IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-10676

SCOTT MEYERS; SUSAN MEYERS,

 Plaintiffs–Appellants,

versus

TEXTRON FINANCIAL CORPORATION,

 Defendant–Appellee,

versus

CYNTHIA WILLIAMS COLE,

Appellant.

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 4:12-MC-15

Before REAVLEY, SMITH, and GRAVES, Circuit Judges.

JERRY E. SMITH, Circuit Judge:*

Scott and Susan Meyers and their attorney, Cynthia Cole, appeal 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

April 9, 2015

Lyle W. Cayce

Clerk

 

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sanctions awarded against them in favor of Textron Financial Corporation

(“Textron”). Textron moves for attorney’s fees and costs pursuant to Federal 

Rule of Appellate Procedure 38. We affirm the sanctions and deny the fees.

I.

We reviewed part of the history of this case in Meyers v. Textron, Inc., 

540 F. App’x 408 (5th Cir. 2013) (per curiam), portions of which we repeat here. 

The Meyerses formed AIH Acquisitions, L.L.C. (“AIH”), to purchase assets 

from American IronHorse Motorcycle Company, Inc. (“AIMC”), after it had

filed for bankruptcy. Textron was AIMC’s pre-petition secured lender and 

post-petition debtor-in-possession lender. After negotiations between the Meyerses and Textron, AIH and Textron finalized a sales transaction in which AIH 

acquired AIMC using financing from Textron. AIH defaulted shortly thereafter, and the Meyerses filed a petition for intervention against Textron alleging fraudulent inducement and negligent misrepresentation. The bankruptcy 

court dismissed those claims with prejudice. On appeal, the district court

determined that the bankruptcy court did not have the constitutional authority 

to dismiss the claims with prejudice, but the district court dismissed them with 

prejudice on its own.

Rocky Mountain Choppers, L.L.C. (“RMC”), then sued Textron, alleging 

fraud in connection with the sales transaction. Textron moved to dismiss and 

for sanctions against the Meyerses and Cole. The district court severed the 

request for sanctions into the case that is currently on appeal and dismissed 

RMC’s complaint with prejudice on the ground that, inter alia, it was barred 

by res judicata because of the Meyerses previously dismissed case. We 

affirmed after concluding that there was privity between RMC and the 

Meyerses—they solely owned RMC and were its only members, they “controlled the [RMC] action as well as the dismissed case,” and they had “full 

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authority to exercise RMC’s powers and bring or defend claims on RMC’s 

behalf.’” Id. at 410.

After briefs were filed in the sanctions action, the district court ordered 

the Meyerses, Cole, and Textron to have a face-to-face meeting to resolve the 

dispute. Because that meeting never occurred, Cole and the Meyerses were 

ordered to show cause—in a written filing followed by a hearing—for why they 

should not be sanctioned. The court also ordered each party to file a document,

with all available legal authorities, establishing whether the Meyerses could

be sanctioned even though they were not named parties to the RMC complaint, 

and the court ordered the Meyerses to inform it whether they intended to raise 

that issue as a defense. The Meyerses and Cole failed to comply with those 

orders.

On the morning of the hearing, Cole filed a Suggestion of Bankruptcy 

and “suggest[ed] that this action and all hearings or other activity related 

thereto have been stayed by operation of Title 11 U.S.C. § 362.” Although 

counsel for Textron was present at the hearing, Cole and the Meyerses did not

appear. 

The following day, the court noted that, “[f]or the fifth time, [the Meyerses and Cole] have failed to comply with an order of this court,” and it indicated that those failures were “intentional[], deliberate[], and contemptous[] 

. . . .” The court also ruled that § 362 did not stay the sanctions hearings and

that, regardless, Cole had an obligation to appear as counsel for the Meyerses.

The court then ordered the Meyerses and Cole to file two itemizations of 

fees and expenses incurred in previous proceedings in which Textron was a 

party. Nothing was filed, and the court found that they have “twice again 

creat[ed] the appearance that they have disrespect and contempt for the 

authority of this court.” The court ordered them to file the information 

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required in the previous order, followed by a show-cause hearing. 

On the day the filings were due, Cole appeared through counsel and 

motioned to extend the deadline and continue the hearing. On the day before 

the hearing, Cole’s counsel filed an amended motion for continuance, and Cole 

filed a motion for continuance on behalf of the Meyerses. Both motions contained an affidavit from Cole stating that the Meyerses and Cole had not

received some of the orders.

