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FILED

JUL 21 2016

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-15-1330-KiKuF

)

WILLIAM ROBERT NORRIE, ) Bk. No. 2:13-bk-25751-BR

)

Debtor. ) Adv. No. 2:15-ap-01362-BR

 )

)

WILLIAM ROBERT NORRIE, )

)

Appellant, )

)

v. ) M E M O R A N D U M1

)

KELLY MALLEN; JOHN PULOS, )

)

Appellees. )

______________________________)

Submitted Without Oral Argument2

on June 23, 2016

Filed - July 21, 2016

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Barry Russell, Bankruptcy Judge, Presiding

 

Appearances: Appellant William Robert Norrie, pro se, on brief;

Paul R. Burns on brief for appellees Kelly T.

Mallen and John M. Pulos.

 

Before: KIRSCHER, KURTZ and FARIS, Bankruptcy Judges.

1 This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have, it has no precedential value. See 9th Cir. BAP Rule 8024-1.

2 On May 18, 2016, the Panel entered an order determining

this appeal was suitable for disposition without oral argument. 

Fed. R. Bankr. P. 8019.
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Appellant, chapter 73 debtor William Robert Norrie, appeals a

judgment granting the motion of Kelly T. Mallen and John M. Pulos

("Creditors") to enforce a prior settlement between Creditors and

the chapter 7 trustee and dismissing Debtor's motion to set aside

a default judgment entered by the state court in 2010. Creditors

have separately moved for sanctions against Debtor under

Rule 8020, contending that the appeal is frivolous. We AFFIRM and

GRANT the sanctions motion. 

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY4

A. Events leading up to Debtor's bankruptcy filing 

Debtor's case has a long and contentious history. Creditors

were tenants of Debtor, leasing a residence located in Manhattan

Beach, California. In August 2010, Creditors sued Debtor, his

entity Norrie Corporation, Mark Bliss and others in state court

for breach of written contract, breach of the implied covenant of

good faith and fair dealing, forcible entry and preliminary

injunction (the "Landlord/Tenant Action"). Creditors alleged,

among other things, that Debtor had engaged in acts of forcible

entry into the residence and had breached the lease agreement by

engaging in illegal rent skimming. On November 15, 2010,

Creditors obtained a default judgment against Debtor, Norrie

Corporation and Bliss, jointly and severally, for $18,585 (the

3 Unless specified otherwise, all chapter, code and rule

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. The

Federal Rules of Civil Procedure are referred to as “Civil Rules.”

4 We have exercised our discretion to take judicial notice

of the bankruptcy court's docket and the imaged documents attached

thereto. See O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert,

Inc.), 887 F.2d 955, 957-58 (9th Cir. 1989).

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"Landlord/Tenant Judgment"). 

In January 2012, Creditors filed and recorded an abstract of

judgment for the Landlord/Tenant Judgment, which had grown to

$31,530.00 including interest. In February 2012, Creditors filed

an Acknowledgment of Satisfaction of Judgment as to Bliss, stating

that the Landlord/Tenant Judgment had been satisfied in full. 

Creditors were later awarded postjudgment attorney's fees of

$115,000 in connection with the Landlord/Tenant Judgment. 

In response to the Landlord/Tenant Action, Debtor filed an

unlawful detainer action against Creditors in state court in or

around October 2010. It appears that action became part of the

settlement between Creditors and Trustee. 

In June 2012, Creditors filed a second civil action against

Debtor and Norrie Corporation in state court (the "Fraud Action"). 

A copy of the complaint is attached to Creditors' initial proof of

claim, Claim 1-1. In that case, Creditors asserted fraud and

specific performance claims in connection with their purchase of

the Manhattan Beach residence from Debtor. In an attempt to

settle the Landlord/Tenant Judgment postjudgment, the parties

agreed that Creditors would pay Debtor $88,000, forgive the

Landlord/Tenant Judgment and provide Debtor with other

consideration in exchange for Debtor's transfer of the residence

to Creditors. Creditors alleged that they had performed under the

agreement, but that Debtor had not performed and that he never

intended to. The Fraud Action was pending when Debtor filed his

bankruptcy case. Creditors pursued that action before the

bankruptcy court (Adv. No. 2:13-01996), which ultimately entered

terminating sanctions against Debtor for discovery violations and

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a default judgment in favor of Creditors in June 2014. 

