South Carolina Lawyers Weekly
A leasing company that successfully argued a lawsuit against it was frivolous had to move for sanctions within 10 days of a favorable judgment, the Court of Appeals has ruled.
The ruling means the company must forfeit nearly $10,000 in attorney’s fees that a trial judge awarded.
Republic Leasing was the target of a lawsuit brought by plaintiffs who erroneously alleged they were employees. The company had the suit dismissed following a summary judgment motion.
However, the company waited nearly two months before moving for attorney’s fees under S.C. Code Ann. Sect. 15-36-10, the Frivolous Proceedings Sanctions Act. That was too long, the appeals panel ruled, and the trial judge lost any authority to make a fee award.
“Absent specific statutory language vesting the trial judge with continuing jurisdiction, we refuse to hold that a trial judge retains jurisdiction to consider a motion for sanctions beyond 10 days after entry of the judgment,” Chief Judge Kaye G. Hearn wrote. “Such an interpretation would run counter to our established case law that a trial judge loses jurisdiction over a case when the time to file post-trial motions has elapsed.”
The case is Pitman v. Republic Leasing Company, Inc. (South Carolina Lawyers Weekly No. 011-126-02, 5 pages). Click here for the full text of the decision.
Facts
The plaintiffs filed suit to collect damages over their alleged employment with Republic Leasing. They alleged Republic Leasing violated state wage laws and owed them for unpaid vacation time, incentive pay, moving expenses and bonuses.
In its answer, Republic Leasing denied the Pitmans were company employees. The plaintiffs eventually admitted that they were employees of HRC ARMCO, which issued their paychecks and prepared their W-2 forms, not Republic Leasing.
On Jan. 17, 2000, Republic Leasing filed a summary judgment motion. A trial court ruled in the company’s favor on April 28, 2000.
On June 23, 2000, Republic Leasing moved for sanctions pursuant to Sect. 15-36-10. The act provides for the assessment of attorney’s fees and court costs against “[a]ny person who takes part in the procurement, initiation, continuation, or defense of any civil proceeding … if: (1) he does so primarily for a purpose other than that of securing the proper discovery, joinder of parties, or adjudication of the claim upon which the proceedings are based; and (2) the proceedings have terminated in favor of the person seeking an assessment of the fees and costs.”
A Circuit Court judge ruled for the company on August 23, 2000, awarding attorney’s fees of $9,766 as a sanction. The plaintiffs appealed.
Ruling
The central issue before the court: how much time did Republic Leasing have to ask for sanctions? The parties disagreed on that point:
* The plaintiffs said the sanctions request had to be filed within 10 days of final judgment. Rule 59 gives trial judges 10 days to set a new trial or amend a judgment, the plaintiffs said. That starts running when the jury is discharged or “10 days after the receipt of written notice of the entry of judgment or of the filing of an order disposing of the action.”
* Republic Leasing said it could move for sanctions any time after receiving the final judgment, unless the equitable defenses of laches and estoppel applied.
The court agreed with the plaintiffs and vacated the attorney’s fees award, ruling the trial judge no longer had subject matter jurisdiction over the case.
It was clear that Republic Leasing did not have to ask for sanctions “until it received notice of the summary judgment ruling in its favor,” according to the opinion.
Trial judges retain jurisdiction under Rule 59(e) to alter or amend a judgment within 10 days of its issuance. Republic Leasing’s motion for sanctions would be timely if filed within 10 days of judgment, the court said.
“Here, however, Republic Leasing waited until almost two months after the grant of summary judgment to move for sanctions under the act,” Chief Judge Hearn said.
