In re: Pleasure Point Marina, LLC

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: November 3, 2015
• Docket: CC-15-1030-FKiKu
• Status: Unpublished

Opinion

FILED NOV 03 2015 1 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT

3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-15-1030-FKiKu 6 ) PLEASURE POINT MARINA, LLC, ) Bk. No. 6:14-15871-WJ 7 ) Debtor. ) 8 ______________________________) NARAN REITMAN, ) 9 ) Appellant, ) 10 ) v. ) MEMORANDUM1 11 ) PLEASURE POINT MARINA, LLC, ) 12 ) Appellee. ) 13 ______________________________) 14 Argued and Submitted on October 22, 2015 at Los Angeles, California 15 Filed – November 3, 2015 16 Appeal from the United States Bankruptcy Court 17 for the Central District of California 18 Honorable Wayne E. Johnson, Bankruptcy Judge, Presiding 19 Appearances: Kira L. Klatchko of Lewis Brisbois Bisgaard & 20 Smith argued for appellant Naran Reitman; Robert P. Goe of Goe & Forsythe, LLP argued for appellee 21 Pleasure Point Marina, LLC. 22 Before: FARIS, KIRSCHER and KURTZ, Bankruptcy Judges. 23 24 25 26 1 This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8024-1(c)(2). 1 INTRODUCTION 2 This case presents a depressingly familiar set of 3 circumstances. Due to the combined effects of an attorney’s 4 inattention, a client’s intransigence, and a breakdown in the 5 attorney/client relationship, no one timely complied with 6 discovery obligations. As a result, the bankruptcy court 7 required the client (who in this case is also an attorney) to pay 8 the princely sum of $4,265.87, representing a third of the 9 attorneys’ fees and costs incurred by the opposing party, under 10 Rule 7037 of the Federal Rules of Bankruptcy Procedure.2 We hold 11 that the bankruptcy court did not abuse its discretion in 12 sanctioning the client for his role in hindering the discovery 13 process and disobeying the court’s order. Accordingly, we 14 AFFIRM. 15 FACTS 16 Appellant Naran Reitman is an attorney who represented 17 Ronald and Melinda Lerg in a state-court action against Appellee 18 Pleasure Point Marina, LLC. 19 Perceiving that the state court litigation was “at an 20 impasse,” Mr. Reitman sent counsel for Pleasure Point a letter 21 stating that “plaintiffs are left with no choice but to demand 22 that the Board accept the plaintiffs’ proposal, as written, and 23 execute the Settlement Agreement tendered by the plaintiffs 24 . . . . If the Board fails to execute the Settlement 25 2 26 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all 27 “Rule” references are to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037, and all “Civil Rule” references are 28 to the Federal Rules of Civil Procedure, Rules 1-86.

2 1 Agreement[,] . . . the plaintiffs will proceed forward with a 2 plan to place Pleasure Point Marina, LLC into involuntary 3 bankruptcy.”3 4 The Lergs retained attorney Thomas Polis as bankruptcy 5 counsel. Mr. Polis did not, however, entirely replace 6 Mr. Reitman; in his own words, Mr. Reitman continued to act “as 7 the referring attorney, to provide information and documents 8 relating to the state court proceeding, and to be available to 9 the bankruptcy attorney and clients as needed.” 10 On May 5, 2014, the Lergs made good on their threat and 11 filed an involuntary bankruptcy petition against Pleasure Point. 12 At the time of the initial filing, the Lergs were the only 13 petitioning creditors. 14 Pleasure Point filed a Motion to Dismiss Involuntary 15 Bankruptcy Proceeding Pursuant to Sections 303 and 305 (“Motion 16 to Dismiss”). Pleasure Point claimed that it had more than 17 twelve creditors, so at least three petitioning creditors were 18 required under § 303, but the Lergs’s petition included only two 19 petitioning creditors. The hearing on the Motion to Dismiss was 20 set for June 30, 2014. 21 On June 27, 2014, one business day before the hearing on the 22 Motion to Dismiss, Mr. Polis, as counsel for Mr. Reitman, filed a 23 3 24 Although Mr. Reitman, as counsel for the Lergs, sent the letter to Pleasure Point threatening involuntary bankruptcy, at 25 oral argument, counsel for Mr. Reitman argued that it was 26 bankruptcy attorney Thomas Polis who suggested the involuntary bankruptcy and that Mr. Reitman “had nothing to do with it.” 27 This assertion is not supported by the record and is belied by the fact that Mr. Reitman ostensibly authored the letter to 28 Pleasure Point in the state court action.

3 1 Joinder to Involuntary Petition by Creditor of the Debtor 2 (“Joinder”). Mr. Reitman contended that he was a creditor of 3 Pleasure Point, based on an assignment of a promissory note made 4 by Pleasure Point in favor of the Lergs.4 Thus, Mr. Reitman’s 5 role changed; in addition to being the “referring attorney” 6 working with Mr. Polis, he became a party to the involuntary case 7 and a client of Mr. Polis. According to Mr. Reitman, this was 8 supposed to be a temporary arrangement: “I expected to retain 9 personal counsel and substitute such counsel in Mr. Polis’ place 10 shortly thereafter.” 11 In response to the Joinder, Pleasure Point argued that the 12 assignment was ineffective and was made solely to fabricate a 13 third petitioning creditor. This argument was unavailing; the 14 bankruptcy court denied Pleasure Point’s Motion to Dismiss and 15 scheduled trial on the involuntary petition for August 21, 2014. 16 Due to the impending trial date, the court set an expedited 17 discovery schedule. Exhibit lists and witness lists were due on 18 August 7, and responses to requests for production were due seven 19 days after service, rather than the usual thirty days. 20 On or around July 11, Pleasure Point served the Lergs with 21 requests for production of documents (“First Lergs RPOD”). 22 Responses were due on July 21. Thirty-four of the thirty-eight 23 categories of requested documents dealt with the merits of the 24 Lergs’s claims against Pleasure Point; the remaining four 25 26 4 At oral argument, counsel for Mr. Reitman argued that 27 Mr. Polis advised Mr. Reitman that he should be the third petitioning creditor. This contention is also unsupported by the 28 record.

