United States Court of Appeals FOR THE EIGHTH CIRCUIT

_____________ Nos. 97-1221/2300

_____________ In re: Bishweshwar Rai Mahendra, * * Debtor, * *

------------------------------------------------- * * Eric J. Snyder, * Appeals from the United States * District Court for the Eastern Creditor -- Appellant, * District of Missouri. * v. * * A. Thomas Dewoskin, * * Trustee -- Appellee. *

_____________ Submitted: September 10, 1997 Filed: December 17, 1997

_____________ Before BEAM, FLOYD R. GIBSON, and HEANEY, Circuit Judges.

_____________ FLOYD R. GIBSON, Circuit Judge.The Hon orable Donald J. Stohr, United States District Judge for the Easter n 1 District of Missouri. The Honorable David P. McDonald, United States Bankruptcy Judge for th e 2 Eastern District of Missouri. -2- These appeals arise from a District Court Order entered November 26, 199 6 1 which affirmed the Bankruptcy Court Order dat ed May 6, 1996 that granted judgment 2 in favo r of Appellee A. Thomas Dewoskin ("Trustee") and against Appellant Eric J

. Snyder. Snyder also appeals the District Court Order of March 3, 1997 whic h sanctioned Snyder for his frivolous appeal to the district court. For the reasons set forth below, we affirm these orders.

I. BACKGROUND

On S eptember 22, 1994, Bishweshwar Rai Mahendra ("Debtor") and Snyde r
exe cuted a Representation Agreement (the "Agreement"). In pertinent part, th e language of the Agreement provided:

1. W HEREAS, [Debtor] may not have filed income tax returns with eith er the IRS or the State of Missouri for the years, 1987, through an d including 1993; and 2. WHEREAS, [Debtor] wishes to have [Snyder] represen t him, but does not have the present cash with which to pay [Snyder]; and
3. WHEREAS, [Snyder] is willing to represent [Debtor] based upo n [Debtor's] proposal to give him a Second Deed of Trust in the property.

. . . * * *
17

. [Snyder] agrees to represent [Debtor] regarding his income ta x returns for the years 1987 through and including 1993 both before theThe Deed of Trust provided in pertinent part: 3 [Debtor] has executed a Note to secure future advances for legal services and costs provided by [Snyder to Debtor]. Suc h parties have entered into a Representation Agreement whereby [Snyder] agrees to provide certain legal ser vices and [Debtor] . . . has agreed to pay for such legal services by executing a Note for such leg al services and costs and by securing the Note by th is Deed of Trust. . . . This security instrument is governed by V.A.M.S. Section 433.055.
Id. at 109. -3- Internal Revenue Service and before the Missouri Department of Revenue.
Snyder's App. at 100, 103. Debtor also signed a Promissory N ote (the "Note") in favor of Snyder for "[a]dvances up to $35,000." Id. at 105. This Note was for Snyder' s "legal services" to be performed on behalf of Debtor. Id. Debtor further executed a Deed of Tru st that pledged his real property located in DeSoto, Missouri (th e 3 "property" or "real property") to Snyder as security for the Note.

On Nov ember 28, 1994, Debtor filed his voluntary petition for relief unde r Chapter 7 of the United States Bankruptcy Code. Snyder served as Debtor's attorney of r ecord. Snyder did not file an application to be employed on behalf of th e bankruptcy estate or an application for compens ation. Regarding the fee arrangements between Snyder and Debtor with respect to the bankruptcy, Snyder stated that "[w]e
cons idered [the bankruptcy] to be a continuation of the criminal representatio n [regarding the tax matters. The] method of paying . . . was [that] I was to be paid from the proc eeds of the sale of his house." Snyder Dep. at 6. As of the date of th e bankruptcy filing, Snyder was a pre-petition creditor of Debtor. Snyd er recognized that he might have a conflict of interest with the bankruptcy estate. See id. at 12-13.Snyder claims that Debtor and he modified the Agreement by orally agreein g 4 th atit extend to bankruptcy services. Snyder and Debtor memorialized thi s modification with a compensation statement, Amended Promissory Note, and Amended Deed of Trust. In addition, Snyder contends that the bankruptcy services were als o independ ently covered within the scope of the original Agreement. See Snyder's Br., No. 97-1221, at 15. Snyder claims that neither partyconsented to "submission" of the case and that 5 the parties never agreed to the facts. After reviewing this issue, we find Snyder' s contention to be without merit. By submitting a motio n for summary judgment, Snyder s t ated that "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any mater ial fact." Fed. R. Civ. P. 56; see also Fed R. Bankr. P. 7056. Therefore, b y submitting his motion for summary judgment and stating that no genuine issue o f material fact existed, Snyder agreed to submit the case. -4- On Apri l 28, 1995, Trustee closed the sale of Debtor's real property in DeSoto for the purchase price of $165,500. After priority claims were paid, Trustee deposited the sum of $17,171.64 into the bankruptcy estate's bank account. Snyder sough t compensati on from the sale proceeds of the real property for legal services in th e amount of $13,484.68. Snyder maintained that he w as entitled to compensation for his services rendered both pre-petition and post-petition. 4

