Opinion
SUPREME COURT NO. 2009-SCC-0036-CIV
December 29, 2010, Decided
Douglas Cushnie, Saipan, Commonwealth of the Northern Mariana Islands, for Appellant Antonio Atalig.
Reynaldo Yana, Saipan, Commonwealth of the Northern Mariana Islands, appearing Pro se.
Stephen Nutting, Saipan, Commonwealth of the Northern Mariana Islands, for Appellees.
SLIP OPINION
Manglona, J.:
Appellants Antonio M. Atalig and Reynaldo O. Yana appeal an order entered by Judge Kenneth L. Govendo holding them in civil contempt and imprisoning them until they repay $1,288,500.00 in attorney fees received for work performed in connection with the Estate of Angel Malite. Appellants argue that Judge Govendo should have recused himself from the Malite proceedings because comments he made during a hearing demonstrated a lack of impartiality. Appellants further argue that Judge Govendo's order to disgorge all attorney fees exceeded the scope of this Court's mandate issued in Malite v. Tudela, 2007 MP 3, 7 N. Mar. I. 407, and that continued incarceration is improper because Appellants are judgment debtors and have sufficiently demonstrated an inability to comply with the probate court's disgorgement order.
We hold that Judge Govendo's contested comments were general in nature and reflected his opinion of the law, and therefore, his disqualification is not warranted. We hold that our prior opinion, Malite v. Tudela, neither ordered nor foreclosed disgorgement, and so the issued mandate did not bar the probate court's disgorgement order. We further hold that Appellants were not imprisoned as judgment debtors, but for failing to comply with court orders, and that they have failed to adequately demonstrate an inability to at least partially comply with these orders. However, we hold the probate court abused its discretion by denying all attorney fees without first considering all relevant fee factors stated in Rule 1.5 of the Model Rules of Professional Conduct. We therefore VACATE the probate court's order denying all attorney fees and REMAND this matter to the probate court for a hearing on the reasonableness of attorney fees.
I
The Estate of Angel Malite (the "Estate") entered probate in April 1997. At some point prior to November 2000, the Marianas Public Land Authority ("MPLA") agreed to pay the Estate $3,450,000 for a piece of land originally owned by Angel Malite. This amount was offered as a settlement for the Estate's condemnation action taken by the Trust Territory Administration. However, on November 7, 2000, before the money was disbursed, the Attorney General's Office ("AGO") brought a separate civil action to enjoin the payment of the $3,450,000 to the Estate. The Estate and MPLA were named as defendants.
Many filed documents refer to Angel "Malite," while others refer to Angel "Maliti." Both parties use Angel "Malite" in their briefs and so we will do likewise.
This Court has issued multiple opinions related to the disposition of the Angel Malite Estate. As a result, portions of this factual background are taken from Tudela v. Superior Court, 2010 MP 6, 8 N. Mar. I. 398 and Malite v. Tudela, 2007 MP 3, 7 N. Mar. I. 407.
In response to the AGO's request for an injunction, four of the Estate's eighteen potential heirs signed a contingency fee agreement with attorney Antonio M. Atalig, agreeing to pay him thirty-three percent of whatever amount he could secure from MPLA. Mr. Atalig also represented the Estate's administrator, Jesus C. Tudela (the "Administrator"), in the Estate's probate. The Administrator did not sign the contingency fee agreement.
It is unclear from the record whether there are multiple contingency fee agreements or one agreement signed by all participating heirs.
On February 28, 2006, a settlement was reached in the civil case. The settlement was executed by the Commonwealth (through an Assistant Attorney General ("AAG")), the Department of Public Lands (through the Acting Secretary), and the Estate (through the Administrator and Mr. Atalig as "Attorney for the Administrator of the Estate of Angel Maliti"). Attorney Stephen J. Nutting, separately representing four of the Estate's heirs ("the Heirs"), also signed the settlement. On March 13, 2006, the civil court accepted the settlement agreement and entered a judgment in accordance with it.
The next day, March 14, 2006, Mr. Atalig, along with co-counsel in the civil action Reynaldo O. Yana, filed a request in the civil court for attorney fees under the contingency fee agreement. A hearing on the matter was set for April 18, 2006. No notice regarding this hearing or the request for attorney fees was given to the AAG who handled the injunction and the resulting settlement. Nevertheless, the AAG learned of the hearing and appeared in court. The AAG informed the court that she had not been served and requested the court continue the matter so that she could receive notice and have time to respond. The court granted her request, taking the matter off calendar and ordering Mr. Atalig to provide notice.
However, on May 12, 2006, without a hearing on the matter and apparently sua sponte, the civil court entered an order approving Mr. Atalig and Mr. Yana's thirty-three percent contingency fee. Noting "the absence of any evidence to the contrary," the court found the contingency fee "appropriate compensation for civil cases." Additionally, the court provided "the clients" ten days to file an opposition. On May 18, 2006, the Administrator filed a waiver of objection to the fees. Neither the AAG nor the Heirs were served with the order granting attorney fees. Thus, no opposition was filed within the ten-day time period.
This Order awarded Appellants $1,138,500.00. Appellants had previously been awarded $150,000.00 through a probate court order entered April 19, 2006. Supplemental Excerpts of Record ("SER") at 22.
Commonwealth ex rel. Brown v. Demapan-Castro, Civ. No. 04-0563 (NMI Super. Ct. May 12, 2006) (Order Approving Attorneys' Fees) (included in SER at 19).
After learning of the civil court's order awarding attorney fees, the Heirs petitioned the probate court for a temporary restraining order requiring Mr. Atalig and Mr. Yana to disgorge the fees. Following a hearing, the Heirs' motion for a TRO was denied. The Heirs then filed a petition for a writ of mandamus with this Court, asking us to order the probate court to order the Administrator and his attorneys to disgorge the awarded fees and conduct a proper review and accounting to determine appropriate attorney and administrator fees and costs.
This Court responded to the Heirs' petition in its opinion Malite v. Tudela, 2007 MP 3, 7 N. Mar. I. 407, issued on February 16, 2007. Therein, we ruled that the Heirs had not met the burden for a writ of mandamus, but, after converting the matter to an interlocutory appeal, we found the probate court erred in failing to conduct an independent review of attorney fees. The Court subsequently reversed and remanded the matter "to the probate court for a hearing on the propriety of the attorney fees which should be awarded in the civil proceeding." Malite, 2007 MP 3 ¶ 37.
After the case was remanded, the Heirs filed a motion in the probate court, asking it to order Mr. Atalig and Mr. Yana to disgorge the awarded attorney fees. A hearing on this motion was delayed due to a series of motions seeking judge recusal and disqualification. On June 15, 2007, Judge Govendo made comments during a hearing on attorney fees that led Appellants to file a motion seeking his disqualification. Judge Naraja subsequently denied the motion. On November 6, 2007, Judge Govendo granted the Heirs' motion seeking disgorgement, ordering Mr. Atalig and Mr. Yana to disgorge attorney fees and stating that if they failed to do so the court would hold contempt proceedings.
Judge Juan T. Lizama was originally assigned to handle the Malite probate case, but was later disqualified in an order issued by Judge David A. Wiseman. Presiding Judge Robert C. Naraja then assigned the case to Judge Wiseman, who subsequently recused himself. The case was then assigned to Judge Kenneth L. Govendo.
The Administrator subsequently filed a motion to disqualify Judge Govendo, which Presiding Judge Naraja denied. The Administrator, through his attorneys Mr. Atalig and Mr. Yana, then filed a petition for a writ of prohibition with this Court to restrain Presiding Judge Naraja and Judge Govendo from presiding over Malite Estate proceedings. This Court requested supplemental briefing concerning whether Judge Govendo should have been disqualified. See Tudela v. Superior Ct., 2010 MP 6 ¶ 1 n.1.
The probate court order stated:
It is important to note, for the parties and their attorneys that the disgorgement of attorney fees does not mean that the parties' attorneys will be denied reasonable attorney fees. Rather, the purpose of disgorging the attorney fees is to place the funds in a Superior Court trust while a proper and thorough review and accounting can be performed in accordance with the Supreme Court Order.
In re Estate of Angel Malite, Civ. No. 97-0369 (NMI Super Ct. November 6, 2007) (Order Granting the Maliti Heirs' Motion to Disgorge Attorney Fees at 2).
The probate court and the parties repeatedly refer to the probate court's order to return awarded attorney fees pending a final fee determination as ordering "disgorgement." This term typically refers to a permanent legal remedy, whereas the probate court's order is more aptly classified as ordering that the funds be interpleaded. See Black's Law Dictionary 659 (7th ed. 2000) (defining "interplead" as "to institute an interpleader action, usu. by depositing disputed property into the court's registry to abide the court's decision about who is entitled to the property."). However, throughout this litigation the courts and parties have used the word "disgorgement" and so we will generally do likewise.
Appellants subsequently submitted billing statements to the court and a document summarizing attorney fees and costs. They also stated in sworn declarations that "the fees received have already been distributed and exhausted by both counsels." SER at 28-31. The court was unsatisfied with this response and ordered the attorneys to provide the court with a detailed accounting of how the fees had been spent, including who received the funds and on what dates, the amounts distributed, and documentation supporting the purported distributions.
When Appellants failed to comply, the court conducted a hearing to show cause why they should not be held in contempt. At the hearing both attorneys testified that they did not keep records of the time they spent working on the case, and that they had been forced to reconstruct their time records. They were only able to provide a vague accounting of how the money was distributed, and in many cases were either unable or unwilling to answer questions concerning how the fees were spent. The court found the attorneys in contempt of court for "failure to disgorge to [sic] attorneys' fees, failure to provide a detailed billing statement, and failure to provide a detailed accounting." In re: Estate of Angel Maliti, Civ. No. 97-0369 (NMI Super. Ct. Jan. 15, 2008) (Amended Order) at 35. Judge Govendo then incarcerated both attorneys. In the months that followed, Mr. Atalig and Mr. Yana filed a series of motions in this Court to stay the probate court's judgment imprisoning them for civil contempt.
