Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-03123/USCOURTS-ca10-91-03123-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 

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IN RE: 

BURGER 

v. 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

JOHN ERCY WILKINSON ) 

) 

Debtor. ) 

) 

) 

KING CORPORATION, ) 

) 

Plaintiff-Appellant/ ) 

Cross-Appellee, ) 

) 

) 

) 

FlL~D als . t£d Sta.t<?s Court ~t Appe Um Ter.th C1rcm': 

~PR 161992 

ROBERT L. HOECKER - Clerl: 

Nos. 91-3123 

& 

JOHN ERCY WILKINSON, ) 91-3130 

) (D.C. No. 88-C-2458-O) 

Defendant-Appellee/ ) ( D. Kan.) 

Cross-Appellant, ) 

) 

) 

CARL R. CLARK, ) 

) 

Trustee. ) 

ORDER AND JUDGMENT* 

Before SEYMOUR and ANDERSON, Circuit Judges, and SAM,** District 

Judge. 

**Honorable David Sam, District Judge, United States District 

Court for the District of Utah, sitting by designation. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel . 10th Cir. R. 

36.3. 

Appellate Case: 91-3123 Document: 010110242995 Date Filed: 04/16/1992 Page: 1
After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of these appeals. See Fed . R. App. P. 

34(a); 10th Cir. R. 34.1 . 9. The cases are therefore ordered 

submitted without oral argument . 

On appeal No. 91-3123, Plaintiff challenges the bankruptcy 

court's order, affirmed by the district court, dismissing its 

Amended Complaint to Determine Dischargability of Debt as a 

sanction following its failure to file a timely response to the 

Debtor-defendant's motion for dismissal on the meri ts, as required 

by D. Kan. Rule 206. On cross appeal No . 91-3130, Defendant 

challenges the district court ' s denial of his request for leave to 

file an oversized brief and his motion seeking sanctions under 

Fed . R. App. P . 38 against Plaintiff for pursuing a frivolous 

appeal. 

I . Background 

Following the conversion of Defendant's Chapter 11 petition 

to a Chapter 7 proceeding, Plaintiff filed a complaint objecting 

to discharge pursuant to 11 u.s.c. § 523(a)(2)(A), (a)(4), and 

(a)(6). Defendant moved to strike the complaint because it was 

directed jointly at Defendant and his wife, who was pursuing her 

own separate bankruptcy proceeding. After Plaintiff remedied the 

defect by amendment, Defendant moved for dismissal on the grounds 

that the Amended Complaint was filed beyond the time allowed by 

Bankr. R. 4007(c) and any relation-back rule could not cure the 

problem because the original complaint had neve r been served 

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within the period prescribed by Bankr. R. 7004(j). When Plaintiff 

failed to respond as required by D. Kan. Rule 206(b), the 

bankruptcy court entered an order, submitted ex parte by 

Defendant, which deemed the motion confessed pursuant to D. Kan. 

Rule 206(g). Plaintiff moved for reconsideration, but after an 

adversary hearing, the bankruptcy court concluded that Plaintiff's 

conduct throughout the proceedings warranted the severe sanction 

effected by its initial ruling. The bankruptcy court's decision 

was affirmed on appeal to the district court, and Plaintiff's 

present appeal followed. The district court, however, refused to 

grant Defendant's request for appellate sanctions against 

Plaintiff pursuant to Fed. R. App. P. 38, prompting Defendant's 

cross appeal. 

Plaintiff raises several issues concerning the procedures 

followed and determinations made by the bankruptcy court in 

arriving at its decision to dismiss the Amended Complaint. Our 

review of the bankruptcy court's orders is constrained by the same 

standards--de novo for legal conclusions and clear error for 

factual findings--that generally govern appellate scrutiny of 

bench rulings. Davidovich v. Welton (In re Davidovich), 901 F.2d 

1533, 1536 (10th Cir. 1990). Of course, we review the bankruptcy 

court's ultimate decision to impose the sanction of dismissal 

under an abuse of discretion standard. See, e.g., Miller v. 