Trustee filed a Complaint to Determine the Validity, Priority, and Extent of the Lien on June 6, 1995; a Motion for Review of Attorney Fees on July 20, 1995; and a Mot ionfor Imposition of Sanctions Pursuant to Rule 9011 of the Federal Rules o f Bankru ptcy Procedure on August 31, 1995. These motions named Snyder as th e defendant in each matter. The parties "submitted" these contested matters to th e 5 bankru ptcy court pursuant to uncontested facts, Snyder's Motion for Summar y Judgment, and legal briefs.
On May 6, 1996 , the Bankruptcy Court entered an Order determining that: (1) to the extent Snyder's lien was valid, it did not c over representation beyond tax mattersThe apparent conflict of interest arose from Snyder's assertion of a lien which 6 would decrease the amount of b ack taxes Debtor paid to the Internal Revenue Service out of the estate. As a creditor of the bankruptcy estate, the larger the amount o f attorney fe es that Snyder would have received would leave less estate funds fo r distrib utionto the taxing authorities and a larger non-dischargeable debt claim fo r Debtor. -5- set fo rth in the Agreement; (2) to the extent that Snyder's lien was valid, it wa s extinguished on the petition date with respect to any further future adv ances; (3) Snyder was not entitled to receive com pensation from the assets of the estate for post-petition legal services; (4) legal services rendered for pre-petiti on tax and other non-bankruptcy matters would be awarded in the amount of $4,348.80; and (5) compensation for legal services rendered for pre-petition bankruptcy matters would be awarded in the amount of $ 1,000 but reduced by the same amount as sanctions for Snyder's conflict o f interest. The bankruptcy court entered this order without a hearing or trial. This order 6 al so did not award interest on the pre-petition lien nor any protection and collectio n costs.
On June 24, 1996, Snyder filed his Notice of Appeal to contest the Bankruptcy Court's Order. On November 25, 1996, the District Court entered its Judgment , affirming the Bankruptcy Court's Order in its entirety. Snyder filed his Notice o f Appeal to this court on December 26, 1997.

On Janu ary 9, 1997, Trustee filed a Motion for Sanctions against Snyde r pursuant to Fed. R. Bankr. P. 9011 for Snyder's alleged frivolous appeal to the district court. Snyder did not file a response. On March 3, 1997, the District Court entered
an Order assessing sanctions against Snyder in favor of Trustee in the amount o f $4,352.80. The district cour t denied Snyder's request to set aside this order on March 17, 1997. Accordingly, Snyder also appeal s to this court arguing that the district court erred in assessing sanctions against him for filing an alleged frivolous appeal.-6-

II. DISCUSSION

In a case originating in bankruptcy court, the court of appeals functions as a second court of review and reviews the b ankruptcy court's conclusions under the same standards that the district

court applied. We review the bankruptcy court's findings of fact u nder the clearly erroneous standard and consider legal issues de novo

. Se e Gourley v. Usery ( In re Usery) , 123 F.3d 1089, 1093 (8th Cir. 1997).