While Appellants remained incarcerated, the probate court held hearings to address the disgorgement issue. After Mr. Atalig and Mr. Yana stated that they could not comply with the court's order while in jail, Judge Govendo released them from custody two days each week. The court told Appellants to use this time to comply with the disgorgement order; specifically, to compile detailed billing statements and produce an accounting of time spent on the Malite Estate and how the attorney fees were distributed.
Following one hearing, Judge Govendo suspended Mr. Atalig and Mr. Yana from practicing law until the attorney fees were disgorged. The suspensions were vacated in Atalig v. Superior Court, 2008 MP 19, 8 N. Mar. I. 147.
The court also granted Mr. Atalig temporary release from custody to care for his family after his son was involved in an accident and had to be flown to Hawai'i for treatment.
On January 5, 16 and 28, 2009, hearings were held concerning Appellants' submitted time billings. On January 27, 2009, Mr. Atalig and Mr. Yana separately submitted documents showing how they spent the awarded attorney fees. Appellants' Excerpts of Record ("ER") at 78-81; SER at 123-34. On January 28, 2009, the court issued its ruling, finding that "Mr. Atalig and Mr. Yana's billing statements are excessive, unreliable and disingenuous." In re: Estate of Angel Maliti, Civ. No. 97-0369 (NMI Super. Ct. Jan. 28, 2009) (Order) ("Order Denying Attorney Fees") at 14. The court ruled the attorneys were not entitled to any fees and awarded the Estate of Angel Malite a judgment for the entire amount of $1,288,500.00—the amount of fees previously awarded to Mr. Atalig and Mr. Yana. The attorneys were subsequently remanded to custody beginning on January 30, 2009, and remained incarcerated until this Court granted their motion to stay their incarceration pending disposition of this appeal.
It is unclear from the record whether a hearing on the reasonableness of attorney fees was also held on January 20, 2009. See SER at 119.
The court issued two orders on this date, both of which are entitled "Order." The first Order is a two-page order denying all attorney fees and is included in Appellants' Excerpts of Record. ER at 26-27. The court then issued a second Order nunc pro tunc, which denied attorney fees and included the court's legal analysis which was missing from the initial Order. SER at 137-150. References in this opinion to the Order Denying Attorney Fees refer to the Order issued nunc pro tunc.
II
This Court must resolve multiple issues on appeal. First, we must determine whether Judge Govendo should have been disqualified from presiding over the Malite proceedings due to comments made at a hearing concerning attorney fees. Second, we must determine whether Judge Govendo's order denying attorney fees and imprisoning Appellants must be reversed because: (1) the probate court's disgorgement order conflicted with the mandate issued in Malite v. Tudela, 2007 MP 3, 7 N. Mar. I. 407; (2) Appellants are judgment debtors and therefore cannot be incarcerated for more than six months (which they have already served); and/or (3) Appellants cannot purge themselves of contempt and are now being held in criminal contempt, which is limited to six months in jail. Addressing these issues requires reviewing whether Judge Govendo held a proper reasonableness hearing before denying attorney fees. We will address each issue separately.
A. Judge Govendo May Preside over the Malite Proceedings
Whether Judge Govendo properly presided over the Malite proceedings impacts the level of deference we afford his decisions, and so we will address this issue first. Appellants previously filed a series of petitions with this Court alleging that both Presiding Judge Naraja and Judge Govendo should be disqualified from further participation in the Malite case. In Tudela v. Superior Court, 2010 MP 6, 8 N. Mar. I. 398, we held that Presiding Judge Naraja was permitted to rule on the disqualification motions filed to remove both himself and Judge Govendo, and that Presiding Judge Naraja properly refused to recuse himself. However, we ordered supplemental briefing concerning whether Presiding Judge Naraja properly denied Appellants' motion to disqualify Judge Govendo. We now resolve this matter.
Both parties filed supplemental briefs, and Roman Demapan filed a brief as amici curiae.
Appellants argue that Judge Govendo's disqualification was warranted on multiple grounds. We disagree. Appellants make two main arguments for why Judge Naraja should have disqualified Judge Govendo. First, Mr. Yana asserts that Judge Govendo should have been disqualified from presiding over the Malite proceedings because Mr. Atalig, Mr. Yana and Bernardo Cruz had filed an ethics complaint against Judge Govendo in an unrelated case. We gather from Appellant Yana's brief that Judge Benson, the investigating judge, ultimately dismissed the complaint. Appellant Yana's Supplemental Brief on the Disqualification Issue ("Yana's Supplemental Brief") at 8 n.1. Given this disposition, Yana apparently argues that recusal is required whenever a judge is the subject of a pending ethics complaint.
While we decide this matter on substantive grounds, we note that Appellants' disqualification motion may have been untimely. Judge Govendo was assigned to this case on April 12, 2007, and Appellants filed their motion to disqualify him 133 days later—on August 23, 2007. Perhaps even more significantly, sixty-nine days elapsed between Judge Govendo's contested comments concerning attorney fees, which were made on June 15, 2007, and Appellants' disqualification motion.
A party seeking disqualification under 1 CMC § 3308(a) must do so in a timely manner. Bank of Saipan v. Superior Ct., 2002 MP 16 ¶ 15. "A party waives the [disqualification] issue by not raising it at the first available opportunity." Id. ¶ 18 (citations omitted). Whether a motion under 3308(a) is timely is determined on a case-by-case basis, considering the following factors: (1) the extent of movant's involvement in the proceeding; (2) whether recusal would result in a waste of judicial resources; (3) whether the motion was made after entry of judgment; and (4) whether movant can demonstrate good cause for delay. Id. While we reject Appellants' disqualification argument on substantive grounds, attorneys would be well-advised to ensure that disqualification motions are filed in a timely manner.
In denying Appellants' motion to disqualify Judge Govendo, Judge Naraja considered and rejected arguments grounded in Judge Govendo's actions in related cases. These arguments were raised to this Court in a series of writ petitions Appellants filed. While Appellants did not revisit these arguments in their supplemental briefs, because Mr. Yana stated during oral argument that he had not abandoned these arguments, we will address them.
Appellants assert that Judge Govendo's disqualification was warranted because in a series of adoption proceedings—unrelated to the present case—in which Mr. Yana was counsel, Judge Govendo issued rulings against Mr. Yana. For reasons discussed in Tudela v. Superior Court, 2010 MP 6 ¶¶ 24, 27, we find these arguments unpersuasive.
Similarly meritless is Appellants' argument that Judge Govendo was required to disclose that in an unrelated case he reviewed billing statements submitted by the late Pedro Atalig—Appellant Antonio Atalig's brother. The trial court found that this connection was too tenuous to require disclosure. Appellants have made no legal argument supporting that this decision was erroneous, and so we need not examine it further.
Mr. Yana cites no legal authority supporting this position. The only case he cites, Blaisdell v. City of Rochester, 135 N.H. 589, 609 A.2d 388 (N.H. 1992), does not involve recusal in instances where an ethics complaint is pending against the challenged judge.
We find Mr. Yana's argument unpersuasive. "The mere filing of a complaint of judicial misconduct is not grounds for recusal." Ginsberg v. Evergreen Sec., Ltd., 570 F.3d 1257, 1265 (11th Cir. 2009). "It would be detrimental to the judicial system if a judge had to disqualify himself anytime someone filed a complaint about his conduct. A party would only have to file a complaint to get a different judge." Id.; see Ball v. Melsur Corp., 161 Vt. 35, 633 A.2d 705, 709 (Vt. 1993) ("We decline to hold that a per se lack of impartiality, mandating recusal, arises whenever a judge is the subject of a judicial conduct complaint by an attorney. . . . Otherwise, an attorney would need only file a complaint, possibly groundless, to avoid a particular judge thereafter.") This reasoning is even more persuasive when, as here, the ethics complaint is filed in an unrelated proceeding. We thus reject Mr. Yana's argument as a basis for disqualification.
Appellants also suggest that the trial court erred by not staying probate court proceedings while various writ petitions were pending before this Court, and that such actions implicate Judge Govendo's impartiality. However, absent the granting of a stay, a lower court is not deprived of jurisdiction while a writ petition is pending before this Court. See, e.g., Ellis v. United States Dist. Ct., 360 F.3d 1022, 1023 (9th Cir. 2004) ("in the context of an extraordinary writ such as mandamus, there is no need for the appellate court to relinquish its jurisdiction to the district court because it was never deprived of jurisdiction over the underlying case. The district court does not lose jurisdiction over a case merely because a litigant files an interlocutory petition for an extraordinary writ."); Woodson v. Surgitek, 57 F.3d 1406, 1416 (9th Cir. 1995) ("If the district court or the court of appeals finds it appropriate to stay proceedings while a petition for mandamus relief is pending, such a stay may be granted in the court's discretion. However, absent such a stay, the jurisdiction of the district court is not interrupted."); Stebbins v. Stebbins, 673 A.2d 184, 193 (D.C. 1996) ("Because the decision whether to issue an extraordinary writ is discretionary and turns on the particular facts of a given case, it would be inexpedient to create a blanket rule that the mere filing of any such petition has the effect of freezing proceedings in the trial court.").
Appellants also assert Judge Govendo's recusal/disqualification is warranted due to comments he made during a hearing concerning attorney fees for the Malite estate probate and accompanying civil action. Specifically, Appellants argue that for these comments Presiding Judge Naraja should have disqualified Judge Govendo under 1 CMC §§ 3308(a) and (b)(1), and Canon 3(D)(c) of the Commonwealth Code of Judicial Conduct. Under 1 CMC § 3308(a), a "justice or judge of the Commonwealth shall disqualify himself or herself in any proceeding in which his or her impartiality might reasonably be questioned." Without citing any factually analogous cases, Appellants simply assert that "[a]ny reasonable person hearing [Judge Govendo's comments] would reasonably question his impartiality." Yana's Supplemental Brief at 11. Appellants elaborate that their fear that Judge Govendo lacked impartiality materialized in Judge Govendo's subsequent decisions to suspend Appellants from practicing law, replace Mr. Tudela as administrator, incarcerate Appellants for civil contempt, and deny Appellants attorney fees. Appellees respond that Appellants have attempted to disqualify every judge who has presided over the Malite case and that Appellants' actions show a lack of respect for the judicial process. Appellees also argue that none of Judge Govendo's comments or actions creates an appearance of bias, prejudice or partiality.