=D~e~p~a=r~t=m=e=n~t"'-~o~f=--T=r~e=a=s=u=ry~, 934 F.2d 1161, 1162 (10th Cir. 1991), 

cert. denied, 112 S. Ct. 1215 (1992); Toma v. City of 

Weatherford, 846 F.2d 58, 60 (10th Cir. 1988). For the reasons 

set forth below, we reject most of Plaintiff's objections, but 

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remand for (1) a more particularized specification of the prior 

procedural abuses that, in conjunction with the D. Kan. Rule 206 

problem, led the bankruptcy court to dismiss Plaintiffs' Amended 

Complaint, and (2) an express determination regarding the relative 

culpability of Plaintiff and Plaintiff's counsel with respect to 

these incidents. As for Defendant's cross appeal, we likewise 

review the district court's denial of the requested appellate 

sanctions for an abuse of discretion, Sherk v. Texas Bankers Life 

& Loan Ins. Co. (In re Sherk), 918 F.2d 1170, 1178 (5th Cir. 

1990); see also Lawrence Nat'l Bank v. Edmonds (In re Edmonds), 

924 F.2d 176, 181 (10th Cir. 1991)(sanction imposed under 

Fed. R. Civ. P. 11 (Bankr. R. 9011)), and affirm that decision, as 

well as the district court's rejection of Defendant's oversized 

brief, for substantially the reasons expressed by the district 

court in its order. 

II. Analysis 

A. Plaintiff's Appeal (No. 91-3123) 

We shall initially address those objections raised by 

Plaintiff which we deem to be without merit and then turn to the 

matters to be remanded for further consideration by the bankruptcy 

court. The first point Plaintiff challenges is the bankruptcy 

court's finding that Plaintiff failed to contest Defendant's 

Motion to Dismiss the Amended Complaint. Although Plaintiff 

admits neglecting to file any direct, formal response to that 

particular motion, Plaintiff insists it had already contested the 

motion's substance in previous filings and, hence, complied with 

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the spirit if not the 

Specifically, Plaintiff 

letter of D. Kan . Rule 206(b) . 

maintains that the same timeliness issue 

raised in Defendant's Motion to Dismiss the Amended Complaint had 

been raised in Defendant's Motion for Stay pending appeal from the 

bankruptcy court's previous order granting Plaintiff leave to 

amend in the first place, as well as on the district court appeal 

itself. Thus, Plaintiff contends it "had previously contested the 

issues raised in the Motion to Dismiss by: (i) filing the Amended 

Complaint in the first instance as a consequence of [Defendant's] 

complaints about misjoinder; (ii) resisting [Defendant's] appeal 

from the order permitting the filing of the Amendec [sic] 

Complaint; and (iii) resisting [Defendant's] motion for stay 

pending appeal." Brief of Plaintiff-Appellant at 17. 

We need not decide whether D. Kan. Rule 206 permits such 

indirect--in lieu of literal--compliance, since a close review of 

the cited materials belies Plaintiff's claim that they reflect a 

preliminary, adversarial contest on the merits of the timeliness 

issue subsequently raised in Defendant's Motion to Dismiss . 

Obviously, Plaintiff's amendment of the original Complaint, to 

cure the misjoinder defect that had been the exclusive focus of 

Defendant's Motion to Strike, did not in and of itself contest the 

issue of timeliness. To hold otherwise, we would be obliged to 

adopt the absurd position that all motions for dismissal on 

limitations grounds are contested ab ante by the very pleadings 

they challenge. Furthermore , while Defendant did attempt to 

interject the timeliness issue in his resultant appeal and 

attendant motion for stay, Plaintiff's resistance to the appeal 

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and stay clearly did not involve its engagement of the issue on 

the merits. Plaintiff successfully opposed the appeal on the 

grounds that the denial of Defendant's Motion to Strike was not a 

final order and the issues resolved by the bankruptcy court did 

not justify an interlocutory appeal. See Plaintiff's Motion to 

Dismiss the Appeal, App. at 258; District Court Judgment filed 

March 29, 1988, App. at 267. As for the stay, Plaintiff argued to 

the bankruptcy court, again successfully, that such relief was not 

warranted on the merits of the joinder issue resolved on the 

Motion to Strike and was not necessary to preserve Defendant's 

newly asserted timeliness objection precisely because the latter 

"may be brought to the attention of this court in the form of a 

motion to dismiss the Amended Complaint." Objection to Stay 

Pending Appeal, App. at 41, 42; see also Bankruptcy Court Order 

Denying Motion to Stay, App. at 44. Under the circumstances, the 

bankruptcy court correctly held that Defendant's Motion to Dismiss 

was uncontested in light of Plaintiff's silence following its 

submission. 

