Court Opinion

ID: 3173767
Source: CourtListenerOpinion
Date Created: 2016-01-30 03:00:59.098059+00
Date Added: 2024-06-11T12:02:29.950443
License: Public Domain

FILED
                                                                  JAN 29 2016
 1                          NOT FOR PUBLICATION
 2                                                           SUSAN M. SPRAUL, CLERK
                                                                U.S. BKCY. APP. PANEL
                                                                OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )       BAP No. CC-15-1125-DKiG
                                   )
 6   WILLIAM ROBERT NORRIE,        )       Bk. No. 13-25751-BR
                                   )
 7                   Debtor.       )       Adv. Proc. No. 14-01755-BR
     ______________________________)
 8                                 )
     MARK BLISS,                   )
 9                                 )
                     Appellant,    )
10                                 )
     v.                            )       M E M O R A N D U M1
11                                 )
     JOHN NORRIE, Trustee of the   )
12   561 Brooks Avenue Trust Dated )
     March 14, 2007,               )
13                                 )
                     Appellee.     )
14   ______________________________)
15                  Argued and Submitted on January 21, 2016
                             at Pasadena, California
16
                            Filed - January 29, 2016
17
                 Appeal from the United States Bankruptcy Court
18                   for the Central District of California
19            Honorable Barry Russell, Bankruptcy Judge, Presiding.
20
21   Appearances:      Appellant Mark Bliss argued pro se.
22
     Before:     DUNN, KIRSCHER, and GAN,2 Bankruptcy Judges.
23
24
          1
25             This disposition is not appropriate for publication.
     Although it may be cited for whatever persuasive value it may
26   have (see Fed. R. App. P. 32.1), it has no precedential value.
27   See 9th Cir. BAP Rule 8024-1.
          2
28             Hon. Scott H. Gan, United States Bankruptcy Judge for
     the District of Arizona, sitting by designation.
 1        The bankruptcy court denied Appellant’s motion for sanctions
 2   (“Sanctions Motion”) against Appellee’s counsel pursuant to
 3   Rule 9011,3 and this appeal followed.   We conclude that the
 4   bankruptcy court’s findings of fact and conclusions of law with
 5   respect to the standards for evaluating a request for Rule 9011
 6   sanctions were not sufficient to support its ruling on the
 7   Sanctions Motion.   Accordingly, we VACATE and REMAND this matter
 8   for further proceedings.
 9                         I.   FACTUAL BACKGROUND
10        In order to understand Appellant’s issues in this appeal, it
11   is necessary to evaluate them in context with other litigation
12   and proceedings that have taken place in the chapter 7 bankruptcy
13   case of William Robert Norrie (“William”).      We highlight in
14   somewhat summary form the disputes and proceedings in the
15   bankruptcy court that inform our review of the appeal before us.
16   At the heart of the disputes is William’s interest in a Venice,
17   California apartment complex (“Venice Property”).4
18   A.   The Venice Property
19        William purchased the Venice Property in 2005.      In
20   connection with the purchase, William borrowed $1,496,250
21
          3
22             Unless otherwise indicated, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
23   all “Rule” references are to the Federal Rules of Bankruptcy
24   Procedure, Rules 1001-9037. The Federal Rules of Civil Procedure
     are referred to as “Civil Rules.”
25
          4
               Unless otherwise noted, the facts relating to the
26   Venice Property and the bankruptcy court litigation involving it
27   are taken from the bankruptcy court’s findings of fact and
     conclusions of law entered in one of the disputes and adopted by
28   the District Court on appeal.

