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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-10068
Non-Argument Calendar
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D.C. Docket No. 1:14-cv-00586-WSD
ELAINE ARMSTEAD
Plaintiff,
SANDRA FINCH,
Respondent-Appellant,
versus
ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY,
Defendant-Appellee,
WEBB, ZSCHUNKE, NEARY, & DIKEMAN, LLP,
Defendant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
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(July 14, 2017)
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Before ED CARNES, Chief Judge, JORDAN and ROSENBAUM, Circuit Judges.
PER CURIAM:
Attorney Sandra Finch represented Elaine Armstead in Armstead’s lawsuit
against Allstate Property & Casualty Insurance Company. In the weeks leading up
to trial, Finch, on Armstead’s behalf, filed a motion in limine to exclude or strike
the deposition testimony of Allstate’s fact witness Mark Gould. Allstate filed a
response in opposition that, among other things, described what happened during
Gould’s deposition, which it supported by citing the deposition transcript and
Gould’s affidavit. The transcript showed that during the deposition Finch handed
Gould page-by-page photographs of a document titled “Steamatic Guide to
Restoration Services” (an outdated company document) and that when Gould
asked Finch where she had found that document, Finch refused to answer. Gould
in his affidavit stated that he “got very upset when it became apparent [that Finch]
had obtained the document from my office without my permission.”
The photographs of the Steamatic Guide were not the only photographs
Finch showed Gould during his deposition. At one point she handed Gould a
photograph of the inside of his office, but refused to explain where she had gotten
the picture. Gould accused Finch of trespassing, at which point Finch responded,
“I caution you on defaming me, because if you defame me, I can promise you it
will not be good.”
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On July 1, 2016, the district court entered an order denying Armstead’s
motion in limine and instructing Finch to “file, on or before July 5, 2016, a sworn
affidavit stating, in detail, how and under what circumstances she obtained the
photographs of Mr. Gould’s office and the Steamatic Guide in question.” Finch
responded to that order on July 5 by filing objections based on lack of notice, due
process, and relevance. On July 6 the district court entered an order overruling
Finch’s objections and instructing her to file the affidavit “on or before 5:00 p.m.
EST today, July 6, 2017” because “the matters required to be addressed in the
affidavit may impact the admission of evidence at trial.” Finch did not file the
affidavit by that deadline.
The next morning (July 7), the district court held a pretrial conference.
Finch and Allstate’s counsel attended, and Finch explained that she was traveling
by plane when the district court entered its July 6 order and was unable to file her
response by the 5:00 deadline. Finch stated that she needed additional time to
respond to the court’s order and that she objected to that order on due process
grounds, explaining that “I really don’t understand what the complaint is or what it
is that I’m responding to.” The district court clarified that Finch was to file an
affidavit providing the source of the photographs because that information “may
well impact the admissibility” of those documents at trial. The district court then
told Finch that she would be permitted “a little more time today to provide the
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information.” At 5:07 that evening, after Finch had not filed the affidavit, the
district court entered an order directing her to show cause why it should not hold
her in contempt and impose sanctions for failing to follow its July 1 and July 6
orders.
On July 11, after the first day of trial had ended, the district court held a
hearing on its show cause order and, at that hearing, Finch argued for the first time
that she had not filed the affidavit based on her Fifth Amendment right against
self-incrimination. The district court did not impose sanctions at that hearing and
scheduled a second sanctions hearing to give Finch time to retain counsel to
represent her in the matter. At the second sanctions hearing Finch, through her
attorney, reiterated that she had not filed the affidavit based on her Fifth
Amendment right.
A few days after that second hearing, the district court entered an order
finding that Finch had acted in bad faith by refusing to comply with its July 1 and
July 6 orders. It decided to exercise its inherent power to sanction Finch by
ordering her to pay Allstate’s attorney’s fees incurred by its participation in and
preparation for both the pretrial conference (nearly all of which was spent
discussing Finch’s failure to comply with the July 1 and July 6 orders) and the first
sanctions hearing. The court ordered Allstate to submit to it the amount of
attorney’s fees it had incurred in connection with those two hearings. Allstate
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submitted the calculation of its attorney’s fees, and the district court entered an
order directing Finch to pay Allstate $1,548 in attorney’s fees. This is Finch’s
appeal of the district court’s orders imposing sanctions based on her non-
compliance with its July 1 and July 6 orders.
