Court Opinion

ID: 183782
Source: CourtListenerOpinion
Date Created: 2011-01-28 01:02:45+00
Date Added: 2024-06-11T17:26:05.095414
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             JAN 27 2011

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

In the Matter of: SOUTHERN                        No. 09-56292
CALIFORNIA SUNBELT DEVELOPERS,
INC.,                                             D.C. No. 8:06-cv-00269-DDP

              Debtor,
                                                  MEMORANDUM *
ORANGE BLOSSOM LIMITED
PARTNERSHIP; PEAR TREE LIMITED
PARTNERSHIP; BANYAN LIMITED
PARTNERSHIP; DON W. GRAMMER;
TRAILS END LIMITED PARTNERSHIP;
SHOWTHUNDER INC.; BIRCH
INTERNATIONAL LIMITED
PARTNERSHIP; DTG LIMITED
PARTNERSHIP; SLEVIN LIMITED
PARTNERSHIP, THOMAS W.
DRESSLER,

              Appellants,

       v.

IBT INTERNATIONAL, INC.;
SOUTHERN CALIFORNIA SUNBELT
DEVELOPERS,

              Appellees,

        *
        This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
UNITED STATES TRUSTEE,

            Trustee.

In the Matter of: IBT INTERNATIONAL,          No. 09-56293
INC.,
                                              D.C. No. 8:06-cv-00276-DDP
            Debtor,

DON W. GRAMMER; BANYAN LIMITED
PARTNERSHIP; PEAR TREE LIMITED
PARTNERSHIP; ORANGE BLOSSOM
LIMITED PARTNERSHIP; THOMAS W.
DRESSLER; DTG LIMITED
PARTNERSHIP; SLEVIN LIMITED
PARTNERSHIP; SHOWTHUNDER INC.;
TRAILS END LIMITED PARTNERSHIP;
BIRCH INTERNATIONAL LIMITED
PARTNERSHIP,

            Appellants,

       v.

IBT INTERNATIONAL, INC.,

            Appellee,

 and

UNITED STATES TRUSTEE,

            Trustee.

                 Appeal from the United States District Court
                    for the Central District of California

                                      2
                     Dean D. Pregerson, District Judge, Presiding

                           Submitted November 17, 2010 **
                               Pasadena, California

Before: SCHROEDER, FISHER, and N.R. SMITH, Circuit Judges.

        This is an appeal from an order of the district court awarding sanctions under

Rule 8020 of the Federal Rules of Bankruptcy Procedure. We have jurisdiction

under 28 U.S.C. § 158(d) and we affirm in part, vacate in part and remand.

        1.    Given that appellants raised both frivolous and nonfrivolous

arguments, the district court properly awarded partial sanctions, requiring

appellants to pay appellees’ attorney’s fees only with respect to the frivolous

arguments. See Gaskell v. Weir, 10 F.3d 626, 629-30 (9th Cir. 1993). Appellants

offer no authority for the proposition that partial sanctions should not be awarded

unless the court finds that frivolous arguments predominated over nonfrivolous

ones.

        2.    The district court’s finding that appellants mischaracterized the facts

and the law is not clearly erroneous. Appellants’ numerous claims that two

California state court decisions made findings that Dan Baer looted joint venture

         **
         The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

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assets are not supported by the record. Appellants also mischaracterized a pair of

Florida decisions setting aside fraudulent conveyances made by Tedder.

      3.     The district court also properly found that appellants’ challenge to

Judge Smith’s reconsideration of Judge Alberts’ fee order was frivolous. As the

district court explained, appellants “did not raise any legitimate arguments or

support for their appeal of the bankruptcy court’s decision to amend its original

judgment.”

      4.     The district court’s conclusion that appellants’ punitive damages

argument regarding Planned Parenthood of Columbia/Willamette Inc. v. American

Coalition of Life Activists, 422 F.3d 949, 962 (2005), was frivolous, however, was

in error. Appellants argued that a standalone punitive damages award under 11

U.S.C. § 303(i) would violate due process because the ratio of punitive to actual

damages would be infinite – and thus in excess of the 4:1 or 9:1 ratios suggested

by the Supreme Court in State Farm Mutual Automobile Insurance Co. v.

Campbell, 538 U.S. 408, 425 (2003). The district court concluded that this

argument was frivolous because, in its view, appellants had misstated the holding

of Planned Parenthood. That finding is not supported by the record. Furthermore,

appellants’ novel “infinite ratio” argument, although unpersuasive, was not

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“wholly without merit.” In re George, 322 F.3d 586, 591 (9th Cir. 2003) (per

curiam).

      We affirm the district court’s frivolousness findings in most respects. The

district court erred, however, in finding appellants’ punitive damages argument

frivolous. We therefore vacate that portion of the district court’s order and remand

for a recalculation of sanctions accordingly. Each party shall bear its own costs on

appeal.

      AFFIRMED IN PART, VACATED IN PART and REMANDED.

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