorney or party constitutes a certification by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

The plain meaning of the rule is that pleadings must be signed by the attorney that prepares them.

Persels’ practice of providing limited representation to its clients does not abrogate this obligation under the Kentucky Rules of Civil Procedure nor did Persels offer any legal authority from Kentucky or otherwise to support its position that limited representation changes the effect of this civil rule or any other. Moreover, because the clients entered into a contract that specified Persels attorneys would not sign pleadings or make an appearance, it is not sufficient to change the requirements under CR 11. It is indisputable that a court cannot enforce an illegal contract. S.J.L.S. v. T.L.S., 265 S.W.3d 804, 821 (Ky. App. 2008). Any contract that ignores or changes the application of the civil rules is not legal. Thus, in contravention to Persels’ position, we hold that pursuant to CR 11, the attorneys who prepared the pleadings must sign them.

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