B. The bankruptcy case and Trustee's settlement with Creditors 

Debtor filed a chapter 7 bankruptcy case on June 17, 2013.5

Brad D. Krasnoff was appointed as trustee. Creditors filed an

unsecured nonpriority claim for $31,530. Their claim was amended

to include the postjudgment attorney's fees of $115,000 awarded in

the Landlord/Tenant Action and a claim for $356,300.78 in damages

respecting the Fraud Action, for a total claim of about $480,000. 

In January 2014, the bankruptcy court authorized Trustee to 

sell Debtor's interest in Norrie Corporation to Creditors and to

transfer to Creditors by quitclaim deed whatever interest Debtor's

estate had in the Manhattan Beach residence. Debtor appealed the

sale order to the BAP, which dismissed for lack of standing. 

In October 2014, Trustee filed a motion to compromise

controversy resolving the claims of Creditors against the estate

("Settlement Motion"). Under the proposed settlement agreement,

Creditors would hold an allowed general unsecured nonpriority

claim for $695,222.74. Upon payment of Creditors' claim, whether

in full or in part, Creditors agreed to release any and all claims

against Debtor in the Landlord/Tenant Action, the Fraud Action,

and in the bankruptcy case. The agreement contained mutual

releases, wherein the parties agreed to release any and all

prepetition claims against each other (plus any of Debtor's claims

5 This is not to be confused with Norrie Corporation, which

has filed at least two chapter 11 cases in the Central District of

California, one in May 2010 (an alleged involuntary case filed by

Debtor's family members and dismissed in January 2011 for failure

to prosecute, case no. 2:10-29146) and the other in February 2012

(dismissed in May 2012 with a 180-day refiling bar, case no.

2:12-15163).

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against Norrie Corporation) arising from the Landlord/Tenant

Action, the Fraud Action and "any other matter or claim that arose

or transpired between the parties and that occurred prior to the

[petition date] . . . and all other matters expressly or impliedly

raised or related to therein." The parties also expressly waived

all rights to any unknown claims against the other. The

settlement agreement excluded any future sanctions actions against

Debtor "related to any action currently pending in any State or

Federal Court." Exclusive jurisdiction was reserved for the

bankruptcy court to resolve any dispute under the agreement. 

According to the attached proof of service, Debtor was served with

the Settlement Motion. 

Without any opposition, the bankruptcy court approved the

Settlement Motion as proposed on November 26, 2014 ("Settlement

Order"). No appeal was taken. 

In February 2015, the bankruptcy court entered an order

finding Debtor in contempt of two prior bankruptcy court orders

respecting his failure to produce documents and to appear for a

Rule 2004 examination and ordering Debtor's arrest. During this

same time, Debtor had sought sanctions against Creditors for

filing a frivolous motion for relief from the automatic stay, when

the stay had long been terminated. In its March 12, 2015 order

denying Debtor's motion, the bankruptcy court found that while it

had merit, Debtor's request for sanctions was denied based on his

"disentitled fugitive" status. Because Debtor had recently fled

to England in response to the contempt order to avoid arrest, the

court determined that Debtor's fugitive status precluded him from

bringing the motion. The court affirmed its "disentitled

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fugitive" determination in an order entered on April 30, 2015,

which denied Debtor's motion to purge his contempt. 

C. Debtor's Motion to Set Aside Void Judgment; Creditors' Notice

of Removal; Debtor's Motion for Remand; Creditors' Motion to

Enforce the Settlement Agreement and Dismiss the Motion to

Set Aside Void Judgment 

On June 16, 2015, Debtor filed, pro se, in the Superior Court

of California Los Angeles his Motion to Set Aside Void Judgment,

seeking to set aside the Landlord/Tenant Judgment ("Motion to Set

Aside"). Debtor claimed that Creditors obtained the judgment by

default in November 2010 by intentionally failing to serve both

Debtor and Norrie Corporation with the complaint and summons. 

According to Debtor, the filed proofs of service purported to show

that Debtor was served (individually and as agent for Norrie

Corporation) at the same time in two different locations. 

Clearly, argued Debtor, he could not have been in two places at

once. Then, in what Debtor called a "lazy attempt to correct the

patently dishonest Proof of Service," Creditors' counsel filed a

corrected proof of service, claiming to have served both Debtor

and Norrie Corporation at the same time at Debtor's residence. 