4 1 categories concerned the assignment of claims to Mr. Reitman. 2 Mr. Polis served the Lergs’s written responses on July 24, a 3 few days late. The responses claimed that the Lergs had already 4 filed all of the requested documents in the bankruptcy court. 5 Accordingly, the Lergs did not produce any additional documents. 6 On or around July 14, Pleasure Point served a second set of 7 requests for production of documents on the Lergs (collectively, 8 “Second Lergs RPOD”). The Second Lergs RPOD included a single 9 request for the Lergs’s federal and state income tax returns 10 spanning 2003 to the present. 11 Also on or around July 14, Pleasure Point served Mr. Reitman 12 with a request for production of documents (“Reitman RPOD”). 13 Among other things, the requests concerned the assignment of 14 claims from the Lergs to Mr. Reitman, as well as Mr. Reitman’s 15 billing records regarding his representation of the Lergs. The 16 responses to the Second Lergs RPOD and the Reitman RPOD were due 17 by July 21. 18 At that point, the discovery process began to go awry. 19 Mr. Polis forwarded the Reitman RPOD to Mr. Reitman on July 15. 20 According to Mr. Reitman’s unrebutted declaration testimony, by 21 July 17, he had given Mr. Polis everything he needed to prepare 22 responses to the Second Lerg RPOD and the Reitman RPOD. 23 Mr. Reitman told Mr. Polis that all of the requested documents 24 were either protected by the attorney-client privilege or 25 nonexistent. Mr. Reitman expected Mr. Polis to prepare and serve 26 the responses, and Mr. Polis never contended otherwise. 27 On July 25, 2014, Mr. Reitman left on a two-week motorcycle 28 trip to South Dakota. On July 28, Mr. Polis also left on

5 1 vacation. Mr. Polis had not served the discovery responses that 2 were due on July 21; he has never attempted to explain or excuse 3 that failure. 4 On July 29, Pleasure Point sent a letter to Mr. Polis to 5 follow up on the outstanding discovery requests. Mr. Polis, who 6 was still on vacation at the time, informed Pleasure Point the 7 following day that he would respond to the discovery requests 8 when he returned to the office on August 5. Given that witness 9 lists and exhibit lists were due on August 7, Pleasure Point 10 found Mr. Polis’s response unacceptable and thereafter filed its 11 Emergency Motion to Compel Responses to Written Discovery and for 12 Monetary Sanctions Against Petitioning Creditors and Their 13 Counsel of Record (“Motion to Compel”). 14 Mr. Reitman contends that he did not realize that Mr. Polis 15 had not responded to the Second Lergs RPOD and the Reitman RPOD 16 until he checked his e-mail on July 30. He then exchanged a 17 number of e-mails with Mr. Polis, wherein he blamed Mr. Polis for 18 his failure to answer the discovery requests and accused 19 Mr. Polis of professional negligence. Mr. Polis responded by 20 expressing frustration with Mr. Reitman’s self-serving e-mails 21 and his attempts to control the case. 22 On August 4, Mr. Polis filed an opposition to the Motion to 23 Compel. Mr. Polis argued (in summary) that Pleasure Point’s 24 requests were overbroad. He did not address his failure to file 25 timely responses to the Second Lergs RPOD and the Reitman RPOD. 26 The bankruptcy court held a hearing on the Motion to Compel 27 28

6 1 on August 5.5 Mr. Reitman still had not produced any documents 2 responsive to the discovery requests. The court continued the 3 hearing and entered its Second Scheduling Order that provided 4 for, among other things, a meet-and-confer and supplemental 5 briefing regarding the Motion to Compel. The court ordered: 6 7. A continued hearing regarding the Emergency Motion [to Compel] shall occur on August 13, 2014 at 7 1:00 p.m. to consider the request of Debtor to compel discovery responses. Trial counsel for all parties are 8 hereby ordered to meet and confer regarding the pending discovery dispute. If the parties do not otherwise 9 resolve the matter themselves, then on August 8, 2014 at 12:00 p.m., the parties shall meet and confer for at 10 least one hour in person in good faith in an attempt to resolve the Emergency Motion. Senior counsel of record 11 for the moving party and senior counsel of record for the opposing party shall personally attend the meeting. 12 The meeting shall occur at the United States Bankruptcy Court, 3420 Twelfth Street, Riverside, CA 92501 in any 13 available conference room on the third floor. The parties may move the date, time and location of the 14 meeting pursuant to an agreement confirmed in writing (or by e-mail) provided the meeting occurs no later 15 than August 8, 2014 at 12:00 p.m. No court order is required to move the date, time and location of the 16 meeting. However, the meeting must occur in person (i.e. not by telephone) and senior counsel must attend. 17 18 The court also required a joint stipulation (“Stipulation”) 19 pursuant to Central District of California Local Bankruptcy Rule 20 (“LBR”) 7026-1(c)(3) and provided for supplemental briefing 21 regarding the Motion to Compel: 22 8. If the parties are unable to reach an agreement resolving the Emergency Motion, then (a) the 23 parties shall prepare the stipulation required by LBR 7026-1(c)(3) and submit it to the court no later 24 than August 11, 2014, (b) supplemental briefs regarding the Emergency Motion are due no later than August 12, 25 26 5 Mr. Reitman states that he wanted to monitor the hearing 27 telephonically, but Mr. Polis told him (incorrectly) that the hearing was set for 1:30 p.m., not 1:00 p.m. As a result, 28 Mr. Reitman only heard the last few minutes of the hearing.