At the hearing, Judge Govendo stated:
Probate is for the heirs, not for the attorneys. The heirs should make more than attorneys in probate. Unfortunately, we have had a bad example set in the Commonwealth, it was called the estate of Larry Hillbloom [sic], in which attorneys made contingent fee contracts and got away with it. It isn't going to happen in this case. All right. So gentlemen, all of you, start going back to day one; date, legal service rendered, I want to see it, I'm going to go through it with a fine tooth comb and I want you to know, I want all of you to know that I've done many many probates, okay. And in all my doing a [sic] probate, I probable [sic] never got paid more than $5,000.00 for the entire probate and I guarantee I had many more heirs than the Malite case, many more. I've done Carolinian probates, they are a mine field, a mine field that heirs and people that have died in other probates, just what you are going through here. It can be done. So we are going to take a look I want the heirs to get some money out of this. The money in this estate is for the heirs, not for the attorneys. All right, now I'm not saying, I'm not prejudging since I haven't seen anything, maybe what Mr. Atalig and Mr. Yana had done is well deserving of it, maybe there's some complications, I will take a look at it . . . . Things are going to change in the probate law in the CNMI and they're going to change with this case. And the word that should go out is when there's money it goes to the heirs not to the attorneys. The Hillbloom case was a fluke, it was an aberration. It gave the Commonwealth a bad name. All right, it's not going to happen again.
Petition for Writ of Prohibition, Exhibit E, Transcript of Proceeding of June 15, 2007 at 18-19.
They assert as examples the fact that Appellants disregarded Supreme Court rules governing the procedures for moving to disqualify judges, and that Appellants "engaged in baseless personal attacks on the individual judges, claiming that the first, Judge Wiseman had pre-judged the case against them, the second, Judge Govendo, had a racial prejudice and the third, Judge Naraja, lacked the 'guts' to disqualify Judge Govendo." Supplemental Brief in Response to Order of May 12, 2010 Relative to the Disqualification of the Honorable Kenneth L. Govendo ("Appellees' Supplemental Brief") at 1.
Appellees also assert that Appellants' motion to disqualify Judge Govendo was procedurally deficient because it was untimely filed, violated the one-affidavit rule, was not accompanied by a certification that it was brought in good faith, and that the submitted affidavits were signed by the attorneys and not a party to the action. Appellees' Supplemental Brief at 11. In denying Appellants' motion to disqualify Judge Govendo, Presiding Judge Naraja stressed the numerous procedural deficiencies attending Appellants' challenge. See In re: Estate of Angel Malite, Civ. No. 97-0369 (NMI Super. Ct. Sept. 19, 2007) (Order Denying Administrator's Motion to Disqualify Judge Kenneth L. Govendo and Requiring Counsel for Administrator to Show Cause Why They Should Not Be Sanctioned at 3-5). To the extent that Appellants' challenge involves 1 CMC § 3308(b)(1), it is denied due to procedural infirmities. See Tudela, 2010 MP 6 ¶ 20. Thus, the only remaining question before us is whether Judge Govendo's actions violated 1 CMC § 3308(a).
We find that Judge Govendo's comments do not require disqualification, and therefore Presiding Judge Naraja did not err in denying Appellants' disqualification motion. At the outset, however, we stress that even though Judge Govendo's comments do not ultimately warrant disqualification, we question the prudence of his remarks and find he could have conveyed his thoughts in a more temperate manner. Judges are empowered to exercise control over their courtroom, and many judges no doubt find that making extended remarks from the bench aids courtroom administration and facilitates the litigation process. Judges must be vigilant, however, to ensure that their remarks are evenhanded. When comments cause additional litigation, they undermine the very ideals of judicial efficiency they are intended to promote. For example, Judge Govendo's comments led to dozens of legal filings and the expenditure of precious judiciary resources. Protracted litigation could have been avoided if Judge Govendo had chosen his words more carefully and exercised greater judicial self-control. Observing these practices in the future is necessary to prevent potential disqualification and protect the integrity of the judiciary.
Despite these serious concerns, we find in this particular case that Judge Govendo's comments were general in nature, reflected his view of the law, and were permissible. It is undisputed that the comments at issue were made during a preliminary hearing on attorney fees. As stated by the United States Supreme Court in Liteky v. United States:
[J]udicial remarks during the course of a trial that are critical or disapproving of, or even hostile to, counsel, the parties, or their cases, ordinarily do not support a bias or partiality challenge. They may do so if they reveal an opinion that derives from an extrajudicial source; and they will do so if they reveal such a high degree of favoritism or antagonism as to make fair judgment impossible.
510 U.S. 540, 555, 114 S. Ct. 1147, 127 L. Ed. 2d 474 (1994). While the Liteky Court did not focus on when an opinion derived from an extrajudicial source "may" warrant disqualification, the Court stressed that the presence or absence of an extrajudicial source alone is not determinative of whether judicial disqualification is required:
The Supreme Court, however, has long maintained that bias or prejudice "to be disqualifying must stem from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case." United States v. Grinnell Corp., 384 U.S. 563, 583, 86 S. Ct. 1698, 16 L. Ed. 2d 778 (1966).
The fact that an opinion held by a judge derives from a source outside judicial proceedings is not a necessary condition for "bias or prejudice" recusal, since predispositions developed during the course of a trial will sometimes (albeit rarely) suffice. Nor is it a sufficient condition for "bias or prejudice" recusal, since some opinions acquired outside the context of judicial proceedings (for example, the judge's view of the law acquired in scholarly reading) will not suffice. Since neither the presence of an extrajudicial source necessarily establishes bias, nor the absence of an extrajudicial source necessarily precludes bias, it would be better to speak of the existence of a significant (and often determinative) "extrajudicial source" factor, than of an "extrajudicial source" doctrine, in recusal jurisprudence.
Appellees appear to have mischaracterized the nature of the extrajudicial source doctrine. Citing Liteky, they argue that "[b]ecause all of the statements referenced were made in 'open court' as a result of the judicial source rule, those statements and judicial rulings could constitute a valid basis for finding a bias or partiality only if they display[ed] a deep-seated favoritism or antagonism that would make fair judgment impossible." Appellees' Supplemental Brief at 20 (citing Liteky, 510 U.S. 540, 114 S. Ct. 1147, 127 L. Ed. 2d 474). This Court has previously applied the "judicial source rule," which is also known as the extrajudicial source doctrine. See Bank of Saipan v. Superior Ct., 2002 MP 16 ¶ 39, 6 N. Mar. I. 453 ("bias stemming from a court's decisions during proceedings are not of an extra-judicial nature."); Saipan Lau Lau Dev. Inc. v. Superior Ct., 2000 MP 12 ¶ 4 (stating that disqualification is warranted if factual allegations "stem[] from some extrajudicial source and would thus result in an opinion on the merits on some basis other than what the judge has learned from his participation in the case.").
Appellees' argument—that comments made in a courtroom by definition cannot be extrajudicial—mischaracterizes the Liteky case and its progeny. The Liteky Court stated that "[j]udicial remarks during the course of a trial . . . may . . . reveal an opinion that derives from an extrajudicial source." 510 U.S. at 554. The critical inquiry in applying the extrajudicial source doctrine is thus not simply where the comments are made, but the source of the information underlying the comments. This idea was succinctly stated by District of Columbia Court of Appeals:
Ordinarily, a trial judge is not required to recuse when an affiant alleges bias arising from a source within the "four corners of the courtroom." The "four corners of the courtroom" test is really an alternative formulation of the rule that bias must be personal rather than judicial before recusal will be required. The proper distinction is between a judicial determination derived from evidence and lengthy proceedings before the court, and a determination not so founded upon facts brought forth in court, but based on attitudes and conceptions that have their origins in sources beyond the four corners of the courtroom. Essentially, the importance of the distinction lies not in the physical location of the incidents from which bias is alleged to arise, but in the nature of the incidents as inside or outside the scope of official judicial conduct in regard to the instant or a prior case. The alleged bias and prejudice to be disqualifying must stem from an extra-judicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case.
In re Evans, 411 A.2d 984, 995 (D.C. 1980) (emphasis added) (citations omitted).
Ultimately, Appellees' mistaken view of the law is inconsequential to resolving the present case because we find Judge Govendo's comments—regardless of their origin—insufficient to warrant recusal. See United States v. Barry, 961 F.2d 260, 263, 295 U.S. App. D.C. 173 (D.C. Cir. 1992) ("even if the remarks should prove to have been derived from an extrajudicial source, they will not require a judge to disqualify himself unless they are of such a character that 'an informed observer would reasonably question the judge's impartiality.'").
Thus, we must do more than simply classify the nature of Judge Govendo's comments. "The general rule is that bias sufficient to disqualify a judge must stem from extrajudicial sources and must be focused against a party to the proceedings." Hamm v. Members of Bd. of Regents, 708 F.2d 647, 651 (11th Cir. 1983) (citations omitted). The disqualifying "attitude of personal enmity" must be "towards the party or in favor of the adverse party to the other's detriment" and thus "[i]mpersonal prejudice resulting from the judge's background experience does not warrant disqualification." State ex rel. Wesolich v. Goeke, 794 S.W.2d 692, 697-98 (Mo. Ct. App. 1990); see United States v. Fiat Motors of N. Am., Inc., 512 F. Supp. 247 (D.D.C. 1981) (involving a motor vehicle lawsuit where challenged judge had been involved in the car accident, the court held that "personal background and experience of a trial judge" are insufficient to warrant disqualification). Thus, "[g]enerally stated views, even when expressed strongly, against a wide variety of conduct, are not unreasonable for a judge, and would not, absent more, disqualify a judge from sitting on a case involving the same subject matter." United States v. Cooley, 1 F.3d 985, 993 n.4 (10th Cir. 1993).