However, later in a Memorandum of Costs, Creditors' counsel stated

that Norrie Corporation had been served at its place of business,

not at Debtor's residence. Debtor alleged that both he and Norrie

Corporation were unrepresented at the time of the suit and that he

and his new attorney did not discover the lack of service of

process until July 2014. 

In addition to the lack of service, Debtor contended that the

Landlord/Tenant Judgment entered in November 2010 violated the

automatic stay, as he was in bankruptcy between October 2010 and

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January 2011.6 Therefore, it was void. Finally, Debtor contended

that the Landlord/Tenant Judgment was satisfied by Bliss, so

Debtor was no longer liable for it. 

As for any alleged damages based on the Landlord/Tenant

Judgment, Debtor contended, among other things, that he had been

defrauded of ownership of Norrie Corporation, that the Manhattan

Beach residence had been "stolen" from him, and that Creditors had

been using the judgment to harass Debtor's family members and

obtain "illegal" depositions from them, as well as deceive Trustee

about their fraudulent proof of claim. 

On July 8, 2015, Creditors timely filed their Notice of

Removal under 28 U.S.C. § 1452. 

The bankruptcy court then issued an order to show cause why

removal of the Motion to Set Aside was proper and why the court

should not abstain and remand the case. A status conference was

set for August 25, 2015. 

Creditors' response to the OSC included copies of: their

abstract of judgment for the Landlord/Tenant Judgment; the order

awarding them the $115,000 in attorney's fees and the dismissal of

Debtor's appeal of that order; the settlement agreement with

Trustee and Settlement Order; the Motion to Set Aside; the

involuntary petition filed in Debtor's individual chapter 11 case

in October 2010; excerpts of deposition transcripts from Debtor's

family members taken in England in July 2014; and what Creditors'

counsel referred to as the bankruptcy court's findings regarding

6 This case too was an involuntary chapter 11 case allegedly

filed by Debtor's family members, which was also dismissed for

lack of prosecution. Case no. 2:10-53949, filed October 13, 2010.

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Creditors' previous motion to enforce the settlement agreement

entered in March 2015. Creditors disputed Debtor's contention

that he only discovered in July 2014 he was never served with the

original complaint and summons. Debtor had been involved in

multiple proceedings over the Landlord/Tenant Judgment since 2010. 

Further, the Landlord/Tenant Judgment had been final for years and

all of Debtor's appeals had been dismissed. As for any alleged

violation of the automatic stay, Creditors contended that the

October 2010 involuntary bankruptcy filing was a sham because all

of the petitioning creditors (Debtor's mother, father and brother)

testified under oath they had no knowledge of the bankruptcy case

or of the addresses Debtor wrote in for their alleged residences

in the involuntary petition. Finally, Creditors disputed Debtor's

standing to bring the Motion to Set Aside; Debtor's prepetition

claims belonged to Trustee, and such claims were settled via the

Settlement Order. 

Creditors contended that removal of the Motion to Set Aside

was proper because: (1) the motion required interpretation and

enforcement of the settlement agreement, over which the bankruptcy

court had exclusive jurisdiction; and (2) Debtor had only filed

the "improper and frivolous motion" in state court to frustrate

and evade the bankruptcy court's fugitive disentitlement order. 

Creditors requested attorney's fees per the terms of the

settlement agreement. 

In conjunction with their response to the OSC, Creditors

moved to enforce the settlement agreement and requested dismissal

of Debtor's Motion to Set Aside ("Motion to Enforce Settlement and

Dismiss"). The motion set forth the same arguments and exhibits

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as in Creditors' response to the OSC.

Debtor filed his motion for remand on August 3, 2015 ("Motion

for Remand"). He contended that remand was mandatory and/or

equitable because the Landlord/Tenant Action involved state law

claims and the default Landlord/Tenant Judgment had been entered

by the state court. Debtor contended that the settlement

agreement was voidable because it was based upon the fraudulent

Landlord/Tenant Judgment, and he disputed Creditors' assertion

that he lacked standing to report fraud to the court. Debtor

reiterated his arguments that he was never served with the

original summons and complaint for the Landlord/Tenant Action and

that the entry of the Landlord/Tenant Judgment had violated the

automatic stay. He also disputed the admissibility of the

deposition transcripts of his family members submitted by

Creditors, arguing that Creditors had "no standing" to depose

them. Finally, Debtor noted that the doctrine of fugitive

disentitlement was a discretionary one, and he requested that the

bankruptcy court not apply it given the seriousness of his fraud

claims, particularly since he had made good faith attempts to

purge the contempt. 

