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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`____________________________________
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`In re: W.A.R. LLP
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`____________________________________)
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`Civil Action No. 11-1574 (RCL)
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`MEMORANDUM AND ORDER
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`Before the Court is appellee William Cartinhour’s motion for sanctions [23]. Cartinhour
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`seeks sanctions against appellant Wade Robertson and his lawyer, Ty Clevenger, for filing an
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`allegedly frivolous appeal. The Court disposed of that appeal and affirmed the judgment of the
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`Bankruptcy Court in an order [22] issued January 27, 2012. Upon consideration of the motion,
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`Robertson and Clevenger’s opposition [30] and Cartinhour’s reply [32], the applicable law, and
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`the entire record herein, the Court will enter sanctions against Robertson and Clevenger, jointly,
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`in the amount of $7,249.00.
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`I.
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`BACKGROUND
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`The facts underlying the instant motion are described at length in this Court’s January 27
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`order (as well as in various orders in related cases before Judge Huvelle); a comparatively brief
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`summary will suffice here. This motion arises out of an appeal in a bankruptcy case that was in
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`essence a tangent to previous litigation in this district court between the founding partners of the
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`debtor partnership W.A.R. LLP, Wade Robertson and William Cartinhour. Robertson initially
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`filed a declaratory judgment action, which was assigned to Judge Huvelle. Cartinhour
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`counterclaimed, arguing that Robertson had fraudulently induced him to invest a total of $3.5
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`million in the partnership. Cartinhour later alleged that Robertson had caused W.A.R. LLP to
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`lend to Robertson at least $3,405,000 of the $3.5 million invested in the partnership by
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`Cartinhour. Cartinhour successfully moved for a preliminary injunction putting a freeze on what
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`1
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`remained of those assets in Robertson’s bank accounts. Robertson then filed a suit implicating
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`the same set of issues in the Southern District of New York. (This case was eventually
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`transferred to this district, and reassigned to Judge Huvelle as a related case; Judge Huvelle
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`granted Cartinhour and the other defendants’ motion to dismiss.) Cartinhour sought an anti-
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`filing injunction against Robertson in the original declaratory judgment case. Judge Huvelle
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`declined, but not without noting:
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`Robertson proceeded to file no less than fourteen motions, including a
`motion to reconsider an order granting Cartinhour leave to amend his
`counter-claims, a motion to quash a subpoena for documents that
`Robertson had already agreed to produce, and a motion to recuse. Two of
`those motions were sufficiently meritless, and were considered by the
`Court to have been filed recklessly and in bad faith, so as to justify the
`award of attorney’s fees against Robertson under 28 U.S.C. § 1927, which
`permits the award of fees “against an attorney who frustrates the progress
`of judicial proceedings.”
`The Court of Appeals has been equally frustrated by Robertson’s
`vexatious litigation strategy, finding sanctions to be “abundantly justified”
`after Robertson filed his fourth motion to stay despite being warned, less
`than a week earlier, that the Court “looks with extreme disfavor upon
`unnecessary pleadings.” . . . Prior to imposing those sanctions, the Circuit
`Court had summarily denied Robertson’s motion for disqualification and
`sanctions against Cartinhour’s counsel; Robertson’s petition for
`mandamus seeking recusal; Robertson’s motion for clarification and
`reconsideration, where the Court explicitly warned him that it “will not
`hesitate to impose sanctions” . . .; Robertson’s emergency motion to stay a
`preliminary injunction; and Robertson’s motion for sanctions and a stay,
`noting, inter alia, that certain orders of the district court were
`unappealable.
`In addition to the flurry of appellate activity and the sanctions imposed to
`date, this Court has had to rule on endless motions for recusal, motions to
`stay, motions for reconsideration, and motions to quash.
`. . .
`The Court . . . warns Robertson, as did the Court of Appeals, that if he
`should continue to pursue his strategy of unnecessarily proliferating this
`litigation, this Court will not hesitate to entertain a renewed motion for an
`injunction.
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`(internal citations and modifications omitted).
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`2
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`Around the same time, an outside W.A.R. LLP creditor filed an involuntary Chapter 7
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`bankruptcy petition in the Western District of Tennessee against W.A.R. LLP—the genesis of
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`the instant bankruptcy case. Because the filing of a bankruptcy case automatically stays actions
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`“to obtain possession of or to exercise control over property of the bankruptcy estate,” 18 U.S.C.
