I respectfully dissent. I disagree with the majority’s holding that Rule 11 sanctions should be imposed in this case.
The majority dismisses U.S. Bank’s argument that it had a good-faith belief that the trial court’s order granting summary judgment was a final and appealable order. The majority held that all the cases cited by the bank in support of its argument that a trial court need not always establish the amount of damages in order for the order to be final and appealable were inapposite.
The majority distinguishes the cited cases from the present case. It is common for this court to distinguish cases cited in the parties’ brief from the case at hand. We often disagree with parties’ contentions that the cases cited in their briefs are on point with the case before the court. Our disagreement with the parties’ contentions does not warrant sanctions.
The majority also notes that the trial court did not certify the partial summary-judgment as final pursuant to Ark. R. Civ. P. 54(b). While it is true that the bank did not attempt to obtain partial certification from the trial court, a review of our case law indicates that we have not imposed Rule 11 sanctions when we have not addressed the merits of an appeal due to a party’s failure to have a judgment certified pursuant to Rule 54(b). See, e.g., Fisher v. Chavers, 351 Ark. 318, 92 S.W.3d 30 (2002); Chapman v. Wal-Mart Stores, Inc., 351 Ark. 1, 89 S.W.3d 906 (2002); Dodge v. Lee, 350 Ark. 480, 88 S.W.3d 843 (2002); Sharp v. State, 350 Ark. 529, 88 S.W.3d 848 (2002); City of Corning v. Cochran, 350 Ark. 12, 84 S.W.3d 439 (2002); Cole v. Laws, 349 Ark. 177, 76 S.W.3d 878 (2002); Eason v. Flannigan, 349 Ark. 1, 75 S.W.3d 702 (2002); Tri-State Delta Chems., Inc. v. Crow, 347 Ark. 255, 61 S.W.3d 172 (2001).
In addition, the majority states:
Indeed, U.S. Bank eventually conceded that the partial summary-judgment order was not final. Accordingly, we must disagree with U.S. Bank’s assertion that it acted in good faith, when in fact it waited until the last possible moment to abandon that point on appeal. (Emphasis added.)
The majority appears to be implying that if U.S. Bank had maintained until the end that it believed the partial summary judgment order was a final judgment, then there would be no Rule 11 sanctions.
Counsel for U.S. Bank was acting as an officer of the court in admitting in its reply brief that the partial summary judgment was not a final order. Are we imposing sanctions because counsel was being honest and candid with this court and properly acting as an officer of the court? The majority is sending the wrong message to the bar.
It should be noted that Milburn previously filed a motion to dismiss the appeal because the partial summary judgment was not a final appealable- order, and this court declined to rule on that motion. If the appeal was frivolous, and if it was so clear that the partial summary judgment order was not a final appealable order, would not this court have granted Milburn’s motion to dismiss?
Rule 11 provides, in part:
(a) The filing of a brief, motion or other paper in the Supreme Court . . . constitutes a certification of the party or attorney that, to the best of his knowledge, information and belief formed after reasonable inquiry, the document is well grounded in fact; is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and is not filed for an improper purpose such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. A party or an attorney who files a paper in violation of this rule, or party on whose behalf the paper is filed, is subject to a sanction in accordance with this rule.
(c) Sanctions that may be imposed for violations of this rule include, but are not limited to, dismissal of the appeal; striking a brief, motion, or other paper; awarding actual costs and expenses, including reasonable attorneys’ fees; imposing a penalty payable to the court; awarding damages attributable to the delay or misconduct; and, where there has been delay, advancing the case on the docket and affirming.
(d) A party may by motion request that a sanction be imposed upon another party or attorney pursuant to this rule, or the court may impose a sanction on its own initiative. A motion shall be in the form required by Rule 2-1 of the Rules of the Supreme Court and Court of Appeals, with citations to the record where appropriate, and will be called for submission three weeks after the filing. ... If the court on its own initiative determines that a sanction may be appropriate, the court shall order the party or attorney to show cause in writing why a sanction should not be imposed on the party or attorney or both.
Ark. R. App. P— Civ. 11 (2002).
It should be noted that Milburn’s counsel argued that sanctions should be imposed on the bank, inter alia, because the bank violated procedural rules, i.e., failing to obtain the trial court’s certification of the partial summary judgment order, pursuant to Rule 54(b); however, Milburn’s counsel failed to follow procedure in requesting sanctions. Motions to request sanctions must comply with Rule 2-1. Rule 2-1 provides, in part, that “[a]ll motions must be in writing,” and that “[i]n cases pending before the Supreme Court, eight (8) clearly legible copies must be filed . . . .” Ark. Sup. Ct. R. 2-1 (2002). While it is true that this court on its own initiative may determine that sanctions are appropriate and issue a show-cause order, there is nothing in the record to indicate that this court, prior to the oral request by Milburn’s counsel, determined that sanctions may be appropriate.