Plaintiff's next contention on appeal is that the lower 

courts "improperly relied upon the review of prior proceedings to 

justify the sanctions imposed in the present case." Brief of 

Plaintiff-Appellant at 20. Actually, Plaintiff argues three 

separate points under this general heading, namely that the 

bankruptcy court erred in (1) imposing sanctions in this adversary 

proceeding based in part on Plaintiff's conduct throughout the 

overall bankruptcy litigation, (2) neglecting to give Plaintiff 

notice that anything other than its noncompliance with D. Kan. 

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Rule 206 was involved, and (3) failing to issue any prior warnings 

regarding the asserted abusiveness of Plaintiff's conduct. 1 See 

id. at 20-24. However, because the latter two points were not 

considered by the bankruptcy court and were never raised, argued, 

or resolved on Plaintiff's intermediate appeal to the district 

2 court, we will not consider them here. See Mountain America 

Credit Union v. Skinner (In re Skinner), 917 F.2d 444, 446 (10th 

Cir. 1990); E.F. Corp. v. Smith, 496 F.2d 826, 829 (10th Cir. 

1974). 

As to the first point, Plaintiff complains that "[n)either 

the Bankruptcy Court, nor the District Court, have given any 

reason as to why consideration of other proceedings between the 

same parties is appropriate in determining the sanctions to be 

imposed in a newly commenced adversary proceeding." Brief of 

Plaintiff-Appellant at 22. This argument might have some force in 

another context, where the proceedings in question truly were 

independent, even if, coincidentally, the same parties and the 

same tribunal were involved. Here, however, the interrelationship 

between the overall bankruptcy case and its constituent adversary 

proceedings, which are presided over--necessarily, rather than by 

mere coincidence--by the same judge, is undeniable. Accordingly, 

1 Plaintiff also complains in this connection of the bankruptcy 

court's failure to employ lesser sanctions, but that is a matter 

subsumed in our assessment of the severity of the sanction 

actually imposed, which follows later in this Order and Judgment. 

2 See Statement of Issues on Appeal, App. at 193; Initial Brief 

of Appellant, App. at 270, 290-92; Appellant's Reply Brief, App. 

at 374; Memorandum and Order filed March 21, 1989, App. at 404; 

Motion of Appellant to Alter or Amend Judgment and for 

Reconsideration, App. at 410; Memorandum and Order filed March 11, 

1991, App. at 447. 

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we think it far more appropriate to demand a persuasive 

explanation, with supporting authority, from Plaintiff for its 

unlikely position that when a request for sanctions is made, the 

bankruptcy court must construct a Chinese wall isolating the 

various individual proceedings it 

consideration exclusively to the 

which the request immediately arises. 

oversees and restrict its 

particular proceeding out of 

Given the lack of such an 

explanation, we deem Plaintiff's contention meritless. See 

Phillips v. Calhoun, __ F . 2d __ , No. 91-5063, slip op. at 11 

(10th Cir. Feb. 11, 1992)(quoting Pelfresne v. Village of Williams 

Bay, 917 F.2d 1017, 1023 (7th Cir. 1990), for proposition that 

"(a] litigant who fails to press a point by supporting it with 

pertinent authority, or by showing why it is sound despite a lack 

of supporting authority ... , forfeits the point"). 

Next, we consider together three related objections that all 

challenge the procedures followed by the bankruptcy court in 

arriving at and issuing its initial decision to grant Defendant's 

Motion to Dismiss. Specifically, Plaintiff asserts the bankruptcy 

court erred in (1) accepting and entering an unsolicited ex parte 

order on a matter that had been set for oral argument, in 

violation of Fed. R. Civ. P. 58 ("[a]ttorneys shall not submit 

forms of judgment except upon direction of the court, and these 

directions shall not be given as a matter of course"), and D. Kan. 

