This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
AGA Medical Corporation,
Thomas B. Hatch,
Filed January 10, 2006
Hennepin County District Court
File No. CT 02-017734
William Z. Pentelovitch, David F. Herr, Laura E. Walvoord, Julian C. Zebot, Maslon Edelman Borman & Brand, LLP, 3300 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402 (for respondent Afremov)
Terrence E. Bishop, Larkin Hoffman Daly & Lindgren, Ltd., 1500
Linda Holstein, Parsinen Kaplan Rosberg & Gotlieb, P.A.,
Lewis A. Remele, Jr., Bassford Remele, P.A., 33 South Sixth Street, Suite 3800, Minneapolis, MN 55402 (for respondent AGA Medical Corporation)
Eric J. Magnuson,
Rider Bennett, LLP,
Considered and decided by Willis, Presiding Judge; Worke, Judge; and Crippen, Judge.[*]
U N P U B L I S H E D O P I N I O N
Appellant, an attorney for one of the named parties in this dispute, contests an order in which the district court imposed sanctions following an emergency evidentiary hearing. Because the district court’s exercise of its inherent powers failed to provide sufficient notice to appellant of the purpose of the hearing and the court did not inform him of the potential for sanctions, its order violated appellant’s due process protections. Therefore, we reverse and vacate the order insofar as it imposed sanctions on appellant.
Franck Gougeon, Dr. Kurt Amplatz, and Michael Afremov were equal shareholders of AGA Medical Corporation (AGA). Afremov commenced the present action, which was ultimately settled, in October 2002. On September 9, 2003, the district court ordered Gougeon to immediately turn over to the court-appointed receiver “any and all computer equipment currently in his possession on which [AGA] business operations have been conducted” and denied Gougeon any further access to AGA’s computer network. On October 30, 2003, at 4:11 p.m., the district court filed an order finding Gougeon in violation of the September 9 order and requiring him to
immediately turn over his AGA home computer and its hard drive to the Receiver. [Gougeon]’s counsel may have access to the information contained on this computer to determine what, if any of the information contained therein is privileged, after it has been received by the Receiver.
Gougeon’s attorney, appellant Thomas Hatch, received a desktop computer from his client on the morning of October 31, and delivered the computer to AGA’s counsel, who delivered it to the receiver later that day. The district court authorized the receiver to hire a computer expert to receive and sort the information on Gougeon’s home computer. The expert prepared a preliminary report after determining that certain alterations were made to the computer’s directories after the issuance of the October 30 order and before it was turned over by appellant.
In response to the expert’s preliminary report, the district court scheduled an emergency hearing to inquire into the handling of Gougeon’s home computer. The hearing commenced on November 18, 2003, and continued on November 26, 2003. Appellant repeatedly questioned the district court as to the nature of the hearing, and the court responded that the hearing was about the computer. Appellant stated that he did not do anything to the computer. The district court compelled appellant to provide sworn testimony. Gougeon testified that he and appellant briefly operated the computer on the morning of October 31. Gougeon also testified that he had delivered a separate laptop computer to appellant on October 31 or November 1, and appellant had the laptop computer delivered from his office to the courtroom during the November 18 emergency hearing.
The computer expert testified at both sessions of the hearing about the alterations discussed in his preliminary report. He explained at length the precise technical details of the alterations, and stated that some emails had been deleted on the morning of October 31. He also stated that he could not ascertain the extent to which the altered file mentioned in his preliminary report had been changed. At the continuation of the emergency hearing, the expert stated that subsequent to his earlier testimony he had recovered 300 emails that had been moved. Under appellant’s cross-examination, the expert clarified that those emails may have been archived rather than deleted.
On December 5, 2003, the district court issued its order. The court found that appellant instructed Gougeon on the morning of October 31 to “open the computer, turn it on and to look at ‘what was in there.’” The court also found that either appellant or Gougeon was responsible for the deletion of approximately 300 emails from the computer after the issuance of the October 30 order. The court further found that appellant had been “untruthful to the court directly and by omission,” had deliberately and intentionally impeded discovery and violated the court’s order, and had engaged in the spoliation of evidence that would not have been discovered without the services of an expert. The court stated that appellant was “ordered not to appear before [the district court], nor to submit any affidavits, nor represent in any way facts to [the district court],” but clarified that appellant’s firm could continue to handle Gougeon’s case. Appellant appeals from the district court’s final judgment in this matter, contesting the sanction imposed on him by the December 5, 2003 order.
