RUSSELL JAMES COLE v. PETER LIN AGAPE INDUSTRIAL INC (2016)

MEMORANDUM*

Russell James Cole (“Cole”) and How Guin Robert Fong (“Fong”) appeal the district court's orders imposing sanctions and attorneys' fees pursuant to Federal Rule of Civil Procedure 11 (“Rule 11”). We have jurisdiction pursuant to 28 U.S.C. § 1291. We review for an abuse of discretion. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 409 (1990).

The district court properly held that Cole and Fong failed to conduct “an inquiry reasonable under the circumstances,” Fed. R. Civ. P. 11(b), before filing pleadings asserting time-barred claims for breach of an oral contract and tortious interference with prospective economic advantage. See Cal. Civ. Proc. Code § 339(1) (two-year statute of limitations). Cole and Fong, however, made nonfrivolous arguments that a breach of fiduciary duty claim may have reasonably been timely. See id. §§ 338 (three-year statute of limitations), 343 (four-year statute of limitations). Accordingly, we affirm the district court's grant of Rule 11 sanctions for the breach of contract and tortious interference claims, but vacate with respect to the breach of fiduciary duty claim. We remand to the district court to reconsider the amount of sanctions and to recalculate the attorneys' fees award, as appropriate.

AFFIRMED IN PART, VACATED IN PART, AND REMANDED.