Court Opinion

ID: 1006630
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:14:04.393656+00
Date Added: 2024-06-11T09:11:53.034709
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
               FOR THE FOURTH CIRCUIT

In Re: PROPERTY MOVERS, L.L.C.,       
                           Debtor.

PROPERTY MOVERS, L.L.C.,
               Plaintiff-Appellant,              No. 01-1742

                v.
JOSEPH GOODWIN; HOPE GOODWIN,
             Defendants-Appellees.
                                      
           Appeal from the United States District Court
        for the Eastern District of Virginia, at Alexandria.
                 Gerald Bruce Lee, District Judge.
               (CA-01-116-A, BK-00-11721-RGM)

                     Argued: December 3, 2001

                     Decided: February 14, 2002

    Before LUTTIG, WILLIAMS, and MOTZ, Circuit Judges.

Affirmed, appellees’ motion for damages granted, and appellant’s
counter-motion for damages denied by unpublished per curiam opin-
ion.

                            COUNSEL

ARGUED: Thomas Kenneth Plofchan, Jr., PLOFCHAN & ASSO-
CIATES, Sterling, Virginia, for Appellant. William Scott Greco,
2                      IN RE: PROPERTY MOVERS
GRECO & GRECO, P.C., McLean, Virginia, for Appellees. ON
BRIEF: Frederick D. Greco, GRECO & GRECO, P.C., McLean, Vir-
ginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                              OPINION

PER CURIAM:

   Property Movers LLC appeals the district court’s imposition of
sanctions for the filing of a frivolous bankruptcy appeal, contending
that its appeal was never moot, had merit, and was not frivolously
argued. Property Movers further appeals the merits of the district
court’s finding that its bankruptcy appeal was moot. Finding that it
was clear beyond all doubt that Property Movers’ appeal was taken
from an order that was and is moot, and further, that Property Mov-
ers’ arguments on appeal to the district court were patently baseless,
illogical, and without support in fact or law, we will affirm. Further,
we find that Property Movers’ appeal to this Court is frivolous both
as filed and as argued, and we grant the motion of Property Movers’
sole creditor, the Goodwins, for sanctions against Property Movers
pursuant to Federal Rule of Civil Procedure 38, while denying Prop-
erty Movers’ counter-motion for sanctions.

                                   I.

                                  A.

   This action arises from a dispute over a real estate sale between the
Goodwins and Norman Bradford, principal of Property Movers. Brad-
ford and Property Movers leased a house from the Goodwins on a
month-to-month basis, in which Bradford lived. Bradford and the
Goodwins were negotiating a purchase of the residence by Bradford,
but the purchase never occurred, allegedly because the Goodwins
                       IN RE: PROPERTY MOVERS                         3
increased the asking price after learning that the property had been
appraised for substantially more than their original asking price. Brad-
ford threatened to sue the Goodwins for failing to go through with the
sale, and the Goodwins brought an action seeking to evict Bradford
and Property Movers for nonpayment of rent. Settlement negotiations
occurred, and Bradford placed a rent check in escrow, apparently
pending a successful settlement. Bradford asserts that the "settlement
attorney" told him the case would be settled. The Goodwins, however,
proceeded with their eviction action in state court. Bradford appeared
at a hearing in the eviction action, but Property Movers was treated
by the state court as not having appeared because its counsel was not
in attendance. The hearing resulted in a judgment against Bradford
personally and a default judgment against Property Movers.

                                  B.