"Since the language at issue in 1 CMC § 3308 — the statute governing disqualification and recusal of judges — is nearly identical to that in 28 U.S.C. § 455, we look to federal case law for guidance." Tudela, 2010 MP 6 ¶ 8, 8 N. Mar. I. 398 (citing Commonwealth v. Caja, 2001 MP 6 ¶ 18).
In the present case, Judge Govendo's comments were not directed toward any particular party to the Malite proceedings. Instead, his remarks conveyed to the attorneys and the administrator how fees would be awarded. No one was singled out for preferential treatment. To the contrary, Judge Govendo stated that he had "not prejudged" the fee issue. While this statement alone will not act as a talisman, shielding judges from disqualification challenges, it distinguishes this case from others in which a party is clearly disfavored by a judge's prejudgment of the issues. See Leighton v. Henderson, 220 Tenn. 91, 414 S.W.2d 419 (Tenn. 1967) (ordering new trial where judge stated, "I don't care what proof is in the record, if the Governor doesn't pardon this man, I'm going to grant the petition. . . .").
It also appears Judge Govendo exercised some restraint throughout the proceedings. For example, he held many hearings before holding Appellants in contempt, released both attorneys from jail two days per week so that they could comply with the disgorgement order, and released Mr. Atalig from jail so that he could attend to his injured son.
Appellants further argue that Judge Govendo should be disqualified because his in-court comments "show an individual with a strong animosity against attorney fees in probate proceedings, and a publicly stated intention to personally remedy the situation." Appellant's Supplemental Brief at 2. However, a judge's expression on a legal issue is generally insufficient to warrant disqualification. See Johnston v. Citizens Bank & Trust Co., 659 F.2d 865, 869 (8th Cir. 1981) (holding that a judge's remarks that state usury laws were "harsh" and amounted to a "gift" were not grounds for recusal because "[t]he judge merely expressed a viewpoint concerning a legal issue"); see also, United States v. Haldeman, 559 F.2d 31, 136, 181 U.S. App. D.C. 254 (D.C. Cir. 1976) ("although fixed, an opinion on the law is not disqualifying."); Shank v. American Motors Corp., 575 F. Supp. 125, 129 (E.D. Pa. 1983) ("A judicial attitude, even though developed partly through previous experience on the bench, and not wholly as a result of participation in the instant case, cannot serve as a basis for recusal.").
Cases supporting this proposition are legion. See, e.g., Cooley, 1 F.3d at 993 ("the mere fact that a judge has previously expressed an opinion on a point of law, or has expressed a dedication to upholding the law or a determination to impose severe punishment within the limits of the law upon those found guilty of a particular offense," is ordinarily not enough to satisfy the requirements for disqualification under [28 U.S.C.] § 455(a) . . . .") (citations omitted); Phillip v. ANR Freight Sys., Inc. 945 F.2d 1054, 1056 (8th Cir. 1991) (finding recusal not required where district court judge voiced strong feelings about Title VII litigation); S. Pac. Commc'ns Co. v. Am. Tel. and Tel. Co., 740 F.2d 980, 990-91, 238 U.S. App. D.C. 309 (D.C. Cir. 1984) ("It is well established that the mere fact that a judge holds views on law or policy relevant to the decision of a case does not disqualify him from hearing the case . . . . If a judge approached every case completely free of preconceived views concerning the relevant law and policy, we would be inclined not to applaud his impartiality, but to question his qualification to serve as a judge."); City of Cleveland v. Cleveland Elec. Illuminating Co., 503 F. Supp. 368, 377 (N.D. Ohio 1980) ("A judge is not disqualified merely because he believes in upholding the law, even though he says so with vehemence . . . .") (citation omitted).
Examining the substance of Judge Govendo's statements more critically, we find they reveal Judge Govendo's legal opinion and are therefore insufficient to warrant disqualification. For example, Judge Govendo expressed his intention to review the attorney and administrator billing records "with a fine tooth comb." Even his comment that probate "is for the heirs, not for the attorneys," reflects the well-established policy position that the function of probate courts is to protect heirs. See Malite, 2007 MP 3 ¶ 29, 7 N. Mar. I. 407 ("The major policy concern underpinning probate courts — safeguarding the interests of those who can't care for themselves — is equally implicated regardless of whether the probate court is protecting the interests of an incapacitated or a deceased and heirs.").
In summary, we hold that Judge Naraja did not commit error in denying Appellants' motion to disqualify Judge Govendo from presiding over the Malite proceedings. Judge Govendo's comments were not of a sufficient nature that a reasonable person would question his impartiality. Instead, Judge Govendo's comments were general in nature and expressed his view of the law. While the comments could have been made in a more prudent fashion, " [n]ot establishing bias or partiality, however, are expressions of impatience, dissatisfaction, annoyance, and even anger, that are within the bounds of what imperfect men and women, even after having been confirmed as [] judges, sometimes display." Liteky, 510 U.S. at 555. We trust Judge Govendo will preside over future Malite proceedings in a fair and impartial manner.
B. Disgorgement Order Did Not Exceed Scope of Mandate Issued in Malite v. Tudela
We next examine Appellants' argument that Judge Govendo exceeded the scope of the mandate issued in Malite v. Tudela, 2007 MP 3, 7 N. Mar. I. 407, by ordering Appellants to disgorge attorney fees and holding them in contempt for non-compliance with this order. In Malite, we held that "because the probate court abrogated its duties under our probate law and rules, we REVERSE and REMAND this matter to the probate court so that an accounting and approval of the requested attorney fees may take place pursuant to the Rules of Probate Procedure." Malite, 2007 MP 3 ¶ 1. On remand, the Heirs filed a motion with the probate court requesting that previously awarded attorney fees be interpleaded with the court pending a final fee determination. Following a hearing, the probate court granted the motion.
Citing Supreme Court precedent that a lower court must "strictly obey the directions [in the mandate] without variation," Appellants argue that the probate court's disgorgement order unlawfully exceeded the scope of the mandate issued in Malite v. Tudela. Appellant's Opening Brief at 8 (citing Wabol v. Villacrusis, 4 NMI 314, 317 (1995)). Appellants argue that since nothing in the mandate permits the lower court to either order disgorgement or inquire into what Appellants did with the previously awarded fees, such actions were unlawful. Appellees respond that the Court's decision in Malite v. Tudela left the probate court broad power to administer the Estate, and that the disgorgement order was a proper exercise of this power. Whether a lower court order violates the mandate issued by this Court is a question of law reviewed de novo. Wabol, 4 NMI at 315.
It is well-settled in this jurisdiction that the trial court must "comply strictly" with the mandate of the appellate court. Loren v. E'Saipan Motors, Inc., 1 NMI 133, 137 (1990). "The lower court, upon receiving the mandate of the appellate court, is under a duty 'to [strictly] comply with the mandate . . . and to obey the directions therein without variation.'" 4 NMI 314, 317 (1995) (citing Loren, supra, and In re Sanford Fork & Tool Co., 160 U.S. 247, 256, 16 S. Ct. 291, 40 L. Ed. 414 (1895)); see also Aldan-Pierce v. Mafnas, 1999 MP 11, 5 NMI 247, 249 (1999). Actions of the lower court not in conformity with the directions of the mandate are void. Wabol, 4 NMI at 317; see also, Aldan-Pierce, 5 NMI at 249.
Further, the opinion issued by a court can be considered when determining the meaning of the mandate. In In re Sanford, the seminal U.S. Supreme Court case addressing this issue, the Court stated that the "opinion delivered by this court, at the time of rendering its decree, may be considered to ascertain what was intended by the mandate." 160 U.S. at 256. Courts have repeatedly echoed this position. See, e.g., Ex parte Union Steamboat Co., 178 U.S. 317, 319, 20 S. Ct. 904, 44 L. Ed. 1084 (1900) ("The inferior court is justified in considering and deciding any question left open by the mandate opinion of this court, . . . and the opinion of this court may be consulted to ascertain exactly what was decided and settled."); United States v. Kellington, 217 F.3d 1084, 1093 (9th Cir. 2000) ("in construing a mandate, the lower court may consider the opinion the mandate purports to enforce as well as the procedural posture and substantive law from which it arises."). We adopted this position in Wabol v. Villacrusis, stating that in the "absence of a specific remand directive" the trial court could take action as long as it "would not be inconsistent with the mandate of the earlier opinion as gleaned from the judgment together with the accompanying opinion." 2000 MP 18 ¶ 16. The Wabol Court further elaborated that while "an order issued after remand may, in some instances, diverge from the appellate court's mandate, it must be consistent with the 'spirit' of the appellate decision and within the scope of the remand." Id. ¶ 16 (citation omitted).
It is against this backdrop of authority that we examine the probate court's actions following issuance of our mandate in Malite v. Tudela. The mandate reads, "the Court REVERSES and REMANDS this matter to the probate court so that an accounting and approval of the requested attorney fees may take place pursuant to the Rules of Probate Procedure and for a hearing on the propriety of the attorney fees awarded in the civil proceeding." Malite v. Tudela, Civ. No. CV-06-0002-OA (NMI Sup. Ct. March 19, 2007) (Mandate). Appellants conclude that we considered the disgorgement issue and ruled in their favor. Conversely, the probate court in ordering disgorgement based its ruling on the "the Supreme Court's order and the duties of the probate court[,]" and stated at a hearing that we ordered disgorgement. Both contentions are incorrect as the mandate and accompanying opinion in Malite v. Tudela neither required nor foreclosed disgorgement. This conclusion is grounded in the text of the mandate, the Malite opinion, and Commonwealth and federal precedent.