D E C I S I O N
As a preliminary matter, we consider appellant’s argument that the district court’s March 31, 2005 order for judgment, by its own terms, vacated the December 5, 2003 order; therefore, we need not reach the merits and may simply hold that the order was vacated by the district court’s subsequent action. In support of this argument, appellant cites the following language from the district court’s March 2005 order: “Any and all prior Orders of this Court that are inconsistent with, or rendered moot or otherwise unnecessary by, the terms hereof are hereby vacated.” But the March 2005 order also retained jurisdiction over the matter to ensure and enforce compliance with the details of the settlement. Such ongoing supervision would have possibly permitted appellant’s future appearance before the court if the December 2003 order had been vacated by the March 2005 order. We are not convinced that the December 2003 order, insofar as it sanctioned appellant, was inconsistent with, rendered moot by, or made otherwise unnecessary by the March 2005 order. Therefore, we must address the merits of his appeal.
judicial power . . . comprehends all authority necessary to preserve and
improve the fundamental judicial function of deciding cases.” In re
Clerk of Court’s Comp. v. Lyon County Comm’rs, 308
Appellant argues that the district court denied his
fundamental right to procedural due process by questioning and ultimately
sanctioning him during an emergency hearing for which he and his client were
given only a day’s notice without explanation as to the purpose of the hearing. “The fundamental requirement of due process
is the opportunity to be heard at a meaningful time and in a meaningful
manner.” Eisen v. State, Dep’t of Pub. Welfare, 352 N.W.2d 731, 736 (
In its December 2003 order, the district court explained that it first learned of the computer expert’s findings in a meeting with the expert, the receiver, and the receiver’s counsel on November 10. On November 14, the district court received the expert’s preliminary report and immediately scheduled an emergency hearing for November 18, at which time the report would be provided simultaneously to all parties. Appellant stated in an affidavit to the district court that he was notified of the emergency hearing on November 17, and his efforts to ascertain the nature of the hearing were rebuffed. The transcript contains multiple exchanges between appellant and the district court regarding the purpose of the hearing, and the court’s clarifications are somewhat circumspect.
Federal courts have indicated that notice is necessary
before proceedings that consider sanctions against an attorney. See,
e.g., Jensen v. Fed. Land Bank of Omaha, 882 F.2d 340, 341-42 (8th Cir.
1989) (reversing for lack of notice where trial court imposed sanctions during
bankruptcy proceedings against attorney and denied his request for a separate hearing
on the issue); see also In re Ruffalo,
390 U.S. 544, 550, 88 S. Ct. 1222, 1226 (1968) (requiring procedural due process,
including fair notice of the charge, for disbarment proceedings).
We recognize that the district court was concerned in part with appellant’s conduct during the hearing, but we note that these concerns arose necessarily from the court’s requirement that appellant be sworn as a witness in a proceeding for which he received insufficient notice. In any event, the district court’s findings indicate that appellant was sanctioned primarily for his handling of evidence subject to the court’s October 30 order; in other words, activities out of court. In light of this emphasis on appellant’s conduct, we conclude that the district court’s decision should have been made after an examination of the evidence that followed proper notice as to the purpose of the hearing. Therefore, we reverse the district court’s December 2003 order for lack of due process. Because this matter appears to be fully resolved, we see no point in remanding for further proceedings, and the December 2003 order insofar as it relates to appellant is vacated.
Reversed; order vacated in part.
[*] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
This court previously considered certain contempt and fee issues from the
district court’s October 30 order, but was not presented with issues regarding
Gougeon’s production of AGA-related computer equipment. Afremov
v. Amplatz, No. A04-952 (
 Earlier that day, this court denied Amplatz and Gougeon’s petition for writs of prohibition and mandamus regarding the emergency hearing, stating that ordinary remedies were adequate, “including preserving their objections on the record and taking an appeal as a matter of right in the future.” Afremov v. Amplatz, No. A03-1798 (Minn. App. Nov. 26, 2003) (order).