   On April 18, 2000, Property Movers filed a Chapter 7 bankruptcy
proceeding in the United States Bankruptcy Court for the Eastern Dis-
trict of Virginia. The Goodwins, as creditors, filed a motion for relief
from the automatic stay imposed by the bankruptcy filing. On May
17, 2000, Bankruptcy Judge Robert G. Mayer lifted the automatic
stay with respect to Property Movers’ only asset, a month-to-month
leasehold interest in Bradford’s home, as well as with respect to a
pending unlawful detainer action regarding the Bradford residence
and any other claims brought by the Goodwins. Property Movers filed
a motion to reconsider the lifting of the stay and filed a motion for
emergency injunctive relief. Notwithstanding the pendency of these
motions, in early August 2000, the Goodwins secured an order evict-
ing Bradford and Property Movers from the property. On August 17,
2000, noting that the lift-stay issue was moot, Property Movers with-
drew its motion for reconsideration of the lift-stay order. Property
Movers then appealed the grant of the lift-stay order to the district
court. Due to the apparent misplacing of Property Movers’ notice of
appeal, the appeal was not heard until March 30, 2001, but Property
Movers continued to argue for a reversal of the lift-stay order, eight
months after it had been evicted. By order dated April 25, 2001, the
district court affirmed the bankruptcy court and awarded sanctions
against Property Movers for the filing of a frivolous appeal, finding
that the appeal was clearly moot because Property Movers had
already been evicted. Property Movers timely appealed.
4                       IN RE: PROPERTY MOVERS
   On appeal, Property Movers argues that the district court did not
apply the proper standard of review to the bankruptcy appeal; that the
district court erred in justifying sanctions by reference to Property
Movers’ failure to cite legal authority in support of its arguments;
and, in gross, that its appeal was not moot and in fact had merit
because the bankruptcy court’s lift-stay order encompassed potential
future assets of Property Movers, and because Property Movers was
challenging the validity of its debt to the Goodwins.

                                    II.

   The district court’s award of sanctions in this case was authorized
by Bankruptcy Rule 8020, which permits a district court to impose
sanctions for the filing of a frivolous bankruptcy appeal. Because the
language of Bankr. Rule 8020 is materially identical to Fed. R. App.
P. 38, the sanctions provision for the filing of frivolous appeals in the
Court of Appeals, the standard for imposing sanctions is similar. Pet-
tey v. Belanger, 232 B.R. 543, 548 (D. Mass. 1999). As to the stan-
dard of review for a district court’s award of sanctions under
Bankruptcy Rule 8020, we find applicable by analogy the unitary
abuse of discretion standard applicable to the review of a sanctions
award under Fed. R. Civ. P. 11. Cooter & Gell v. Hartmarx Corp.,
496 U.S. 384, 403 (1990). We review the district court’s dismissal of
this appeal on mootness grounds de novo.1 Stop H-3 Ass’n v. Dole,
870 F.2d 1419, 1423 (9th Cir. 1989).
    1
    While our resolution of the sanctions and mootness issues leaves us
no occasion to review any of the district court’s other determinations, we
briefly address Property Movers’ citation of In re Campbell, 812 F.2d
1465 (4th Cir. 1987), for the proposition that Article III concerns require
de novo reexamination of both the legal and factual conclusions of bank-
ruptcy courts. This assertion is based on a failure to apprehend the differ-
ence between core and noncore proceedings. Campbell noted that in the
wake of the Supreme Court’s decision in Northern Pipeline Construction
Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982), questioning the Arti-
cle III permissibility of assigning certain types of adjudication to non-
Article III bankruptcy courts, Congress has mandated, via 28 U.S.C.A.
§ 157(c)(1) (West 1993), that district courts "apply a de novo standard
. . . in cases such as this one." Campbell, 812 F.2d at 1467. Section
157(c)(1) requires de novo review only in noncore bankruptcy proceed-
                        IN RE: PROPERTY MOVERS                            5
                                    A.