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`§ 362(a)(1), Judge Huvelle held a hearing to determine whether the district court case could
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`proceed. Judge Huvelle determined that it could, because the litigation involved solely claims by
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`Robertson against Cartinhour and vice versa, and did not implicate partnership property. In
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`ruling on a motion to enjoin the D.C. case filed in the Tennessee bankruptcy court, Judge
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`Paulette J. Delk reached the same conclusion. However, “[o]ut of an abundance of caution,”
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`Judge Delk “expressly” found that “sufficient cause exists under 11 U.S.C. § 362(d)(1) to modify
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`the stay to permit the D.C. lawsuit to go forward.” The Tennessee court then transferred the case
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`to the District of Columbia.
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`Following the bankruptcy court’s adoption of the trustee’s determination of no assets for
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`distribution, and various other orders of the bankruptcy court, Robertson and W.A.R. LLP
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`appealed to this Court. Meanwhile, the original declaratory judgment action in front of Judge
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`Huvelle proceeded to trial, where the jury returned a verdict for Cartinhour in the amount of $3.5
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`million in compensatory damages and $3.5 million in punitive damages for Robertson’s breach
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`of fiduciary duty as business partner and for his legal malpractice. This Court upheld the
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`bankruptcy court’s orders in its January 27, 2012 order; this motion followed. Cartinhour
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`requests the imposition of sanctions in the amount of $7,249.00, representing attorney’s fees for
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`the appeal and for preparation of the instant motion.
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`II.
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`DISCUSSION
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`Bankruptcy Rule 8020 authorizes a district court to impose sanctions in the form of single
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`or double costs against an appellant and/or his attorney if the court determines that an appeal was
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`frivolous. The Advisory Committee Note to the rule states that the standard for sanctions is the
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`same as for circuit courts of appeals reviewing frivolous appeals from a district court under Fed.
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`R. App. P. 38. See, e.g., In re Porto, 645 F.3d 1294, 1306-07 (11th Cir. 2011).1 An appeal is
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`frivolous if “its disposition is obvious, and the legal arguments are wholly without merit.”
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`Reliance Ins. Co. v. Sweeney Corp., Maryland, 792 F.2d 1137, 1138 (D.C. Cir. 1986). Sanctions
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`are warranted against a lawyer personally for prosecuting a frivolous appeal if the lawyer’s
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`conduct reflects “a reckless indifference to the merits of a claim.” Id.
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`Although it will “tolerate[] and entertain[] marginal appeals,” Jenkins v. Tatem, 795 F.2d
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`112, 113 (D.C. Cir. 1986), the Court of Appeals for the D.C. Circuit has awarded sanctions for
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`frivolous appeals on numerous occasions. For example, in Reliance Ins. Co., it sanctioned a
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`party and its lawyer for the groundless claim that a surety was not bound by an arbitration award
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`against the principal when the arbitration panel awarded damages slightly in excess of the
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`plaintiff’s request. 792 F.2d at 1138. In Solomon v. Supreme Court, it sanctioned a party for its
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`attempt to collaterally challenge a judgment of the Florida Supreme Court and to hold members
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`of that court liable for damages under 42 U.S.C. § 1983 despite judges’ absolute immunity. No.
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`03-7002, 2003 U.S. App. LEXIS 6458 (D.C. Cir. Apr. 2, 2003) (unpublished opinion). In El
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`Paso Merch. Energy, L.P. v. Ferc, it sanctioned a party for unfounded claims of procedural
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`issues warranting review of a non-final agency proceeding. Nos. 02-1140, 02-1142, 2002 U.S.
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`App. LEXIS 18357 (D.C. Cir. Sept. 5, 2002) (unpublished opinion). And in South Star
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`1 Courts are empowered under Fed. R. App. P. 38 to award attorney’s fees as part of “costs.” See, e.g., Garden State
`Broadcasting Ltd. Partnership v. FCC, 966 F.2d 386, 396 (D.C. Cir. 1993).
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`Communications, Inc. v. FCC, it sanctioned a lawyer for arguing his client could compete for a
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`license even though his client lacked a transmitter site, a clear prerequisite. 949 F.2d 450, 452
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`(D.C. Cir. 1991).
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`The Court finds that the appellants’ arguments in this case are similarly ill-founded and
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`frivolous.2 The appellants’ fundamental argument on appeal was that W.A.R. LLP retained
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`some form of property interest over the money held by the court in constructive trust. They
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`pursued this argument despite the fact that those funds (with the exception of $4,611.66 to which
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`Cartinhour made no claim) came from Robertson’s personal bank account, Robertson having
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`taken possession of said funds in exchange for unsecured promissory notes issued to W.A.R.