                                      -2-
 1   (“Loan”) from Luther Burbank Savings (“Luther”).    As security for
 2   the Loan, William granted Luther a first position deed of trust
 3   on the Venice Property.
 4        On or about January 9, 2008, William transferred all of his
 5   interest in the Venice Property to his newly-formed, solely owned
 6   limited liability company ("LLC") for no consideration.    A grant
 7   deed reflecting the transfer was recorded with the Los Angeles
 8   County Recorder on the same date.     William confirmed to Luther in
 9   2010 that the LLC was “solely owned by myself.”
10        William filed a chapter 7 petition on July 1, 2013.    In his
11   schedules and statement of financial affairs, William did not
12   list either the Venice Property or his interest in the LLC as
13   assets, did not list the Loan debt he owed Luther with respect to
14   the Venice Property, and did not disclose his transfer of the
15   Venice Property to the LLC.5   As a result, the chapter 7 trustee
16   had no knowledge of the existence of the Venice Property.
17        Enter Mark Bliss, aka Mark O'Gorman ("Appellant"), William's
18   former friend and business associate.    Appellant informed the
19   chapter 7 trustee of William’s ownership interest in the Venice
20   Property and apparently assisted the chapter 7 trustee in the
21   prosecution of a fraudulent transfer adversary proceeding
22   ("Venice Property Litigation") filed against William and the LLC.
23   The Venice Property Litigation resulted in the entry of a default
24   judgment (“Default Judgment”) against the LLC and recovery of the
25
26        5
               After filing his bankruptcy case, William continued to
27   collect the rents from the Venice Property, and, in November
     2013, William attempted to obtain a refinance of debt on the
28   Venice Property.

                                     -3-
 1   Venice Property for the benefit of William’s bankruptcy estate.6
 2        Less than 24 hours before the July 1, 2014, scheduled
 3   hearing on the chapter 7 trustee’s motion for default judgment
 4   (“Default Motion”) against the LLC, John Norrie (“John”),
 5   William’s brother, filed both a motion to continue the hearing
 6   (“Continuance Motion”) and a motion to intervene (“Intervention
 7   Motion”)7 in the Venice Property Litigation.   In filing the
 8   motions, John asserted, as purported trustee, alleged rights of
 9   The 561 Brooks Avenue Trust Dated March 14, 2007 (“Brooks
10   Trust”).   According to John, the Brooks Trust was formed for the
11   purpose of holding title to the Venice Property for the benefit
12   of William’s sons.   Michael Kwasigroch was the attorney
13   representing the Brooks Trust with respect to both motions.
14        The bankruptcy court denied the Continuance Motion on the
15   basis that John should have brought the Continuance Motion
16   sooner,8 and set the Intervention Motion for hearing
17
18        6
               Both William and the LLC filed motions to dismiss the
19   Venice Property Litigation, which the bankruptcy court denied.
     It then set March 25, 2014, as the deadline for William and the
20   LLC to file their answers in the Venice Property Litigation. The
21   LLC did not answer, but instead attempted to appeal the denial of
     its motion to dismiss to this Panel. That appeal was dismissed
22   May 9, 2014, when our motions panel denied the LLC’s motion for
     leave to appeal.
23
          7
24             The Intervention Motion was filed at 8:45 p.m. the
     evening before the hearing on the Default Motion.
25
          8
               The bankruptcy court noted in the context of its ruling
26   on the Intervention Motion that John, as the purported managing
27   member of the LLC, had hired counsel for the LLC to file the
     motion to dismiss the Venice Property Litigation and to prosecute
28                                                      (continued...)

                                     -4-
 1   approximately ten weeks out.   After the hearing on the Default
 2   Motion, the bankruptcy court made written findings of facts and
 3   conclusions of law, which it forwarded to the District Court with
 4   its recommendation for entry of the Default Judgment.9   The
 5   bankruptcy court subsequently conducted proceedings on the
 6   Intervention Motion.
 7        The chapter 7 trustee opposed the Intervention Motion on the
 8   basis that Appellant, not John, was the trustee of the Brooks
 9   Trust.   John countered that Appellant had been automatically
10   terminated as trustee of the Brooks Trust as a result of an
11   involuntary bankruptcy petition having been filed against him,
12   but in any event was removed as trustee by William not later than
13   November 15, 2010, under the procedures set forth in the trust
14   formation documents.
15        The bankruptcy court denied the Intervention Motion on
16   October 27, 2014.   In its findings of fact and conclusions of
17   law, the bankruptcy court charged the Brooks Trust with notice of
18   the Venice Property Litigation as early as February 18, 2014,
19   based on John’s participation in the Venice Property Litigation
20
          8
           (...continued)
21
     the interlocutory appeal when that motion was denied by the
22   bankruptcy court. The bankruptcy court charged the Brooks Trust
     with John’s knowledge as the purported trustee.
23
          9
               John, as Trustee of the Brooks Trust, appealed entry of
24
     the bankruptcy court’s order after hearing on the Default Motion,
25   which stated only that the bankruptcy court would review the
     chapter 7 trustee’s proposed findings of fact and conclusions of
26   law and submit them with its recommendation to the District Court
27   for review and entry of a final judgment against the LLC. Our
     motions panel, noting that the BAP had no jurisdiction over the
28   order, dismissed the appeal.

