Beverly Beam v. Marc Bauer

PRECEDENTIAL
THE UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT
___________
Nos. 03-1874, 03-2194
___________
BEVERLY BEAM,
Appellant,
v.
MARC BAUER; GLENN W .
ZEHNER; CAPITAL AREA
INTERMEDIATE UNIT; SCOTT
DOWNEY; ROGER MORRISON;
DAVID L. GRAYBILL;
MICHAEL SWEGER
___________
ON APPEAL FROM THE UNITED
STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF
PENNSYLVANIA
(D.C. Civil No. 02-cv-01797)
District Judge: The Honorable
Sylvia H. Rambo
___________
Submitted Under Third Circuit
LAR 34.1(a)
January 30, 2004
BEFORE: NYGAARD and FUENTES,
Circuit Judges, and
O’NEILL,* District Judge.
(Filed September 9, 2004)
Donald A. Bailey, Esq.
4311 North 6th Street
Harrisburg, PA 17110
Counsel for Appellant
Melinda B. Kaufmann, Esq.
Stock & Leader
221 West Philadelphia Street
Susquehanna Commerce Center
East Building
York, PA 17404
Counsel for Appellees Bauer, Zehner,
Capitol, and Downey
Kathryn L. Simpson, Esq.
Mette, Evans & Woodside
3401 North Front Street
P.O. Box 5950
Harrisburg, PA 17110-0950
Counsel for Appellee Morrison
Spero T. Lappas, Esq.
Melanie L. Erb, Esq.
Serratelli, Schiffman, Brown & Calhoun
2080 Linglestown Road
Suite 201
Harrisburg, PA 17101-9445
Counsel for Appellees Graybill and
Sweger
*H onorable Thomas N. O’Neill, Jr.,
Senior District Judge for the United
States District Court for the Eastern
District of Pennsylvania, sitting by
designation.

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___________
OPINION
___________
NYGAARD, Circuit Judge.
Judge Sylvia Rambo, of the United
States District Court for the M iddle
Dis tri c t o f P e n n s yl v a n i a, f o u nd
plaintiff/appellant’s claim to be barred by
the res judicata doctrine; she further
concluded that the suit was frivolous, and
then dismissed it. She also imposed Rule
11 sanctions on plaintiff’s attorney, Don
Bailey, who was also appellant’s counsel
on appeal. On Beam’s appeal challenging
the dismissal and the sanctions, counsel
failed to offer any argument, facts, or law
to show that the claim was not frivolous,
or that the Court had in some way erred.
Hence, we affirmed, conclud ing
additionally in our opinion that the appeal
was also frivolous. Appellees now ask
that we award damages pursuant to
Federal Rule of Appellate Procedure 38, to
compensate them for the financial loss
they incurred defending the dismissal
order. The request presents us with three
issues: Should we award damages? If so,
in what amount? And, against whom? We
will award damages in the amounts
requested by the various appellees under
Rule 38, and against counsel for appellant.
A brief procedural history of this, and
an earlier lawsuit filed by Beam, is both
instructive and germane to the issue in this
motion. Beam has twice brought lawsuits
that the District Court summarily
dismissed. The District Court dismissed
Beam’s first lawsuit for failure to state a
claim upon which relief could be granted.
We affirmed. Beam v. Downey, 54 Fed.
Appx. 113 (3d Cir. 2002). But, while the
first case was pending on appeal, Beam
filed a second suit. The second suit added
additional defendants, a few new legal
theories, but still contained nothing of
substance or merit. In its opinion
explaining the dismissal order, the District
Court found that Beam’s second complaint
was “intended to harass, cause unnecessary
and needless increase in the cost of
litigation, . . . that factual contentions have
no evidentiary support . . . that the claims
and legal contentions . . . are not warranted
by existing law nor by non-frivolous
argument for the extension, modification,
or reversal of existing law or for the
establishment of new law.” Memorandum
and Order of the District Court (Mar. 25,
2003). The District Court also ordered
Beam’s attorney, Don Bailey, and his law
firm to pay Rule 11 sanctions to the
appellees. These findings and conclusions
were fully supported by the record, so we
affirmed. Beam v. Bauer, 88 Fed. Appx.
523 (3d Cir. 2004).
The decision whether to appeal from an
order of the District Court is not a matter
to be taken lightly by either a losing party
or her counsel. An appeal is not just the
procedural next step in every lawsuit.
Neither is it an opportunity for another
“bite of the apple,” nor a forum for a
losing party to “cry foul” without legal or
factual foundation. An appeal is a serious
matter because it is a claim of error by the