Rule 218 (preparation of judgment in accordance with court's 

direction under Rule 58 requires service on opposing party and 

submission of latter's objections along with proposed judgment), 

(2) failing to comply with D. Kan. Rule 110, which contemplates 

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provision of notice and an opportunity to respond--by way of 

adversarial motion or show cause procedures--before imposition of 

sanctions on a party, and (3) depriving Plaintiff of due process 

through the combined effect of the cited procedural errors and 

irregularities. 

The district court rejected Plaintiff's first procedural 

objection, holding "[t]he bankruptcy court did not violate 

Fed. R. Civ. P. 58 because the order submitted by [Defendant) was 

not a form of judgment." Memorandum and Order filed March 11, 

1991, App. at 452 n.6. We agree. The bankruptcy court's Order 

Sustaining Motion to Dismiss, which recited the operative facts, 

discussed the application of D. Kan. Rule 206 thereto, and 

sustained the motion without expressly effecting or even directing 

the entry of judgment, did not implicate the procedural 

requirements attendant upon formal entry of judgment pursuant to 

Rule 58. See United States v. City of Kansas City, 761 F.2d 605, 

606 {10th Cir. 1985). We also agree with the district court's 

holding that any failure by the bankruptcy court to follow D. Kan. 

Rule 110 in initially ruling on Defendant's Motion to Dismiss was 

cured or rendered harmless by the subsequent adversarial 

proceedings conducted pursuant to Plaintiff's motion to reconsider 

that ruling. See G.J.B. & Assocs., Inc. v. Singleton, 913 F.2d 

824, 832 {10th Cir. 1990). The same reasoning applies to 

Plaintiff's due process objection. Id. 

That brings us to those matters prompting the remand referred 

to at the outset of this Order and Judgment. As the lower courts 

impliedly acknowledged, absent evidence of significant prejudi ce 

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to Defendant, inconvenience to the court, or contumacious conduct 

on the part of Plaintiff--none of which have been demonstrated 

here--the single instance of Plaintiff's noncompliance with 

D. Kan. Rule 206 would not justify the drastic sanction of 

dismissal. See, e.g., Miller v. Department of Treasury, 934 F.2d 

at 1162; Hancock v. City of Oklahoma City, 857 F.2d 1394, 1396 

(10th Cir. 1988); Meade v. Grubbs, 841 F.2d 1512, 1519-22 (10th 

Cir. 1988). Starting from this premise, Plaintiff challenges the 

bankruptcy court's critical finding that Plaintiff's noncompliance 

with D. Kan. Rule 206 was just "one among many abuses that date 

back through the main bankruptcy case." Bankruptcy Court 

Memorandum and Opinion filed August 24, 1988, App. at 187. These 

abuses were not specifically identified, but in the bankruptcy 

court's view, shared by the district court, "[t]he voluminous 

docket sheets of the main case files and of even this adversary 

case point this out time after time." Id.; see District Court 

Memorandum and Order filed March 21, 1989, App. at 406 ("[e]ven a 

cursory review of the docket sheets bears out [the finding that 

Plaintiff 'had continually abused the local rules and tested the 

court's patience']"). 

We have reviewed the cited docket sheets for some tangible 

indication of the abusive conduct alluded to by the lower courts, 

but from our admittedly remote vantage point, we have been unable 

to identify particular instances of misconduct sufficient to 

warrant the sanction imposed. Indeed, much of the litigation 

between the parties involved matters, such as Defendant's attempt 

to have Plaintiff held in contempt, Plaintiff's motion for relief 

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and the various procedural duels over 

of its complaint challenging 

from the automatic stay, 

Plaintiff's amendment 

dischargeability, upon which Plaintiff ultimately prevailed. 

Furthermore, while the bankruptcy court emphasized its particular 

displeasure over the recurring problem of delay by the parties in 

bringing motions to issue, it appears to us that Defendant 

required some five times as many extensions as Plaintiff in the 

proceedings prior to dismissal of Plaintiff's case. In the 

absence of more detailed findings of abusive conduct supported by 

the record, the ultimate sanction of dismissal cannot stand under 

the authorities cited above . Again, however, this appellate court 

is not in a favorable position conclusively to confirm or deny in 

the first instance the existence of such conduct from the 

inevitably cryptic docket notations recording events witnessed 

directly by another tribunal. For that reason, we consider a 

vacatur and remand for further proceedings, rather than an 

outright reversal, the appropriate action to take in response to 

the analytical difficulty identified here. 