After hearing testimony from Cole and Susan Meyers, the court found 

that Cole had received all previous orders and that their statements to the 

contrary were knowingly false and an attempt to defraud the court. Nevertheless, the court continued the hearing to give the Meyerses an opportunity 

to decide whether to replace Cole with an attorney whose interest did not conflict with theirs.1 The court also ordered them to provide the information 

required by prior orders. 

On the day those filings were due, Cole told the court she would not be 

filing anything, pointing to a settlement discussion with Textron. Because

there was a disagreement about whether a settlement had been reached, the 

court ordered the hearing to proceed as scheduled; the Meyerses and Cole to 

show cause for why they should not be sanctioned for their failures to provide 

court-ordered information; and Cole to verify by affidavit that she had provided 

the Meyerses with copies of previous orders.

Following a two-day show-cause hearing, the court imposed sanctions, 

jointly and severally, against the Meyerses and Cole for their conduct in the

RMC case and the sanctions action. In a thirty-six page opinion, the court 

1 Cole continued to represent the Meyerses in district court and is their counsel on 

appeal.

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awarded Textron $79,424.21 (later reduced to $75,249.41 because of a calculation error) under Rule 11 and 28 U.S.C. § 1927, concluding that the Meyerses 

and Cole had brought the RMC case “in bad faith, vexatiously, and for the purpose of harassment.” In re Motion for Sanctions Against Meyers, No. 4:12-MC015-A, 2014 WL 1494099, at *14 (N.D. Tex. Apr. 16, 2014). Alternatively, the 

court held that the same award would have been appropriate pursuant to its 

inherent power. In a separate forty-eight-page opinion, the court awarded 

“Textron $83,693.87 as a sanction pursuant to the inherent power of the court 

to address the bad faith litigation conduct of the Meyerses and Cole in relation 

to [the action for sanctions].” In re Motion for Sanctions Against Meyers, 

No. 4:12-MC-015-A, 2014 WL 1910621, at *1 (N.D. Tex. May 9, 2014). The 

Meyerses and Cole appeal those awards.

II.

Sanctions awarded under Rule 11 and 28 U.S.C. § 1927 are reviewed for 

an abuse of discretion. See Mercury Air Grp., Inc. v. Mansour, 237 F.3d 542, 

548–49 (5th Cir. 2001). “We review de novo a district court’s invocation of its 

inherent power and the sanctions granted [thereunder] for an abuse of discretion, recognizing that ‘[a] court should invoke its inherent power to award 

attorney’s fees only when it finds that fraud has been practiced upon it, or that 

the very temple of justice has been defiled.’”2 “We review the factual findings 

underlying those sanctions, however, only for clear error.” Positive Software 

Solutions, Inc. v. New Century Mortg. Corp., 619 F.3d 458, 460 (5th Cir. 2010).

III.

The Meyerses and Cole maintain that they were denied due process at 

2 FDIC v. Maxxam, Inc., 523 F.3d 566, 590 (5th Cir. 2008) (second alteration in original) (footnote omitted) (quoting Boland Marine & Mfg. Co. v. Rihner, 41 F.3d 997, 1005 (5th 

Cir. 1995)) (internal quotation marks omitted).

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the show-cause hearing. Under Rule 11 and § 1927, “due process demands only 

that the sanctioned party be afforded notice and an opportunity to be heard.”3 

“In Rule 11 cases, the opportunity to respond through written submissions 

usually constitutes sufficient opportunity to be heard” without requiring “an 

actual hearing.” Merriman, 100 F.3d at 1191–92. Under § 1927, “[t]he right 

to a hearing . . . is limited to cases where a hearing would assist the court in 

its decision.” Travelers, 38 F.3d at 1418 (quoting Hill v. Norfolk & W. Ry., 814

F.2d 1192, 1201 (7th Cir. 1987)) (internal quotation marks omitted). Likewise, 

before invoking its inherent power, “[a] court must . . . comply with the 

mandates of due process, both in determining that the requisite bad faith exists 

and in assessing fees.” Chambers v. NASCO, Inc., 501 U.S. 32, 50 (1991).

Citing the entirety of the 523-page hearing transcripts, the Meyerses and 

Cole assert that the court improperly limited their testimony and “completely 

ceased cross examinations” and that Cole “was told to stop talking after each 

sentence of her [closing argument]”—purportedly demonstrating “the court’s 

bias and lack of impartiality [that] violated their right to due process.” As a 

preliminary matter, “the Federal Rules of Appellate Procedure require that 

appellants, rather than the courts of appeals, ferret out and articulate the record evidence considered material to each legal theory advanced on appeal.”4 

Even if their arguments are not waived for lack of citation to specific incidents, 

a cursory review of the record shows that their descriptions of the proceeding

are badly exaggerated.