Trustee filed a declaration in opposition to the Motion for

Remand. He contended that the settlement agreement and Settlement

Order remained valid and binding between the parties and that it

was not subject to collateral attack by Debtor. 

Creditors also opposed Debtor's Motion for Remand. They

argued that Debtor lacked standing to bring the motion based on

the Settlement Order, a final order which settled all known and

unknown prepetition claims and which only the bankruptcy court

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could review. Creditors contended that the bankruptcy court could

summarily dismiss Debtor's Motion to Set Aside on the basis of its

power to enforce the settlement agreement, as its terms were not

in dispute. 

Creditors also contended that remand was impermissible

because any alleged violation of the automatic stay is a "core"

proceeding that must be heard by the bankruptcy court. On that

score, Creditors argued that Debtor's claim was frivolous; it was

clear that Debtor had forged his family members’ names and

fraudulently filled in information on the involuntary petition. 

In any event, argued Creditors, any stay violation claim from

November 2010 was a prepetition claim settled and released in the

settlement agreement between Trustee and Creditors.

Creditors reiterated their argument disputing Debtor's claim

that he was never served with the original summons and complaint. 

Contrary to Debtor's contention, he was not pro se at the time;

his counsel had acknowledged the filing of the Landlord/Tenant

Action in October 2010 phone and email communications with

Creditors' counsel. In fact, Debtor's counsel had asked for an

extension to file the answer. Creditors argued that Debtor's

contention that he failed to receive notice of the Landlord/Tenant

Action before the subsequent default judgment was entered was

further undermined by the fact that the Landlord/Tenant Action was

discussed in the unlawful detainer action Debtor had filed against

Creditors around that same time. In addition, in a bankruptcy

case Debtor had filed on behalf of Norrie Corporation in 2011 in

the Southern District of California, he listed Creditors in

Schedule F as holding an unsecured claim for $32,000, and he

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listed the Landlord/Tenant Action in the Statement of Financial

Affairs. 

As for the alleged incorrect proof of service, Creditors

argued that the document Debtor provided as evidence of lack of

service was an unfiled, nonconformed proof of service for Norrie

Corporation that contained a typographical error as to the address

but not as to the date of service. Creditors explained that the

address error was corrected in the proof of service actually filed

and entered on the docket. In any event, no proof of service

error existed as to Debtor, and he lacked standing to complain of

any service errors for Norrie Corporation; he was no longer a

stockholder of that entity. Finally, Creditors argued that no

ground existed to relieve Debtor of his disentitled fugitive

status. He had produced only a small fraction of the documents he

had been repeatedly found in contempt for not producing. 

Debtor then filed his opposition to the Motion to Enforce

Settlement and Dismiss. This opposition was essentially identical

to his Motion for Remand, raising the same issues and arguments. 

D. Hearing on all pending motions and bankruptcy court's ruling

Debtor did not appear at the combined hearing on the Notice

of Removal, the Motion for Remand and the Motion to Enforce

Settlement and Dismiss. As for the Notice of Removal, the

bankruptcy court stated that it was keeping the Motion to Set

Aside and asked Creditors' counsel to prepare an order. The court

did not articulate any findings as to why removal of the Motion to

Set Aside was proper. It also summarily denied the Motion for

Remand. 

Finally, the bankruptcy court granted the Motion to Enforce

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Settlement and Dismiss, noting that the Settlement Order was

binding, that Debtor's Motion to Set Aside was frivolous and

finding that Debtor had actual notice of the Landlord/Tenant

Action. The court also awarded Creditors their requested

attorney's fees. Finally, the court noted that although it was

ruling on the merits, Debtor's status as a disentitled fugitive

was another ground for dismissing his Motion to Set Aside. 

Counsel for Creditors agreed to submit the orders and proposed

findings and conclusions for the court to consider. 