                                     -5-
 1   as the purported managing member of the LLC.   The bankruptcy
 2   court found, inter alia, that the Intervention Motion was
 3   untimely filed, that John had presented no evidence in support of
 4   the Intervention Motion or that he was the trustee of the Brooks
 5   Trust, that the chapter 7 trustee had presented evidence both
 6   that Appellant was the trustee of the Brooks Trust and that the
 7   Brooks Trust had no interest in the Venice Property, and that the
 8   Intervention Motion was moot where the District Court had entered
 9   the Default Judgment on September 11, 2014.
10   B.   The Brooks Trust Litigation
11        On November 18, 2014, John, as trustee of the Brooks Trust,
12   filed an adversary proceeding (“Brooks Trust Litigation”), the
13   complaint in which appeared to seek (1) a declaration that John,
14   not Appellant, was the trustee of the Brooks Trust, and (2) that
15   a trust should be imposed on the Venice Property for the benefit
16   of the Brooks Trust.   Mr. Kwasigroch was the attorney
17   representing the Brooks Trust in the Brooks Trust Litigation.
18   The chapter 7 trustee and Appellant were the named defendants in
19   the Brooks Trust Litigation.   After motions to dismiss had been
20   filed by the chapter 7 trustee and Appellant, John filed an
21   amended complaint (“Amended Complaint”) on December 15, 2014.
22   Appellant withdrew his original motion to dismiss the initial
23   complaint after the Amended Complaint was filed but thereafter
24   filed a further motion to dismiss the Amended Complaint.
25        The Amended Complaint asserted seven claims for relief:
26   (1) a declaration that John is the trustee of the Brooks Trust;
27   (2) specific performance of alleged agreements between Joe Davis,
28   William’s former father-in-law, and William that the Venice

                                     -6-
 1   Property was to be held by the Brooks Trust for the benefit of
 2   William’s sons;
 3   (3) imposition of a constructive trust;
 4   (4) imposition of a resulting trust;
 5   (5) imposition of an equitable lien;
 6   (6) imposition of an express lien;
 7   (7) judicial foreclosure of the Venice Property.
 8   Notably, like the original complaint, the Amended Complaint
 9   sought no damages against Appellant. In fact, the Amended
10   Complaint stated expressly that no claim was being asserted
11   personally against Appellant.10    Ultimately, the Brooks Trust
12   filed a Rule 7041 notice of dismissal as to Appellant on
13   January 14, 2015.11
14
15        10
               The Amended Complaint provided:
16
          For clarity, Plaintiff hereby alleges and acknowledges
17        that Plaintiff IS NOT seeking damages for any action of
          [Appellant], or the chapter 7 trustee, in preparing,
18        filing, submitting, testifying in, petitioning, or in
19        any other way participating in any legal proceeding.
          These allegations are made as the assertions made by
20        the chapter 7 trustee and [Appellant] were made in
          legal proceedings, BUT THEREBY CREATE A DISPUTE AS TO
21
          THE RIGHTS AND DUTIES OF THE PARTIES, SPECIFICALLY, WHO
22        THE PROPER AND TRUE TRUSTEE OF THE [BROOKS TRUST] IS.
          However, no damages or monetary recovery is requested
23        based on any action of any party in participating in
24        any legal proceeding.
          11
25             On February 24, 2015, the bankruptcy court dismissed
     the Amended Complaint without leave to amend on the chapter 7
26   trustee’s motion. In doing so, the bankruptcy court rejected the
27   arguments of the Brooks Trust that the chapter 7 trustee was on
     constructive or inquiry notice of the Brooks Trust’s alleged
28                                                      (continued...)

