Court Opinion

ID: 9649546
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:59:27.515718+00
Date Added: 2024-06-11T18:12:12.111456
License: Public Domain

MATHESON, Bankruptcy Judge,
dissenting.
With respect, I dissent from that portion of the opinion that affirms the bankruptcy court’s imposition of sanctions arising from the attorney’s argument that venue of the case was properly premised on the place of the debtor’s employment.
The majority is correct that virtually all courts have held that a salaried individual debtor’s place of employment does not equate to the “place of business” specified in the venue provisions of 28 U.S.C. § 1408. I concur with the order of the majority affirming the order dismissing the bankruptcy case. But that is not the test for the propriety of the imposition of sanctions. An attorney is not subject to sanctions simply because he espouses the minority view.
The majority points out that Stites failed to cite a single case in support of his position. However, as the majority states, the test for sanctions is not what Stites did, but what a reasonable and competent attorney would do. Thus, if there is authority to support Stites’ position, even though not found by him, sanctions ought not to have been imposed. And such authority exists.
In the ease of Milwaukee Corrugating Co. v. Flagge, 19 F.2d 518 (8th Cir.1927), the court was presented with the case of a debtor who, with his family, resided in Wisconsin but was employed in Iowa. Without analysis, and "without any citation of authority, the court concluded that the Iowa bankruptcy court had jurisdiction to grant the debtor his discharge.1 That decision, although perhaps not persuasive, has not been reversed in that circuit. There is no contrary authority in the Tenth Circuit nor in the Northern District of Oklahoma. Thus, Stites would have been fully justified in arguing his position based on that case, and should not have been subject to sanctions by reason thereof, even though his position was not found to be persuasive. For that reason I would reverse the order of the bankruptcy court that imposed sanctions on Stites for arguing for venue based on the debtor’s place of employment.2

. The Bankruptcy Act, as then in effect, granted the bankruptcy court "jurisdiction ... to — (1) Adjudge persons bankrupt who have had their principal place of business, resided, or had their domicile within their respective territorial jurisdictions for the preceding six months...." Section 2, Bankruptcy Act of 1898, as amended.

. The majority infers guilt because Stites amended the bankruptcy petition to delete "business" and to insert "employment." I, to the contrary, find that to be further evidence of Stites good faith in taking the position he took. It is a complete disclosure of the basis for venue.