   A court considering a motion for sanctions for the filing of a frivo-
lous appeal must "first determine that the appeal is frivolous, and then
determine that this is an appropriate case for the imposition of sanc-
tions." Williams v. United States Postal Service, 873 F.2d 1069, 1075
(7th Cir. 1989). An appeal is frivolous where "the result is obvious
or when the appellant’s argument is wholly without merit." Id. (inter-
nal quotation marks omitted). A finding of frivolity is appropriate
where an appellant cites no relevant cases in response to a lower
court’s accurate exposition of the law, and where an appellant’s argu-
ments are irrelevant to the issues in dispute. Id. It is particularly
appropriate to hold not only the appellant, but also his attorney, liable
for a sanctions award when the frivolity of an appeal is premised not
only on the filing of the appeal but also on the type of arguments used
to support it. Dungaree Realty, Inc. v. United States, 30 F.3d 122,
124-25 (Fed. Cir. 1994). Sanctions for the filing of a frivolous appeal
are desirable in an appropriate case because "they compensate the
prevailing party for the expense of having to defend a wholly merit-
less appeal, and by deterring frivolity, they preserve the appellate cal-
endar for cases truly worthy of consideration." Id. at 125 (internal
quotation marks omitted). We will analyze the frivolity of Property
Movers’ appeal (an inquiry which, as we shall see, subsumes the mer-
its of this appeal) by first examining whether the appeal was frivolous
"as filed," i.e. whether the result would have been obvious regardless
of how Property Movers’ appeals were argued, and then by turning
to an examination of how Property Movers has argued its appeals in
the district court and in this Court.

ings. A motion to allow a liquidated claim against the bankruptcy estate
and a motion to lift an automatic stay are core proceedings under 28
U.S.C.A. § 157(b)(2) (West 1993), and Bankr. Rule 8013 requires the
application of the clear error standard to factual findings in core proceed-
ings. The "core/noncore" distinction was Congress’s response to North-
ern Pipeline; this Court has not questioned the constitutional
permissibility of the § 157 scheme but has instead repeatedly affirmed
the application of the clear error standard to factual findings in core pro-
ceedings. E.g., In re Biondo, 180 F.3d 126, 130 (4th Cir. 1999).
6                       IN RE: PROPERTY MOVERS
                                   B.

   Property Movers attempts to characterize this appeal as involving
at least seven issues. A single issue of jurisdictional dimension —
mootness — is, however, dispositive of this appeal, and the focus of
our inquiry is thus on Property Movers’ argument that its appeals to
the district court and to this Court were not rendered moot by its evic-
tion from Bradford’s former residence. Property Movers contends that
its appeal to the district court was not moot because (1) the bank-
ruptcy court’s lift-stay order reached property other than the former
Bradford residence, and (2) its appeal sought to challenge the bank-
ruptcy court’s ruling, or failure to rule, on the validity of Property
Movers’ debt to the Goodwins.

   Property Movers argued to the district court only that mootness
was defeated by the fact that it was challenging the validity of the
debt; consequently, its argument that other assets were potentially
subject to the lift-stay order is addressed here only as it relates to the
appropriateness of sanctions. Cf. Karpel v. Inova Health Sys. Servs.,
134 F.3d 1222, 1227 (4th Cir. 1998) (arguments not made below are
waived). At the outset, Property Movers concedes that the district
court lacked the ability to restore Property Movers to possession of
the Bradford residence more than eight months after it was evicted
and its month-to-month lease was terminated. Indeed, Property Mov-
ers denies that it ever asked the district court to take this action. The
only relief requested by Property Movers in its appeal to the district
court was the reversal of the bankruptcy court’s lift-stay order, how-
ever, and Property Movers must show that the reversal of this order
would have provided it with some form of effective relief. In an
attempt to meet this burden, Property Movers argues that the lift-stay
order was not moot because "should Property Movers receive assets
in the future" without the stay, "Appellees could make a claim for
those assets." (Br. of Appellant at 38.)