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`LLP. The appellants cited no legal authority providing even a modicum of support to their
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`proposition. They argued that W.A.R. LLP had an interest in those funds because W.A.R. LLP
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`was a party to the underlying declaratory judgment suit, even though W.A.R. LLP most
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`evidently was not a party to that suit, and even though the appellants made no effort to specify
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`any legal claims W.A.R. LLP might have to those funds. They listed a variety of cases
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`pertaining to other aspects of partnership law, even citing a case involving marital dissolution.
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`They made a litany of other, unrelated, arguments. The complete lack of merit to these claims
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`convinces the Court that they could have been brought for no “purpose other than to harass and
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`2 As a preliminary matter, the appellants argue that the Court should delay action on Cartinhour’s motion while the
`appeal of this Court’s January 27 order is pending in the Court of Appeals. Post-judgment motions for sanctions are
`collateral to the court’s judgment, cf. Elec. Privacy Info. Ctr. v. Dep’t of Homeland Security, 811 F. Supp. 2d 216,
`225 (D.D.C. 2011) (citing Moody Nat’l Bank of Galveston v. G.E. Life & Annuity Assurance Co., 383 F.3d 249, 250
`(5th Cir. 2004)), and the taking of an appeal from a district court’s final judgment does not divest the court of
`jurisdiction over such motions, see In re Schaefer Salt Recovery, Inc., 542 F.3d 90, 98 (3rd Cir. 2008). The
`appellants stress that the Court should refrain from ruling on the motion because the Court of Appeals might reverse
`its January 27, 2012 order. However, given the frivolous nature of the appellants’ arguments, the Court sees no
`reason for further delay, especially since the appellants’ pattern of conduct in this case suggests they will appeal this
`order as well.
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`delay.” Reliance Ins. Co., 792 F.2d at 1139. The groundless nature of the appeal, unfounded
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`whatsoever in the law, warrants sanctions.
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`Furthermore, the Court notes that this legal question, or variations thereof, had been
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`resolved by three judges prior to the instant appeal. Judge Huvelle had already ruled that the
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`imposition of a constructive trust would not affect the Tennessee bankruptcy proceedings. Judge
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`Delk ruled the same way, and in the alternative granted relief from the automatic stay. Judge
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`Teel issued the rulings subject to the instant appeal. All three judges agreed that imposition of
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`the constructive trust in no way implicated any property held by W.A.R. LLP.
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`Adding to the Court’s “suspicions” regarding the motives behind the appellants’ decision
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`to prosecute the instant appeal, see id., is the lengthy history of misconduct, and of sanctions
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`already imposed against them, in related litigation. As Judge Huvelle noted in her most recent
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`order dismissing the former S.D.N.Y. case, which was transferred to this district court:
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`[T]he ensuing litigation here was tumultuous. [Robertson’s] incessant filings—described
`as “vexatious,” “meritless,” “reckless,” and “bad faith”—ultimately elicited warnings and
`sanctions from this Court, as well as the Court of Appeals, for frustrating proceedings and
`imposing unnecessary costs on Cartinhour.
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`Robertson v. Cartinhour, Civil No. 11-1919, 2012 U.S. Dist. LEXIS 35217, *8-9 (D.D.C. Mar.
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`16, 2012). Specifically, Judge Huvelle noted two instances in which the district court ordered
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`costs. Id. at *9-10 n.8. The Court stresses that it is only imposing sanctions for the appellants’
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`conduct in this appeal, and not as a result of their conduct elsewhere. But the belabored history
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`of this litigation, the apparent bad faith of the appellants in other, related litigation, and prior
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`impositions of sanctions all give the Court further confidence in its characterization of this
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`appeal as frivolous.
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`Judge Huvelle aptly characterized this bankruptcy proceeding as “an effort to sidetrack
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`the [declaratory judgment] trial . . . and to find a more favorable forum.” Id. at *15. The Court
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`fully agrees. The Court can come up with no explanation for the appellants’ prosecution of the
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`underlying bankruptcy litigation except as a strategy to force Judge Huvelle to block further
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`proceedings in the declaratory judgment action by operation of the automatic stay provision, and
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`thus to avoid a verdict in that case that Robertson had defrauded Cartinhour. The same
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`motivation in all likelihood applies to the prosecution of this appeal.
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`III. CONCLUSION
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`The appellants’ appeal to this Court of the bankruptcy court’s orders was frivolous and
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`warrants sanctions. It is therefore hereby
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`ORDERED that appellant Wade Robertson and his counsel, Ty Clevenger, pay
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`attorney’s fees in the amount of $7,249.00 to William Cartinhour.
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`SO ORDERED.
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`Signed by Royce C. Lamberth, Chief Judge, on April 2, 2012.
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