We review for an abuse of discretion the district court’s imposition of
sanctions under its inherent power. See Sciarretta v. Lincoln Nat’l Life Ins. Co.,
778 F.3d 1205, 1212 (11th Cir. 2015). A district court abuses its discretion when it
“applies an incorrect legal standard, applies the law in an unreasonable or incorrect
manner, follows improper procedures in making a determination, or makes
findings of fact that are clearly erroneous,” or when it “misconstrues its proper
role, or ignores or misunderstands the relevant evidence.” Id. (quotation marks
omitted) (alterations omitted). “Courts have the inherent power to police
themselves and those appearing before them,” and “[t]he key to unlocking that
inherent power is a finding of bad faith.” Id. “Once unlocked, the power carries
with it the authority to assess attorney’s fees as a sanction for bad faith conduct.”
Id.
Finch first contends that because she had a good faith basis for asserting her
Fifth Amendment right, the district court erred in finding that she acted in bad faith
by refusing to comply with its July 1 and July 6 orders. Although Finch raised
objections to those orders, she did not assert her Fifth Amendment privilege at that
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time. She instead brought up her Fifth Amendment right at the sanctions hearings
as an after-the-fact reason for not filing the affidavit.
If Finch wished to assert her Fifth Amendment right as a basis for not
complying with the July 1 and July 6 orders, she should have claimed her Fifth
Amendment privilege at the time she was instructed to file the affidavit. See
Minnesota v. Murphy, 465 U.S. 420, 434, 104 S. Ct. 1136, 1146 (1984) (noting
“[t]he general rule that the [Fifth Amendment] privilege must be claimed when
self-incrimination is threatened”). Instead, Finch objected to the July 1 and July 6
orders on other grounds (which the district court overruled) and then sat silently
while the July 7 deadline passed. The district court’s decision to sanction Finch
did not, as she contends, “effectively penaliz[e] [her] for the exercise of her Fifth
Amendment privilege.” It was instead based on her failure to either comply with
or timely raise a valid objection to complying with the July 1 and July 6 orders.
Finch also contends that the district court erred in finding that Finch’s failure
to file the required affidavit constituted bad faith because the court failed to make
specific findings of the conduct that warranted sanctions. “We review a court’s
finding of bad faith, and the subsidiary factual findings that go into it, only for
clear error.” Sciarretta, 778 F.3d at 1213. “Under clear error review, we will
reverse only if after viewing all the evidence, we are left with the definite and firm
conviction that a mistake has been committed.” Id. (quotation marks omitted).
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The district court’s order imposing sanctions found that Finch “acted in bad faith
when she repeatedly and flagrantly disregarded [its] orders” without providing
“adequate justification or explanation.” The district court made specific findings
of bad faith and it did not clearly err in finding that Finch acted in bad faith by
failing to either comply or timely justify not complying with its orders.1
Finally, Finch contends that the district court abused its discretion by
imposing sanctions because it failed to give her sufficient notice of its intent to
sanction her and failed to provide a legal basis for imposing sanctions. See
Chambers v. NASCO, Inc., 501 U.S. 32, 50, 111 S. Ct. 2123, 2136 (1991) (“A
court must, of course, exercise caution in invoking its inherent power, and it must
comply with the mandates of due process . . . .”). Before the first sanctions
hearing, the district court ordered Finch to show cause why she should not be held
in contempt and sanctioned for not complying with its July 1 and July 6 orders.
During the first sanctions hearing the district court made clear both the factual and
legal basis for which it was considering imposing sanctions. At that hearing the
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Finch also contends that the district court erroneously failed to take into account
Allstate’s egregious conduct during discovery, which is what led to the “need to disprove
Gould’s testimony without the benefit of full discovery” and her need to “get to the truth . . . in a
situation where [her client] was deprived of discovery.” But Finch was not sanctioned for
allegedly sneaking into Gould’s office. She was sanctioned for refusing to file an affidavit after
the court more than once ordered her to do so. For that reason, Allstate’s conduct during
discovery is not relevant to whether Finch acted in bad faith by refusing to file the court ordered
affidavit.
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district court told Finch that she needed to show cause why she should not be
sanctioned for specific conduct:
In [the July 1 order] I required Ms. Finch to provide certain
information about the acquisition of materials that were used during a
deposition. The information that was required to be provided is set
out on page 34 of the order, . . . and the information was required to
be provided in a sworn affidavit, stating in detail how and under what
circumstances she obtained the photographs of Mr. Gould’s office and
the Steamatic guide in question . . . . She did not provide the
information as originally required in the July 1, 2016 order, nor did
she provide me information as she was told she was required in the
Court’s subsequent order. And then, further, during the pretrial
conference that we had just a couple of days ago, she told me that she
intended to file a response to the order, and she has failed to do that.
In an order scheduling the second sanctions hearing, the district court stated
that it was holding that hearing “to determine whether the Court should exercise its
inherent power, and, if it should, what sanctions are appropriate.” Finch’s
statement that “[t]he District court failed to notify [her] of a) the conduct that is
subject to sanction; or b) the legal basis for said sanctions” is false.
AFFIRMED.
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