HELEN J. FRYE, United States District Judge
The matter before the court is defendant Kahl's motion for an award of attorney fees and costs (#170).
BACKGROUND
On June 12, 2000, Cooper Industries filed this action against Brian Lagrand, Dianne Lagrand, Richard Hagarty, and their associated business entities arising out of the transfer of tire chains obtained from Cooper Industries to the plaintiffs under false pretenses.
On September 14, 2000, a default judgment was entered against Brain Lagrand and the Lagrand companies in the amount of $731,806.06.
On January 11, 2001, Cooper Industries filed an amended complaint to add as defendants the Clarice Janet Kahl Trust, and Deborah Kahl, in their capacity as trustees, in an attempt to collect the default judgment. Dianne Lagrand is the wife of Brian Lagrand. Deborah Kahl is the sister of Dianne Lagrand. Clarice Janet Kahl is the mother of Dianne Lagrand and Deborah Kahl. Prior to January of 2000, there were business transactions between Clarice Kahl and Brian Lagrand, including loans of money and involving property. The amended complaint alleges that the Trust was used for the purpose of enabling Brian Lagrand and the Lagrand companies to transact business. From the end of March, 2000 through May, 2000, when Brian Lagrand was receiving money from the resale of Cooper Industries' tire chains, over $230,000.00 was deposited into an account in the name of the Clarice Janet Kahl Trust. Opinion and Order (Docket #158), February 19, 2002, p. 6.
On February 26, 2001, Cooper Industries sent discovery requests to Dianne Lagrand, Kahl's co-trustee, including a Request for Production and a request for answers to interrogatories regarding trust documents.
On June 12, 2001, Cooper Industries filed a motion to compel production of discovery after receiving no responses from Lagrand to the Request for Production and interrogatories.
On June 13, 2001, counsel for Kahl sent a First Request for Production of Documents to Cooper Industries seeking documents which may show the basis for the claims against Kahl. Counsel for Kahl wrote in a letter to counsel for Cooper Industries enclosed with the discovery request, in part, as follows: "We have investigated the claims made by your client against Ms. Kahl and have been unable to find any evidence to substantiate them. . . . We request that you reconsider having named Ms. Kahl as a defendant in this case." Exhibit A to Memorandum in Support of Defendant Kahl's Motion for an Award of Attorney Fees.
On September 20, 2001, counsel for Kahl wrote to counsel for Cooper Industries, stating:
On June 13, 2001, we wrote to advise you that we had investigated the allegations made in the above referenced case against our client Deborah Kahl and that we could find no evidence to substantiate the allegations. We served a request for production of documents aimed at obtaining any evidence the plaintiff may have that would substantiate the allegations against Ms. Kahl. You did not produce any documents responsive to the request.
It appears you are relying solely on the bank documents to which you refer in plaintiff's response to Ms. Kahl's request for production to prove her liability. We have carefully reviewed these documents and can find nothing in or about them that supports the claims made against our client. We again request that you reconsider naming Ms. Kahl as a defendant in this lawsuit.
We make this request in preparation for a Rule 11 sanction motion. If you have further evidence about which we are unaware, please advise us of that immediately. Otherwise, we intend to file a motion for summary judgment, seek our attorney fees and seek sanctions.
Exhibit B to Memorandum in Support of Defendant Kahl's Motion for an Award of Attorney Fees.
On October 10, 2001, Kahl filed a motion for summary judgment.
On October 25, 2001, arrangements were made for the plaintiff to take Kahl's deposition. At the conclusion of the deposition, counsel for Kahl asked counsel for Cooper Industries to again consider dismissing its case against Kahl voluntarily. Counsel for Cooper Industries promised a response as soon as possible and that afternoon faxed a letter agreeing to enter into a stipulation for dismissal of all claims and counterclaims between Cooper Industries and Kahl. The motion for summary judgment filed by Kahl was withdrawn, and Kahl was voluntarily dismissed from the case.
CONTENTIONS OF THE PARTIES Kahl moves the court for an award of attorney fees pursuant to 28 U.S.C. § 1927 and the inherent power of the court on the grounds that counsel unreasonably protracted the proceedings. Kahl contends that counsel for Cooper Industries did not concede to a dismissal until October 25, 2001 despite repeated warnings that there was no evidence to support the claims. Kahl contends that competent counsel could not have formed a reasonable belief that his allegations against her were well-grounded in fact after reasonable inquiry. Kahl contends that she was forced to incur substantial attorney fees to defend baseless accusations made by Cooper Industries. Cooper Industries explains that discovery documents indicated that approximately $200,000.00 of funds obtained from the tire chain transactions at issue were deposited in an account at Bank of America which was in the name of the Clarice Janet Kahl Trust, and that Deborah Kahl and Dianne Lagrand were signers on this account. Cooper Industries contends that it had the opportunity to take the deposition of Deborah Kahl on October 25, 2001, and finding that she did not, in fact, have involvement in the operation of Brian Lagrand's business or any personal involvement in laundering funds from the resale of the Cooper chain, agreed to the immediate dismissal of Kahl from the case.
ANALYSIS
Kahl's motion for sanctions is limited to 28 U.S.C. § 1927 and the inherent power of the court. Kahl does not rely upon Rule 11 of the Federal Rules of Civil Procedure.
1. 28 U.S.C. § 1927
28 U.S.C. § 1927 provides:
Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.
Sanctions pursuant to section 1927 "must be supported by a finding of subjective bad faith." New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir. 1989). "Bad faith is present when an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent." Estate of Blas v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986) (citations omitted). In In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431 (9th Cir. 1996), the United States Court of Appeals for the Ninth Circuit explained:
Because [§ 1927] authorizes sanctions only for the "multipli[cation of] pro-ceedings," it applies only to unnecessary filings and tactics once a lawsuit has begun. We have twice expressly held that § 1927 cannot be applied to an initial pleading. . . . The filing of a complaint may be sanctioned pursuant to Rule 11 or a court's inherent power, but it may not be sanctioned pursuant to § 1927.
Id. at 435 (citations omitted).
Discovery in this case indicated a connection between Brian Lagrand and the trust account for which Dianne Kahl was a co-signer. Cooper Industries did not file frivolous pleadings. There is no evidence that counsel for Cooper Industries acted recklessly, with subjective bad faith, or with an intent to harass in this case. Sanctions cannot be applied pursuant to section 1927.
2. Inherent Power of the Court
The United States Court of Appeals for the Ninth Circuit has "routinely insisted upon a finding of bad faith before sanctions may be imposed under the court's inherent power." Zambrano v. City of Tustin, 885 F.2d 1473, 1478 (9th Cir. 1989). There are no facts in this case to support a finding of bad faith.
CONCLUSION
IT IS HEREBY ORDERED that defendant Kahl's motion for an award of attorney fees and costs (#170) is DENIED.