FI L ED U.S. COURT OF A P P E A LS E LE V E N T H C IR C U IT J ULY 07, 2008 THOMAS K. KAH

N CL ERK [ P U B L I S H ] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 07- 1404 9 Non-A rgum ent Calendar

____ ____ ____ ____ ____ ____ D. C. Docket N o. 07-80121 -CV -A SG BKCY No . 03 -3 21 58 -BKC- PGH IN RE: JAME S F. WAL KE R, D e b t o r .

____ ____ ____ ____ ____ ____ ____ ____ ____ ____ __ MARY ALICE GWY

NN, Pl ai nti ff -Appe llant Cro ss -Ap pe ll ee, ve rs us JAM ES F. WALKER, De fendant-Appellee Cr oss -Appe llant.

____ ____ ____ ____ ____ ____ Appeals fr om

the United State s District Court fo r the S outhe rnD istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (J ul y 7, 200 8)2

Be fo re D U BIN A , BL A CK a nd P RY O R, Ci rc uit

Jud ge s. PE R CU RIA M: Mary A lic e G w ynn, c ouns el f

or ac re dit or

in a ba nkr

upt cy pr oc ee din g, appeals pro se an aw ard of sanctions against her, a denial of her m otion for f ees under Bankruptcy

Rule 9011, and a denial of her m otion for r ecusal. Jam es F. W al ke r cr oss -a

ppe al s ase pa rate or de r tha t va cate d an aw ar d of sanc tio ns a ga ins t G w yn n . We a f

f i rm. I. BACKG ROUND Most of the issu es on appeal invo lve two m otion s for sanctions. G ary Ro te lla , c ouns el f

or W al ke r, f

ile d bo th m oti ons in r es pons e to m oti ons fi le d by G w ynn tha t a lle ge d m isc ondu ct by Ro te lla . I n e ac h in stanc e, Ro te lla w as not fo und to h av e en ga ge d inm isc ondu ct . Rotella filed the first m otion after Gwynn filed a m otion to disq ualify Ro te lla a s c ouns el f

or W al ke r. R ote lla

r es pond ed

to the m oti on and m ove d to sh or te n t he no ti ce p eri od forfil in g a m ot io n fo r sa nc ti on s u nd er Ru le 90 11 . Ro te lla not if ie d G w ynn tha t he w oul d se ek sanc tio ns unde r Ru le 901 1 if she did not withdraw the m otion to disq ualify . Af ter a hearing, the bankruptcy court de ni edbo th th e m ot io n t o d is qu al ify andth e m ot io n t o s ho rte n t he no ti ce p eri od . G w ynn the n f

ile d ar en ew ed

m oti on t o di squa lif

y Ro te lla f ro m r ep re se nti ng3

W alker. T hat sam e day , R otella filed a m otion for sanctions against Gwy nn un der Ru le 901 1. T enday s late r, the bankr upt cy c ourt de nie d th e re ne w ed m oti on t o di sq ua li fy

an d g ran te d t he m ot io n fo r sa nc ti on s. Gw ynn appealed the award of sanctions to th e district court. The district court vacated the aw ard of sanctions because Gwynn had no t been aff orded tw en ty -o ne day s to w ith dr awhe r m oti on. G w ynn the n f ile d am oti on f

or attorney ’ s fees and costs as the prevailing party under Rule 9011 and Bankruptcy L oc al Ru le 801 4. T he bankr upt cy c ourt gr an te d inpart

a nd d en ie d inpart

the mo t i o n a n dt a x e dc o s t s i n t h e a mo u n to f $ 1 , 5 9 1 . 5 8 a g a i n s tR o t e l l a , h i s l a wf i rm, an d Walk er. Ro te lla f ile d th e se co nd m oti on i n r es pons e to anothe r m oti on f ile d by G w ynn. G w ynn h ad

a lle ge d th at

Ro te lla m ad e fa lse r ep re se nta tio ns t o th e co urt, co m m itt ed f ra ud a ga ins t the c ourt, a nd p lanne d to be ne fi t pe rs ona lly a t the ex pe nse of

the c re dit or s. T he bankr upt cy c ourt gr an te d R ote lla ’ s m oti on f or sanc tio ns and o rd er ed