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District Court and an attack on the validity
of its order. Consequently, if the appeal is
wholly lacking in merit, there are
consequences. Appellant herein now
must face them.
Rule 38 states that “[i]f a court of
appeals determines that an appeal is
frivolous, it may, after a separately filed
motion or notice from the court and
reasonable opportunity to respond, award
just damages and single or double costs to
the appellee.” Fed. R. App. P. 38. Of
course, we recognize that not every claim
dismissed as frivolous is frivolous.
District C ourts oc casio nally err.
Nonetheless, we state with equal emphasis
that an appeal from a frivolous claim is
likewise frivolous. See A-Abart Elec.
Supply, Inc. v. Emerson Elec. Co., 956
F.2d 1399, 1407 (7th Cir. 1992). It is
counsel’s responsibiliy to make the
distinction.
Although often mistakenly referred to
as both, an award under Rule 38 is neither
a sanction nor a punishment. Huck v.
Dawson, 106 F.3d 45, 52 (3d Cir. 1997)
(“Rule 38 is not a sanctions provision.”).
Nor is appellant’s intent a consideration.
Appellant is like any other tortfeasor. It
does not matter whether she filed this
appeal out of malice, ignorance, or deceit;
it is the merit of her argument on appeal
that determines whether she carries the
day. It is not a punitive provision.
“Damages [under Rule 38] are awarded by
the court in its discretion . . . as a matter of
justice to the appellee.” See Hilmon Co.
(V.I.) Inc. v. Hyatt Int’l, 899 F.2d 250, 253
(3d Cir. 1990) (citing the Advisory
Committee Note to Rule 38).
The rationale of Rule 38 is simply that
when parties suffer pecuniary loss by
paying attorney fees to defend a valid
judgment against a frivolous appeal, they
are as entitled to be awarded damages as is
a victim seeking compensation for any
other financial loss incurred by the acts of
a tortfeasor. It is a rule designed to make
whole a party victimized by needlessly
having to expend money for attorney fees
to protect a valid judgment from a baseless
attack. That is precisely what has
happened in this matter.
Recently, when discussing Rule 38
damages, we cautioned counsel that a
finding by a District Court that a lawsuit is
frivolous should serve as notice to the
parties and their attorney to exercise
caution, pause, and “devote additional
examination to the legal validity and
factual merit of his contentions.” Huck,
106 F.3d at 52. Here, despite many cues
from us and the District Court that her
cause was wholly meritless, Beam and her
counsel have persisted before the District
Court and again before us. Additionally,
as we noted in our opinion in Beam v.
Bauer, “[i]n her haste to file [this] lawsuit,
Beam disregarded the then-pending appeal
before this Court. Beam would have been
well-advised to await our opinion, which
ultimately affirmed the result in the first
case.” 88 Fed. Appx. 523, 526 (3d Cir.
2004). Our affirmation of the District
Court’s first dismissal was lost on counsel,
who had already filed the second suit. Had
counsel been paying attention, our result

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could have given him notice of the fact
that he had failed to discern on his own;
that his client’s claims were wholly
without legal or factual substance. We
thus will award damages to appellees.
In her response to the request for
damages, Beam does not raise an issue as
to the propriety of the amount of damages
requested. Moreover, because this is a
damage issue, and because there is neither
anything shocking in the amount
requested, nor do the fees appear at all
inflated, there is no need for us to raise an
issue as to the amount sua sponte. Simply
stated, appellees have incurred costs and
expenses defending a valid judgment
against a frivolous appeal, and are entitled
to be made whole. Hence, we will award
damages in the amount expended by
appellees.
Having decided that both the claim for
fees and the statement ad damnum are
proper, we must determine whether to
place the responsibility for payment with
Beam, her counsel, or both. Beam “had a
right to rely upon [her] attorney for sound
advice.” Hilmon, 899 F.2d at 254.
Although an unrepresented litigant should
not be punished with damages for his
failure to appreciate legal subtleties in
legal arguments, Hughes v. Rowe, 449
U.S. 5, 15 (1980), we have consistently
held represented clients, and specifically
their counsel, to a higher standard.
Moreover, because it would be unfair to
charge a damage award against a party
who has relied upon her counsel’s
expertise in deciding whether to appeal,
we have routinely imposed Rule 38
damages upon counsel when a frivolous
appeal stems from counsel’s professional
error. See Nagle v. Alspach, 8 F.3d 141,
145 (3d Cir. 1993); see also A-Abart, 956
F.2d at 1407.
In Hilmon we set this standard:
[A]ttorneys have an affirmative
obligation to research the law and
to determine if a claim on appeal
[has merit]. We conclude that if
counsel ignore or fail in this
obligation to their client, they do so
at their peril and may become
personally liable to satisfy a Rule
38 award. The test is whether,
following a thorough analysis of
the record and careful research of
the law, a reasonable attorney
would conclude that the appeal is
frivolous.
Hilmon, 899 F.2d at 254.
In this case it would have been obvious
to a reasonable attorney that an appeal
from the District Court’s order was
frivolous, unless he had law or facts to
support a conclusion that the District Court
judge had erred. By failing to appreciate
this, Beam’s counsel exposed himself to
personal liability for Rule 38 damages.
Moreover, in his response to the motion
for damages, counsel presents no reason to
conclude that the responsibility for the
appeals lies anywhere but with him.
Hence, we conclude that it is appropriate
that counsel bear the burden of paying the
damages.

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Finally, counsel for Beam contends in
a motion to strike the appellees’ Rule 38
motion that Beam is entitled to an
evidentiary hearing. We disagree. In her
response to the motion for Rule 38
damages, Beam raises no evidentiary
issues that would indicate to us any need
for a hearing to find facts. We will deny
Beam’s motion to strike.
In sum, and upon consideration of the
appellees’ motions, the appellant’s
opposition thereto, and a thorough review
of the record, we will award damages to
appellees’ in the amounts requested, all in
accord with the attached order.

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