The bankruptcy court entered its written findings of fact and

conclusions of law for the Motion to Enforce Settlement and

Dismiss on September 14, 2015. Determining that it had

jurisdiction over the settlement agreement and final Settlement

Order, the court found that Debtor's claims of lack of service of

process for the Landlord/Tenant Action, satisfaction of the

Landlord/Tenant Judgment by Bliss and any alleged violation of the

automatic stay were part of the settlement agreement between

Trustee and Creditors; thus, any such prepetition claims relating

to that action were barred. The court rejected Debtor's claim of

lack of service of process as not credible and found that Debtor

had been served with the summons and complaint. Finally, the

court awarded Creditors their requested attorney's fees of

$18,387.50 as contemplated by the settlement agreement, finding

that Debtor's Motion to Set Aside was frivolous. No findings were

provided with respect to the Notice of Removal or the Motion for

Remand.

Also on September 14, 2015, the bankruptcy court entered two

orders: an order granting Creditors' Notice of Removal; and an

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order denying Debtor's Motion for Remand. 

Debtor filed a notice of appeal of the bankruptcy court's

"findings and conclusions" on September 28, 2015. As for the

Motion to Enforce Settlement and Dismiss, the bankruptcy court

entered a separate judgment on October 14, 2015. Thus, Debtor's

premature notice of appeal was deemed timely once the judgment was

entered on October 14.7 Rule 8002(a).

II. JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334

and 157(b)(2)(A). We have jurisdiction under 28 U.S.C. § 158.

III. ISSUES 

1. Does Debtor have standing to challenge the judgment

respecting the Motion to Enforce Settlement and Dismiss?

2. Did the bankruptcy court abuse its discretion in granting the

Motion to Enforce Settlement and Dismiss and in sanctioning

Debtor?

3. Is an award of sanctions against Debtor warranted under

Rule 8020 for a frivolous appeal? 

IV. STANDARDS OF REVIEW

Questions of standing are reviewed de novo. Motor Vehicle

Cas. Co. v. Thorpe Insulation Co. (In re Thorpe Insulation Co.),

677 F.3d 869, 879 (9th Cir. 2012).

We review the bankruptcy court's enforcement of a settlement

7 Debtor believes that he is also appealing the order

denying remand, but we disagree. Debtor appealed only the

"findings and conclusions" entered on September 14, 2015, and they

do not make any direct findings as to the Motion for Remand,

noting only that it was dismissed by separate order. The reasons

why the Motion for Remand was denied are contained in that order,

which Debtor did not appeal.

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agreement for abuse of discretion. See Callie v. Near, 829 F.2d

888, 890 (9th Cir. 1987). All aspects of a bankruptcy court's

award of sanctions are reviewed for an abuse of discretion. 

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990). The

court abuses its discretion if it applied the wrong legal standard

or its findings were illogical, implausible or without support in

the record. TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d

820, 832 (9th Cir. 2011).

V. DISCUSSION 

A. Debtor lacks standing to pursue this appeal as it relates to

the judgment for the Motion to Enforce Settlement and Dismiss

but not as to the sanctions awarded.

1. Requirements for standing 

Creditors contend that Debtor lacks standing to challenge the

bankruptcy court's decision to enforce the settlement agreement

and dismiss his motion to set aside the default judgment. Because

standing is a jurisdictional requirement and open to review at all

stages of the litigation, we must consider the issue once raised. 

Nat'l Org. For Women, Inc. v. Scheidler, 510 U.S. 249, 255 (1994);

Ctr. for Biological Diversity v. U.S. Fish & Wildlife Serv.,

807 F.3d 1031, 1043 (9th Cir. 2015). 

To have standing to appeal a decision of the bankruptcy

court, an appellant must show that it is a "person aggrieved" who

was directly and adversely affected pecuniarily by an order of the

bankruptcy court. Darby v. Zimmerman (In re Popp), 323 B.R. 260,

265 (9th Cir. BAP 2005) (internal quotation marks and citations

omitted). A "person aggrieved" is someone whose interest is

directly affected by the bankruptcy court's order, either by a

diminution in property, an increase in the burdens on the

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property, or some other detrimental effect on the rights of

ownership inherent in the property. Id. The burden is on Debtor

to establish his standing for this appeal. Ctr. for Biological

Diversity, 807 F.3d at 1043. 

2. Enforcement of settlement agreements

A bankruptcy court, as a court of equity, has the power to

summarily enforce settlements. City Equities Anaheim, Ltd. v.