A. The Unencumbered Portion of Debtor's Real Property Became Estat e Property on the Petition Date. Snyder argues that the bankruptcy court erred as a matter of law in finding that 11 U.S.C. § 542 (1994) extinguished his lien interest. Snyder also contests Trustee's posi tion that 11 U.S.C. § 541 (1994) extinguished Snyder's lien interest. Snyde r maintains that his right to be secured as to future advances and future obligation s constitutes a present lien on Debtor's property. Snyder claims that, under Mo. Rev

. Stat. § 443. 055.2 (1994), his lien embodied the full extent of the face amount of th e securit y instrument for future advances and obligations at the time the securit y instrumen t

was created. Here, the Deed of Trust's face amount is $35,000 and wa s established on September 22, 1994. There fore, Snyder concludes that this lien existed prior to the commencement of the bankrupt cy filing--November 28, 1994--and that the bankruptcy estate takes its interest in the Debtor's real estate subject to Snyder' s intere st, regardless of how much Debtor owed Snyder on the petition date. W e disagree.
Determining whether an interest is part of the bankruptcy estate requires a threepart query. First, the court must decide whether the item constitutes "property" under § 541(a)(1). See C.T. Dev. Corp. v. Barnes ( In re Oxford Dev., Ltd.) , 67 F.3d 683 , 685 (8th Cir. 1995). Second, the court should look to state law to a scertain the debtor's interest in the property because "[p]roperty interests are created and defined by state-7-

law . . . [u]nless some federal interest requires a different result." Id. (quotation an d citation omitted). Third, the court must find that the debtor had the property interest at the ti me of filing the bankruptcy petition. See Davis v. Moon ( In re Usery) , 15 8 B.R. 470, 472 (Bankr. W.D. Mo. 1993).
Under § 541(a)(1), the bankruptcy esta te consists of all of the debtor's legal and equi table property interests that existed as of the time that the bankruptcy petition i s filed. See§ 54 1(a)(1). The property of the bankruptcy estate is broadly defined by § 541( a)(1). See United States v. Whiting Pools, Inc. , 462 U.S. 198, 204-05 (1983)

. "Any p ortion of a debtor's property that is unencumbered by mortgage--the equity--is part of the bankrupt's estate." United States v. Rauer , 963 F.2d 1332, 1337 (10th Cir.), cert. denied , 506 U.S. 886 (1992).

Pu rsuant to § 541, Debtor's legal and equitable interests in the real propert y became property of the estate as of the petition date. Thus, the estate possesse d Debto r's unencumbered portion, or Debtor's equity, in the property. At that point , Debtor lost the right to authorize Snyder's legal services wh ich could potentially further encumber this asset of the bankruptcyestate. Only the bankruptcy court could control the f urther encumbrance of the estate property. Neither Debtor nor Snyder sought or obtained the bank

ruptcy court's approval to continue to draw upon the future advance clause contained in the Agreement, Note, and Deed of Trust. To the extent that Debtor and Snyder have attempted to continue to draw upon the future advance clause after the petition's filin g, such attempts constitute unauthorized post-petition transfers pursuant to 11 U.S.C. § 549 (1994). "[T]he trustee may avoid a transfer of prope rty of the estate

. . . that occurs after the commencement of the case; and . . . that is not authorized . .

. by the court. " 11 U.S.C. § 549; see also Brown v. Harris ( In re Auxano, Inc.) , 9 6 B.R. 957 , 960 (Bankr. W.D. Mo. 1989) ("Taking a security interest in real estate is a 'transfer' as that term is defined in 11 U.S.C. Section 101(50).").-8-

Turning to Missouri state law's determinat ion of the extent of Debtor's interest in the property, Snyder misapprehends § 443.055's effect in the present case. Sectio n 443.005.1(1) defines "borrower" to include a "successor in interest" to the "mortgagor, deed of trust grantor, or debto r." Section 443.055.6 allows the owner of the interest in the real property encumbered by the security instrument to give notice to the lender , electing to terminate the operation of the instrument as security for future advance s made or i ncurred after the date the lender receives notice. We find that the filing o f Debtor's bankruptcy petition, in the present case, comported with § 443.055.6's notice requirement

to Snyder and effectively terminated the operation of the Note and Deed of Trust as security for future advances incurred after the date of filing the bankruptcy petition. Here, Snyder himself prepared and filed Debtor's bankruptcy petition and , thus, had actual notice of Debtor's re linquishment to the estate of his interest in the real property. Moreover, the Trustee, as the representative for the bankruptcy estate an d successor in interest to th e real property, did not authorize any further legal services to be performed by Snyder.
Such a result is analogous to the legal eff ect of a cash security retainer. Snyder's security agreement with a future advance clause, like a cash security retainer, was held by Snyder to secure

payment of professional fees and costs yet to be rendered. Under the ethical rules applicable in most jurisdictions, the security retainer monies remai n property of the client until counsel applies them to legal services actually performed