7 1 2014 at 10:00 a.m. and (c) trial counsel for all parties must appear at the continued hearing on August 2 13, 2014. Appearances by telephone are not authorized for the hearing on August 13, 2014. 3 4 LBR 7026-1(c)(3) provides, among other things, that the 5 Stipulation “must identify, separately and with particularity, 6 each disputed issue that remains to be determined at the hearing 7 and the contentions and points and authorities of each party as 8 to each issue.” It must also advise the court of “each party’s 9 contentions” for each disputed discovery request. 10 LBR 7026-1(c)(3)(A), (B). 11 The parties held their meet-and-confer on August 7, 2014. 12 Mr. Polis attended in person on behalf of Mr. Reitman and the 13 Lergs, and Robert Goe and Elizabeth LaRocque attended in person 14 as counsel for Pleasure Point. Mr. Reitman, who was still out of 15 state and whom Mr. Polis had told he could participate by phone 16 “if you so choose,” participated telephonically. 17 The parties reached a simple resolution of the dispute about 18 the Second Lergs RPOD. Mr. Polis agreed to produce redacted 19 portions of the Lergs’s tax returns as a compromise to Pleasure 20 Point’s request for complete and unredacted copies. 21 The discussion of the Reitman RPOD was more difficult. 22 Pleasure Point recounts that Mr. Reitman “was combative and was 23 completely uncooperative in producing crucial documents . . . .” 24 Mr. Reitman acknowledges that “[t]he discussion was ‘spirited.’” 25 Mr. Reitman maintained that he had no documents relating to the 26 assignment of the Lergs’s promissory note to him. In the end, 27 Mr. Reitman agreed only to provide a spreadsheet summarizing the 28 amount of his billings to and payments received from the Lergs

8 1 and a privilege log for a single letter. 2 At the conclusion of the meet-and-confer, Mr. Reitman 3 believed that all discovery disputes were resolved. He says, 4 however, that he realized shortly after the meeting that he “did 5 not hear how the tax return issue was disposed of.” Later that 6 evening, he told Mr. Polis (via text message) to include in the 7 Stipulation a provision that the Lergs’s tax returns were not to 8 be revealed to anyone other than the attorneys and retained 9 experts. 10 Counsel for Pleasure Point drafted the Stipulation required 11 by the bankruptcy court pursuant to LBR 7026-1(c)(3). On 12 August 8, 2014, they sent the draft to Mr. Polis to complete the 13 sections describing the positions of Mr. Reitman and the Lergs. 14 On August 10, Mr. Polis responded that he would provide his 15 comments by mid-day on August 11. 16 At this point, the already strained relationship between 17 Mr. Reitman and Mr. Polis collapsed. Mr. Polis did not forward 18 Mr. Reitman the draft Stipulation until the evening of Sunday, 19 August 10, two days after he had received it and one day before 20 it was due. On August 11 (the day the Stipulation was due), 21 Mr. Reitman responded by stating that, “I do not understand the 22 Stipulation. It contains nothing relating to the Lergs and 23 myself prepared by you.” He also stated that, “[t]he Stipulation 24 also contains gratuitous statements and argument by the LLC’s 25 counsel, which has no place in a Stipulation. All such 26 statements should be deleted.” Mr. Polis did not respond. 27 That same day, Mr. Polis’s office sent Ms. LaRocque a 28 revised version of the Stipulation, which included a description

9 1 of the Lergs’s position but left blanks for Mr. Reitman’s 2 position. Ms. LaRocque responded by requesting comments for 3 Mr. Reitman. Mr. Polis responded that he had forwarded the 4 Stipulation to Mr. Reitman for his review. 5 Mr. Polis forwarded a copy of the revised Stipulation to 6 Mr. Reitman. In response to Mr. Reitman’s further questions 7 regarding whether the Lergs’s tax returns would be produced, 8 Mr. Polis responded, “You obviously have an agenda going forward 9 with this case that’s other than litigating in the most fair, 10 effective and efficient manner to get this done for the clients’ 11 best outcome. That’s my objective and I’ll do what I have to do 12 [to] achieve those ends.” Mr. Polis also demanded that 13 Mr. Reitman transmit the Lergs’s tax returns to his office for 14 production to Pleasure Point, but Mr. Reitman responded that he 15 had returned the tax returns to the Lergs and was no longer in 16 possession of them.6 17 At this point, Mr. Polis essentially abandoned Mr. Reitman. 18 At 3:35 p.m., Ms. LaRocque e-mailed Mr. Polis a revised version 19 of the Stipulation and again asked for comments regarding 20 Mr. Reitman. Shortly thereafter, Mr. Polis told Ms. LaRocque 21 that she should contact Mr. Reitman directly, because “[a]fter a 22 recent conference call regarding this matter, [he was] not 23 6 24 Mr. Reitman’s claim that he no longer had possession of the returns is implausible. In the very same e-mail, Mr. Reitman 25 informed Mr. Polis, “I have the clients in my office at this 26 moment.” In other words, Mr. Reitman said, virtually in the same breath, that he could not produce the tax returns because the 27 Lergs had them and that the Lergs were at that moment in Mr. Reitman’s office. Mr. Reitman was “hiding the ball,” not 28 just from Pleasure Point, but also from his own counsel.