Although the Meyerses and Cole claim that the district court “completely 

3 Merriman v. Sec. Ins. Co. of Hartford, 100 F.3d 1187, 1191 (5th Cir. 1996); accord

Travelers Ins. Co. v. St. Jude Hosp. of Kenner, La., Inc., 38 F.3d 1414, 1418 (5th Cir. 1994).

4 Alexander v. Monsanto Co., 396 F. App’x 137, 140 (5th Cir. 2010) (per curiam) (quoting Conto v. Concord Hosp., Inc., 265 F.3d 79, 81 (1st Cir. 2001)) (internal quotation marks 

omitted).

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ceased cross examinations,” Textron called two witnesses: Cole, who was not 

cross-examined, and another, who was cross-examined without interruption. 

Similarly, Cole was not “told to stop talking after each sentence of her [closing 

argument]”; instead, she argued—with only one interruption—over five of the 

seven transcribed pages of closing argument and was never told to stop talking. 

The court spoke only seven times, instructing Cole to limit argument to the 

record and confirming the testimony of a witness. When asked whether there 

was anything else she wanted to say, Cole declined, stating that “it’s all in the 

record . . . .” Although the Meyerses and Cole maintain that the court improperly limited their answers to “yes or no,” citing no specific instances, they perhaps refer to the single occasion on which the court instructed Cole to “[e]ither 

say yes or no or whatever the appropriate answer is . . . without just grunting.”

In addition to the initial briefing they submitted in opposition to sanctions, the Meyerses and Cole were afforded multiple opportunities to provide

additional information. They were given a two-day hearing, and due process 

was not violated by the court’s instructions to stay within the record or confirmation of testimony. Rather than conducting the proceedings with bias, the 

court acted with commendable patience throughout this case.

The Meyerses aver that the court prohibited them from arguing that it 

was improper to sanction them because they were not named parties to the 

RMC complaint. They neglect to mention, however, that they failed to comply 

with multiple orders to file a document with all legal authorities establishing 

whether they could be sanctioned, and they did not inform the court whether 

they intended to raise that issue as a defense. Although Textron filed the 

requested document, the Meyerses did not; Cole does not deny receiving that 

order, nor does she explain why it was ignored. 

The Meyerses also contend that “the district court went so far as to enter 

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an order forbidding [them] from including RMC in written filings with the 

court,” but the court did no such thing; it merely instructed them “not to 

pretend in any of their filings that [RMC] is a party to this action.”5 Rather 

than preventing them from arguing that they could not be sanctioned because 

they were not named parties to the RMC case, the court solicited their views 

on the issue, and Cole argued the point uninterrupted in closing argument.

We need not decide whether the Meyerses fall within the scope of

Rule 11, which authorizes sanctions against “any attorney, law firm, or party 

that violated the rule or is responsible for the violation,” if sanctions were 

appropriate under the court’s inherent power, which “extends to a full range of 

litigation abuses.”6 A court must make a specific finding of bad faith before 

using its inherent power to impose sanctions. See Toon v. Wackenhut Corr. 

Corp., 250 F.3d 950, 952 (5th Cir. 2001). 

Although the district court made such a finding, the Meyerses and Cole 

maintain that they did not act in bad faith because there was only one cause 

of action filed by RMC against Textron. Relying on specific factual findings 

that are unchallenged on appeal, the court concluded that the allegation in the 

RMC complaint—that RMC was fraudulently induced by Textron to provide

funding for AIH’s purchase of AIMC’s assets—was false and an attempt to 

5 RMC was not a party to the severed action for sanctions, yet Cole filed a document 

showing herself to be attorney for herself, the Meyerses, and RMC, and she referred to RMC 

as one of the parties.

6 Chambers, 501 U.S. at 46 (“[W]hereas [Rule 11 and § 1927] reach[] only certain individuals or conduct, the inherent power extends to a full range of litigation abuses. At the 

very least, the inherent power must continue to exist to fill in the interstices.”); see 2 JAMES 

WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 11.41[1] (3d ed. 2014) (“If the district court 

cites multiple sources of authority for sanctions, the appellate court . . . will reverse the award 

only if none of the sources provides a sound basis for the sanctions.” (citing Balerna v. Gilberti, 708 F.3d 319, 323 (1st Cir. 2013); Amlong & Amlong, P.A. v. Denny’s, Inc., 500 F.3d 

1230, 1238–39 (11th Cir. 2007))).