   Section 362 of the bankruptcy code states that an automatic stay in
bankruptcy applies to proceedings against any of a debtor’s assets,
subject to various exceptions. See 11 U.S.C.A. § 362 (West 1993 &
Supp. 2000). The lift-stay order in this case applied to the Bradford
residence, the Goodwins’ unlawful detainer action regarding that resi-
dence, and claims brought by the Goodwins generally. Property Mov-
                        IN RE: PROPERTY MOVERS                           7
ers, in its filings below, described the lift-stay order as limited to the
Bradfords’ former residence, and at no point argued to the district
court that the likelihood of future assets becoming subject to the
Goodwins’ claims defeated mootness. (J.A. at 98.) Property Movers
also conceded that the rehearing motion on the lift-stay order was
moot. After Property Movers was evicted from the Bradford residence
and its month-to-month leasehold interest in the residence ceased to
exist, it had no assets of any kind. Bradford testified that Property
Movers has never had any assets other than the leasehold interest in
Bradford’s residence, has never had a bank account, has never filed
tax returns, and has never engaged in any business activity other than
notional "transactions" whereby Bradford, in paying the rent on his
residence, characterized his rent and utilities payments, made in cash
from his personal resources, as involving a loan to Property Movers
followed by a payment of the rent by Property Movers. Bradford testi-
fied, however, that these "loans" were always forgiven as soon as they
were made.

   It is well-established that a bankruptcy appeal is moot when a court
"is without the power to afford effective relief." Central States, S.E.
and S.W. Areas Pension Fund v. Central Transp., Inc., 841 F.2d 92,
96 (4th Cir. 1988). When a debtor ceases to retain any interest in the
property against which a bankruptcy stay would operate, a lift-stay
motion becomes moot. In re Byker, 64 B.R. 640, 642 (Bankr. N.D.
Iowa 1986); see also In re Marin Town Ctr., 142 B.R. 374, 382 (N.D.
Cal. 1992) (noting that when "changes in circumstances [make] it
impossible for [the court] to . . . restore the interested parties to their
former position" or provide other effective relief, an appeal is moot
(alterations in original) (internal quotation marks omitted)). When it
is clear that there never will be any assets available to satisfy a credi-
tor’s claims, an appeal becomes moot. Cox v. Sunbelt Savings Ass’n,
896 F.2d 957, 959-60 (5th Cir. 1990) (addressing prudential moot-
ness); cf. Central States Pension Fund, 841 F.2d at 96 (addressing
equitable mootness). Here, the Goodwins argued below that Property
Movers’ appeal was moot for exactly this reason, and neither below
nor on appeal has Property Movers made any showing that the pros-
pect of assets being available to satisfy any liability to the Goodwins
is anything other than the very remotest of possibilities. Property
Movers may not resist a finding of mootness by simply asserting in
its appellate brief that additional assets are likely to be subject to the
8                       IN RE: PROPERTY MOVERS
Goodwins’ claims, when the undisputed evidence indicates that Prop-
erty Movers is a shell corporation which has never had any assets of
any kind other than its share in a month-to-month leasehold interest
in Bradford’s residence.2 Thus, even if Property Movers’ argument
regarding potential future assets were not clearly waived, it is entirely
baseless.

   With respect to Property Movers’ second contention, that the issue
of the "validity of the debt" to the Goodwins precludes a finding of
mootness, it is clear that Property Movers never appealed a bank-
ruptcy court determination of the validity of a debt to the Goodwins,
and it could not have done so because there was no such determina-
tion. Indeed, Property Movers, in its appellate brief to the district
court, described the order appealed from exclusively as an order lift-
ing the automatic bankruptcy stay with respect to the Bradford resi-
dence. (J.A. at 98.) Property Movers, in its brief, made no mention of
any order regarding the validity of the debt, stating only, in connec-
tion with the appeal of the lift-stay order, that "there was considerable
question as to the validity of the debt." (J.A. at 101.) Property Movers
now continues to argue that "no court ever ruled on the validity of the
debt," and that "the bankruptcy court did not determine the validity
of the debt." (Br. of Appellant at 13, 20.) On a very sympathetic read-
ing of its brief to the district court, one could conclude that Property
Movers appealed a grant of a lift-stay motion on the basis that the
bankruptcy court should have entered a final, reviewable order deter-
mining the validity of the debt before lifting the stay. Property Mov-
ers cites no authority, however, holding that a final ruling on the
validity of a debt is a precondition to the lifting of an automatic stay
in bankruptcy. The bankruptcy court’s lift-stay order properly did not
include or constitute a final ruling or order of any kind on the validity
of the debt. See Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26, 32
(1st Cir. 1994) (stating that lift-stay hearings "do not involve a full
    2
    Had this argument been properly raised below, this Court would have
the benefit of factual findings by which to evaluate it. Because we con-
sider this waived argument solely as it relates to the imposition of sanc-
tions for the filing of this appeal, we find it necessary to consider the
record before this Court, which is devoid of facts indicating that the dis-
trict court or this Court could provide effective relief to Property Movers
by reversing the lift-stay order.
                       IN RE: PROPERTY MOVERS                          9
adjudication on the merits of claims, defenses, or counterclaims," but
merely involve a more preliminary determination). Therefore, there
can have been no appeal of such an order. See 28 U.S.C.A.
§ 158(a)(1) (stating that the district court reviews "judgments, orders
and decrees"). Any issue relating to the validity of the debt, therefore,
cannot save Property Movers’ appeal from mootness; at most, Prop-
erty Movers’ arguments in this regard are agruments going to the
merits of the lift-stay order which are beside the point if that order
was moot.