G w ynn t o pay

Ro te lla $14 , 000. II. ST AN DA RD S OF RE VIEW W e re view the im

posit ion of sanction s for abuse of discretion. I n re Mr oz, 65 F.3d 1567 , 1571-72 (11th Cir. 1995 ). U nder this stand ard, we “ m ust affirm unless [we f

ind] that the [ lower] court has m ade a c lear e rror of j udgm ent, or has4

ap pli ed the w ro ng l eg al standard . ” A m lon g & A m lon g, P . A . v. D en ny ’ s I nc . , 500 F. 3d 12 30, 1238 (11t h Cir. 2007 ). W e m ay aff irm on any legal ground su pported by the r ec or d. B ro w n v. Joh nson , 387 F . 3d 1 344, 135 1 ( 11th C ir . 200 4) . W e al so re vie wade nia l of

am oti on f

or r ec usa l f or abuse of dis cr et ion . C hr ist o v. P ad ge tt, 22 3 F .3d 13 24 , 13 33 (11 th Cir . 20 00 ). III. D ISCU SSION Ou r d i s cu s s i o n i s d i v i d ed i n fo u r p ar t s . F i rs t , we ad d re s s Wal k er ’s ar gum en t tha t the dis tr ic t c ourt sh oul d no t have va cate d th e fi rs t sanc tio n a ga ins t Gw ynn. Se cond, w e address G wy nn’s argum ent that the bankrup tcy court abused its discretion in deny ing her request for fe es and costs related to Gw ynn’s a ppeal of the f ir st s an ct iona nd the de nia l of som e of the e xpe nse s f

or w hic h G w ynn soug ht reim

bursem ent. T hird, w e address G wy nn’s argum ent that the bankrup tcy co urt a buse d it s di sc re tio n ina w ar din g asanc tio n of $14 , 000. F ourth, w e ad dr es s Gwyn n ’s ar g u m en t

t h at t h e b an kru p t cy co u rt erre dwh en i td en i ed Gwyn n ’s m oti on f or r ec usa l. A. The D istrict Cour t Did Not E rr W hen It V acated the F irs t Sa nc tio n A gai nst

G wy nn. A party w ho m ove s f

or sanc tio ns unde r Bankr

upt cy Ru le 901 1 m

ust f oll ow a tw o- ste p pr oc es s. S ee F ed . R. Bankr . P . 901 1( c) (1 )( A ). T he party f ir st m ust5

serve the m otion on the opp osing party and then, at lea st twenty -one day s later, fi le the m oti on w iththe c ourt. I d. T his pr oc es s pr ovi de s a“ sa fe harb or ” in w hic h th e of

fe ndi ng p ar

ty c ana voi d sanc tio ns b y

w ith dr aw ing or

c or re ct ing the ch al le ng eddo cu m en t o r po si ti on aft er rec ei vi ng no ti ce o f th e al le ge d v io la ti on . A lth oughthi s C ir cu it ha s ne ve r ad dr es se d w he the r a m oti on f or sanc tio ns unde r Ru le 901 1 m ay

be f ile d a ft er ac ourt ha s r

ule d onthe of

fe ndi ng m oti on, the Second, F ourth, and Sixth Circuits have concluded th at a m otion under Federa l Rule of Civil Proce dure 11, w hich is “ subs tantially identical” to Rule 9011 , Mr oz, 65 F . 3d a t 15 72, c an not

be f ile d “ [i ] f the c ourt di spos es of the of fe ndi ng co nte nti on b ef

or e the tw en ty -o ne day

‘ sa fe harb or ’ pe ri od e xpi re s. ” Ri dde r v. Ci ty of S pr ing fi el d, 109 F . 3d 2 88, 295 ( 6thCi r. 199 7) ; se e al so B ri ckw ood Co ntr ac tor s, Inc. v. D atanet E ng’g, Inc. , 369 F. 3d 38 9-90 (4th Cir. 2004) (en banc); I n re Pe nni e & E dm onds L L P, 323 F . 3d 8 6, 89 & nn. 1- 2 ( 2d C ir . 200 3) . A s th e Si xth Ci rc uit e xpl ai ne d, “ an y