. See Indian Motocycle Assocs. III Ltd. Partnership v. Massachuset ts Hous. Fin. Agency , 66 F.3d 1246, 1255 (1st Cir. 1995). The debtor's equitable interest in the unearne d portion of the retainer bec omes property of the estate upon the filing of the bankruptcy petition. See id. To withdraw the retainer, counsel is required to file a fee application with the ba nkruptcy court pursuant to 11 U.S.C. § 330 (1994), and the court coul d require the debtor's counsel to surrender the unearned portion a s "property of the estate" pu rsuant to § 542. See id. ; see also Meeker v. Germeraad ( In re Quincy Air Cargo , Inc.) , 155 B.R. 193, 197 (Bankr. C.D. Ill. 1993) (security interest in property as a "security retainer" was estate property which can only be used by the professionalS nyder also argues, in the alternative, that the Agreement with Debto r 7 cons titutes an executory agreement because, if Snyder is not secured for his post

petition services, then Debtor has not fully performed the contract on Debtor's part

. After carefully considering this issue, we find it to be without merit. Snyder furthe r claims t hat Snyder and Debtor orally amended the Agreement to cover bankruptc y servi ces. However, whether Snyder and Debtor orally amended the Agreement t o cover bankruptcy matters is irrelevant because Snyder's lien was extinguished on the petition date and does not secure any post-petition legal services. -9- upon c ompliance with the entire fee application process, including court approval); In
re Fitzsimmons Trucking Inc. , 124 B.R. 556, 560 (Bankr. Minn. 1991) (an attorney's retainer held in trust is property of the bankruptcy estate).

In sum, at the time of filing the bankruptcy petition, Debtor still retained equity in the portion of

the real estate unencumbered by Snyder's post-petition legal services. The filing of the petition transf erred Debtor's equity in the real estate to the bankruptcy estate. Although we find that § 541, as opposed to § 542 (as the bankruptcy cour t found), is the more appropriate section for evaluating the relevant property interests, we affirm, under § 541's three-part query, the bankruptcy court's and district court' s conclusi ons that the unencumbered portion of Debtor's real property became estat e property on the petition date. See Cooksey v. Delo , 94 F.3d 121 4, 1218 (8th Cir. 1996) (appellate court may affirm on any basis supported by the record).
B. Snyder Is Not Entitled to Receive Compensation From t he Estate's Assets for His Post-Petition Legal Services. Snyder's contention that he i s entitled to compensation for his post-petition legal services rests primarily on his belief that his lien interest was not extinguished b y Deb tor's filing of a bankruptcy petition because these legal services constituted future advances pursuant to § 443.055. Ho wever, we reject this argument. As we explained 7 supra i n Section A of this Opinion, Snyder's lien--to the extent it was valid--wa s extinguished on the petition date with respect to any future advances. Snyder's only-10-

avenue for post-petition compensation would have been to seek such compensatio n pursuant to § 330 as an administrative expens e. See In re Quincy Air Cargo, Inc. , 155 B.R. a t 197 (professional must comply with entire fee application process, includin g court approval, in order to be paid fro m estate property even when the professional has a lien on such property).
Here, Snyder did not seek permission to be employed by the estate, and no o fficer of the e state asked Snyder to perform services on behalf of the estate. In fact, Snyder would not have been eligible to be employed by the estate because he is no t "disinterested" in accordance with 11 U.S.C. § 327 (1994). See Pierce v. Aetna Life Ins. Co. (In re Pierce ) , 809 F.2d 1356, 1363 (8th Cir. 1987) ("[U]nder Section 327(a), an attorney may be disqualified not only because he or she is not disinterested, but also because the attorney holds an 'interest adverse to the estate.' 11 U.S.C. § 327(a). . . . [A]n attorney's pre-p etition mortgage on the debtor's real estate constitutes an 'adverse interest' under Section 327(a)."). Therefore, because denial of compensation is within the cour t's discretion, see id. ; 11 U.S.C. § 328(c) (1994), and because we perceive no abuse of dis cretion, we affirm the bankruptcy court's and district court's decisions that Snyder is not entitled to compensation for services rendered post-petition.
C. The Bankruptcy Court Did Not Err in Awarding Snyder Compens ation in the Amount of $4,348.80 for Pre-Petition Nonbankruptcy Legal Services. Snyder arg ues that the bankruptcy court erred by (1) only awarding hi m $4,348.80 for his pre-petition nonbankruptcy legal services; (2) not awarding hi m interest and pro tection/collection fees and costs under 11 U.S.C. § 506(b) (1994); and (3) n ot attaching his lien, to the extent it is valid, to Debtor's $8,000 homestea d exemption in the real property. We disagree.
First, w e find no reason to disturb the bankruptcy court's finding of fact tha t Snyder was entitled to $4,348.80 for pre-petition tax work. Snyder's time records-11-