   It is clear that Property Movers’ appeal to the district court became
moot when the Goodwins evicted Property Movers from the Bradford
residence.3 Property Movers’ arguments to the contrary are so uncon-
vincing that we must deem this appeal as well as Property Movers’
appeal to the district court frivolous as filed, because "the result is
obvious [and] the appellant’s argument is wholly without merit." Wil-
liams, 873 F.2d at 1075 (internal quotation marks omitted). We now
turn to the questions of whether Property Movers’ appeals were frivo-
lous as argued, and whether it is appropriate to impose sanctions on
Property Movers’ counsel as well as Property Movers itself.

                                   C.

   We will proceed by surveying Property Movers’ relevant conten-
tions before the district court and examine how Property Movers
defends each of these contentions on appeal. This examination reveals
that Property Movers’ pattern of illogical and irrelevant argument
before the district court continues in this appeal.

   Before the district court, Property Movers filed a brief which, as
we have noted above, made no plausible argument that the district
court could afford Property Movers some form of effective relief.
Property Movers’ brief to the district court did, however, contain sev-
eral arguments, which we evaluate in turn. First, Property Movers
  3
   As a consequence, we do not address the parties’ arguments regarding
whether the state court judgment against Property Movers was valid or
regarding the impact of a pending state court breach of contract action
brought by Bradford against the Goodwins on this litigation. The moot-
ness of Property Movers’ appeal renders these controversies irrelevant.
10                      IN RE: PROPERTY MOVERS
contended that the Goodwins, via their counsel, "committed fraud on
the Bankruptcy Court and caused the Court to rely on certain state-
ments [and other information] that [was] materially false." (J.A. at
99.) Property Movers argued that this was the case because counsel
for the Goodwins allegedly asserted that a trial on the merits had
taken place in the Goodwins’ unlawful detainer action, which Prop-
erty Movers asserted was an example of "serial perjury committed by
the alleged Appellees [sic] Counsel." (J.A. at 104.) Further, Property
Movers argued that the testimony of Geraldine Quigley, a witness in
the bankruptcy court proceeding, was inaccurate.