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circumvent res judicata. The court set forth nine instances in which the Meyerses and Cole represented in judicial proceedings that the Meyerses, and no 

one else, provided the funding. Moreover, RMC did not file a proof of claim in 

bankruptcy, and there had been no prior assertion that it was the lender.

Finding the Meyerses well-educated, knowledgeable about their business activities, and heavily involved in the litigation, the court concluded that 

they knew that the allegation in the RMC complaint was false yet caused, 

authorized, and encouraged Cole to file it. Likewise, the court found that Cole 

was deeply involved in the representation of the Meyerses and AIH in the 

bankruptcy court and knowingly made the false allegation. Noting that the 

Meyerses and Cole disregarded Textron’s Rule 11 warning, and the Meyerses 

personally financed all of AIH’s bankruptcy litigation against Textron, the 

court concluded that the RMC complaint was part of an ongoing scheme among 

the Meyerses and Cole to harass Textron and needlessly increase its litigation 

costs through repeated court actions, tantamount to a fraud on the court. 

Failing to address the court’s factual findings, the Meyerses and Cole have not 

shown that it erred by concluding that the lawsuit “was brought and prosecuted by [them] against Textron in bad faith, vexatiously, and for the purpose 

of harassment.”

The Meyerses and Cole assert that the court erred by “failing to conduct 

an independent and unbiased investigation” into the reasonableness of the 

attorney’s fees requested by Textron. Although they state that the district 

court accepted the testimony regarding the fees “without question” and “was 

not inclined to require [Textron] to produce an accurate accounting of the fees 

that were sought,” the record belies those assertions. The court repeatedly 

asked questions during the testimony about fees and ordered Textron to 

respond to the claim that the fee calculations were inaccurate. Once Textron

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had provided corrected calculations, the court ordered the Meyerses and Cole 

to identify “each disagreement they now have with the reasonableness, necessity, or calculation of attorneys’ fees set forth in Textron’s reply,” yet they did 

not respond.

Moreover, the Meyerses and Cole have not shown that the sanctions 

were inappropriate. The district court limited sanctions to Textron’s reasonable attorney’s fees and costs despite finding that, in light of “[t]estimony given 

by Mr. Meyers . . . indicat[ing] that the Meyerses and Cole are not finished 

with Textron yet . . . a significant sanction award against [them] would be 

helpful in deterring them from again filing frivolous and harassing litigation 

against Textron.” Finding no error, we affirm the awards.

IV.

Textron moves for sanctions on appeal pursuant to Federal Rule of 

Appellate Procedure 38. The Meyerses and Cole have not responded to that

motion. Under Rule 38, we may award “just damages and single or double 

costs to the appellee” if we determine that an appeal is frivolous. “An appeal 

is frivolous if ‘the result is obvious or the arguments of error are wholly without 

merit.’”7

Textron identifies many deficiencies with the Meyerses and Cole’s brief. 

The first nineteen pages of their “Statement of Relevant Facts” is mostly copied 

verbatim from a brief filed previously with this court, rehashing their alreadyrejected fraud claims without a single citation to the record, and is largely 

irrelevant to this appeal. Their due-process argument grossly exaggerates the 

limitations placed on them by the district court and provides no specific 

7 Howard v. St. Germain, 599 F.3d 455, 458 (5th Cir. 2010) (per curiam) (quoting Buck 

v. United States, 967 F.2d 1060, 1062 (5th Cir. 1992) (per curiam)).

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citation to the 523 pages of hearing transcripts. They claim that “the district 

court failed to apply to [sic] proper standard for awarding sanctions,” yet they

cite the same standards that the court applied. Likewise, their argument that 

the district court had made a “pre-hearing promise to rule in [Textron’s] favor” 

is completely unfounded and without citation to the record.

Although much of this appeal borders on frivolous, it is not so deficient 

as to warrant attorney’s fees and costs. We note that Cole does not have a 

history of filing frivolous appeals, and the parties have agreed to a pre-filing 

injunction prohibiting the Meyerses from bringing further claims against Textron without first receiving the express permission of the district court.

Textron’s motion for Rule 38 relief is DENIED. The judgment is in all 

respects AFFIRMED.

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