Plaintiff also points out that the bankruptcy court never 

made any express finding with respect to the direct culpability of 

Plaintiff itself, as distinguished from counsel, for the events 

leading to dismissal of this adversary proceeding. Our cases make 

such a finding mandatory, particularly where the litigant is the 

target of a sanction that pre cludes its day in court. See 

Ruplinger v. Rains (In re Rains), 946 F.2d 731, 733 (10th Cir. 

1991); M.E.N. Co. v. Control Fluidics, Inc., 834 F.2d 869, 873-74 

(10th Cir. 1987); see also Se curity Na t'l Bank v. J ohn Deere Co., 

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927 F.2d 519, 521 (10th Cir. 199l)(confession of motion for 

failure to file timely response under local rule falls within 

class of "sanction" cases for which distinction between counsel 

and client culpability is critical). The bankruptcy court is 

directed to give this factor explicit consideration in its 

deliberations on remand. 

Finally, Plaintiff contends that the bankruptcy court failed 

to explore the appropriateness of lesser sanctions before electing 

to dismiss the action, as required by such decisions as Ocelot Oil 

Corp. v. Sparrow Industries, 847 F.2d 1458, 1465 (10th Cir. 1988), 

and Meade, 841 F.2d at 1520-21 and n.7. However, it appears to us 

that the bankruptcy court explicitly rejected, rather than 

neglected, the option of lesser sanctions. See Memorandum Opinion 

and Order filed August 24, 1988, App. at 184-87 (recognizing 

general rule and "explain[ing] why dismissal is the most 

appropriate sanction rather than attorney's fees"). In any event, 

the question of lesser sanctions will have to be addressed anew in 

conjunction with the other matters to be considered on remand. 

That concludes our review of Plaintiff' s appeal. To 

summarize, we hold that the bankruptcy court did not commit any 

reversible error in (1) finding De fendant's Motion to Dismiss 

uncontested for purposes of D. Kan . Rule 206, (2) including within 

the scope of its sanction inquiry Plaintiff 's conduct outside the 

immediate confines of this adversary proceeding, and 

(3) conducting the proceedi ngs and i ssui ng i ts initial decision in 

the manner now challenged by Plaintiff on procedural grounds. 

Howeve r, due to our inability to confirm with speci fic references 

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to the record the bankruptcy court's generally stated conclusion 

regarding Plaintiff's prior abuses, as well as the bankruptcy 

court's silence on the relative culpability of Plaintiff and 

counsel for those abuses, we must remand the matter for further 

proceedings consistent with the legal principles discussed above. 

B. Defendant's Cross Appeal {No. 91-3130) 

Defendant challenges two unfavorable rulings made by the 

district court on Plaintiff's intermediate appeal. First, 

Defendant contends that the district court erred in denying him 

leave to file an answer brief in excess of the fifty pages 

prescribed by Bankr. R. 8010(c). Defendant has failed to 

demonstrate that the district court's enforcement of this 

reasonable limitation constitutes an abuse of discretion. 

Second, Defendant urges us to reverse the district court's 

denial of his request for appellate sanctions against Plaintiff. 

Our disposition of Plaintiff's appeal obviously undercuts any 

claim that the arguments advanced by Plaintiff are so frivolous as 

to warrant sanctions. The district court did not abuse its 

discretion in denying sanctions. 

III. Disposition 

On appeal No. 91-3123, the judgment of the United States 

District Court for the District of Kansas affirming the bankruptcy 

court's dismissal of Plaintiff's pleadings is VACATED, and the 

cause is REMANDED to the bankruptcy court for further proceedings 

consistent with the principles expre sse d herein. On appeal No. 

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91-3130, we AFFIRM the district court's denial of Defendant's 

motions for leave to file an oversized brief and for imposition of 

appellate sanctions against Plaintiff. 

Entered for the Court 

David Sam 

District Judge 

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