10 1 certain as to [his] future role in this matter.” She forwarded 2 the Stipulation to Mr. Reitman and asked for his comments as soon 3 as possible. Mr. Reitman responded, “I have sent instructions 4 under separate cover to Mr. Polis a few moments ago regarding 5 these issues. Mr. Polis now knows what he needs to do.” Shortly 6 thereafter, at 5:47 p.m., he again e-mailed Ms. LaRocque, “please 7 advise Mr. Polis, who is being copied on this message, that I am 8 instructing that the Stipulation not be returned to Mr. Goe’s 9 office [counsel for Pleasure Point] under any circumstances 10 unless and until you receive further instructions either from me 11 or the clients.” Shortly after 6:00 p.m., without waiting for a 12 further response from Mr. Reitman, counsel for Pleasure Point 13 filed the Stipulation in an attempt to meet the court’s deadline. 14 The following morning, on August 12, Pleasure Point filed 15 its supplemental brief in support of its Motion to Compel, as 16 provided in the Second Scheduling Order. Pleasure Point alleged 17 that Mr. Reitman and the Lergs were in contempt of the bankruptcy 18 court’s order for failing to execute the Stipulation by 19 August 11. Pleasure Point requested that the court sanction 20 Mr. Reitman, the Lergs, and Mr. Polis for $11,415.10 in 21 attorneys’ fees and costs. 22 Half an hour later, Mr. Polis filed the Stipulation with his 23 signature on behalf of the Lergs. Mr. Polis did not sign the 24 Stipulation on behalf of Mr. Reitman or include information about 25 Mr. Reitman’s position. 26 Mr. Polis also filed a declaration in which he attempted to 27 explain the circumstances surrounding the Stipulation (and to 28 exculpate himself). He said he had recommended that the Lergs

11 1 produce redacted portions of their tax returns and that 2 Mr. Reitman had promised to provide the returns for production. 3 He said that the Lergs and Reitman “are now for reasons 4 unbeknownst to me hesitant to provide such documents . . . .” He 5 said he had “no control” over the production of documents by 6 Mr. Reitman, that Mr. Reitman’s failure to comply with the 7 Stipulations was “his own doing of which I have no control,” and 8 that his efforts to protect the Lergs’s interests and comply with 9 the court’s discovery order “have been completely thwarted by 10 [Mr. Reitman’s] blatant disregard for the Court’s Discovery Order 11 . . . .” He said he “will be substituting out of this matter 12 very soon.”7 13 That day, Mr. Reitman produced a brief summary of billing 14 records and payments from the Lergs to Mr. Reitman. The Lergs 15 also agreed to produce their redacted tax returns. 16 The following day, at the August 13 continued hearing on the 17 Motion to Compel, the parties apprised the bankruptcy court of 18 the ongoing discovery dispute. The court said that it would 19 “take off calendar the motion to compel as to the Lergs, and deem 20 it as resolved by consent of the parties.” The court turned its 21 attention to Mr. Reitman, inquiring if he ever responded to the 22 Reitman RPOD. Mr. Reitman at first argued that he was not served 23 with any discovery request, because it was served on Mr. Polis. 24 25 7 The bankruptcy court did not sanction Mr. Polis, so we 26 need not rule on the propriety of his conduct. We do not condone his decision to abandon one of his clients - Mr. Reitman - in 27 favor of his own self interest or to disclose privileged attorney-client communications to the court in an effort to 28 exculpate himself and avoid sanctions.

12 1 When the court pressed him whether he “at any time, provided a 2 written response to the discovery request,” he answered, “No, 3 sir. I provided all of that information to Mr. Goe.”8 He 4 further admitted that he did not provide a privilege log to 5 opposing counsel; participated in the meet-and-confer by 6 telephone; did not file a supplemental brief; and believed that 7 the discovery dispute was mostly resolved, except for the 8 question whether a particular letter was privileged. He argued, 9 “I did not understand that I was a party to this motion until 10 pretty much right now.9 I was never served with discovery. 11 Mr. Polis was. At no time did Mr. Polis tell me that, ‘You need 12 to respond to this discovery, and so get it responded to.’” 13 At the conclusion of the hearing, the bankruptcy court 14 sanctioned Mr. Reitman for his (1) failure to respond to 15 discovery requests; (2) failure to participate in person at the 16 August 7, 2014 meet-and-confer; (3) failure to file a 17 supplemental brief; and (4) failure to execute the Stipulation. 18 The bankruptcy court sanctioned Mr. Reitman $4,265.87 and 19 explained its rationale for doing so: 20 With respect to the sanctions of $4,265.87, that figure is calculated as follows: 21 22 8 Mr. Reitman probably misspoke. He probably meant to refer 23 to Mr. Polis, his attorney, rather than opposing counsel. 9 24 Mr. Reitman’s position that he was not served with the Motion to Compel or did not understand that it was directed at 25 him is disingenuous. At oral argument, counsel argued that if 26 the motion was electronically filed, he would not have seen it. However, the record is clear that Mr. Polis forwarded the Motion 27 to Compel to Mr. Reitman. Moreover, even a cursory reading of the motion (by an attorney, no less) would inform Mr. Reitman 28 that he is one of the subjects of the Motion to Compel.

13 1 The Court has reviewed the billing records that have been submitted by the moving party. Those billing 2 records articulate or identify $12,656 in attorney’s fees; $141.60 in costs, for a total of $12,797.60 in 3 fees and costs. The Court has divided that by one-third, resulting in the sanctions of $4,265.87.10 4 5 The bankruptcy court did not sanction Mr. Polis or the Lergs and 6 stated that, “I think, frankly, Mr. Polis has saved his clients 7 [the Lergs] - or soon to be former clients - from disaster by 8 signing a stipulation . . . .” 9 Mr. Reitman thereafter filed a motion for reconsideration, 10 in which he attempted to blame the discovery dispute on 11 Mr. Polis. He argued that any of his mistakes, “whether as an 12 attorney or represented client . . . were the product of 13 excusable neglect” under Civil Rule 60(b). 14 At the December 5, 2014 hearing, the court orally denied the 15 motion for reconsideration, and it issued its order to that 16 effect on January 22, 2015. Mr. Reitman timely filed his notice 17 of appeal on January 28, 2015. 18 JURISDICTION 19 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 20 §§ 1334 and 157(b)(1). We have jurisdiction under 28 U.S.C. 21 § 158. 22 ISSUES 23 (1) Whether the bankruptcy court abused its discretion in 24 25 10 Although Pleasure Point requested only $11,415.10 in 26 attorneys’ fees and costs, the actual billing invoices attached to Pleasure Point’s supplemental brief to its Motion to Compel 27 totaled $12,656 in attorneys’ fees and $141.60 in costs. Thus, the court used the amount calculated from the actual invoices, 28 rather than the number stated in the brief.

