APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT JACKSON COUNTY, SOUTH DAKOTA. HONORABLE LORI S. WILBUR Judge.
CONSIDERED ON BRIEFS ON NOVEMBER 3, 2008
[¶1.] Dawn Reynick, also known as Dawn Rowe (Rowe), appeals an order sanctioning her and her attorney, Patrick Ginsbach (Ginsbach), in the amount of $4,920.61 payable to Pioneer Bank and Trust (Bank). We affirm.
[¶2.] Rowe's mother, Dorcas Cameron (Dorcas), and Dorcas's husband, Gerald Cameron (Gerald), who was Rowe's stepfather, exercised a power of attorney for a period of time on behalf of Dorcas's aunt, Eleanor Youman Sigloh (Sigloh). Upon Sigloh's death, Dorcas was appointed her personal representative. While occupying these positions of trust, Dorcas engaged in self-dealing by obtaining funds from Sigloh and her estate in the approximate amount of $324,353.85. Some of the funds were spent while the balance was deposited or invested in accounts held by Dorcas, Gerald or Dorcas's other daughter, Laurie Robertson (Laurie).
[¶3.] In late 2006, Bank, as special administrator of Sigloh's estate, commenced an action against Dorcas, Gerald, Laurie and two other individuals who once exercised a power of attorney on Sigloh's behalf. The complaint raised causes of action for breach of fiduciary duty and fraud and sought an accounting and damages.
[¶4.] Following Bank's commencement of its action, discovery ensued. A series of partial summary judgments were then entered against the various defendants in the case. A partial summary judgment in the amount of $454,626.08 was entered against Dorcas in April 2007.
[¶5.] During the discovery process, information was discovered suggesting that Dorcas had not only transferred funds obtained from Sigloh and her estate to Gerald and Laurie, but also to several of her other children, including Rowe. Thus, in July 2007, Bank moved to amend its complaint to join Rowe and three of her siblings as defendants in the action previously commenced against Dorcas and the other original defendants. An order granting the motion was entered on August 16, 2007. On September 26, 2007, Rowe filed an answer in the action and a counterclaim against Bank for barratry. Rowe alleged that Bank's action was frivolous, malicious and brought for an improper and unjustifiable motive.
[¶6.] On November 8, 2007, the circuit court entered a partial summary judgment against Laurie in the amount of $23,601.28 on a theory of implied trust. In December 2007, Bank moved for sanctions against Rowe and her attorney, Ginsbach, alleging that Rowe's counterclaim for barratry was unwarranted and interposed for improper purposes. On February 13, 2008, Bank filed a motion for summary judgment on Rowe's counterclaim. An order granting the motion was entered on March 26, 2008. The order also imposed sanctions on Rowe and her attorney, Ginsbach, in the amount of $4,920.61. A judgment for the sanctions was entered on April 9, 2008. Rowe appeals.
[¶7.] Whether the circuit court erred in failing to enter findings of fact and conclusions of law?
[¶8.] The circuit court did not enter findings of fact and conclusions of law in support of its order or judgment imposing sanctions. Rowe argues this requires reversal of the award.
[¶9.] SDCL 15-6-11(c) once required a court awarding sanctions to enter findings of fact and conclusion of law in support of the award. See SDCL 15-6- 11(c)(2004). This express requirement was omitted when this Court amended SDCL 15-6-11(c) by rule in 2006. See 2006 SDSessL ch 281 (Supreme Court Rule 06-07). Currently, the only explicit requirement that a rationale be set forth for an award of sanctions appears in SDCL 15-6-11(c)(3): "Order. When imposing sanctions, the court shall describe the conduct determined to constitute a violation of this rule and explain the basis for the sanction imposed." This language is essentially analogous to Federal Rule of Civil Procedure 11(c)(6): "An order imposing a sanction must describe the sanctioned conduct and explain the basis for the sanction." Rule 11(c)(6) has been analyzed as follows:
If sanctions are deemed appropriate, the 1993 amendment requires that the district court "describe the conduct determined to constitute a violation" of Rule 11 and "explain the basis for the sanction imposed." Thus, as the illustrative cases cited in the note below make clear, the district judge should indicate fairly precisely what conduct has been found to be improper and under which provision of law the sanctions are being awarded by the court. In addition, and particularly when a substantial amount of money is involved, the district judge should state with some specificity the manner by which the sanction has been computed. These requirements are designed to promote the rational exercise of trial court discretion in the utilization of Rule 11 and to facilitate ...