oth er int er pr et at ionw oul d de fe at

the r ule ’ s e xpl ic it re qui re m en ts. ” Ri dde r, 109 F . 3d a t 29 5. U nde r tha t i nte rp re ta tio n of Ru le 901 1, W al ke r’s arg um en t o n c ro ss -ap pe al fai ls . T he re is no d oubt

that R ote lla ’ s m oti on f

or sanc tio ns w as f

ile d a ft er the of fe ndi ng m oti on h ad

be ende nie d. G w ynn f

ile d th e of

fe ndi ng m oti on t o disqu alify

Rotella on April 21, 2004. R otella gave notice that he would seek6

sanc tio ns o n Apr il 24, 200 4, but the bankr

upt cy c ourt de nie d th e m oti on t o dis qua lif y on Apr il 28, 200 4. O n M ay 18, 200 4, G w ynn f

ile d ar en ew ed

m oti on t o dis qua lif y Ro te lla ’ s lawf

irm , a nd tha t sam e da y

Ro te lla f ile d am oti on f

or sanc tio ns unde r Ru le 901 1. R ote lla ’ s m oti on r el at ed to the f ir st m oti on t o disqu alify

filed by Gwynn. A lthou gh Rotella’ s m otion for sanctions was f iled m or e than tw en ty -o ne day s a ft er he ga ve not ic e tha t he w oul d se ek sanc tio ns, the ba nk rupt cy

co ur t h adalr ead y

de ni edGwy

nn ’s firs t m ot io n t o d is qu al ify. W e ag re e w iththe S ec ond, F ourth, a nd S ixth C ir cu its that the se rv ic e an d filing of a m otion for sanctions “ m ust occur prior to final j udgm ent or j udicial rej ection of the offending” m otion . Id. at 297. A ny argum ent to the contrary re nde rs the sa fe harb or

pr ovi sio n am er e fo rm al ity . T he pr ovi sio n c an not ha ve a ny ef fe ct if the c ourt ha s a lr ea dy

de nie d th e m oti on; it

is too la te f

or the of fe ndi ng party to withdrawthe challenged contentio n. S ee id. T he district court did n ot err whe n i t v acat edth e award of s an ct io ns .

B . T he B ank ruptcyCo urt

D id N ot A buse I

ts D isc re tio n in Its Deni al

of Fees , Cos ts , an d Exp en se s f or Gwyn n. G w ynn arg ue s th at

the bankr

upt cy c ourt a buse d it s di sc re tio n w he n it did not a w ar d he r attor

ne y ’ s f ee s and c ost s r el at ing to he r ap pe al of the a w ar d of sanc tio ns. G w ynn a lso a rg ue s th at the bankr

upt cy c ourt a buse d it s di sc re tio n7

whe n i t d id no t awa rdall of h er re as on ab le ex pe ns es un de r Ban krup tc y Ru le 80 14 . W e d is ag ree. Ro te lla ’ s m oti on f

or sanc tio ns and G w ynn’ s c or re spon din g e xpe nse s c oul d have been avoided if Gw ynn had no t filed her f rivolou s m otion to disq ualify Ro te lla in the f ir st i nst an ce . O ne of

the pur pose s of sanc tio ns unde r Ru le 901 1 is to d et er ba se le ss f

ili ngs, a nd c ourts s houl d r ed uc e ana w ar d of

sanc tio ns b as ed

on

“ the e xte nt t o w hic h th e nonv iol at ing party ’ s e xpe nse s c oul d have be ena voi de d, or m iti ga te d. ” Bake r v. A lde rm an , 158 F . 3d 5 16, 528 ( 11th C ir . 199 8) . B ec au se G w ynn’ s in iti al f

ri vol ous fi lin g pr om

pte d th e dis put e, the bankr upt cy c ourt di d no t ab use it s di sc re tio n w he n it de nie d a tto rn ey ’ s f

ee s and c ost s un de r Ru le 9011 (c)( 1)(a) . T he bankr

upt cy c ourt a lso did

not abuse it s di sc re tio n init s aw ar d of reasonable expenses under Rule 8014 . The denial of f ees for a consultin g attorney an d e xpe rt

w itn es s, e xpe dit ing c ost s, a nd c er ta in transc ri pt c ost s w as w ith in the discretion of the court und er R ule 8014 . The bankruptcy court provided detailed reasons for excluding certain expenses, and G wy nn do es not provi de any

legal su pp or t fo r a co nt rary deci si on .