14 1 sanctioning Mr. Reitman under Rule 7037. 2 (2) Whether the bankruptcy court abused its discretion in 3 denying Mr. Reitman’s motion for reconsideration. 4 STANDARDS OF REVIEW 5 We review the bankruptcy court’s imposition of discovery 6 sanctions for abuse of discretion. Freeman v. San Diego Ass’n of 7 Realtors, 322 F.3d 1133, 1156 (9th Cir. 2003). We apply a 8 two-part test to determine objectively whether the bankruptcy 9 court abused its discretion, first determining de novo whether 10 the court identified the correct legal rule, and second examining 11 the court’s factual findings under the clearly erroneous 12 standard. Beal Bank USA v. Windmill Durango Office, LLC 13 (In re Windmill Durango Office, LLC), 481 B.R. 51, 64 (9th Cir. 14 BAP 2012) (citing United States v. Hinkson, 585 F.3d 1247, 15 1261-62 (9th Cir. 2009) (en banc)). A bankruptcy court abuses 16 its discretion if it applied the wrong legal standard or its 17 findings were illogical, implausible, or without support in the 18 record. TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 19 832 (9th Cir. 2011). 20 Similarly, we review the bankruptcy court’s denial of a 21 motion for reconsideration for abuse of discretion. Cruz v. 22 Stein Strauss Tr. #1361, PDQ Invs., LLC (In re Cruz), 516 B.R. 23 594, 601 (9th Cir. BAP 2014) (citing Tracht Gut, LLC v. Cty. of 24 L.A. Treasurer & Tax Collector (In re Tracht Gut, LLC), 503 B.R. 25 804, 810 (9th Cir. BAP 2014)). 26 “We do not reverse for errors not affecting substantial 27 rights of the parties, and may affirm for any reason supported by 28 the record.” COM–1 Info, Inc. v. Wolkowitz (In re Maximus

15 1 Computers, Inc.), 278 B.R. 189, 194 (9th Cir. BAP 2002); see 2 28 U.S.C. § 2111; Civil Rule 61, incorporated by Rule 9005. 3 DISCUSSION 4 A. Civil Rule 37 mandates discovery sanctions for noncompliance with Civil Rule 34. 5 6 Under Civil Rule 34(a), a party may serve another party with 7 a request: 8 (1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the 9 following items in the responding party’s possession, custody, or control: 10 (A) any designated documents or electronically 11 stored information - including writings, drawings, graphs, charts, photographs, sound recordings, 12 images, and other data or data compilations - stored in any medium from which information can be 13 obtained either directly or, if necessary, after translation by the responding party into a 14 reasonably usable form; or 15 (B) any designated tangible things[.] 16 Civil Rule 34(a). The responding party must generally serve a 17 response within thirty days of service, although the court may 18 order a longer or shorter period. Civil Rule 34(b)(2)(A). “For 19 each item or category, the response must either state that 20 inspection and related activities will be permitted as requested 21 or state an objection to the request, including the reasons.” 22 Civil Rule 34(b)(2)(B). 23 Civil Rule 37(a), which is made applicable by Rule 7037, 24 provides that a party may move to compel discovery when, inter 25 alia, “a party fails to respond that inspection will be permitted 26 - or fails to permit inspection - as requested under [Civil] 27 Rule 34.” Civil Rule 37(a)(3)(B)(4). In the event a motion to 28 compel is granted, Civil Rule 37 states that “the court must,

16 1 after giving an opportunity to be heard, require the party or 2 deponent whose conduct necessitated the motion, the party or 3 attorney advising that conduct, or both to pay the movant’s 4 reasonable expenses incurred in making the motion, including 5 attorney’s fees.” Civil Rule 37(a)(5)(A). 6 However, Civil Rule 37(a) also provides that sanctions are 7 inappropriate in certain circumstances: 8 But the court must not order this payment if: 9 (i) the movant filed the motion before attempting in good faith to obtain the disclosure or 10 discovery without court action; 11 (ii) the opposing party’s nondisclosure, response, or objection was substantially justified; or 12 (iii) other circumstances make an award of 13 expenses unjust. 14 Id. 15 Similarly, if a party violates a court order regarding 16 discovery, then “the court must order the disobedient party, the 17 attorney advising that party, or both to pay the reasonable 18 expenses, including attorney’s fees, caused by the failure, 19 unless the failure was substantially justified or other 20 circumstances make an award of expenses unjust.” Civil 21 Rule 37(b)(2)(c). 22 The party facing sanctions bears the burden of proving that 23 its failure to disclose the required information was 24 substantially justified or is harmless. R&R Sails, Inc. v. Ins. 25 Co. of Pa., 673 F.3d 1240, 1246 (9th Cir. 2012) (citing Torres v. 26 City of L.A., 548 F.3d 1197, 1213 (9th Cir. 2008) (construing 27 FRCP 37(c)(1))). The court is not required to find bad faith as 28 a prerequisite to imposing monetary sanctions. Bissell v. United