   What counsel for the Goodwins said to the bankruptcy court was
that "all these issues [relating to the unlawful detainer action] ha[ve]
been previously argued before the state court and [are] subject to a
final judgment." J.A. 83. Because the judgment against Property
Movers was a default judgment, Property Movers asserts that this
statement constitutes "perjury." However, it bears note that (1) while
the state court’s judgment against Property Movers was indeed a
default judgment, Bradford admitted that the state court in the unlaw-
ful detainer action issued a final judgment on the merits against him
personally after he appeared in the state court proceeding, and (2) it
is well-established that a default judgment is a final judgment on the
merits, and res judicata precludes the raising of defenses that could
have been raised in the earlier action. Credit Alliance Corp. v. Wil-
liams, 851 F.2d 119, 122 (4th Cir. 1988). Under the circumstances,
it was frivolous for Property Movers to label this statement by oppos-
ing counsel an act of perjury. Further, we have reviewed Property
Movers’ contentions regarding Ms. Quigley’s testimony and there is
no basis in the record for the claim that she testified falsely by stating
that Bradford never signed a real estate sales contract. Undeterred by
the district court’s sanctions award, Property Movers continues to
accuse opposing counsel of committing "criminal acts" and requests
that this Court refer opposing counsel to the United States Attorney’s
office "to start an investigation regarding the perjury committed by
Appellees’ counsel." (Appellant’s Motion in Opposition to Sanctions
at 8.) Serious accusations of this sort are frivolous when they attempt
to characterize what is at most a disagreement over facts or law as
criminal conduct.
                        IN RE: PROPERTY MOVERS                           11
    Property Movers also has placed great emphasis throughout the
course of this litigation on its contention that the Goodwins do not,
in fact, exist. The genesis of this argument was Property Movers’
statement in its brief to the district court that "[neither] [t]he appel-
lant, nor this honorable court, has any proof that the Goodwins in fact
exist." (J.A. at 99.) Amplifying this contention, Property Movers con-
sistently referred below to counsel for the Goodwins as "the alleged
Appellees’ counsel." (J.A. at 103.) The district court labeled this argu-
ment "completely irrelevant." (J.A. at 168.) On appeal to this Court,
Property Movers labels this concusion "untenable," and undertakes to
defend at some length its contention that the Goodwins do not exist.
Noting correctly that "the existence of the parties in a lawsuit is a fun-
damental element — no parties, no suit," Property Movers contends
that it would be "bereft of common sense" if it did not challenge the
Goodwins’ existence, since "there is no witness with first hand
knowledge" that they exist.4 (Br. of Appellant at 23-24.) We note,
however, that Norman Bradford testified in the Bankruptcy Court that
he signed a lease with the Goodwins, that he paid rent to the Good-
wins, and that he received a copy of a property sales contract signed
by the Goodwins, a set of circumstances which clearly implies that
they exist. Property Movers’ extended challenge in this appeal to the
existence of the Goodwins is exactly the sort of unfounded and illogi-
cal argument capable of rendering an appeal frivolous as argued. See
Romala Corp. v. United States, 927 F.2d 1219, 1225 (Fed. Cir. 1991)
(holding that sanctions are appropriate where "the arguments made
. . . are predominantly irrelevant or illogical").

   Next, Property Movers, in its brief to the district court, argued that
(1) "upon information and belief," counsel for the Goodwins had ex
parte communications with the bankruptcy judge in this case, and that
(2) "the evidence was there for [the bankruptcy judge] but he never
addressed it to save his friend," counsel for the Goodwins. (J.A. at
108.) The district court asked Property Movers’ counsel to provide a
basis for these claims and suggested that if a factual basis existed for
the claims, a complaint to the appropriate attorney and/or judicial
disciplinary authorities would be appropriate. In response, Property
  4
   Property Movers urges this Court, in language bolded for emphasis,
that "appellees’ existence is not only relevant it is vital." (Br. of Appel-
lant at 24.)
12                      IN RE: PROPERTY MOVERS
Movers’ counsel stated that the judicial misconduct claims were "not
an accusation that we are asking this Court to determine." (J.A. at
134.) When the district court noted that these accusations were
included in Property Movers’ brief to the district court and pressed
counsel to illuminate their basis, counsel argued that he was merely
relying on his client’s belief. But see Fed. R. Civ. P. 11(b) (stating
that counsel, by presenting a "pleading, written motion or other
paper" to the Court, "is certifying to the best of the person’s knowl-
edge, information, or belief, formed after an inquiry reasonable under
the circumstances, [that] . . . the allegations or other factual conten-
tions have evidentiary support or . . . are likely to have evidentiary
support after a reasonable investigation." (emphasis added)). When
Bradford took the stand to testify as to the basis for his "belief" that
ex parte contacts had occurred, the sole factual basis he could identify
was the statement of a third party, whose name Bradford did not
know but "who [he] assumed to be an attorney" and whom he met
while in line at the courthouse waiting to make an inquiry, that coun-
sel for the Goodwins had "been friends with" the bankruptcy judge.
( J.A. at 137.) As a foundation for a claim that the bankruptcy judge
"ignored [evidence] to save his friend" and engaged in improper ex
parte contacts, this information is tantamount to no basis at all.