reflect this amount and support that the bankruptcy court did not clearly err in awarding this sum. We also affirm the bankruptcy court's con clusion that Snyder's lien in the real pro perty was limited to the pre-petition tax services as the plain language of th e Agreement so stipulated. See Snyder's App. at 103, ¶ ¶ 1-3, 17.
Second, we find that the bankruptcy court did not err in refusing to award Snyder interest and protection/collection costs on his pre-petition lien despite the Note an d Deed of Trust's provision for such costs. The Bankruptcy Code provides that:
(a) Any a ttorney representing a debtor in a case under this title, or i n connection with such a case, . . . shall file with t he court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition. . . . (b) If such compensation exceeds the reasonable value of any suc h services, the court may cancel any such agreement. . . .
11 U.S.C. § 329 (1994). Section 329 requires the attorney to show that the agree d compensation for the legal services is reasonable. See In re Rheuban , 121 B.R. 368, 385 (Bankr. C.D. Calf. 1990). We conclude that § 329 auth orized the bankruptcy court to a ward Snyder the fee it deemed appropriate for the pre-petition legal service s perfo rmed

in connection with Debtor's bankruptcy proceeding regardless of th e existence of the Agreement, Note , and Deed of Trust and the provision for interest and protection/collection costs. Accordingly, because Snyder has failed to m ake the required showi ng, we find that allowing Snyder any further compensation would exceed th e reasonable value of his services.
Third, we turn to the issue of Snyder's claimed interest in Debtor's homestea d exemption. As of the petition date, the rights in Debtor's exemption were determined. See Armstrong v. Peterson ( In re Peterson) , 897 F.2d 935, 937 ( 8th Cir. 1990). Neither party disputes that Debtor was entitled to an $8,000 homestead exemption-12-

pursuant to Mo. Rev. Stat. § 513.475 (1994). However, Snyder apparently contend s that Debtor's homestead exemption is valid against all creditors except Snyder. W e disagree. Pursuant to Fed. R. Bankr. P. 4003(b), the truste e and creditors have the right to object to the claimed exemptions within thirty days after the conclusion of the first creditors' meeting. Unless such an objection is filed, the property claimed as exemp t by the debtor is exempt. See In re Stanley , 143 B.R. 900, 903 (Bankr. W.D. Mo

. 1992). In the present case, the first meeting of creditors concluded on December 31, 1994; therefore, Snyder is time-barred from objectin g to Debtor's homestead exemption as applied against Snyder.

D. Th e Bankruptcy Court Did Not Err in Awarding Snyder $1000 for Pre

pe tition Bankruptcy Matters and in Reducing This Award in the Same Amount Because of Snyder's Conflict of Interest with the Debtor. From our best analysis of Snyder 's convoluted argument, we discern that Snyder contends that the b ankruptcy court erred in only awarding him $1000 in compensation for hi s pre-petition bankruptcy services. Apparently, Snyder claims that a majority of hi s pre- and post-petition bankruptcy services also constitute "tax matters," ar e reasonable and nec essary expenses, and are secured by the Note and Deed of Trust as Snyd er has previously argued. Therefore, pursuant to the Bankruptcy Compensatio n Statement that provides that Snyder be p aid at the rate of $120 per hour, Snyder claims that he should have received compensation based on this hourly rate. However, we find Snyder's argument to be without merit.

