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In the Matter of Benson (8/30/91), 816 P 2d 200
NOTICE: This opinion is subject to
formal correction before publication in the
Pacific Reporter. Readers are requested to
bring typographical or other formal errors to
the attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
IN THE MATTER OF )
PHILLIP E. BENSON, ) Supreme Court No. S-3863
Regarding Sanctions Imposed ) Superior Court No.
In Freed v. Miller, Superior ) 3AN-87-918 CIVIL
Court No. 3AN-87-918 CIVIL )
) O P I N I O N
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Karen L. Hunt, Judge.
Appearances: Linda P. MacLean, La
Verne, California, for Appellant. Peter W.
Giannini, pro se, Anchorage.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
This appeal arises out of a motion to disqualify
opposing counsel which was filed in connection with a prejudgment
Prior to the commencement of the November 23, 1987
hearing, Thomas Angell informed Phillip Benson, counsel for
plaintiff Oscar Freed, that Peter Giannini, counsel for defendant
Terry Miller, was the same attorney who had advised Freed,
Miller, and Angell when they had mutual business interests.
Freed, Miller and Angell had entered a limited partnership for
the purpose of forming a corporation, which was to purchase and
certain properties. The failure of the limited partnership led
to the underlying prejudgment attachment proceeding between Freed
and Miller. Based upon Angell's statement, Benson apprised the
superior court of Giannini's potential conflict.
The superior court acknowledged that it was appropriate
for Benson to raise the issue of Giannini's potential conflict of
interest. The superior court then gave Benson until noon of the
following day to file a formal motion to disqualify Giannini, if
Benson considered it necessary.
On November 24, 1987, Benson filed a motion to
disqualify Giannini. In support of the motion, Benson filed
Angell's affidavit. In his affidavit, Angell stated as follows:
1. My present address is 2528 Casa
Grande Court, Walnut Creek, CA 94598.
2. During the year 1984-1985, I was
one of the directors and officers of General
Concessions, Inc. The two other officers and
directors were Oscar J. Freed and Terry
3. During the existence of General
Concessions, Inc. which was devised for the
purpose of forming a limited partnership for
the sale of shares involving the Jams
Restaurants in Alaska, among other things,
routine legal advice, legal documentation,
and counseling was provided to the General
Concessions, Inc. entity by Peter Giannini
regarding legal maters [sic] pertaining to
General Concessions, Inc. on several
occassions [sic] on the telephone and in his
office. Peter Giannini's representation
extended to all the officers and directors of
General Concessions, Inc. in his position as
advisor to the entity which is now the
subject of litigation in the above captioned
case between two former members, officers,
and directors of that entity.
Giannini opposed the motion. He also requested costs
and sanctions against Benson for making the disqualification
motion. The superior court denied Benson's motion to disqualify
Giannini and deferred ruling on Giannini's request for costs and
Approximately one year later, Giannini renewed his
motion for sanctions against Benson. After a hearing, the
superior court granted Giannini's motion for imposition of Civil
Rule 11 sanctions, ordering that Benson pay Giannini's reasonable
attorney's fees in the amount of $2,086.50 plus interest.
This appeal followed.
At the time the superior court imposed Rule 11
sanctions against Benson, Rule 11 provided in part as follows:
The signature of an attorney or party
constitutes a certificate 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 expense
in the cost of litigation. . . . If a
pleading, motion, or other paper is signed in
violation of this rule, the court, upon
motion or its own initiative, shall impose
upon the person who signed it, a represented
party, or both, an appropriate
sanction . . . .1
Thus, the issue in this appeal is whether the superior
court abused its discretion in imposing Rule 11 sanctions against
Benson.2 We hold that it did.
The Advisory Committee notes to the federal version of
Rule 11 states, "[t]he court is expected to avoid using the
wisdom of hindsight and should test the signer's conduct by
inquiring what was reasonable to believe at the time the
pleading, motion, or other paper was submitted." Advisory Comm.
Note, 97 F.R.D. 196, 199 (1983). See Alaska Fed. Sav. & Loan
Ass'n of Juneau v. Bernhardt, 794 P.2d 579, 583 (Alaska 1990);
see Alaska State Employees Ass'n v. Alaska Pub. Employees Ass'n,
Op. No. 3711 at 11-12 (Alaska, June 21, 1991). Given the content
of Angell's affidavit, we conclude that there is no record
support for the imposition of Rule 11 sanctions against Benson.
Angell's affidavit demonstrates that the disqualification motion
"is well grounded in fact." Further, under the stringent time
constraints imposed by the superior court, it cannot be said that
Benson failed to make a reasonable inquiry before determining to
file a motion to disqualify Giannini.
1. The mandatory sanction provision has been deleted from
the rule. See Supreme Court Order 1009 (October 12, 1989,
effective January 15, 1990).
2. We review the award of sanctions under Rule 11 for abuse
of discretion. Keen v. Ruddy, 784 P.2d 653, 658 (Alaska 1989).
Under this standard, the court "reviews all factors relevant to
the issue of whether the attorney's inquiry into facts and law
was reasonable . . . ." Id. Reversal is appropriate only when
this court is left with a "definite and firm conviction on the
whole record that the trial judge made a mistake." Alaska Fed.
Sav. & Loan Ass'n of Juneau v. Bernhardt, 794 P.2d 579, 582
(Alaska 1990) (quoting Gregor v. Hodges, 612 P.2d 1008, 1010
(Alaska 1980) (per curiam)).