In re Estate of Angel Malite, Civ. No. 97-0369 (NMI Super Ct. November 6, 2007) (Order Granting the Maliti Heirs' Motion to Disgorge Attorney Fees ("Disgorgement Order") at 2).
In a hearing concerning disgorgement held on March 24, 2008, Judge Govendo stated:
Don't you understand that the court is given an order -- orders are to be followed by attorneys? And originally, I also said that your disgorgement, it doesn't mean that I'm going to keep everything, or that your [sic] not going to get some back. But the original direction for disgorgement came from the Supreme Court, it was a mandate to the Superior Court, to have an [sic] hearing for disgorgement of the fees and that's what we did, we had a hearing . . . .
ER at 43 (emphasis added).
The Malite v. Tudela opinion can be broken into two broad sections, and the relationship between these parts is critical to understanding the meaning of the opinion. The Malite Court first determined that mandamus relief was not warranted. In denying this relief, the Court stated that petitioners had not shown that denying mandamus would produce irreparable harm, or that they would be "damaged or prejudiced in a way not correctable on appeal." Malite, 2007 MP 3 ¶ 15. We further stated that "the Heirs have presented no evidence tending to show they would be unable to recover money damages if an award is ordered. They only make sweeping charges that the attorneys might divert the money they receive in attorney fees." Id. ¶ 18. After converting the matter to an interlocutory appeal, the Court then examined whether the probate court erred by failing to exercise jurisdiction over the entire land compensation award. In finding that it did, the Court relied on Rule 10 of the Commonwealth Rules of Probate Procedure, which states that the "executor shall pay debts of the decedent or the estate only after obtaining the [probate] Court's consent." The Court then held that the "probate court abrogated its oversight duties" by not reviewing the attorney fee request. Id. ¶ 27.
Commonwealth precedent demands the mandate be strictly construed, but the mandate does not exist in a vacuum. While courts agree that a lower court must execute the terms of the mandate, there is also general agreement that the lower court may consider issues not foreclosed by the mandate. See, e.g., Cassett v. Stewart, 406 F.3d 614, 621 (9th Cir. 2005) ("Although lower courts are obliged to execute the terms of the mandate, they are free as to anything not foreclosed by the mandate . . . ."); Nguyen v. United States, 792 F.2d 1500, 1502 (9th Cir. 1986) ("although the mandate of an appellate court foreclosed the lower court from reconsidering matters determined in the appellate court, it leaves to the district court any issue not expressly or impliedly disposed of on appeal."). Accordingly, the trial court's "ultimate task is to distinguish between matters that have been decided on appeal, and are therefore beyond the jurisdiction of the lower court, from matters that have not." United States v. Perez, 475 F.3d 1110, 1113 (9th Cir. 2007) (citing Kellington, 217 F.3d 1084).
Neither the Malite v. Tudela mandate nor the opinion reflects that the disgorgement issue had been decided or that the probate court's power on this issue was limited on remand. Turning first to the mandate itself, it reversed and remanded the matter to the probate court. The civil court had entered an order awarding attorney fees and the Heirs petitioned the probate court for a temporary restraining order ("TRO"). The probate court denied the petition, which asked it to order fee disgorgement and vacate the civil court's fee award order, on the grounds that the Heirs lacked standing before the civil court to challenge the attorney fee order. Malite, 2007 MP 3 ¶ 7. We reversed, finding that the "operative issue was whether the Heirs had a right to be heard in the probate matter as to the propriety of the attorney fees requested in the civil case." Id. ¶ 26. We held that they did. Id. In other words, we reversed the probate court's decision—which denied the TRO on the ground that the Heirs lacked standing in the civil action—because the relevant question was whether the Heirs had standing in the probate action. However, nowhere in the mandate (or in the opinion itself) did we vacate the attorney fee award issued by the civil court or order disgorgement. We simply reversed the TRO denial order on standing grounds, and remanded the matter back to the probate court with instructions to determine the appropriate fee amounts.
That disgorgement was not foreclosed by the mandate is also supported by the Malite opinion itself. While the Court based its ruling on Rule 10 of the Commonwealth Rules of Probate Procedure, we repeatedly stressed the broad powers afforded to probate courts. We stated that the "main policy concern underpinning probate courts" is "safeguarding the interests of those who can't care for themselves." Malite, 2007 MP 3 ¶ 29. We also cited with approval two cases— In re Guardianship of Jadwisiak, 64 Ohio St. 3d 176, 593 N.E.2d 1379 (Ohio 1992) and Gnann v. Woodall, 270 Ga. 516, 511 S.E.2d 188 (Ga. 1999)—that favor a strong regulatory role for probate courts. In Jadwisiak, the court held that a probate court, in order to maintain control over a personal injury settlement award, had authority to order an attorney to remit fees to the court so that the probate court could meet its statutory duty to oversee the settlement funds. 593 N.E.2d at 1379-84. In Gnann, the Georgia Supreme Court found that the probate court's jurisdiction to approve the settlement of a malpractice claim and to protect the best interests of the incapacitated ward "confers upon that court the authority to require that the attorneys pay into the registry of court such settlement funds as they disbursed to themselves, and to hold them in contempt for their refusal to do so." 511 S.E.2d at 189. While noting that these opinions were based on each state's respective statutory schemes, we stressed that "the policy they stand for—favoring a strong regulatory role for probate courts—is equally implicated by our own probate law and procedure." Malite, 2007 MP 3 ¶ 30. We then cited multiple code provisions supporting the probate court's broad powers:
Rule 10's requirement that the payment of all estate debts be approved by the probate court is evidence of this policy, as is the language found at 8 CMC section 2926(c), which states: "[i]n establishing reasonable attorney's fees . . . the personal representative and the court shall account for the services rendered during probate . . . ." Further evidence of the probate court's broad mandate is found at 8 CMC section 2202(a), which grants the probate court jurisdiction "[t]o the full extent permitted by the [N.M.I.] Constitution and the Schedule on Transitional Matters . . . over all subject matter relating to estates of decedents . . . ." Section 2202(b) states that the probate court "shall have full power to make orders, judgments, and decrees and take all other action necessary and proper to administer justice in the matters which come before it." Such broad authority is necessary to ensure that the probate court is able to effectuate the "efficient probate of an estate . . . [and] a fair and proper distribution . . . ." Com. R. Pro., Rule 1.
Malite, 2007 MP 3 ¶ 30, 7 N. Mar. I. 407.
Significantly, these broad assertions of the probate court's power are not qualified by any language suggesting that on remand the probate court's power would be limited concerning disgorgement. To the contrary, our opinion states that the probate court should have considered the disgorgement issue. Specifically, we stated that the administrator had an affirmative duty to seek and obtain consent from the probate court before paying the requested attorney fees and that "[a]lthough the probate court may have determined not to require disgorgement of the attorney fees which had already been paid, it had an obligation to review and approve those fees and provide an opportunity for interested persons to be heard on the matter." Id. ¶ 26. Thus, the Court made clear that the probate court should have exercised discretion on the disgorgement issue, and by extension that the court was empowered on remand to order disgorgement if necessary. Appellants' argument would have us prohibit the probate court from fulfilling the very duties we admonished the court for abdicating in the first place. We reject this position.
In summary, while the disgorgement issue was briefly addressed in the context of mandamus relief, the Court did not address this issue, let alone rule on it, after converting the matter to an interlocutory appeal. There is a strong policy in probate matters of protecting the heirs. If the probate court in the exercise of its broad powers determined that disgorgement was necessary to ensure that funds would later be available, it had discretion to order as much. Reading our opinion as considering for appeal purposes—and foreclosing—fee disgorgement is simply incorrect. The probate court was permitted to employ commonly used judicial tools, such as interpleading of disputed funds, to carry out this Court's mandate. We therefore hold that the probate court did not exceed the scope of the mandate issued in Malite v. Tudela when it ordered Appellants to disgorge attorney fees until the proper fee award was calculated.
Appellants have four writ petitions pending before this Court arising from the ongoing Malite proceedings. Having resolved both the judicial disqualification and disgorgement challenges, we take this opportunity to respond to these petitions.
Appellants filed a petition for writ of prohibition in case number 2007-SCC-0030-PET. We denied most of this petition in Tudela v. Superior Court, 2010 MP 6, 8 N. Mar. I. 398. Given today's ruling that Judge Govendo's comments were not sufficiently severe to warrant disqualification, the remainder of Appellants' petition is denied.
Appellants filed two nearly identical writ petitions contesting the probate court's disgorgement order and whether the court properly calculated reasonable attorney fees. The first petition—initially filed under docket number 2007-SCC-0032-PET—seeks a writ of mandamus, and the second petition—filed under docket number 2007-SCC-0035-PET—seeks a writ of prohibition. Both petitions have since been consolidated under docket number 2007-SCC-0030-PET. The issues raised in these petitions are examined at length in the instant opinion and do not warrant further discussion. To the extent that the petitions assert that the probate court lacked jurisdiction to entertain the attorney fee issue, this position is denied as expressly contrary to our opinion in Malite v. Tudela, in which we held that "the probate court enjoyed jurisdiction over the entire settlement amount" and that the court "erred in failing to conduct an independent review of attorney fees awarded by the civil court." 2007 MP 3 ¶¶ 23, 37, 7 N. Mar. I. 407. Accordingly, both petitions are denied.