At oral argument, the following colloquy took place between the court and counsel for Milburn:
Counsel for Milburn: ... I would like to address one more thing before we leave. I think the act of claiming this to be a final judgment has caused me and my client great harm in this case. . . . What have they gained in the process? Number one, by claiming it is a final judgment, what they have gained is I had to respond to it. . . . They managed to get an appeal before this court. The next thing is, because summary judgment is crucial.... I spent a huge amount of time responding to that. ... So, they have now heard what I am going to do. They have taken advantage of it, and they gain advantage by a false claim that this is a final judgment. I am going to ask the court to dismiss this case with appeal, or, in the alternative, that they be prohibited from raising any new arguments should they bring this case up again,1 and to pay for the time and money I had to spend responding to something they knew they were going to drop when it was all over. . . .
Justice Brown: You seem to be raising a Rule 11 violation under the appellate rules.
Counsel for Milburn: That is exactly what I am suggesting, but this court has inherent authority to do that, as well, I believe.
Later, the court requested a response from U.S. Bank’s counsel.
Justice Brown: What is the response to that? He said that there is no question that you knew it was not a final order and there was not Rule 54(b) certification. That has put him to the expense of having to reply to an appeal.
Counsel for U.S. Bank: Well, I would first say, your honor, that I believe such a request would require a motion and an opportunity for presentation of a full explanation by both sides with us in response.
* * *
Justice Glaze: Your response on the sanction 11 rule, then, is this has not been posed to you prior to today?
Counsel for U.S. Bank: Yes, that is correct, I believe your honor.
Milburn requested that the court impose sanctions. As such, Milburn should have complied with Rule 2-1 and submitted a motion explaining why sanctions should be imposed on the bank. Instead, Milburn ignored Rule 2-1 and orally requested sanctions. After hearing Milburn’s oral request, which was raised at oral argument without notice to the bank, the court, in U.S. Bank, N.A., et al., v. Milburn, 352 Ark. 144, 100 S.W.3d 674, ordered U.S. Bank and its counsel to show cause in writing why a sanction should not be imposed against them.
In addition, the majority rejects the bank’s argument that it acted in good faith in proposing the so-called “impact theory” as the basis for appeal. The bank argues that making a good-faith argument and losing is not grounds for sanctions. I agree. In Crockett & Brown, P.A. v. Wilson, 321 Ark. 150, 901 S.W.2d 826 (1995), the court discussed the requirements of Rule 11. We stated:
. . . Rule 11 does not require that the legal theory espoused in a filing prevail. The essential issue is whether signatories of the document fulfilled their duty of reasonable inquiry into the relevant law, and the indicia of reasonable inquiry into the law include the plausibility of the legal theory espoused and the complexity of the issues raised. CJC Holdings, Inc. v. Wright & Lato, Inc., 989 F.2d 791 (5th Cir. 1993). The CJC Holdings decision admonished that a trial court should not impose Rule 11 sanctions for advocacy of a plausible legal theory, particularly when the law is arguably unclear. Id. at 794.
Crockett & Brown, 321 Ark. at 155-56.
The present case, a class action, involved complex issues. Throughout the appeal, the bank argued that there was a question about whether an appealable order had been entered by the trial court. At oral argument, the bank’s counsel stated:
... [W]e struggle with that question ourselves and with counsel for U.S. Bank from Minnesota, as to whether that was a final order. We talked .... Well, what we had in mind was, if it were a final order, we had better appeal it.
In its response to the order to show cause, the bank stated that, in determining that there was a final order, it reasonably relied on existing law and, that by appealing the order, “it . . . avoided the trap faced by U.S. Bank if it did not appeal — that it would be barred from litigating any further issues of law or fact by failing to appeal the order.” The majority’s determination that sanctions were proper in the present case could have a far-reaching effect on the attorney’s role as an advocate for his or her client. In a case where an attorney is unsure about the finality of the order, is he or she now going to be faced with the choice of either: (1) filing an appeal of an order which may not be final, thereby risking sanctions by this court; or (2) failing to file an appeal of an order which may indeed be final, thereby risking a malpractice action from a client who loses the right to an appeal?
In the present case, the bank’s counsel acted as an advocate for his client. Of course, an attorney may not shield himself or herself from sanctions stating that he or she was merely acting as an advocate. Indeed, Rule 11 provides that sanctions may be imposed upon a party or counsel or both for taking or continuing a frivolous appeal. However, for the purposes of Rule 11, “a frivolous appeal or proceeding is one that has no reasonable legal or factual basis.” The appeal in the present case was not frivolous. The issues were complex, and the record indicates that there was a reasonable question concerning the finality of the order. I agree with the bank that sanctions should not be imposed.
For the foregoing reasons, I respectfully dissent.
Thornton, J., joins this dissent.I note that the majority’s holding does not address the issue of whether U.S. Bank will be precluded from raising any new argument should the bank file a subsequent appeal.