Court Opinion

ID: 63942
Source: CourtListenerOpinion
Date Created: 2010-04-26 05:05:52+00
Date Added: 2024-06-11T17:20:25.408605
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                         October 23, 2008

                                             No. 08-20048             Charles R. Fulbruge III
                                                                              Clerk

IN THE MATTER OF: BEVERLY COCHENER

                                                          Debtor

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RONALD J. SOMMERS, TRUSTEE

                                                          Appellant

v.

DAVID W. BARRY

                                                          Appellee

                      Appeal from the United States District Court
                           for the Southern District of Texas
                                USDC No. 4:07-CV-629

Before JONES, Chief Judge, and OWEN and SOUTHWICK, Circuit Judges.
PER CURIAM:*

        *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
                                  No. 08-20048

      The court has carefully considered this appeal in light of the briefs, record
excerpts, and excellent arguments of counsel, and with due regard for the
lengthy and thoughtful opinions of the bankruptcy and district courts. We are
bound by the requirements that as an appellate court, we determine whether the
bankruptcy court’s findings of fact are clearly erroneous; whether it correctly
applied 11 U.S.C. § 105 to determine David W. Barry’s (“Barry”) liability for
sanctions; and whether it abused its discretion in fixing the amount of sanctions.
We do not, in other words, review the district court’s contrary findings. Most of
the facts in this case are undisputed. The parties’ arguments center, as did the
differing court opinions, around whether factual inferences of bad faith conduct
by Barry were correctly drawn.
      Viewing the case from the bankruptcy court’s perspective, whether or not
we might have drawn different inferences, we ascertain plausible record
evidence to support the bankruptcy court’s findings that Barry acted in bad
faith, especially when he asserted that dismissal of Ms. Cochener's case was in
the best interest of creditors; when he determined that he would not attend the
rescheduled meeting of creditors on June 20, 2001; when he instructed the
Debtor not to turn over relevant documents to the Trustee; and when he
knowingly misrepresented the reach-back period for evaluation of improper
transfers by the Debtor.     The findings are secure whether gauged by a
preponderance or clear and convincing standard. The district court’s critical
error seems to have been its failure to recognize that even if the bankruptcy was
commenced originally as a “two-party dispute” and even if such a case might
ordinarily be dismissible, the debtor has no right to such relief when she has
abused the privilege afforded by bankruptcy relief. Here, the trustee had good
reason to believe following the first meeting of creditors, that assets were being

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                                    No. 08-20048

concealed by the Debtor, to the detriment of creditors. Moreover, Barry was
aware of this likelihood when he undertook to represent Ms. Cochener. The
bankruptcy court acted well within its authority to enforce the integrity of the
process by policing the accuracy of debtors’ schedules and representations to the
court.
         Because the bankruptcy court findings of bad faith conduct are not clearly
erroneous, its determination of Barry’s liability for sanctions under Section 105
was legally appropriate. In re Matter of Case, 937 F.2d 1014, 1023 (5th Cir.
1991). Finally, there is sufficient record evidence to support the amount of
sanctions awarded. The court did not abuse its discretion in assessing sanctions.
         Accordingly, the judgment of the district court is REVERSED, and the
judgment of the Bankruptcy court is AFFIRMED.

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