                                       -7-
 1        Approximately three weeks later, Appellant filed the
 2   Sanctions Motion, the denial of which forms the basis for this
 3   appeal.   The Sanctions Motion sought monetary sanctions against
 4   Mr. Kwasigroch, because the claims alleged in the Amended
 5   Complaint
 6        . . . are barred under law and . . . are not warranted
          under existing law and . . . contain factual allegations
 7        that do not have evidentiary support. This conduct
          constitutes a continuing pattern of bad faith and
 8        improper litigation tactics. As such, [Mr.] Kwasigroch
          is subject to sanctions under [Rule] 9011(b)(2) and (3).
 9        The court should award [Appellant] his reasonable
          attorney fees he has and will incur to bring the
10        [Sanctions Motion] in the amount of $7,535.00 against
          [Mr.] Kwasigroch.
11
12   Although the Sanctions Motion was filed February 3, 2015, it (and
13   the declaration of Appellant’s counsel, John C. Feely, in support
14   of it) was dated December 18, 2014, the date it purportedly was
15   served on Mr. Kwasigroch.   Appellant was dismissed from the
16   adversary proceeding on January 14, 2015, more than 21 days after
17   Mr. Kwasigroch was served with the Sanctions Motion, but before
18   the Sanctions Motion was filed.     Supported by Mr. Feely’s
19   declaration regarding compliance with the safe harbor provisions
20   of Rule 9011, Appellant sought an additional $12,187.50 in
21
22
          11
           (...continued)
23   interest in the Venice Property, and ruled in effect that the
     chapter 7 trustee’s strong arm powers provided in § 544 entitled
24
     the chapter 7 trustee to status as a bona fide purchaser with
25   respect to the Venice Property. The Brooks Trust appealed the
     dismissal to the District Court as well as a subsequent order
26   authorizing the chapter 7 trustee to sell the Venice Property,
27   which appeal was dismissed as moot, where no stay had been
     obtained, and the Venice Property had been sold. The District
28   Court’s dismissal order is now on appeal at the Ninth Circuit.

                                       -8-
 1   sanctions representing the attorney fees incurred in researching
 2   and drafting a motion to dismiss the adversary proceeding,
 3   allegedly made necessary because the adversary proceeding
 4   remained pending.   Appellant sought a total of $19,722.50 in
 5   sanctions against Mr. Kwasigroch through the Sanctions Motion.
 6   The Sanctions Motion was opposed.
 7        The hearing on the Sanctions Motion was held March 11, 2015
 8   (“Sanctions Hearing”), along with other matters.   The transcript
 9   of the Sanctions Hearing is sixteen pages long, but only twenty-
10   three lines relate to the Sanctions Motion:
11        And the next one is – let’s see which order I should
          take these. Well, I’ll take it, I guess, in reverse
12        order. Number 11. That’s the, [Appellant’s] motion
          for sanctions against the attorney. That’s going to be
13        denied. The fact that you lose something doesn’t –
          everything in this case is not frivolous, that is, not
14        warranted for sanctions. I think I have, of course,
          awarded sanctions before, but just because I have
15        before doesn’t mean that just because I’ve done it that
          everybody’s entitled to sanctions because they prevail.
16
          The last motion had to do with just prevailing party.
17        That’s different than, you know, sanctions for filing
          frivolous motions. That’s totally different. That’s a
18        much easier – but this one, I’ve looked at it. Yes, I
          disagreed with the pleadings and I’ve ruled
19        accordingly. But that doesn’t make it frivolous. If
          that were the case, that’s all I would do, and any
20        other judge would be doing, is ruling sanctions up and
          back if people lose. That’s just – I think you’ve
21        gotten a little carried away on what’s happened.
22        So that’s going to be denied. By the way, I will
          prepare an order on – well, no. I think on that one,
23        why don’t you, counsel, why don’t you just prepare that
          order.
24
25   March 11, 2015 Hr’g Tr. at 5:6-6:3.
26        Appellant appealed the order denying the Sanctions Motion.
27   He asserts on appeal, inter alia, that the bankruptcy court’s
28   dismissal of the Amended Complaint without leave to amend

                                     -9-
 1   established that it was meritless when it was filed.12   Appellant
 2   contends the bankruptcy court abused its discretion because it
 3   did not find that the claims in the Amended Complaint, as filed
 4   by Mr. Kwasigroch, seeking a determination that the Brooks Trust
 5   held an interest in the Venice Property, violated the provisions
 6   of Rule 9011(b)(2) and (3).13
 7
 8        12
               Appellant also filed a motion seeking a declaration
 9   that he was the prevailing party in the Brooks Trust Litigation.
     Despite vigorous opposition from the Brooks Trust, the bankruptcy
10   court determined under LBR 7054-1 that Appellant was the
11   prevailing party. No appeal was taken from that determination,
     and it does not appear from the docket that Appellant has sought
12   fees or costs as a result of his prevailing party status.
13        13
                 As relevant to the Sanctions Motion, Rule 9011
14   provides:

15   Rule 9011. Signing of Papers; Representations to the Court;
     Sanctions; Verification And Copies of Papers
16
17   (a) Signature. Every petition, pleading, written motion, and
     other paper, except a list, schedule, or statement, or amendments
18   thereto, shall be signed by at least one attorney of record in
19   the attorney's individual name. A party who is not represented
     by an attorney shall sign all papers. Each paper shall state the
20   signer's address and telephone number, if any. An unsigned paper
     shall be stricken unless omission of the signature is corrected
21   promptly after being called to the attention of the attorney or
22   party.

23   (b) Representations to the Court. By presenting to the court
     (whether by signing, filing, submitting, or later advocating) a
24
     petition, pleading, written motion, or other paper, an attorney
25   or unrepresented party is certifying that to the best of the
     person's knowledge, information, and belief, formed after an
26   inquiry reasonable under the circumstances,—
27   . . . .
     (2) the claims, defenses, and other legal contentions therein are
28                                                      (continued...)

                                      -10-
 1                             II.    JURISDICTION
 2        The bankruptcy court had jurisdiction under 28 U.S.C.
 3   §§ 1334 and 157(b)(2)(B).       We have jurisdiction under 28 U.S.C.
 4   § 158.
 5                                III.     ISSUES
 6        Whether the bankruptcy court abused its discretion when it
 7   denied the Sanctions Motion.
 8                       IV.     STANDARDS OF REVIEW
 9        A bankruptcy court's decision declining to impose sanctions
10   pursuant to Rule 9011 is reviewed for abuse of discretion.
11   Trulis v. Barton, 107 F.3d 685, 691 (9th Cir. 1995); Classic Auto
12   Refinishing, Inc. v. Marino (In re Marino), 37 F.3d 1354, 1358
13   (9th Cir. 1994)(“We review the denial of sanctions under
14   [Rule 9011] for an abuse of discretion.”).
15        The Panel must apply a two-part test to determine whether
16   the bankruptcy court abused its discretion.       United States v.
17   Hinkson, 585 F.3d 1247, 1261–62 (9th Cir. 2009) (en banc).
18
19        13
           (...continued)
20   warranted by existing law or by a nonfrivolous argument for the
     extension, modification, or reversal of existing law or the
21   establishment of new law;
22   (3) the allegations and other factual contentions have
     evidentiary support or, if specifically so identified, are likely
23   to have evidentiary support after a reasonable opportunity for
     further investigation or discovery;
24
     . . . .
25   (c) Sanctions. If, after notice and a reasonable opportunity to
     respond, the court determines that subdivision (b) has been
26   violated, the court may, subject to the conditions stated below,
27   impose an appropriate sanction upon the attorneys, law firms, or
     parties that have violated subdivision (b) or are responsible for
28   the violation.

                                         -11-
 1   First, we consider de novo whether the bankruptcy court applied
 2   the correct legal standard.      Id.      A bankruptcy court abuses its
 3   discretion if it applies an incorrect legal standard or
 4   misapplies the correct legal standard.        TrafficSchool.com v.
 5   Edriver Inc., 653 F.3d 820, 832 (9th Cir. 2011).
 6                               V.   DISCUSSION
 7        Rule 9011
 8        “Pursuant to Rule 9011, bankruptcy courts have the authority
 9   to sanction parties, attorneys, and law firms who present (sign,
10   file, submit, or later advocate) a petition, pleading, or paper
11   to a bankruptcy court that is either frivolous or presented for
12   an improper purpose.”   Winterton v. Humitech of N. Cal., LLC
13   (In re Blue Pine Grp., Inc.), 457 B.R. 64, 75 (9th Cir. BAP
14   2011), rev’d in part, 526 F. App’x. 768 (9th Cir. 2013)(affirmed
15   as to standards; reversed as to amount of sanctions).        Both the
16   Ninth Circuit and this Panel previously have articulated in
17   detail the process and standards for evaluating a motion for
18   sanctions filed pursuant to Rule 9011.
19        “In determining if sanctions are warranted under Rule 9011,
20   the bankruptcy court must consider both frivolousness and
21   improper purpose on a sliding scale, where the more compelling
22   the showing as to one element, the less decisive need be the
23   showing as to the other.”    Dressler v. The Seeley Co.
24   (In re Silberkraus), 336 F.3d 864, 870 (9th Cir. 2003)(internal
25   citation omitted).
26        The word “frivolous,” when used in connection with
          sanctions denotes a filing that is both baseless—lacks
27        factual foundation—and made without reasonable competent
          inquiry. Townsend v. Holman Consulting Corp., 929 F.2d
28        1358, 1362 (9th Cir. 1990). An attorney has a duty to