C. T he B ank ruptcyCo urt

D id N ot A buse I

ts D isc re tio n W he n I t I m pose d a S

anc tio n of

$14, 000 agai nst

G wy nn.8

G w ynn arg ue s th at

the bankr

upt cy c ourt a buse d it s di sc re tio n inthe im posi tio n of

sanc tio ns i n th e am ount

of $14 , 000. T he bankr

upt cy c ourt f ound tha t sanc tio ns w er e ap pr opr ia te und er tw o st at ute s, 28 U . S. C. §§ 1 05, 192 7, a nd i ts inh er en t auth or ity

to m an ag e its a ff

ai rs . W e ne ed

not de ci de w he the r the ba nkr upt cy c ourt ha d th e au tho ri ty

to im pose sanc tio ns unde r ei the r se ct ion192 7 or section 105 because the court did not abus e its discretion when it aw arded sa nc ti on s u nd er i ts in he ren t p owe rs . Fe de ra l c ourts, inc lud ing bankr upt cy c ourts, ha ve the inh er en t po w er to im pose sanc tio ns o n part ie s and l awy er s. B yrn e v. N ez ha t, 261 F . 3d 1 075, 112 1 (1 1thCi r. 200 1) ; se e al so M ro z, 65 F . 3d a t 15 72. T o im pose sanc tio ns unde r the se i n h e r e n tp o w e r s , t h e c o u rtf i r s tmu s tf

i n db a df a i t h . M r o z , 6 5 F . 3 da t1 5 7 5 . “A finding of bad faith is warranted w here an attorney knowinglyor rec klesslyraises a fr ivo lou s arg um en t, or

a rg ue s am er ito ri ous cl ai m f or the pur pose of hara ssi ng anopp one nt. Aparty

a lso de m onstrate s ba d f

ai th b y de lay ing or

dis ru pti ng the lit iga tio n or

ha m pe ri ng e nf

or ce m en t of

ac ourt or de r. ” B yrn e, 261 F . 3d a t 11 21 (citations om itted). S anctions are “ especially appropriate w here c ouns el takes fr ivo lou s le ga l po sit ion s su ppor te d by sc an da lou s a cc usa tio ns. ” A m lon g & A m lon g, P . A . , 500 F . 3d a t 12 38. T he c ourt m ust a ff or d th e sanc tio ne d party

due pr oc es s b ot h i n d et erm in in g t ha t t he req ui si te ba d fa it h e xi st s an d i n a ss es si ng fees .9

Ch am be rs v. NASCO, In c., 50 1 U.S. 3 2, 4 9, 1 11 S. Ct. 2 12 3, 2 13 5 (1 99 1) . G w ynn d oe s no t c ont en d th at she did not r ec ei ve due pr oc es s inthe im posi tio n of

sanc tio ns; she ins te ad

a rg ue s th at

the f ili ng o f the m oti on d id n ot am ount to ba d f ai th. S he a lso c ont en ds tha t a sin gle m oti on c an not

de m onstrate ba d fa it h, b ut req ui res m

ul ti pl e in st an ces of m is co nd uc t. We dis ag ree. T he bankr

upt cy c ourt di d no t a

buse it s di sc re tio n w he n it im pose d a sanction for Gw ynn’s f

iling of a m otion in bad faith. G wy nn’s m otion alleged that Ro te lla ha d m ad e fa lse r ep re se nta tio ns t o th e co urt, c om m itt ed f ra ud a ga ins t the co u rt , a n dp l an n ed t o b en ef i tp er s o n al l y at t h e e x p en s e o f t h e c re d i t o rs . Gw en n ’s accu sa ti on s re qu ire d m

ul ti pl e h eari ng s an d l edto a co un te r-m ot io n fo r sa nc ti on s. The ser iousn ess of the allegations com bined with the lack of any evidentiary supp ort or

m ini m al inv es tig at ionsup port a f ind ing of ba d f ai th. G w ynn a lso a rg ue s th at

