FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

FEBRUARY 19, 2009

THOMAS K. KAHN

CLERK

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 08-11226

Non-Argument Calendar

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D. C. Docket Nos. 07-22679-CV-ASG,

BKCY No. 06-14878-BKC-AJ

In Re: ENRIQUE ANTONIO OCON,

Debtor.

_________________________________________________

ENRIQUE ANTONIO OCON,

Plaintiff-Counter-Defendant

Appellant,

versus

EQUINAMICS, CORP.,

Defendant-Counter-Claimant,

Cross-Claimant-Appellee,

JANINE OCON,

Defendant-Cross-Defendant,
SHERRI B. SIMPSON,

JAMES A. BONFIGLIO,

Interested Parties-Appellants.

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Appeals from the United States District Court

for the Southern District of Florida

_________________________

(February 19, 2009)

Before BIRCH, HULL and PRYOR, Circuit Judges.

PER CURIAM:

Enrique Antonio Ocon and his attorneys, Sherri Simpson and James

Bonfiglio, appeal a decision that affirmed the imposition of sanctions by the

bankruptcy court in an adversary proceeding. The bankruptcy court awarded

Equinamics sanctions based on misrepresentations by Simpson and the defense of

those misrepresentations by Bonfiglio. Ocon, Simpson, and Bonfiglio argue that

the bankruptcy court abused its discretion when it imposed sanctions. We affirm

the sanctions against Simpson and Bonfiglio, reverse the sanctions against Ocon,

and remand.

Federal courts possess inherent authority to impose sanctions against

attorneys and their clients. In re Sunshine Jr. Stores, Inc., 456 F.3d 1291, 1304

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(11th Cir. 2006). We review the exercise of that power for abuse of discretion. Id.

“‘When employing an abuse-of-discretion standard, we must affirm unless we find

that the district court has made a clear error of judgment, or has applied the wrong

legal standard.’” Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d 1230, 1238

(11th Cir. 2007) (quoting United States v. Frazier, 387 F.3d 1244, 1259 (11th Cir.

2004)). This standard “recognizes there is a range of choice within which we will

not reverse the district court even if we might have reached a different decision.”

Schiavo ex. rel. Schindler v. Schiavo, 403 F.3d 1223, 1226 (11th Cir. 2005).

The bankruptcy court did not abuse its discretion when it sanctioned

Simpson and Bonfiglio. A court may exercise its inherent power to punish bad

faith conduct. Chambers v. NASCO, Inc., 501 U.S. 32, 46, 111 S. Ct. 2123, 2133

(1991). “In this regard, if a court finds ‘that fraud has been practiced upon it, or

that the very temple of justice has been defiled,’” the court may impose sanctions

against the responsible party. Id. (quoting Universal Oil Prods. Co. v. Root Ref.

Co., 328 U.S. 575, 580, 66 S. Ct. 1176, 1179 (1946)). A party commits a fraud on

the court when the falsehood mires the “judicial machinery” such that it “cannot

perform in the usual manner its impartial task of adjudging cases . . . .” Travelers

Indem. Co. v. Gore, 761 F.2d 1549, 1551 (11th Cir. 1985). Because sanctions are

measured against objective standards of conduct, “objectively reckless conduct is

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enough to warrant sanctions even if the attorney does not act knowingly and

malevolently.” Amlong, 500 F.3d at 1241. The record establishes that both

Simpson and Bonfiglio acted in bad faith.

Simpson misrepresented to the bankruptcy court that Ocon had not received

payments of $5000 and $2800 from Equinamics and she later admitted she did not

know whether Ocon had been paid. Simpson argues on appeal that it was

reasonable to make false representations to “protect[] . . . her client’s rights” and

based on her “reluctanc[e] to concede facts that had not yet been established,” but

that argument ignores Simpson’s overarching duty of candor to the court. See

Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (“Every lawyer is

an officer of the court. And, in addition to his duty of diligently researching his

client’s case, he always has a duty of candor to the tribunal.”). Simpson later failed

to question Ocon and correct the misrepresentation, even though Equinamics

submitted documents with its motion to dismiss that established it had paid Ocon.

See Byrne v. Nezhat, 261 F.3d 1075, 1117 n.83 (11th Cir. 2001) (“‘[A]s an officer

of the court[, counsel has] a “continuing duty to inform the Court of any

development which may conceivably affect the outcome of litigation.”’” (quoting

United States v. Shaffer Equip. Co., 11 F.3d 450, 457 (4th Cir. 1993)); see also

Barnes v. Dalton, 158 F.3d 1212, 1214 (11th Cir. 1998) (“If particularly egregious,

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the pursuit of a claim without reasonable inquiry into the underlying facts can be

the basis for a finding of bad faith.”). Simpson’s misconduct also multiplied the

proceedings unnecessarily. See Amlong, 500 F.3d at 1241 (“[A] district court may

impose sanctions for egregious conduct . . . even if the attorney acted without the

specific purpose or intent to multiply the proceedings.”).

Bonfiglio perpetuated Simpson’s fraud. The day after Simpson made her

false statements, Bonfiglio failed to make reasonable inquiries before the hearing

and defended Simpson’s false statements. Bonfiglio’s actions needlessly forced

Equinamics to prove that it had paid Ocon. See id.; Barnes, 158 F.3d at 1214.

Bonfiglio argues that he was not notified that Equinamics sought to sanction

him, but this is contrary to the record. “Due process requires that the attorney be

given fair notice” from either the court or the complaining party “that his conduct

may warrant sanction” and an opportunity to respond. In re Mroz, 65 F.3d 1567,

1575 (11th Cir. 1995). Equinamics sought sanctions against Ocon and his counsel,

the motion discussed Bonfiglio’s conduct at the second hearing, and Bonfiglio

appeared at the motion hearing. Bonfiglio failed to respond to the motion or

address the bankruptcy court at the hearing. Id. Bonfiglio received due process.

Although we affirm the sanction against Simpson and Bonfiglio, we

conclude that the bankruptcy court abused its discretion when it imposed sanctions

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against Ocon. The bankruptcy court did not mention any misconduct by Ocon in

its order; instead, the court sanctioned Ocon based on the misrepresentations of

Simpson and Bonfiglio. “Sanctionable conduct by a party’s counsel does not

necessarily parlay into sanctionable conduct by a party.” Byrne, 261 F.3d at 1123.

We reverse that portion of the order that sanctioned Ocon.

We AFFIRM the sanctions against Simpson and Bonfiglio, REVERSE the

sanctions against Ocon, and remand for further proceedings.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

FOR FURTHER PROCEEDINGS.

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