As already discussed, we determined that Snyder's lien was only valid as to his pre-petition tax services. The bankruptcy court properly concluded that any other nontax s ervices constituted unsecured pre-petition debt. The bankruptcy court, under § 329(a), had the p ower to review Debtor's transactions with his attorney Snyder. If the bankruptcy court found that such compensation paid or promised to be paid to th e attorney exceeded the reasonable value of such services, the court could cancel anySnyder also argues that, as the attorney for a debtor in a Chapter 7 case a s 8 opposed to an attorney for the estate or a debtor-in-possession, the Bankruptcy Code's ethic al standards should not apply to him. However, we reject this position. As w e previously determined, upon filing of the bankruptcy petition, the unencumbere d portion of Debtor's real property became estate property. Therefore, Snyder mus t comply with the applicable Code guidelines in order to receive compensation for his post-petition le gal services from estate assets. See In re Independent Sales Corp. , 73 B.R. 772, 774-775 (Bankr. S.D. Iowa 1987) (noting that a retainer obtained by th e debtor's attorney prior to filing the petition for relief is he ld in trust to the extent it is for services to be rendered during the case and until al lowed by the court and ordered paid pursuant to sect

ions 330 and 331, and further indicating that section 330(a) applies to a Chapter 7 case). See also Sturgeon State Bank v. Perkey ( In re Perkey) , 194 B.R. 846, 849-50 (Bankr. W.D. Mo. 1996) (finding, in a Chapter 7 case, that the debtor' s atto rney must satisfy both the ethical requirements set forth in the Model Rules o f Professional Conduct and § 327 of the Bankruptcy Code). -13- such agreement or ord er the return of any such payment to the extent the payment was excessive. See § 329(b). Considering the lack of complexity and the customary legal fees that are awarded in this community for planning, preparing, an d filing the necessary schedules and petition for a Chapter 7 case, the bankruptcy court did not err in awarding Snyder $1000 as a reasonable fee for his pre-petition bankruptcy services.
Snyder a lso disputes the bankruptcy court's imposition of sanctions against him in the amou nt of $1000 for a conflict of interest with Debtor pursuant to Rule 9011

. Snyder contends that the bankruptcycourt never informed him of this apparent conflict of interest and never gave Snyder an opportunity to defend against this charge, which allegedly violated Snyder' s due process rights. Snyder also contests the court's finding that a conflict of interest existed. Once again, we disagree. 8
First, we find that Snyder did have notice that the bankruptcy court coul d potentially award sanctions against Snyder for a conf lict of interest with Debtor. At the August 24, 1995 hearing before the bankruptcy court, Trustee informed the court and Snyder that he was "investigat[ing] whether grounds exist to file a motion forWe note that Rule 9011 was amended on April 11, 1997, with the amendments 9 having an effective date of December 1, 1997. Se e 28 U.S.C. 2075, H.R.Doc. No. 70, 105th Cong., 1st Sess. 87- 96 (1997). Because the relevant sanction ord ers arose under former Rule 9011, amended Rule 90 11 does not have implications in the present case. -14- sanctions." Bankr. Hr'g Tr. of August 24, 1995 at 6. On Augus t 31, 1995, Trustee filed
a Rule 9011 Motion for Imposition of Sanctions. Finally, Snyder himself admitted in his deposition that he might have an adverse interest with the bankruptcy estate. See Snyder Dep. at 12-13. Therefore, as Snyder clearly had notice and an opportunity to defend a gainst the potential sanctions charge, Snyder's due process rights were no t violated.
Turning to the propriety of the bankruptc y court's $1000 sanction against Snyder for his conflict of interest, Rule 9011(a) provides: 9
Every p etition . . . filed in a case under the Code on behalf of a party represented by an attorney . . . shall be signed by at least on e attorney of record. . . . T he signature of an attorney or a party constitutes . . . that to the best of the attorney's . . . knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law. . . . I f a document is signed in violation of this rule, the co urt on motion or on its own initiative, shall impose on th e person who signed it . . . an appropriate sanction, which may include an order to pa y to the other party or parties the amount of the reasonabl e expenses incurred because of the filing of the document, including a reasonable attorney's fee.
The language of Rule 9011 closely tracks t he language of Fed. R. Civ. P. 11, and cases interpreting Rule 11 are applicable to Rule 901 1 cases. See Grunewaldt v. Mutual Life Ins. Co. of New York (In re Coon es Ranch, Inc.) , 7 F.3d 740, 742 n.4 (8th Cir. 1993). "[T]he established standard for imposing sanctions is an objective determination o f whe ther a party's conduct was reasonable under the circumstances." In re Armwood ,Sn yder also attempts to characterize Trustee's motion and the district court' s 10 order as a "motion and order for attorney's fees and cost s" as opposed to a "motion and order for sanctions." However, we reject this argument as completely lack ing any merit and not warranting further discussion. -15- 175 B.R. 779, 788 (Bankr. N.D. Ga. 1994). "We apply an ab use-of-discretion standard of review in all aspects of Rule 11 (and by analogy, Rule 9011) cases." In re Coones Ranch , 7 F.3d at 743.