the r ec or d do es not

sup port the a m ount

of the sanction. Gwynn argues that the court sho uld no t have considered the expenses inc ur re d a ft er she w ith dr ewhe r m oti on, a nd s he c ont en ds tha t the e sti m at es m ad e by the co ur t wer e arb it rary. W e d is ag ree. T he c ourt ha d an a m

ple e vid en tiary

ba sis f or de te rm ini ng the a m ount

of sanc tio ns. R ote lla

sub m itt ed

ade ta ile d lo g of

ti m e spe nt i n r es pons e to the m oti on, a nd the c ourt e xa m ine d th e log , not ed e ntr ie s th at

w er e unne ce ssary

or10

unwarr anted, and found the hou rly rate to be reasonable. The c ourt also foun d that Ro te lla ’ s r es pons e to the m oti on w as dis pr opor tio na te a nd e sti m at ed

the a m ount

of ti m e req ui redfora pr op or ti on al res po ns e. The c ourt did n ot clearly

err when it included Rotella’ s tim e spent after G w ynn w ith dr ewhe r m oti on f or sanc tio ns. S ee I n r e O pti ca l T ec h. , I nc . , 425 F . 3d 1294 , 130 0 ( 11th C ir . 200 5) . I t w as r ea sona ble f or Ro te lla to fi le the m oti on f

or sanc tio ns b ec au se G w ynn’ s m oti on c ont ai ne d se ri ous an d un fo unde d a lle ga tio ns of m isc ondu ct . T he c ourt, in re spon se , ha d to inv es tig at e the f ound at ion s of Gwy nn ’s m ot io n. T he e sti m at e by

the c ourt a s to the ti m e ne ce ssary to pr ep ar e fo r an d a tte nd the he ar ing on G w ynn’ s m oti on, pr ep ar e Ro te lla ’ s own m oti on, a nd p re pa re f or an dat t en dt h e h ea ri n g fo r R o t el l a’s m o t i o n wa s n o tar b i t ra ry. Ba s ed o n Ro t el l a’s tim e en tr ie s, the e xpe ri en ce of the bankr

upt cy c ourt w ithf

ee appl ic at ion s, a nd i ts know le dge of

Ro te lla ’ s e xpe ri en ce a s an a tto rn ey , it w as not c le ar ly e rr one ous fo r the c ourt t o de te rm ine that f orty hours w as ar ea sona

ble a m ount

of ti m e to r es pond to the m oti on f

or sanc tio ns. T he c ourt e xe rc ise d r es tr ai nt i n it s de te rm ina tio n of the appr opr ia te a m ount

w he n it c onsi de re d R ote lla ’ s di spr opor tio na te r es pons e and consid ered only

a re asonable am ount of tim e to respond to th e unfound ed m otion . The bankruptcy

court did not abuse its discretion when it awar ded11

$1 4,0 00 in san ct io ns ag ai ns t Gwynn un de r it s i nh eren t p owe rs .

D . T he B ank ruptcyCo urt

D id N ot A buse I

ts D isc re tio n W he n I t D en ie d G wy nn’

s M oti on f or R ec usal . A j udge sha ll re cu se him se lf if he is pe rs ona lly

bia se d or pr ej udi ce d a ga ins t a pa rty or in favor of a n a dve rs e pa rty , or

w he ne ve r the j udge ’ s “ im pa rt ia lity m igh t reasonably

be question ed.” 28 U. S. C. §§ 14 4, 455(a). T he standard is “ whether anobj ec tiv e, f

ull y inf orm ed lay obs er ve r w oul d e nte rt ai n si gni fi cant d oubt about the j udge’s im

partiality .” Christo, 223 F. 3d at 133 3. “ The gener al rule is that bias suf fi ci en t t o di squa lif

y aj udge m

ust ste m f ro m e xtr aj udi ci al sourc es . ” T hom as v. T en ne co P ac ka gin g C o. , 293 F . 3d 1 306, 132 9 ( 11th C ir . 200 2) . “ T he e xc ep tio n to this rule is ‘ when a j udge’s r em arks in a j udicial context d em onstrate such pe rv as ive bia s and p re

