United States Bankruptcy Appellate Panel

FOR THE EIGHTH CIRCUIT

 

No. 05-6029 WA

 

In re: *

*

Annette B. Sabala, *

*

Debtor. *

*

Gerald Hanson, * Appeal from the United States

* Bankruptcy Court for the 

Movant Below - Appellant * Western District of Arkansas 

*

v. *

*

Annette B. Sabala, *

*

Debtor - Appellee. *

 

Submitted: November 15, 2005

Filed: December 8, 2005

 

Before SCHERMER, MAHONEY, and MCDONALD, Bankruptcy Judges

SCHERMER, Bankruptcy Judge
1

The Honorable James G. Mixon, United States Bankruptcy Judge for the

Eastern and Western Districts of Arkansas. 

2

Gerald Hanson appeals the bankruptcy court1 order imposing monetary

sanctions on him. We have jurisdiction over the appeal from the final order of the

bankruptcy court imposing sanctions. See 28 U.S.C. § 158(b). For the reasons set

forth below, we affirm.

ISSUE

The issues on appeal are (1) whether Mr. Hansons’s appeal was timely and (2)

whether the court properly imposed monetary sanctions on Mr. Hanson after he filed

a second complaint to determine the dischargeability of a debt of Annette B. Sabala

(“Debtor”) after the dismissal of his prior complaint to determine dischargeability of

debt and after the granting of the Debtor’s discharge. We conclude that the appeal

was timely and that the court properly exercised its discretion in awarding sanctions

against Mr. Hanson.

BACKGROUND

The Debtor filed a petition for relief under Chapter 7 of the Bankruptcy Code

on December 1, 2003. In her schedules, the Debtor listed Mr. Hansen as the holder

of a contingent, unliquidated unsecured nonpriority claim in the amount of $10.

On January 13, 2004, Mr. Hanson filed a complaint to determine the

dischargeability of the Debtor’s indebtedness to him. The Debtor filed a motion to

dismiss the dischargeability complaint which was granted by order dated May 6, 2004.
2

The Debtor reopened her case in October, 2004, to add a secured creditor. 

The case was re-closed on November 24, 2004.

3

The Debtor and her husband had moved from Arkansas before Mr. Hanson

filed his second complaint and therefore had to travel from out of state to attend the

hearings on the complaint and on the motion for sanctions.

3

The bankruptcy court entered its order discharging the Debtor on May 19, 2004, and

the Debtor’s case was subsequently closed.2

On December 27, 2004, Mr. Hanson filed a second complaint to determine

dischargeability of debt. The court sua sponte re-opened the case on January 6, 2005.

The court held a hearing on the second dischargeability complaint on February 24,

2005, at which the court dismissed the second complaint and granted the Debtor

twenty days to file a motion for sanctions. The court entered its order dismissing the

second complaint on March 17, 2005.

On March 15, 2005, the Debtor filed a motion for sanctions. On April 18, 2005,

Mr. Hanson filed a response to the motion. The court held a hearing on the motion

on April 27, 2005, at which the Debtor appeared through counsel and Mr. Hanson

appeared pro se. The Debtor’s husband testified on behalf of the Debtor that he and

Mr. Hanson had been involved in much litigation elsewhere; that upon the advice of

counsel, his wife listed Mr. Hanson as the holder of a nominal, contested claim in her

bankruptcy case; that Mr. Hanson had objected to the Debtor’s discharge of his debt

and that the objection had been dismissed; that the Debtor had received a discharge;

that after entry of the discharge, Mr. Hanson filed a second complaint objecting to the

discharge of his debt; and that he had incurred expenses coming to court on account

of Mr Hanson’s second dischargeability complaint.3

 Mr. Hanson did not call any

witnesses nor did he testify. At the close of evidence, the bankruptcy court

determined that Mr. Hanson had violated the discharge injunction and that sanctions

were warranted. The bankruptcy court imposed monetary sanctions consisting of
4

Mr. Hanson filed his motion to reconsider and his notice of appeal before

the Debtor’s counsel filed the affidavit of fees or proof of travel costs.

5

Mr. Hansen filed the notice of appeal 85 days after entry of the order

dismissing his adversary complaint, well beyond the 10-day time period required

for filing a notice of appeal under Federal Rule of Bankruptcy Procedure 8002(a).

4

$1,000 in attorneys’ fees for the Debtor’s counsel and the amount of travel expenses

incurred by the Debtor and/or her husband to travel to court twice from out of state.

The court directed the Debtor’s counsel to file and serve on Mr. Hanson an affidavit

of attorneys’ fees and costs and proof of travel costs. The court denied the Debtor’s

request for punitive sanctions as lacking any basis.

Mr. Hanson filed a motion to reconsider on May 9, 2005. The court entered the

order granting the Debtor’s motion for sanctions on May 17, 2005. Mr. Hanson

withdrew the motion for reconsideration on May 31, 2005, and filed a notice of appeal

on June 10, 2005. In the notice of appeal Mr. Hanson purports to appeal the dismissal

of his complaint to determine dischargeability of debt, the award of sanctions, and his

motion for reconsideration.4

 The appeal was untimely as to the dismissal of the

complaint5

 and Mr. Hanson withdrew his motion for reconsideration. Therefore our

jurisdiction in this appeal is limited to the award of sanctions.