Appellants filed an Emergency Petition for Writ of Prohibition under docket number 2008-SCC-0001-PET, which was consolidated under docket number 2007-SCC-0030-PET. To the extent this petition challenged an order suspending petitioners from practicing law we severed this issue and addressed it in Atalig v. Superior Court, 2008 MP 19, 8 N. Mar. I. 147. The petition also asserts that Judge Govendo's decision to remove Jesus C. Tudela as estate administrator was an improper exercise of judicial authority. However, no argument is set forth on this issue and therefore the extraordinary relief sought is denied. See Fitial v. Kyung Duk, 2001 MP 9 ¶ 18 ("we will not consider an issue for which the proponent cites no legal authority."); Hardage v. CBS Broadcasting, Inc., 433 F.3d 672, 672 (9th Cir. 2006) ("we will not manufacture an argument on Hardage's behalf and then rule on it in his favor."). Finally, Petitioners argue that Judge Govendo should be disqualified from the Malite proceedings for ordering fee disgorgement and an accounting of how disgorged fees were spent because, they assert, these actions were outside the scope of the mandate issued in Malite v. Tudela, 2007 MP 3, 7 N. Mar. I. 407. For reasons discussed in this opinion, supra section II(B), we reject this position. Accordingly, Petitioner's Emergency Petition for Writ of Prohibition is denied.
C. Attorney Fees
We next examine the probate court's order denying Appellants all attorney fees. An award of attorney fees is reviewed for an abuse of discretion; however, whether the trial court applied the correct legal standard is reviewed de novo. Century Ins. Co. v. Guerrero Bros., 2010 MP 13 ¶ 17; Or. Natural Desert Ass'n v. Locke, 572 F.3d 610, 613-14 (9th Cir. 2009).
1. The Probate Court Failed to Conduct a Proper Reasonableness Hearing
In Malite v. Tudela, we ordered the probate court to conduct a hearing to determine reasonable attorney fees. On January 5, 16, and 28, 2009, hearings were held concerning Appellants submitted time billings. Mr. Atalig and Mr. Yana submitted documents purportedly showing how they spent the awarded fees. On January 28, 2009, the probate court issued its order denying Appellants all attorney fees in the Malite case. Appellants do not contest the probate court's finding that their submitted time billings were "excessive, unreliable and disingenuous[,]" but instead argue the probate court never held a proper hearing on the reasonableness of attorney fees because in denying all attorney fees the court only considered Appellants' submitted time billings. Order Denying Fees at 14.
Rule 1.5 of the Model Rules of Professional Conduct ("MRPC") lists the factors for a court to consider when calculating attorney fees. We applied this rule in Camacho v. J.C. Tenorio Enters., Inc., 2 NMI 509 (1992), approving in part and denying in part a request for attorney fees. In determining attorney fees, the Camacho Court was "guided by Rule 1.5 of the American Bar Association 'Model Rules of Professional Conduct[,]'" and ruled that in "this particular case, the factor of 'the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly' leads us to conclude that the number of hours being charged is excessive and unreasonable." Id. at 511. The Court concluded the appellee was not entitled to attorney fees for reworking appellant's poorly organized brief in order for it to write its own brief, and as a result cut attorney fees in half for the activities in question, awarding $5,401. Id. at 513.
This rule states:
a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent
ABA Model Rules of Professional Conduct Rule 1.5.
We relied on Camacho in Pille v. Sanders, 2000 MP 10, in which a mother seeking child support claimed she was entitled to attorney fees under the Commonwealth Uniform Parentage Act. Citing Camacho, we noted that in "evaluating the reasonableness of attorney fees, the court considers the time and labor required, the novelty and difficulty of the questions involved, and the skill required to properly perform the legal service." Id. ¶ 25 (citing Camacho, 2 NMI at 511). We concluded that fees were improperly denied and remanded the case to the trial court to determine reasonable fees. Id. ¶ 26.
Both relevant orders in the instant case reference MRPC Rule 1.5. In its Order granting the Heirs' motion to disgorge attorney fees, the court stated that in awarding fees it would be guided by Rule 1.5 of the American Bar Association's Model Rules of Professional Conduct and this Court's precedent. Disgorgement Order at 2. The court also stated that in "considering the reasonableness of attorney fees, the court considers the time and labor required, the novelty and difficulty of the questions involved, and the skill required to properly perform the legal service." Id. at 3-4 (citing Camacho, 2 NMI 509). In its subsequent order denying all attorney fees, the court referenced the statement in its Disgorgement Order that it would consider all of the MRPC Rule 1.5 factors when calculating reasonable fees. Order Denying Attorney Fees at 2-3.
While both orders cite MRPC Rule 1.5, the orders and the record reveal a fatal deficiency: the court did not actually consider the MRPC Rule 1.5 factors. The Order denying attorney fees references MRPC Rule 1.5 in its background section, but the discussion section of the Order only examines the submitted time billings, and not the other relevant Rule 1.5 factors. While the lower court's dissatisfaction with Appellants' time billings could factor into the ultimate fee determination, other factors are certainly relevant. For example, the Order does not discuss in any detail the amount of skill required to obtain the $3,450,000 land settlement payment or the difficulty of the legal questions involved.
Appellees question Appellants' candor in entering into the contingency fee agreement. Appellees assert in their supplemental reply brief that it was reported on November 11, 2003, "only two months before the contingent free agreements were executed that a $40,000,000 bond deal to compensate landowners was expected to close before Christmas" and that "only two weeks after the contingent fee agreements were signed, it was reported that checks would be issued to land claimants as early as that week." Reply Brief in Response to Supplemental Memorandums Filed By Attorneys Reynaldo Yana and Antonio Atalig Relative to the Disqualification of the Honorable Kenneth L. Govendo ("Supplemental Reply Brief") at 6. Relying on these purported facts Appellees conclude that "it should be readily apparent to even the most unsophisticated observed that there was little 'contingent' about the award to the Malite Estate." Id. Appellees included newspaper articles in their Excerpts of Record purportedly supporting these arguments. In contrast, Appellants have asserted that because of their actions the Estate grew from $3,000.00 to over $3,400,00.00, and thus they are entitled to adequate compensation for their role in achieving this result. See ER at 59 (Mr. Atalig's comments at January 5, 2009 hearing).
Appellees arguments implicate the contingency fee agreement and MRPC Rule 1.5 factors, such as the skill required to obtain the land settlement award. Considering the merits of these arguments would require us to conduct our own reasonableness hearing and thereby usurp the probate court's authority. We decline to do this, and instead only stress that one of the reasons a proper reasonableness hearing is needed is so that the court can consider arguments raised by the parties, like those discussed in this footnote.
Merely citing MRPC Rule 1.5 in an order—without discussing which Rule 1.5 factors were considered—is legally insufficient and prevents us from reviewing whether a proper reasonableness hearing occurred and whether awarded fees are reasonable. Since attorney fee awards are reviewed for an abuse of discretion, lower courts are granted wide latitude in awarding fees. With this power comes a responsibility to ensure that all relevant attorney fee factors are considered. There is no formula, and a trial court must exercise its discretion and wisdom to tailor the balancing of factors to the particular circumstances in a given case. What is crucial for purposes of our ruling is not how the MRPC Rule 1.5 factors are balanced, but that the lower court must consider more than only time billings. This is the lesson imparted in Camacho and Pille. While time billings constitute an important element of a reasonableness hearing as the Court considers the time and labor a case required, billings alone are insufficient. While the trial court is empowered to balance the MRPC Rule 1.5 factors as it deems appropriate, it is not free to disregard all of the factors (and MRPC Rule 1.5 in the process), and reduce a reasonableness hearing to only a review of time billings. In many cases—as was the case in Camacho and Pille—a court will want to consider the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the requested legal services. Depending on the circumstances in a given case, some factors may be weighted more heavily than others.
Relying on time billings alone is particularly inappropriate when an attorney is acting on a contingency fee basis. Numerous courts have acknowledged that attorneys are less inclined to keep time records when operating under contingency fee agreements. See Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 325 (5th Cir. 1995) ("Failing to provide contemporaneous billing statements does not preclude an award of fees per se, as long as the evidence produced is adequate to determine reasonable hours"); Cf. Mardirossian & Associates, Inc. v. Ersoff, 153 Cal. App. 4th 257, 274, 62 Cal. Rptr. 3d 665 (2007) (stating that under Business and Professions Code Section 6147, contingency fee lawyers are not required to maintain billings records). While failing to keep contemporaneous records is risky and generally an ill-advised business practice, it will not necessarily preclude a fee award and instead may only result in a significant fee decrease. See Monaghan v. SZS 33 Assocs., L.P., 154 F.R.D. 78 (S.D.N.Y. 2004) (reducing fees by thirty-percent where attorneys failed to keep time records); Davignon v. Clemmey, 176 F. Supp. 2d 77, 97 (D. Mass. 2001) ("Cohen did not keep contemporaneous billing records 'due to the fact that this matter was taken on a contingent fee basis.' Nevertheless, Cohen has produced a seventeen-page bill for 337.63 hours of work. That will not do. Because Cohen failed to keep contemporaneous billing records, the Court reduces his time by approximately fifty percent to 175.00 hours."). That time billings may be a particularly inadequate basis for denying all attorney fees in contingency fee cases is distinct from whether the parties executed a valid contingency fee agreement in this case. See infra Section II(C)(2) (discussing contingency fee agreement).
Our ruling that the probate court erred by not consulting MRPC Rule 1.5 is predicated on the fact that the court concluded that the contingency fee agreement was unenforceable. In the absence of a valid agreement between an attorney and client, or in cases where reasonable attorney fees are awarded pursuant to statute, MRPC Rule 1.5 factors must be considered when calculating reasonable attorney fees. However, nothing in this opinion should be construed as requiring courts to look to MRPC Rule 1.5 factors in cases involving a valid fee agreement between a party and their attorney. MRPC Rule 1.5 is used to calculate reasonable fees in cases where no valid agreement exists or where reasonable fees are awarded pursuant to statute. Had the probate court found the contingency fee agreement valid, it would not be required to consult MRPC Rule 1.5. As discussed in section II(C)(2), infra, this remains true on remand.