j udi ce that i t c onst itu te s bi as a ga ins t a party . ’ Me re ‘ fr ic tio n be tw ee n th e co urt and c ouns el , ’ how ev er , is not e noug h to de m onstrate ‘ pe rv as ive bia s. ’ ” I d. ( ci ta tio n om itt ed ) (quot ing H am m v. Bd . of Re ge nts , 708 F . 2d 6 47, 651 (11th Cir. 1983)). Gw ynn contend s that she establish ed pervasive bias throug hout the court pr oc ee din g by

the bankr

upt cy j udge , but

the gr ound s c ite d by

G w ynn d o no t inc lud e an y

e xtr aj udi ci al sourc es . G w ynn r el ie s onse ve n or de rs , a ll pr ep ar ed by Ro te lla , a s e vid en ce of

bia s, a nd G w ynn c ont en ds tha t sh e w as not able to re spon d12

in t im e to those or de rs . G w ynn a lso r el ie s ona dve rs e ru lin gs and h er r ef er ra l t o th e Fl or id a Barby the ba nk rupt cy jud ge . Although we have “ repeate dly condem ned the gho stwriting of j udicial orders by litigants ,” In re ColonySquare C o., 819 F.2d 272, 274, 277 (11t h Cir. 1987 ), “ suc h or de rs w ill be va cate d on ly if aparty c ande m onstrate that the pr oc es s b y

whi ch th e jud ge arri ve d a t t he m was fu nd am en ta ll y

un fai r,” i d. at 27 6. Whe th er t he op po si ng pa rty had“ am pl e o pp or tu ni ty to p res en t i ts arg um en ts ,” w he the r the r

uli ng w as “ co rr ec t a s am atte r of law , ” an d th e fr eque nc y

of the use of or de rs pr ep ar ed

by aparty a re r el ev an t f

ac tor s to c onsi de r. S ee id. a t 27 6- 77; Chudasam a v. Mazda Motor Corp. , 123 F. 3d 13 53, 1373 n .46 & 1374 (11th Cir. 19 97 ). In the light of the extensi ve history of this litig ation, the seven isolated or de rs , pr ep ar ed

by Ro te lla , in a ba nkr

upt cy pr oc ee din g in vol vin g a lm ost 2, 000 fi lin gs d o no t e vin ce pe rv as ive bia s and p re j udi ce . G w ynn h ad

a m ple opp ortun ity to b e he ar d. S he f

ile d r es pons es , m oti ons to s tr ike , not ic es of he ar ing s, a nd m ot io ns forreco ns id erat io n. Al th ou gh on e o rd er was in co rrec t as a m at te r of law, it w as r ev er se d by

the dis tr ic t c ourt, a nd the bankr upt cy j udge a dm itt ed

his m ist ak enr el ianc e on a

pr ep ar ed or de r. N one of

the oth er or de rs w as inc or

re ct a s a m at te r of law.13

Adv ers e ru li ng s ar e g ro un ds forap pe al , bu t ra rel y are g ro un ds forrecu sa l, se e L ite ky

v. U nit ed S ta te s, 510 U . S. 540 , 554 , 114 S . Ct . 114 7, 115 7 ( 1994 ), a nd re fe rr al to a sta te bar dis ci pli na ry board f or inv es tig at ionis not

c onsi de re d a sanc tio n or

dis ci pli na ry

m ea sur e, se e U nit ed

S ta te s v. Mc Co rk le , 321 F . 3d 1 292, 1298 ( 11th C ir . 200 3) . B ec au se af ull y inf orm ed a nd o bj ec tiv e obse rv er

w oul d no t en te rt ai n si gni fi cant d oubt about the bankr

upt cy j udge ’ s im

pa rt ia lity in the pr oc ee din gs, se e Ch ri sto , 223 F . 3d a t 13 33, w e co nc lud e tha t the bankr upt cy j udge di d n ot ab us e h is di sc ret io n i n d en y in g t he m ot io n fo r rec us al . II I. CONCLUSI ON T he dis tr ic t c ourt di d no t e rr w he n it va cate d th e fi rs t sanc tio n a ga ins t G w ynn, a nd the bankr

upt cy c ourt di d no t a

buse it s di sc re tio n init s de nia l of G w en n’ s m oti on f

or f ee s, c ost s and e xpe nse s, it s sanc tio n of $14 , 000 ag ai nst Gwy nn , and it s d en ia l o f Gwynn ’s m ot io n fo r rec us al . AFFIRMED.