   Before this Court, Property Movers denies that it ever made "any
accusation . . . against anyone." (Br. of Appellant at 27.) Yet the plain
language of Property Movers’ brief to the district court refutes this
contention. Further undertaking to defend its ex-parte-contacts accu-
sation before this Court, Property Movers attempts to draw a distinc-
tion between counsel having ex parte contacts with the bankruptcy
judge and the bankruptcy judge having ex parte contacts with counsel.
The distinction, even if tenable, is beside the point because Property
Movers still can show no good faith basis for believing that either
form of ex parte contacts occurred.5
  5
    Property Movers can cite no authority for its contention that the
United States Constitution protects the right to make wholly unfounded
accusations of judicial and attorney misconduct in papers filed in an ordi-
nary court proceeding. Cf. In re Kelly, 808 F.2d 549, 550 (7th Cir. 1986)
(rejecting the contention that Rule 11 is infirm under the First Amend-
ment).
                        IN RE: PROPERTY MOVERS                          13
   Property Movers makes a number of additional arguments on
appeal, contending that the district court denied it constitutional due
process by misreading its pleadings, which Property Movers claims
clearly raised the issue of "the validity of the debt" to the Goodwins;
that the district court denied it due process by failing to recognize that
the validity of the debt should have been determined by the bank-
ruptcy court; and that the district court erred in finding its appeal friv-
olous in part based on its total failure to cite any legal authority in its
briefs to the district court. We have reviewed these contentions and
find them to be without merit.

                                   III.

   We are cognizant that sanctions should not be lightly imposed for
the filing of a frivolous appeal. Nevertheless, because Property Mov-
ers has pursued this moot appeal principally by making arguments
which are irrelevant, illogical, and utterly without any good-faith fac-
tual basis, we find that this appeal is frivolous as argued to this Court,
and find that the district court did not abuse its discretion in finding
Property Movers’ appeal to the district court to be frivolous and sanc-
tionable. Further, because the as-argued frivolity of this appeal is
demonstrated "in the type of argument[s] used to support it," such as
the challenge to the Goodwins’ existence and baseless accusations
that opposing counsel has engaged in criminal conduct, this is an
appropriate case in which to hold Property Movers and its counsel
jointly and severally liable for a sanctions award. Romala, 927 F.2d
at 1225. Property Movers does not challenge the district court’s deter-
mination of a sanctions amount, nor does it contest the Goodwins’
assertion that they have incurred $3,675 in legal fees defending Prop-
erty Movers’ appeal to this Court.

   Under the circumstances, it would be grossly inequitable to require
the Goodwins to bear the costs of defending this unfortunate example
of a frivolous appeal. Accordingly, we affirm the district court’s find-
ing of mootness and award of sanctions in the amount of $3,064
under Bankruptcy Rule 8020. Further, we grant the Goodwins’
motion for damages pursuant to Federal Rule of Appellate Procedure
38 and impose sanctions against Property Movers and its counsel,
Thomas Plofchan, jointly and severally, in the amount of $3,675.00
plus twice the Goodwins’ costs of this appeal. See Fed. R. Civ. P. 38
14                    IN RE: PROPERTY MOVERS
(providing that in an appropriate case, double costs may be awarded
against a party filing a frivolous appeal). We deny Property Movers’
counter-motion for damages under Rule 38.

AFFIRMED; APPELLEES’ MOTION FOR DAMAGES GRANTED;
  APPELLANT’S COUNTER-MOTION FOR DAMAGES DENIED