Accordingly, we vacate the probate court's order denying all attorney fees because the court failed to consider all relevant MRPC Rule 1.5 factors, and thus, did not conduct a proper reasonableness hearing. The probate court, in denying all attorney fees due to excessive billing, relied exclusively on Ferreira v. Borja, 1999 MP 23, wherein we denied all attorney fees because the attorney had engaged in discouraged billing practices. Our decision today makes clear that awarding attorney fees involves a two-step process. First, the court must determine whether the requested fees are reasonable. This requires a court to consider all fee agreements and relevant MRPC Rule 1.5 factors. Second, the court must determine the appropriate fee award. If requested fees are deemed reasonable, they may be awarded. If the fees are declared unreasonable, the court must determine the appropriate remedy. Ferreira presents one possible remedy—denying all attorney fees. However, Ferreira does not create a blanket rule mandating denial of all attorney fees in all cases of excessive billing. Instead, a court must review the information gathered during the reasonableness hearing and determine what fee award is reasonable. While complete denial of fees may be appropriate, this will not always be the case.
To the extent that Ferreira can be read as permitting a court to deny all attorney fees without first examining relevant fee agreements and MRPC Rule 1.5 factors, it is overruled. A court must consider these factors to determine whether requested fees are reasonable.
For the foregoing reasons, we hold that by only considering attorney time billings, the probate court failed to conduct a proper reasonableness hearing. At a legally sufficient hearing, the court needed to consider all relevant MRPC Rule 1.5 factors. Accordingly, we remand this case to the probate court to conduct a hearing on the reasonableness of attorney fees as soon as is practicable. We urge the court to resolve this matter expeditiously, as further delay burdens Appellants, the Heirs, and the judiciary.
2. The Contingency Fee Agreement
Properly framing the issue we remand to the probate court requires examining the settlement agreement executed in this case and whether Judge Lizama's order awarding attorney fees is entitled to any deference. A settlement agreement in the civil case was executed on February 28, 2006. Section four of the Agreement states:
The Settlement Agreement together with the General Release of claims executed by the heirs of Angel Maliti, shall be subject to the approval of the Commonwealth Superior Court in Civil Action No. 04-0563C and, upon approval by the Court, judgment shall be entered as set forth herein. Upon the entry of judgment, the Land Compensation shall be paid into the Commonwealth Superior Court pursuant to Rule 67 of the Commonwealth Rules of Civil Procedure until an order of distribution and the approval of attorneys fees and costs is entered in In re Estate of Angel Maliti Civil Action No. 97-0369 in accordance with the laws of the Commonwealth of the Northern Mariana Islands and the CNMI Rules of Probate Procedure.
SER at 4. Appellees argued in their briefs and during oral argument that this provision prohibits enforcement of a contingency fee agreement. While the probate court did not discuss this section in its Order denying fees, comments made elsewhere suggest the probate court felt a contingency fee agreement was impermissible in this case.
In its order finding Appellants in contempt, the court discussed Appellants obligation to keep accurate time records, even in a case involving a contingency fee agreement. The court stated:
Mr. Atalig and Mr. Yana knew or should have known that contingency fees in probate cases are prohibited by law, or at the very least, would/could be challenged by an interested party. . . .Thus, Mr. Atalig and Mr. Yana knew or should have known that entering into a contingency fee in a probate case or a matter inherently connected to a probate case could be called into question.
ER at 65.
At the hearing concerning attorney fees held on January 20, 2009, Judge Govendo stated:
It's been mentioned that it was a contingent fee case although any award was going to go to the estate of Malite and everyone should be on notice that as soon as your hear the wording estate, contingency flies out the window. There is no such thing as a contingent fee when you're dealing with an estate, especially if you are representing the administrator of the estate.
ER at 73.
While Commonwealth law prohibits contingency fee agreements in probate cases, this prohibition is not applicable in the present case. The contingency fee prohibition Appellees rely on—8 CMC § 2926(a)—applies to efforts undertaken in administrating an estate, and has no bearing on civil actions that are only related to the estate because the estate may be entitled to a portion of any ultimate recovery. The attorney fees at issue arise from a civil case settlement, not the administration of the Estate. Simply stating in a settlement agreement that attorney fees will be calculated as part of the accompanying probate action is legally insufficient to change the nature of the underlying action. If the parties wanted the settlement agreement to preclude recovery on a contingency fee basis, this needed to be explicitly stated in the agreement.
In relevant part, 8 CMC § 2926(a) states that an "attorney or personal representative shall not calculate his fees as a percentage of the value of all or any part of an estate."
This case is distinguishable from those in which legal matters affecting the estate are addressed during probate proceedings. The distinct issue of when contingency fee agreements are permissible in such circumstances is not presently before us and we decline to address it at this time.
Our ruling on this matter does not mean that we find the contingency fee agreement enforceable. Appellees assert that the agreement contains numerous deficiencies, including that it is only signed by four of the eighteen heirs, is vague, that none of the signatories were parties to the civil case, and that Appellants represented the estate administrator. We decline to infringe upon the province of the probate court by speculating as to the agreement's validity without a proper record before us. Instead, we find that enforcement of an otherwise valid contingency fee agreement would not be foreclosed by section four of the settlement agreement. On remand, the probate court must first rule on the validity of the contingency fee agreement. If valid, it must be enforced. If the agreement is declared invalid, then the court must examine all relevant MRPC 1.5 factors to determine reasonable attorney fees.
3. Judge Lizama 's Order Awarding Attorney Fees
On May 12, 2006, Judge Lizama entered an order approving Mr. Atalig and Mr. Yana's thirty-three percent contingency fee award. In Malite v. Tudela, we ruled that "the probate court enjoyed jurisdiction over the entire settlement amount" and that the administrator had an affirmative duty to obtain the probate court's consent before paying those attorney fees from the Estate's land compensation award. 2007 MP 3 ¶¶ 23, 27. Since we again remand this case to the probate court to conduct a reasonableness hearing, we must determine whether Judge Lizama's Order awarding fees is entitled to any deference.
In his Order awarding the fees, Judge Lizama simply stated that in "the absence of any evidence to the contrary, a thirty-three-percent contingency fee is appropriate compensation for civil cases." SER at 19. Setting aside the fact that those who could have provided contrary evidence were never given notice of the hearing, in making an award of over one million dollars Judge Lizama failed to examine the validity of the contingency fee agreement, consider any of the attorney fee factors listed in MRPC Rule 1.5, or otherwise provide any legal support for his conclusion. Given these fatal defects, it would be inappropriate for Judge Lizama's Order to bind the probate court on remand. Accordingly, we find that Judge Lizama's order awarding attorney fees is not entitled to any deference.
Appellants were awarded $1,138,500.00 in connection with the civil case and $150,000.00 in connection with their work probating the Estate. Both figures were ordered disgorged until a final determination was made as to their reasonableness. On remand, the court must determine the appropriate fees to be awarded in connection with the civil case, as well as reasonable fees for work Appellants performed in connection with the probate of the Malite Estate.
III
While this decision vacates Judge Govendo's order denying all attorney fees, this does not completely resolve the instant appeal. Appellants were originally found in contempt for failing to take adequate steps to comply with the probate court's order to disgorge attorney fees pending a final decision on the appropriate fee award. Our decision to vacate the order denying attorney fees does not vacate the order requiring disgorgement or the probate court's order finding Appellants in contempt for failing to comply with this order. Accordingly, Appellants risk finding themselves in a familiar position—facing incarceration for failing to take steps to comply with the probate court's order to disgorge fees pending a final attorney fee determination. We must therefore examine Appellants' remaining arguments to determine whether continued incarceration is permissible.
A. Whether Mr. Atalig and Mr. Yana have been Imprisoned as Judgment Debtors
Appellants argue that their continued incarceration is barred by 7 CMC § 4208, which limits jail terms for judgment debtors. This provision reads:
If any debtor fails without good cause to comply with any order in aid of judgment made under this chapter, the debtor may be adjudged in contempt as a civil matter, after notice to show cause why the debtor should not be so adjudged and an opportunity to be heard thereon, and upon such adjudication shall be committed to jail until the debtor complies with the order or is released by the court or serves a period fixed by the court of not more than six months in jail, whichever happens first.
Appellants contend that a final judgment was entered in this case on August 19, 2009, when Judge Govendo issued an order stating that Appellants are "not entitled to any attorneys' fees and this Court awards the Estate of Angel Malite a judgment for the entire amount of $1,288,500.00. This judgment will begin accruing at a rate of 9% as a January 28, 2009." Appellant's Reply Brief at 7. Appellants argue that they were jailed for failing to comply with this "judgment debt," and that since they were imprisoned for failure to pay a debt, the maximum jail sentence is six months. Appellees respond that Appellants were incarcerated not for failure to pay a debt, but because of their "stubborn contemptuous unwillingness to make even the slightest effort to comply with the Court's disgorgement orders." Appellee's Brief at 23.
While 7 CMC § 4208 limits incarceration of judgment debtors, we find that this code provision is facially inapplicable in the present case. "A basic cannon of statutory construction is that statutory language must be given its plain meaning." Nansay Micronesia Corp. v. Govendo, 3 NMI 12, 18 (1992). Section 4208 unambiguously states that it applies when a debtor "fails without good cause to comply with any order in aid of judgment." Thus, a court cannot hold a party in contempt under 7 CMC § 4208 for failure to pay a debt unless an order in aid of judgment has been issued and the debtor fails to comply with it. To permit otherwise contradicts the express language of this code provision. No order in aid of judgment has been issued in this case and the probate court never cites this provision as the basis for imprisonment. In light of these uncontested realities, 7 CMC § 4208 is facially inapplicable and therefore Appellants' argument must fail.
It follows that incarceration for failure to comply with a judgment for payment of money—which is distinct from incarceration for failure to make efforts to comply with a court order—must always be grounded in 7 CMC § 4208. In other words, a court cannot circumvent the six month incarceration limit and jail debtors indefinitely for failure to pay a debt by simply not issuing an order in aid of judgment. Similarly, a party who is owed money cannot keep debtors in jail indefinitely by not seeking an order in aid of judgment. Noncompliance with an order in aid of judgment is a prerequisite to incarceration of judgment debtors. To hold otherwise would be contrary to the Commonwealth Code itself as well as established principles governing the jailing of debtors.