A p plying these standards, we conclude that the bankruptcy court did not abuse its disc retion by sanctioning Snyder for his conflict of interest with Debtor. As w e previously noted, Snyder's security interest was limited to the value of his pre-petition legal services for tax matters. Sny der's assertion that his lien extended to other matters was not supported by t

he law or a good faith argument for its modification or reversal. When Snyder argued that his lien extended to his other non-tax services, Snyder' s interests directly conflicted with Debtor 's interest to pay his non-dischargeable claim to the Inter nal Revenue Service. It is appropriate to deny or reduce compensation to a professional that represents a party (here, Snyder represented himself as a creditor of Debtor ) who has an interest adverse to the bankruptcy estate. See In re Pierce , 80 9 F.2d at 1362 -63. Therefore, we find that the bankruptcy court did not abuse it s discretion in sanctioning Snyder for a conflict of interest as Snyder's actions were not reasonable under the circumstances.

E. The District Court Did Not Err in Sanctioning Snyder for His Frivolou s Appeal. Snyder argu es that the district court erred in sanctioning him for his allege d frivolous appeal to the district court, in part, because Trustee's motion failed t o 10 comport with Rule 11's requirement that the motion specifically describe the conduc t alleged t o have violated such rule, and the district court's order failed to mak e sufficiently detailed findings of fact and conclus ions of law. In addition, Snyder asserts-16-

that hi s preceding legal arguments demonstrate that the appeal was not frivolous. We disagree.
In the present case, Trustee submitted to the district court a seven page legal brief enti tled"Suggestions in Support of Motion for Sanctions." This brief detailed tha t Truste e was pursuing sanctions against Snyder, pursuant to Rule 9011, because th e appeal was n ot grounded in fact nor by existing law or a good faith argument for a n extens ion, modification, or reversal of the existing law. The Trustee's brief, in short , highlights Snyder's conflict of interest in representing Debtor a nd in attempting to apply his lien to the non-tax and post-petition legal services. As such, we find that Trustee's motion and brief fully comply with Rule 9011's specificity requirements.

Similar ly, we conclude that the district court did not abuse its discretion i n granting Trustee's unopposed motion and sanctioning Snyder in the amount of $4,352.80 fo r Trustee's attorney fees and double costs in defending the frivolous appeal in th e district co urt. Although a more thorough analysis might be illuminating, the distric t court o rder adopted Trustee's rationale for the imposition of sanctions by implicatio n and provided Snyder with sufficient noti ce of the rationale underlying the sanctions. In th is case, the district court did not abuse its discretion as sanctions were appropriat e bec ause Snyder's appeal was not supported by the evidence nor in conformance with ap plicable law, nor a good faith argument for its extension, modification, or reversal

. As our disposition in this case reveals, Snyder still appears to not understand the law applicable to his case. Therefore, we affirm the district court's order sanctioning Snyder for his frivolous appeal.

III. CONCLUSION
We have carefully examined each o f the remaining contentions raised by Snyder
on appeal and find them to be without merit. For the reasons set forth in this opinion, we affirm the bankruptcy court order and district court orders. In addition, we note-17-

Trustee's request, see Briefs of Appellee at 34 (No. 97-1221) and 12 (No. 97 -2300), that we sanction S nyder further in the amount equal to the attorney fees and costs incurred by the bankruptcy estate in defense of Snyder's frivolous post-judgment motions an d appeal to this court. Pursu ant to Rule 38 Fed. R. App. P., we must provide reasonable notice to coun sel that we are contemplating sanctions and give counsel an opportunity to respond. See id. (the 1994 Advisory Committee Notes indicate that a statement in
a party' s brief moving for sanctions does not provide sufficient notice). Therefore , Snyder shall submit a response to the questio n of the propriety of sanctions imposed by this court against him to the clerk of this court within fifteen days of the date of thi s opinion

. Trustee shall also submit to the clerk of this court within fifteen days a n accounting of attorney's fees and costs incurred in this appeal.
A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.