In the Matter of Tracey L. Morin

In the Matter of Tracey L. Morin, 2013 MT 146 (June 4, 2013) (5-0) (McGrath, C.J.)

Issue: Whether the district court Rule 11 sanctions on Morin were an abuse of discretion.

Short Answer: No.


Facts: This case arises from West v. State Farm, in the 21st Judicial District, Ravalli County. Tracey Morin represented the plaintiffs, Sarah West and her parents. Sarah was injured in a car accident in 2004 and settled with the other driver/s insurer for about $93,000. West filed a claim against her insurer, State Farm, for underinsured motorist benefits of $75,000 under the family’s policy. State Farm paid $20,000 and denied liability for additional payments.

In 2007, Morin filed a claim against State Farm on Sarah’s behalf alleging breach of contract, then added claims for bad faith and punitives. In April 2009, Morin moved to bifurcate the contract claims from the tort claims. In June 2009, the parties stipulated to dismiss one tort claim and to bifurcate the contract claim from the remaining tort claims. The stipulation provided that unless Wests requested a revised scheduling order within 60 days of the final disposition of the contract claim, the tort claims would be dismissed with prejudice. The day before the final pretrial conference, Morin moved to dismiss the contract claim without prejudice. The court denied the motion and indicated trial would proceed as scheduled. After a series of motions and another hearing, Morin stipulated to the dismissal of the contract claim with prejudice. The court entered judgment on that claim in October 2010.

Morin failed to ask for a scheduling conference within 60 days, and State Farm moved to dismiss the remaining tort claims with prejudice. Morin did not respond, and the court dismissed the remaining claims and entered final judgment in January 2011. State Farm filed and served notice of entry of judgment in February 2011. Morin did not object, later claiming she did not receive notice.

Meanwhile, in November 2010, the Wests filed but did not serve a federal complaint against State Farm for essentially the same claims. They served the complaint in January 2011, and a preliminary pretrial conference was held in March 2011. The magistrate inquired as to the status of the state court action and the binding effect it might have on the federal action. Morin objected, and stated she had filed a motion opposing dismissal in state court. Two days later, Morin filed a motion to reconsider in state court.

On March 8, 2011, State Farm moved to dismiss the federal action based upon the dismissal of the state court claims with prejudice. The magistrate recommended that the case be dismissed, and Morin did not file objections. The district court dismissed Wests’ case in July 2011. Morin appealed and the Ninth Circuit affirmed.

In April 2011 the state district court denied Morin’s motion to reconsider, and in July 2011 Morin applied for a writ of supervisory control. This Court denied that application.

Procedural Posture & Holding: In May 2011, State Farm moved for Rule 11 sanctions against Morin, not her clients, based upon representations made in her motion to reconsider and a subsequent motion and on representations made to the federal magistrate. Morin responded by filing a motion for sanctions against State Farm’s attorney, Brad Luck. The district court held a hearing and, three months later, entered a 111-page Findings of Fact, Conclusions of Law, and Order. It found multiple misrepresentations made by Morin, and set out a range of sanctions to be considered.

The district court held a sanctions hearing in May 2012 and Morin did not personally appear. Her attorney presented Morin’s affidavit to the court, in which she apologized, and he argued that State Farm’s legal fees were excessive. The court entered written sanctions thereafter, finding State Farm’s requested fees of $38,840 to be reasonable, and also ordering Morin to pay for the Court’s time as a further deterrent, imposing a fine of $32,908. Morin appeals and the Supreme Court affirms.

Reasoning: Morin does not appeal any of the district court’s findings of fact; she only appeals the sanctions it imposed. Rule 11 sanctions must be based on the facts of each case, “and that is exactly what the District Court did here.” ¶ 42.