17 1 States, 321 F. App’x 549, 552 (9th Cir. 2008); see Lewis v. Ryan, 2 261 F.R.D. 513, 518 (S.D. Cal. 2009) (“The lack of bad faith does 3 not immunize a party or its attorney from sanctions, although a 4 finding of good or bad faith may be a consideration in 5 determining whether imposition of sanctions would be unjust and 6 the severity of the sanctions.” (citing Hyde & Drath v. Baker, 7 24 F.3d 1162, 1171 (9th Cir. 1994))). 8 In imposing sanctions, the court should consider the 9 relative responsibility of the attorney and the client in causing 10 the discovery abuse. See, e.g., Dodson v. Runyon, 86 F.3d 37, 40 11 (2d Cir. 1996) (In considering “whether the sanctions should be 12 aimed primarily against the party or the attorney, it can be 13 important for the district court to assess the relative roles of 14 attorney and client in causing the delay, as well as whether a 15 tactical benefit was sought by the delay. In making this 16 statement, we are cognizant of the fact that a client is 17 ordinarily bound by the acts of his lawyer, and this - of course 18 - extends to behavior that would justify a dismissal for failure 19 to prosecute.”); Tom v. S.B., Inc., 280 F.R.D. 603, 612 (D.N.M. 20 2012) (“In reviewing whether sanctions are appropriate, the court 21 should consider who acted in bad faith, the party or the 22 attorney, and to what degree.” (emphasis in original)). Courts 23 must “analyze the conduct of parties and their attorneys 24 separately. ‘The rule that the sins of the lawyer are visited on 25 the client does not apply in the context of sanctions,’ and we 26 therefore must ‘specify conduct of the client herself that is bad 27 enough to subject her to sanctions.’” Ransmeier v. Mariani, 28 718 F.3d 64, 71 (2d Cir. 2013) (quoting Gallop v. Cheney,

18 1 660 F.3d 580, 584 (2d Cir. 2011) (per curiam), vacated in part on 2 other grounds, 667 F.3d 226, 231 (2d Cir. 2011)). 3 B. The bankruptcy court did not abuse its discretion when it sanctioned Mr. Reitman. 4 5 There is no dispute that the bankruptcy court identified the 6 correct standard for the imposition of sanctions under Rule 7037. 7 Rather, Mr. Reitman argues that the court erred in applying that 8 standard to the facts of this case. 9 Similarly, there is no dispute that Mr. Reitman did not 10 fully comply with the bankruptcy court’s Second Scheduling Order. 11 Mr. Reitman claims, however, that the bankruptcy court should 12 have sanctioned Mr. Polis, rather that Mr. Reitman, for that 13 noncompliance. Therefore, we turn to the four instances of 14 noncompliance for which the bankruptcy court sanctioned 15 Mr. Reitman. 16 1. Failure to respond to the Reitman RPOD 17 The bankruptcy court ruled that Mr. Reitman failed to 18 respond to the Reitman RPOD. We think that this failing, 19 standing alone, would not justify sanctioning Mr. Reitman rather 20 than Mr. Polis. 21 The uncontroverted evidence shows that, well before the 22 response was due, Mr. Reitman gave Mr. Polis the information 23 Mr. Polis needed to draft the response to the Reitman RPOD. For 24 reasons he has never attempted to explain, Mr. Polis simply 25 failed to complete that task. 26 Mr. Reitman’s arguments to the bankruptcy court on this 27 issue probably hurt his cause. For example, he argued that he 28 was not responsible for the failure to respond because he was

19 1 never “served” with the Reitman RPOD. This contention was 2 meritless. Pleasure Point’s counsel served the Reitman RPOD on 3 Mr. Polis, who was Mr. Reitman’s attorney. Pleasure Point did 4 not need to serve Mr. Reitman with discovery requests directly. 5 The argument is also disingenuous, because Mr. Reitman eventually 6 admitted that Mr. Polis promptly forwarded a copy of the Reitman 7 RPOD to him, and the record confirms that Mr. Polis forwarded a 8 copy of the discovery request on July 15. The bankruptcy court 9 correctly chastised Mr. Reitman for his misleading statements. 10 Nevertheless, responsibility for the failure to serve a 11 response properly rests with Mr. Polis, and that failing, 12 standing alone, would not justify sanctions against Mr. Reitman. 13 2. Failure to attend the meet-and-confer in person 14 Second, the bankruptcy court sanctioned Mr. Reitman for 15 attending the August 7 meet-and-confer by phone, rather than in 16 person. The bankruptcy court thought that this was contrary to 17 its Second Scheduling Order which provides, in relevant part: 18 Trial counsel for all parties are hereby ordered to meet and confer regarding the pending discovery 19 dispute. . . . [T]he parties shall meet and confer for at least one hour in person in good faith in an attempt 20 to resolve the Emergency Motion. Senior counsel of record for the moving party and senior counsel of 21 record for the opposing party shall personally attend the meeting. . . . [T]he meeting must occur in person 22 (i.e. not by telephone) and senior counsel must attend. 23 Mr. Reitman attended the meeting telephonically, ostensibly with 24 Mr. Polis’s permission. 25 Mr. Reitman argues that, because he was not counsel of 26 record in the bankruptcy case, he was not obligated to attend the 27 meet-and-confer in person. He argues that the court did not 28 order him to attend the meeting and there is no applicable rule

20 1 requiring a client to attend a discovery meeting, in person or 2 otherwise. We agree that the Second Scheduling Order is not 3 sufficiently clear to support sanctions against Mr. Reitman on 4 this score. 5 The court made clear that “senior counsel of record” were 6 required to attend the meeting in person. The order stated at 7 least three times that counsel were to meet “in person.” The 8 order does state at one point that “the parties shall meet and 9 confer in good faith,” but all of the provisions requiring 10 personal appearance apply only to counsel, not the parties. The 11 court did not require any party to attend the meet-and-confer, 12 nor did it impose a requirement that non-counsel must attend in 13 person. 14 Although the meet-and-confer was ordered by the bankruptcy 15 court, the relevant local rule is instructive. LBR 7026-1(c)(2) 16 provides that “counsel for the parties must meet in person or by 17 telephone in a good faith effort to resolve a discovery dispute.” 18 LBR 7026-1(c)(2) (emphasis added). The rule further states that 19 “[u]nless altered by agreement of the parties or by order of the 20 court for cause shown, counsel for the opposing party must meet 21 with counsel for the moving party within 7 days of service upon 22 counsel of a letter requesting such a meeting . . . .” Id. 23 (emphases added). The rule only requires the attendance of 24 counsel and does not require that any party attend the meet-and- 25 confer. Nor can we say that the court’s Second Scheduling Order 26 was clear enough to have “altered” this requirement “by order of 27 the court[.]” 28 When sanctioning Mr. Reitman, the bankruptcy court may have

