Bersher Investments v. Imperial Savings Ass'n (In Re Bersher Investments)

95 B.R. 126, 1988 Bankr. LEXIS 2349, 19 Bankr. Ct. Dec. (CRR) 343, 1988 WL 147888
CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedNovember 7, 1988
DocketBankruptcy No. LA 86-0351-LF, Adv. No. M6-05811-LF, BAP No. CC 87-1051 MoVP
StatusPublished
Cited by5 cases

This text of 95 B.R. 126 (Bersher Investments v. Imperial Savings Ass'n (In Re Bersher Investments)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Appellate Panel for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bersher Investments v. Imperial Savings Ass'n (In Re Bersher Investments), 95 B.R. 126, 1988 Bankr. LEXIS 2349, 19 Bankr. Ct. Dec. (CRR) 343, 1988 WL 147888 (bap9 1988).

Opinion

OPINION

MOOREMAN, Bankruptcy Judge:

By this appeal, the appellant Mr. Brown (attorney for the debtor), seeks to set aside Judge Fenning’s order imposing sanctions in the amount of $500 for appellant’s failure to notify opposing counsel prior to a scheduled hearing that the debtor would not contest the appellee’s motion to lift the stay.

FACTS

On September 5, 1986, the appellee filed a motion for relief from the automatic stay seeking to foreclose on a certain piece of real property. On September 10, 1986, an amended motion was filed. The debtor, by and through its attorney Mr. Brown, filed an opposition to the motions, essentially alleging that the motions were defective because they lacked any declarations as to the “lack of equity.” Additionally, the opposition to the motions alleged that the appellee was adequately protected and that partial payments towards the underlying debt had been rejected by the appellee. Appellee filed an appraisal report on September 18, 1986, and a declaration regarding the value of the property on September 22, 1986.

The hearing on the amended motion took place on September 23, 1986. The bankruptcy court determined that the debtor as well as Mr. Brown had for the first time seen the appellee’s declaration setting forth the alleged value of the property. Due to the late filing of the declaration, the bankruptcy court granted the debtor a two week continuance and stated that if, after review with the debtor, it was determined *128 that no equity existed in the property, Mr. Brown “might want to consider whether pressing this motion makes sense.”

Apparently, after further calculations with the debtor as to the value of the property, Mr. Brown determined it would not be necessary to further oppose the motion to lift the stay. Accordingly, neither the debtor nor Mr. Brown appeared at the continued hearing on the matter. However, counsel for the appellee did appear at the scheduled hearing and obtained an order terminating the automatic stay.

Subsequently, the appellee filed with the bankruptcy court a Motion for Sanctions in which the attorney for the appellee alleged that he had spent three (3) hours preparing for the continued hearing. The appellant filed an opposition to the motion which inter alia stated that Mr. Brown presumed it would be “obvious” to the appellee that he was no longer opposing the motion to lift the stay and that Mr. Brown had been “engaged in Court the two days before the hearing and did not make his customary courtesy phone call to [the appellee’s attorney].”

The bankruptcy court determined that under the circumstances, “[Mr. Brown] had an obligation to inform [the appellee’s attorney] if he didn’t oppose” the lift stay motion. Accordingly, the bankruptcy court held “the amount of $500 in sanctions is appropriate strictly for the unnecessary court appearance.” 1

DISCUSSION

The issue of whether certain conduct violates a court rule and calls for the imposition of sanctions involves a legal question subject to de novo review. In re Walter, 83 B.R. 14, 17 (9th Cir. BAP 1988) (citations omitted). As to the form or amount of any sanction imposed, however, a bankruptcy court has wide discretion and will not be modified by an appellate court absent an abuse of discretion. Id. Additionally, any disputed factual determinations are reviewed under the clearly erroneous standard. In re Film Ventures International, Inc., 89 B.R. 80, 83 (9th Cir. BAP 1988) (citations omitted).

Although the transcript does not specifically set forth the authority upon which the bankruptcy court relied in imposing the sanctions, clear authority does exist to support the bankruptcy court’s order.

Local Bankruptcy Rule 904(f)(3) of the Central District of California provides in the pertinent part:

Any party ... opposing a motion ... who does not intend to urge or oppose the same ... shall, not less than three (3) days in advance of any day fixed for the hearing, notify (1) opposing counsel, (2) the Clerk of the Judge before whom the matter is pending, in order that the Court and counsel may not be required to devote time to an immediate consideration of a matter which is not to be presented.

Central District of California Local Bankruptcy Rule 904(f)(3) (emphasis added).

Additionally, in order to insure compliance with Local Bankruptcy Rule 904, subsection (i) provides in the pertinent part:

The presentation to the court of ... unwarranted opposition of motions, which ... unduly delay the course of an action or proceeding through the Courts, or failure to comply fully with this rule, subjects the offender, at the discretion of the court to appropriate discipline, including the imposition of costs and attorney’s fees to opposing counsel.

Central District of California Local Bankruptcy Rule 904(i) (emphasis added).

The appellant initially argues that there is no authority for the imposition of sanctions for an “unintentional failure to notify counsel of no further opposition.” The appellant contends that Local Bankruptcy Rule 904 is derived from Bankruptcy Rule 9011 and accordingly “should be read to be limited to situations set forth in Bankrupt *129 cy Rule 9011” (ie. “willful” conduct). However, the appellant cites no authority for this proposition.

Bankruptcy Rule 9029 allows for the making of local bankruptcy rules so long as they are not “inconsistent” with the more general Bankruptcy Rules. In the instant case, the relevant portions of Local Bankruptcy Rule 904 allow for appropriate discipline when a party who has previously opposed a motion fails to notify opposing counsel or the court of a later intent not to so oppose, thereby avoiding unnecessary hearings and wasted court time. Bankruptcy Rule 9011 provides inter alia for appropriate sanctions for the filing of frivolous pleadings. Additionally, sanctions under Bankruptcy Rule 9011 are mandatory (thereby warranting a more strict standard when reviewing a party’s conduct), while “appropriate discipline” under Local Bankruptcy Rule 904 is completely at the discretion of the court. These Rules cannot be considered to be “inconsistent” with one another and the appellant’s argument must fail.

Additionally, the appellant argues that under Bankruptcy Rule 9014 (dealing with contested matters), “[n]o response is required under this rule unless the court orders an answer to a motion.” Again, however, there is no inconsistency with Local Rule 904 and Bankruptcy Rule 9014. While Rule 9014 does not specifically require a response, Local Rule 904(f)(3) merely requires that when a response in opposition is originally made and later the opposing party decides to withdraw its opposition, notification must be given. The clear purpose of Local Rule 904(f)(3), which is essentially to avoid unnecessary hearings, is specifically set forth in the local rule.

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Bluebook (online)
95 B.R. 126, 1988 Bankr. LEXIS 2349, 19 Bankr. Ct. Dec. (CRR) 343, 1988 WL 147888, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bersher-investments-v-imperial-savings-assn-in-re-bersher-investments-bap9-1988.