                                        -12-
 1        conduct a reasonable factual investigation as well as to
          perform adequate legal research that confirms that his
 2        position is warranted by existing law (or by a good
          faith argument for a modification or extension of
 3        existing law). Christian v. Mattel, Inc., 286 F.3d
1118, 1127 (9th Cir. 2002). Thus, a finding that there
 4        was no reasonable inquiry into either the facts or the
          law is tantamount to a finding of frivolousness.
 5        Townsend, 929 F.2d at 1362.
 6        The Ninth Circuit has held that the standard to
          determine the reasonableness of an attorney's inquiry as
 7        to facts contained in signed documents submitted to a
          court is an objective one. In considering sanctions
 8        under Rule 9011, the bankruptcy court must measure the
          attorney's conduct “objectively against a reasonableness
 9        standard, which consists of a competent attorney
          admitted to practice before the involved court.” Valley
10        Nat'l Bank of Ariz. v. Needler (In re Grantham Bros.),
          922 F.2d 1438, 1441 (9th Cir. 1991); G.C. & K.B. Inv.,
11        Inc. v. Wilson, 326 F.3d 1096, 1109 (9th Cir. 2003).
          Additionally, an improper purpose is analyzed under an
12        objective standard. In re Grantham Bros., at 1443.
13   In re Blue Pine Grp., Inc., 457 B.R. at 75.
14        The Bankruptcy Court’s Findings
15        As stated above, we review the order denying the Sanctions
16   Motion for abuse of discretion.     “If the bankruptcy court fails
17   to identify or misapplies the correct legal rule of law, [our]
18   inquiry ends there, and we ‘must conclude that the bankruptcy
19   court abused its discretion.’”     Fear v. U.S. Trustee
20   (In re Ruiz), 541 B.R. 892, 896 (9th Cir. BAP 2015), quoting
21   Hinkson, 585 F.3d at 1262.
22        Under Ninth Circuit standards, a bankruptcy court “must
23   consider both frivolousness and improper purpose” when ruling on
24   a motion for sanctions under Rule 9011.     Here, the bankruptcy
25   court made no findings as to whether the Amended Complaint was
26   filed for an improper purpose.     As to whether the Amended
27   Complaint was frivolous, the bankruptcy court stated only
28   “everything in this case is not frivolous,” and “Yes, I disagreed

                                       -13-
 1   with the pleadings and I’ve ruled accordingly.   But that doesn’t
 2   make it frivolous.”
 3         From this limited record, we are unable to determine, de
 4   novo, whether the bankruptcy court applied the correct legal
 5   rule, set forth in the Ninth Circuit’s decision in
 6   In re Silberkraus and this Panel’s decision in In re Blue Pine
 7   Grp., Inc., when it denied the Sanctions Motion.   Without
 8   complete findings, we may vacate a judgment and remand the case
 9   to the bankruptcy court to make the requisite findings.   See,
10   e.g., First Yorkshire Holdings, Inc. v. Pacifica L 22, LLC
11   (In re First Yorkshire Holdings, Inc.), 470 B.R. 864, 870 (9th
12   Cir. BAP 2012).   We do so reluctantly in this case because we
13   fear contributing to a record of litigation that already is both
14   extended and contentious, but we see no appropriate alternative.
15   The litigants in any dispute are entitled to a court’s rationale
16   for its decisions.
17                             VI.   CONCLUSION
18        For the foregoing reasons, we VACATE the bankruptcy court’s
19   order denying the Sanctions Motion and REMAND for further
20   proceedings consistent with this Memorandum Decision.
21
22
23
24
25
26
27
28

                                      -14-