Appellants were not imprisoned for non-compliance with an order in aid of judgment, but for making insufficient efforts to comply with court orders. See In re Estate of Angel Maliti, Civ. No. 97-0369 (NMI Super. Ct. January 28, 2009) (Order) at 13 ("Mr. Yana and Mr. Atalig are not judgment debtors; they are recalcitrant attorneys who are incarcerated because of their own stubborn refusal to take even the smallest steps toward satisfying orders of this court.") Our decision to vacate the order denying all attorney fees and remand this matter to the probate court does not free Appellants from the burden of complying with the probate court's disgorgement order. A court can order contested funds be deposited into a court registry until a distribution order is entered, and failure to comply with such an order can result in a contempt finding and incarceration. Appellants have always been able to purge themselves of contempt by attempting to comply with the probate court's disgorgement orders, and this remains true on remand.
B. Whether Continued Imprisonment is a Proper Exercise of Contempt Power
Aware that Appellants have spent nearly one and one-half years in jail in this matter, we lastly turn to whether continued incarceration is a proper exercise of the probate court's contempt power. It is well-established that lower courts possess the inherent power to find a party in civil contempt and order imprisonment until compliance with a court order is achieved or is no longer possible. Commonwealth v. Borja, 3 NMI 156, 164 (1992). "Sanctions for civil contempt are employed either to coerce compliance with a court order or to compensate a complainant for losses sustained." Commonwealth v. Borja, 3 NMI 156, 165 (1992) (citing United States v. United Mine Workers of America, 330 U.S. 258, 67 S. Ct. 677, 91 L. Ed. 884 (1947)). "If the civil contempt sanctions are designed to coerce compliance with a court order, the alleged contemnor must be given the opportunity to comply and avoid the penalty." Id. In contrast, criminal contempt sanctions "are unconditional, and are intended to punish the contemnor and vindicate the authority of the court." Id. at 166. Under 6 CMC § 3307, a court can impose penalties for criminal contempt, including up to six months in jail.
While Appellants can be incarcerated for not complying with the probate court's orders, a probate court's contempt power is not limitless. A contemnor can assert a present inability to comply with an order as a defense to civil contempt. See United States. v. Rylander, 460 U.S. 752, 757, 103 S. Ct. 1548, 75 L. Ed. 2d 521 (1983) ("Where compliance is impossible, neither the moving party nor the court has any reason to proceed with the civil contempt action. It is settled, however, that in raising this defense, the defendant has a burden of production."); see also Oriel v. Russell, 278 U.S. 358, 366, 49 S. Ct. 173, 73 L. Ed. 419 (1929). Courts have repeatedly stressed that parties asserting an inability defense face a high burden. For example, in Commodity Futures Trading Comm'n. v. Wellington Precious Metals, Inc., 950 F.2d 1525, 1529 (11th Cir. 1992), the court stated that in "order to succeed on the inability defense, the alleged contemnor must go beyond a mere assertion of inability, and establish that he has made in good faith all reasonable efforts to meet the terms of the court order he is seeking to avoid." See Pigford v. Veneman, 307 F. Supp. 2d 51, 57-58 (D.D.C 2004) ("Impossibility of performance constitutes a defense to a charge of contempt . . . and a respondent who raises the defense of impossibility must demonstrate his inability to comply categorically and in detail. When a district court determines, however, that a contemnor has 'not done all within its power' to comply with the court's orders, contempt may be appropriate even where compliance is difficult.").
We review for an abuse of discretion a trial court's contempt finding, including whether a contemnor has failed to adequately assert inability as a defense to civil contempt. Matsunaga v. Matsunaga, 2001 MP 11 ¶ 3 ("The Supreme Court of the Commonwealth of the Northern Mariana Islands reviews the imposition of civil contempt and contempt sanctions for an abuse of discretion."); see George v. George, 232 Ga. 389, 207 S.E.2d 26, 29 (Ga. 1974). The record fails to demonstrate that Appellants have met this high burden. To the contrary, it reflects that Appellants made minimal effort to comply with the probate court's orders. Appellee's Brief at 15. For example, the record reflects that Mr. Atalig did not make any significant effort to retrieve any portion of fees pending a final attorney fee determination. To the contrary, in over two years of ongoing proceedings, Appellants never deposited a single cent into the court registry. While Appellants may have feared that, once disgorged, the fees would not be returned, this belief does not justify noncompliance with a court order. While Appellants may be unable to fully comply with the disgorgement order, this does not free them from partial compliance. The record amply demonstrates that Appellants have repeatedly ignored court orders to disgorge fees and failed to make an adequate showing that they were unable to at least partly comply with such orders. We recognize that Appellants submitted some records documenting how fees were spent. However, we find these submissions insufficient to support a finding that the probate court abused its discretion in keeping Appellants incarcerated.
Appellants' apparent reason for disregarding the court's orders—that they believed the orders were unlawful—is no excuse. See Matsunaga, 2001 MP 11 ¶ 27 ("A court order — even an arguably incorrect court order — demands respect. An order issued by a court with jurisdiction over the parties and the subject matter of an action must be obeyed unless and until it has been vacated or stayed, or until it expires by its own terms.") As previously discussed, supra section II(B), the probate court's disgorgement order did not exceed the scope of the mandate issued in Malite v. Tudela, and so the lower court had jurisdiction to order disgorgement.
Appellants conduct at hearings was also less than candid. The following example is cited by the probate court and is typical of the type of exchanges between Appellants and the court concerning the received attorney fees:
Q: Did you deposit any money, Mr. Atalig?
A: It is impossible to comply with the order.
[Omitted]
Q: Okay. It is impossible for you to comply with any part of the [inaudible]?
A: That's correct.
Q: And is that because at this point in time you are penniless? You don't have any [inaudible]?
A: Ah, I don't have in my possession, ah, anything that I can report to the Court.
Q: You don't have any money in the bank?
A: I have some money for, I have my own money in the bank, but not in the amount that the Court is asking.
Q: How about in your wife's account?
A: Um, my wife has some money, but I don't know how much she has.
Q: After you received some money, after you received the $1.15 million, ah, as a result of that quarter million from Judge Lizama, how much money was transferred to your wife's account?
A: At this time, I cannot answer that. I don't have that information.
Order Denying Attorney Fees 6-7 (ER at 142-43).
See ER at 78-83 and SER at 123-33 (detailing how Mr. Atlaig and Mr. Yana spent awarded fees).
Appellants finally argue that continued incarceration has lost its coercive effect, and that Appellants are therefore now incarcerated for criminal contempt. Under 6 CMC § 3307, imprisonment for criminal contempt is limited to six months. However, in leaving the portion of the order imprisoning Appellants undisturbed we are mindful that the lower court enjoys considerable discretion in determining if civil contempt sanctions have lost their coercive effect. See Simkin v. United States, 715 F.2d 34, 38 (2d Cir. 1983) ("district judge's determination whether a civil contempt sanction has lost any realistic possibility of having a coercive effect is inevitably far more speculative than his resolution of traditional factual issues. Since a prediction is involved and since that prediction concerns such uncertain matters as the likely effect of continued confinement upon a particular individual, we think a district judge has virtually unreviewable discretion both as to the procedure he will use to reach his conclusion, and as to the merits of the conclusion."). To rule on appeal that incarceration has lost its coercive effect would risk undermining the probate court's ability to enforce compliance with its orders. We find that the record before us does not support such a drastic conclusion.
We hasten to reiterate that on remand the probate court must conduct a hearing on the reasonableness of attorney fees with all practicable speed. Following our remand in Malite v. Tudela, nearly two years elapsed before hearings were held on attorney fees. While we realize that numerous procedural matters—many linked to Appellants' actions—caused this delay, further delay should be avoided. The probate court must be mindful that Appellants have already spent approximately eighteen months in jail. Appellants are entitled to a reasonableness hearing, and the interests of justice will be frustrated if Mr. Atalig and Mr. Yana stay indefinitely in jail awaiting their day in court.
On remand we expect the probate court to focus its efforts on conducting a proper reasonableness hearing, not rehashing the disgorgement issue while Appellants sit in jail. Proper attorney fees, if any, must be calculated in order for this case to move toward final resolution.
IV
Conclusion
For the foregoing reasons, we find that Judge Govendo's disqualification is not warranted, and that he may preside over future Malite proceedings. We further hold that Judge Govendo's disgorgement order did not exceed the scope of our mandate issued in Malite v. Tudela, 2007 MP 3, 7 N. Mar. I. 407. However, the probate court erred by denying all attorney fees solely on the basis of attorney time billings. We therefore VACATE the probate court's order denying all attorney fees and REMAND this matter to the probate court for a hearing on the reasonableness of attorney fees. At this hearing, the probate court must first rule on the validity of the contingency fee agreement. If valid, it must be enforced. If the agreement is declared invalid, then the court must examine all relevant MRPC 1.5 factors to determine reasonable attorney fees for work performed in the civil case which resulted in a payment of $3,450,000 to the Malite Estate. In determining the appropriate fee award, Judge Lizama's order awarding attorney fees shall not be afforded any deference. The court must also determine appropriate attorney fees for work performed in connection with the probate of the Malite Estate. Our decision to vacate the order denying all attorney fees does not free Appellants from complying with the probate court's disgorgement order or vacate the probate court's contempt order imprisoning Appellants for failing to disgorge fees pending a final attorney fee determination. However, we expect the probate court to make every effort to conduct a reasonableness hearing in the very near future.
In light of this decision, we lift the stay issued in this case on December 23, 2009. See In re the Estate of Angel Malite, No. 2009-SCC-0036-CIV (NMI Sup. Ct. Dec. 23, 2009).
SO ORDERED this 29th day of December 2010.
/s/ John A. Manglona, Associate Justice
/s/ Robert J. Torres, Justice Pro Tem
/s/ Herbert D. Soll, Justice Pro Tem