21 1 conflated his roles as a client of Mr. Polis and as “referring 2 counsel” (in Mr. Reitman’s words) for the Lergs. The court 3 referred to Mr. Reitman as “counsel” and stated: 4 In addition, Mr. Reitman did not participate in person with the meet and confer meeting. That was 5 specifically ordered by the Court. There was a very intentional reason for that. I find that personal 6 appearances at such meetings heightens the attention of counsel involved, cools tempers, and reminds people the 7 seriousness of problems with discovery issues. And in fact, this case is a perfect example of how a 8 resolution was achieved by counsel who were personally present, but not with counsel who was on the telephone. 9 10 (Emphasis added.) The bankruptcy court’s statements are 11 understandable because, in many respects, Mr. Reitman behaved 12 more like an attorney than a client. The fact remains, however, 13 that he was represented by Mr. Polis during the bankruptcy 14 proceedings and the Second Scheduling Order did not unambiguously 15 require the clients, as opposed to counsel, to attend the meet- 16 and-confer. 17 At oral argument, counsel for Pleasure Point - who also 18 represented Pleasure Point during the bankruptcy court 19 proceedings - conceded that he did not believe that the court’s 20 Second Scheduling Order regarding in-person participation applied 21 to Mr. Reitman. We agree and hold that the court abused its 22 discretion in sanctioning Mr. Reitman for not participating in 23 the meet-and-confer in person. 24 3. Failure to file a supplemental brief 25 Third, the bankruptcy court sanctioned Mr. Reitman for 26 neglecting to file a supplemental brief in opposition to the 27 Motion to Compel. The Second Scheduling Order provided: 28 If the parties are unable to reach an agreement

22 1 resolving the Emergency Motion, then (a) the parties shall prepare the stipulation required by 2 LBR 7026-1(c)(3) and submit it to the court no later than August 11, 2014, (b) supplemental briefs regarding 3 the Emergency Motion are due no later than August 12, 2014 at 10:00 a.m. and (c) trial counsel for all 4 parties must appear at the continued hearing on August 13, 2014. 5 6 (Emphasis added.) 7 Mr. Reitman argues that the order permitted, but did not 8 require, the parties to file supplemental briefs. We agree. 9 The Second Scheduling Order does not explicitly require 10 supplemental briefs. While the court makes clear that certain of 11 the provisions are mandatory - “the parties shall prepare the 12 stipulation” and counsel “must appear at the continued hearing” - 13 the provision regarding supplemental briefs does not contain 14 mandatory language: “supplemental briefs regarding the Emergency 15 Motion are due no later than August 12, 2014[.]” (Emphases 16 added.) This phrasing does not create an imperative that would 17 require supplemental briefing. It would be reasonable for 18 Mr. Reitman to think that further briefing was optional and that 19 he could stand on the arguments raised in his prior opposition to 20 the Motion to Compel. 21 Indeed, counsel for Pleasure Point stated at oral argument 22 that he did not believe that the supplemental briefs were 23 mandatory. Thus, we hold that it would have been unjust to 24 sanction Mr. Reitman solely for failing to file a supplemental 25 brief in opposition to the Motion to Compel. 26 4. Failure to sign the Stipulation 27 Finally, the bankruptcy court sanctioned Mr. Reitman for 28 failing to sign the Stipulation by August 11, 2014. At the

23 1 hearing on the Motion to Compel, the court ordered that, 2 following the meet-and-confer, “the parties shall prepare the 3 stipulation required by LBR 7026-1(c)(3) and submit it to the 4 court no later than August 11, 2014[.]” 5 Mr. Reitman argues that he believed that Mr. Polis was 6 drafting the Stipulation with counsel for Pleasure Point. He 7 states that, when he finally saw a draft of the Stipulation, it 8 did not contain any information relating to himself and the 9 Lergs, and Mr. Polis did not make an effort to include 10 information on Mr. Reitman’s behalf. Mr. Reitman contends that, 11 when Ms. LaRocque contacted him for his input, he did not realize 12 that she was Pleasure Point’s counsel.11 He says that his e-mail 13 directing Mr. Polis not to sign the Stipulation was not intended 14 to disobey the court’s order, but to ensure that “obvious 15 deficiencies were addressed, and language was added to protect 16 the Lergs from the disclosure of sensitive, personal financial 17 information.” 18 Mr. Reitman failed to consider the requirements of 19 LBR 7026-1(c)(3). His arguments on appeal reflect the same 20 error. The rule provides: 21 Moving Papers. If counsel are unable to resolve the dispute, the party seeking discovery must file and 22 23 11 Mr. Reitman claims that he mistakenly thought that 24 Ms. LaRoque was a colleague of Mr. Polis, rather than opposing counsel. This statement is not believable. Ms. LaRoque’s 25 electronic signature on the e-mail stated that she was affiliated 26 with the law firm representing Pleasure Point. Further, she included with her e-mail her prior string of e-mails with 27 Mr. Polis, which make it clear that she was opposing counsel. Finally, a prior e-mail strongly suggests that Mr. Reitman knew 28 that Ms. LaRoque did not work with Mr. Polis.