STANDARD OF REVIEW

We review the award of sanctions for an abuse of discretion. Cooter & Gell v.

Hartmarx Corp., 496 U.S. 384, 399-405, 110 S.Ct. 2447, 2457-2461, 110 L.Ed. 2d

359 (1990); Gordon v. Unifund CCR Partners, 345 F.3d 1028, 1030 (8th Cir. 2003);

MHC Inv. Co. v. Racom Corp., 323 F.3d 620, 624 (8th Cir. 2003); Coonts v. Potts, 316

F.3d 745, 753 (8th Cir. 2003); Schwartz v. Kujawa (In re Kujawa), 270 F.3d 578, 581-

82 (8th Cir. 2001); Grunewaldt v. Mut. Life Ins. Co. of New York (In re Coones Ranch,
5

Inc.), 7 F.3d 740, 743 (8th Cir. 1993); Ebersold v. DeLaughter (In re DeLaughter), 213

B.R. 839, 841 (B.A.P. 8th Cir. 1997).

DISCUSSION

1. TIMELINESS OF APPEAL

Mr. Hanson’s appeal was timely. Federal Rule of Bankruptcy Procedure

8002(a) requires a notice of appeal to be filed within ten days of the entry of the order

appealed from. However, a timely motion for reconsideration tolls the time period for

filing an appeal during the pendency of such motion. Fed. R. Bankr. P. 8002(b). Rule

8002(b) lists the following motions as having a tolling effect: a motion to amend or

make additional findings of fact under Rule 7052; a motion to alter or amend a

judgment under Rule 9023; a motion for a new trial under Rule 9023; or a motion for

relief from judgment or order under Rule 9024 if filed within ten days after entry of

the judgment or order. Mr. Hanson entitled his motion for reconsideration a Motion

for Reconsideration: Pursuant to USCA 11 § Rule 3008; USCA 11 § 502(j); Request

for Judicial Review; Memorandum of Points Authorities; Declaration of Gerald

Hanson in Support of Motion for Reconsideration. A review of the motion to

reconsider indicates that Mr. Hanson was seeking to introduce evidence to contradict

a statement made by the Debtor’s husband that Mr. Hanson is a litigious or vexatious

litigant. Mr. Hanson requested alternatively that the order imposing sanctions be

vacated, that a new hearing be granted, and that he be granted relief from the sanctions

order. Regardless of its denomination, Mr. Hanson’s motion to reconsider seeks relief

of the type available under Rule 9023 and Rule 9024. Therefore the motion to

reconsider tolled the time to appeal under Rule 8002(b).

According to Rule 8002(b), the time period for appeal runs from the entry of

the order disposing of the last outstanding motion which has a tolling effect. In the

present case, no order was entered on the motion for reconsideration because
6

Mr. Hanson withdrew the motion prior to its disposition. In such a circumstance, the

time period for filing the notice of appeal runs from the date of the withdrawal of the

motion. In re McCarthy, 106 B.R. 201 (Bankr. D. Haw. 1989); see also Law Offices

of Peter Francis Geraci v. Bryson (In re Bryson), 131 F.3d 601 (7th Cir. 1997).

Mr. Hanson filed the notice of appeal within ten days after he withdrew his motion for

reconsideration. Therefore the appeal of the order imposing sanctions was timely.

2. SANCTIONS WERE APPROPRIATE

The bankruptcy court did not abuse its discretion in awarding sanctions against

Mr. Hanson. First, Mr. Hanson was given ample notice of the possibility of sanctions.

The issue was first addressed orally at the hearing held on February 24, 2005, more

than two months prior to the April 27, 2005, hearing on the motion for sanctions. The

Debtors filed a motion requesting sanctions to which Mr. Hanson filed a response.

Mr. Hanson attended the hearing on the motion and was given an opportunity to

present evidence and argument.

Second, the bankruptcy court properly determined that Mr. Hanson had violated

the discharge injunction and that sanctions were warranted. The bankruptcy court

rejected the Debtor’s request for punitive sanctions for the pain and suffering

allegedly caused by Mr. Hanson’s second complaint as not supported by any evidence.

The bankruptcy court also took into account Mr. Hanson’s pro se status in

determining an appropriate award of sanctions although not required to do so. The

bankruptcy court carefully limited the award to an amount sufficient to reimburse the

Debtor for her expenses in the form of attorneys’ fees and travel costs necessitated by

Mr. Hanson’s second complaint. Accordingly, the award was both supported by the

evidence and well within the discretion of the court. The bankruptcy court did not

abuse its discretion in awarding sanctions. Accordingly, the order imposing sanctions

should be affirmed. 
7

CONCLUSION

The motion for reconsideration tolled the time to appeal under Federal Rule of

Bankruptcy Procedure 8002(b). Mr. Hansen filed his notice of appeal within ten days

after withdrawing the motion to reconsider. The appeal was therefore timely.

Furthermore, the bankruptcy court did not abuse its discretion in imposing sanctions

against Mr. Hanson. Accordingly, the order imposing sanctions is AFFIRMED.