Lincoln Plaza Dev. Co. (In re City Equities Anaheim, Ltd.),

22 F.3d, 954, 958 (9th Cir. 1994). However, the bankruptcy court

has no discretion to enforce a settlement where material facts

concerning the existence or terms of the settlement agreement are

in dispute, or where a settlement agreement was procured by fraud;

an evidentiary hearing must be held to resolve such issues. Id.

at 957-58; Callie, 829 F.2d at 890. 

Because a motion for summary enforcement of a settlement is

akin to a motion for summary judgment, it should be treated as

such. In re City Equities, Ltd., 22 F.3d at 958-59 (citing

Tiernan v. Devoe, 923 F.2d 1024, 1031-32 (3d Cir. 1991) (likening

motion to enforce settlement to motion for summary judgment)). 

Rule 7056 incorporates Civil Rule 56, which provides for summary

judgment where no material factual dispute exists. Although

Debtor would argue to the contrary, no material factual dispute

respecting the settlement agreement existed. Debtor was unable to

put any material facts in dispute because he lacked standing to

bring the claims raised in his Motion to Set Aside, which were

covered by the settlement agreement.

3. Analysis

Under § 541(a)(1), a bankruptcy estate consists of "all legal

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or equitable interest of the debtor in property as of the

commencement of the case."8 This includes legal claims or causes

of action held by the debtor, such as prepetition tort claims. 

Sierra Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705,

707 (9th Cir. 1986) (citing United States v. Whiting Pools, Inc.,

462 U.S. 198, 205 & n.9 (1983)). As a result, when Debtor filed

his chapter 7 case, his estate became the owner of all of his

property, including claims or interests that accrued as a result

of his prepetition litigation with Creditors. Because the legal

claims and causes of action are part of the chapter 7 estate,

absent abandonment, Trustee is the real party in interest with

exclusive standing to assert, enforce or settle them. He settled

them. 

In the settlement agreement between Trustee and Creditors,

the parties agreed to release any and all prepetition claims

against each other arising from the Landlord/Tenant Action, the

Fraud Action and "any other matter or claim that arose or

transpired between the parties and that occurred prior to the

[petition date] . . . and all other matters expressly or impliedly

raised or related to therein." They even agreed to waive any and

all unknown prepetition claims against the other. Therefore, the

claims that Debtor attempted to raise in his Motion to Set Aside –

i.e., lack of service of process of the Landlord/Tenant Action,

violation of the automatic stay in November 2010 and satisfaction

of the Landlord/Tenant Judgment by Bliss — are all prepetition

claims which belonged to the estate and which were settled by

8 Section 541(b) lists exclusions from this broad

definition, none of which are asserted to be applicable here.

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Trustee, the estate's representative. Thus, Debtor lacked

standing to raise any of these claims before the bankruptcy (or

any other) court. 

Consequently, Debtor lacks standing to appeal the bankruptcy

court's decision, at least with respect to its ruling to enforce

the settlement and dismiss his Motion to Set Aside, because he was

not directly and adversely affected pecuniarily by the judgment.9 

However, Debtor does have standing to appeal the sanction of

attorney's fees awarded to Creditors, because he has a direct

pecuniary interest in the outcome of that portion of this appeal. 

Kowalski-Schmidt v. Forsch (In re Giordano), 212 B.R. 617, 622

(9th Cir. BAP 1997), aff'd in part, rev'd in part on other grounds

by In re Giordano, 202 F.3d 277 (9th Cir. 1999) (Table) 1999 WL

1054726 (Nov. 19, 1999). The bankruptcy court awarded Creditors

$18,387.50 for attorney's fees and costs incurred in defending

against Debtor's Motion to Set Aside as a sanction for his

"frivolous" claims and, alternatively, awarded fees and costs

based on the attorney's fees clause in section 7.0 of the

settlement agreement. The court found the fee request to be

reasonable and granted it in full. 

Debtor makes no arguments with respect to the sanctions

award. Nonetheless, we conclude that the bankruptcy court did not

abuse its discretion. To support its determination that Debtor's

Motion to Set Aside was "frivolous" and sanctions were warranted,

the court found that (1) Debtor lacked standing to bring his

9 We take no position on the bankruptcy court's alternative

ruling that Debtor's Motion to Set Aside was dismissed due to his

status as a disentitled fugitive.

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alleged claims as they had been settled by Trustee, (2) his

allegation of lack of service of process four years after the fact

was false, (3) the involuntary chapter 11 case filed in October

2010 purportedly by Debtor's family members was a forgery, and

(4) therefore no stay violation could have occurred when the

Landlord/Tenant Judgment was entered on November 15, 2010. We

perceive no clear error in those findings that support the

sanctions award. In finding no clear error in the above findings,

we conclude it is unnecessary to consider the bankruptcy court’s

alternative ruling based on the attorney’s fees clause in

section 7.0 of the settlement agreement.

B. Sanctions against Debtor are warranted under Rule 8020. 

Finally, we consider Creditors' motion for sanctions against

Debtor for attorney's fees. Creditors contend that sanctions are

warranted because: (1) the appeal is frivolous as the results are

obvious; (2) Debtor's arguments of error by the bankruptcy court

are wholly without merit; and (3) Debtor's appeal improperly

requests that this panel validate the forged involuntary petition

and become Debtor's ally in committing bankruptcy fraud and

crimes. In sum, Creditors contend that the instant frivolous

appeal is merely a continuation of Debtor's extraordinary and

extensive abuse of bankruptcy law and the system. They contend

that sanctions are necessary to deter such conduct. 

Rule 8020(a) provides that "[i]f the . . . BAP determines

that an appeal is frivolous, it may, after a separately filed

motion . . . and reasonable opportunity to respond, award just

damages and single or double costs to the appellee." An appeal is

frivolous where the result is obvious or the appellant's arguments

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are wholly without merit. First Fed. Bank of Cal. v. Weinstein

(In re Weinstein), 227 B.R. 284, 297 (9th Cir. BAP 1998). 

Considering the record before us, we conclude that Creditors

are entitled to sanctions under Rule 8020. Debtor's appeal is

both meritless and frivolous, justifying the imposition of

sanctions. Debtor's arguments are not supported by specific

references to the record and are groundless. Much of his time was

spent arguing the merits of the Motion to Remand and the order

denying that motion, which are not before us. He also failed to

provide an accurate or complete description of the facts, which

distorts the record. His appendix is disorganized and incomplete. 

Finally, he utterly failed to address the most important issues: 

that he had standing to assert the claims he did in the Motion to

Set Aside and how the bankruptcy court erred in determining that

his claims were frivolous, a determination with which we do not

find error. See Maloni v. Fairway Wholesale Corp. (In re Maloni),

282 B.R. 727, 734 (1st Cir. BAP 2002) (when issuing sanctions,

Panel may consider whether appellant's arguments effectively

address the issues on appeal, fail to cite any authority, cite

inapplicable authority, make unsubstantiated factual assertions,

assert bare legal conclusions, or misrepresent the record). 

"If we determine that an appeal is frivolous, then damages

and single or double costs may be awarded to the appellee." 

Burkhart v. Fed. Deposit Ins. Corp. (In re Burkhart), 84 B.R. 658,

661 (9th Cir. BAP 1988). In conjunction with the sanctions

motion, Creditors' attorney Paul Burns filed a declaration stating

his hourly rate and the number of hours he spent defending against

Debtor's appeal and for the sanctions motion, for a total of 

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$19,687.50. He did not request costs. 

We exercise our discretion and GRANT Creditors' sanctions

motion and award Creditors their attorney's fees for this appeal. 

However, before we will award a dollar amount, Mr. Burns is

ORDERED to file with the BAP Clerk in Pasadena, CA, an affidavit

along with other records bearing upon the fees earned in this

appeal on or before August 4, 2016. Upon our review of these

records, the amount of the award shall be established by a

separate order. Taylor v. Sentry Life Ins. Co., 729 F.2d 652, 657

(9th Cir. 1984). 

VI. CONCLUSION

Debtor lacks standing to pursue this appeal as it relates to

the bankruptcy court's judgment for the Motion to Enforce

Settlement and Dismiss. However, because he is liable for the

sanctions the bankruptcy court issued, he has standing to pursue

that portion of this appeal. We find no error in the imposition

of sanctions. Accordingly, the judgment for the Motion to Enforce

Settlement and Dismiss is AFFIRMED. We further GRANT Creditors' 

sanctions motion under Rule 8020 for Debtor's frivolous appeal. A

separate order for that award will follow once the Panel receives

the required records from Mr. Burns.

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