24 1 serve a notice of motion together with a written stipulation by the parties. 2 (A) The stipulation must be contained in 1 3 document and must identify, separately and with particularity, each disputed issue that 4 remains to be determined at the hearing and the contentions and points and authorities of 5 each party as to each issue. 6 (B) The stipulation must not simply refer the court to the document containing the 7 discovery request forming the basis of the dispute. For example, if the sufficiency of 8 an answer to an interrogatory is in issue, the stipulation must contain, verbatim, both 9 the interrogatory and the allegedly insufficient answer, followed by each party’s 10 contentions, separately stated. 11 (C) In the absence of such stipulation or a declaration of counsel of noncooperation by 12 the opposing party, the court will not consider the discovery motion. 13 14 LBR 7026-1(c)(3) (emphases added). In other words, the 15 stipulation must not only state the parties’ agreements, but must 16 also state and describe their disagreements and their respective 17 arguments. 18 Mr. Reitman balked at the draft Stipulation because he did 19 not think that it should contain Pleasure Point’s arguments. In 20 an e-mail to Mr. Polis, he complained that “[t]he Stipulation 21 also contains gratuitous statements and argument by the LLC’s 22 counsel, which has no place in a Stipulation. All such 23 statements should be deleted.”12 He admitted to the court, “It 24 is true we did not comply with the Court’s order with respect to 25 12 26 Mr. Reitman told the court that he disagreed with the Stipulation because “[i]t didn’t look like a stipulation to me. 27 It looked like a brief with lawyer’s arguments in it, for the most part. And whatever agreements were in that stipulation were 28 buried in it.”

25 1 getting a signed stipulation, but again, if the Court has read 2 that stipulation, which it sounds like you have, I just - I’ve 3 never seen a stipulation that looked like that, frankly.” 4 If Mr. Reitman had bothered to read the local rule, he would 5 have known that his objection lacked any merit. LBR 7026-1(c)(3) 6 explicitly requires that the stipulation include the parties’ 7 arguments in support of their positions. 8 Mr. Polis might have been able to resolve this problem by 9 explaining the local rule to Mr. Reitman. So far as the record 10 reveals, Mr. Polis did not attempt to do so. And by that point, 11 the relationship between Mr. Reitman and Mr. Polis was so 12 poisonous that Mr. Reitman likely would not have believed 13 anything Mr. Polis said. Nevertheless, Mr. Reitman was forming 14 legal judgments about what the stipulation should include without 15 familiarizing himself with the applicable law. As a licensed 16 attorney, he cannot escape responsibility for his own legal 17 opinions, even if his co-counsel failed to inform him that those 18 opinions were wrong. 19 Similarly, Mr. Reitman objected that the Stipulation did not 20 include language protecting the Lergs’s tax returns from 21 disclosure. He complained to the court, “I did see some language 22 that Mr. Polis put into the stipulation relating to [non- 23 disclosure of the Lergs’s tax returns], but I didn’t see any 24 indication that Mr. Goe’s office had agreed to it, or even knew 25 about it.” Again, Mr. Reitman failed to inform himself of the 26 applicable legal requirement. Under LBR 7026-1(c)(3), if the 27 parties have not reached agreement on all issues, the parties 28 were still required to file the Stipulation and state their

26 1 positions on the issues in dispute. 2 Mr. Reitman’s conduct in connection with the Stipulation 3 undercuts his basic argument on appeal, which is that all of the 4 discovery problems were Mr. Polis’s fault. By his own admission, 5 Mr. Reitman is not an expert in bankruptcy procedure. 6 Nevertheless, he took on the role of a lawyer for himself and the 7 Lergs by repeatedly and insistently interjecting himself in the 8 drafting and submission of the Stipulation, and eventually 9 directing Mr. Polis not to sign it. He also failed to cooperate 10 with Mr. Polis by drafting provisions describing his own position 11 on the discovery directed to him. The bankruptcy court correctly 12 held that Mr. Reitman violated the Second Scheduling Order by 13 instructing Mr. Polis not to sign the Stipulation. 14 5. Reduction of sanctions 15 Moreover, it is apparent that the bankruptcy court properly 16 recognized that the blame for the discovery disputes did not rest 17 solely with Mr. Reitman. The Motion to Compel requested that the 18 court sanction Mr. Reitman, the Lergs, and Mr. Polis and require 19 them to pay $11,415.10.13 Although the court sanctioned 20 Mr. Reitman alone, it only sanctioned him $4,265.87, or one-third 21 of Pleasure Point’s fees and costs. Simple arithmetic shows that 22 the court assigned only one-third of the blame to Mr. Reitman. 23 Thus, even considering Mr. Polis’s responsibility for the 24 discovery dispute, it was not unjust to sanction Mr. Reitman in 25 26 13 As noted above, the court used $12,656 as the sum of 27 Pleasure Point’s fees and $141.60 in costs, based on a review of the invoices attached to Pleasure Point’s supplemental brief to 28 its Motion to Compel.

27 1 an amount equal to one-third of Pleasure Point’s fees and costs. 2 B. The bankruptcy court did not abuse its discretion in denying Mr. Reitman’s motion for reconsideration. 3 4 As his second point of error, Mr. Reitman contends that the 5 bankruptcy court erred in denying his motion for reconsideration. 6 Although Mr. Reitman identifies the denial of his motion for 7 reconsideration as one of the points of error and mentions it in 8 a paragraph of his factual history, he does not argue the alleged 9 error anywhere in his opening brief. 10 As the Ninth Circuit has stated, “we cannot ‘manufacture 11 arguments for an appellant’ and therefore we will not consider 12 any claims that were not actually argued in appellant’s opening 13 brief. Rather, we ‘review only issues which are argued 14 specifically and distinctly in a party’s opening brief.’” 15 Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir. 16 2003) (quoting Greenwood v. Fed. Aviation Admin., 28 F.3d 971, 17 977 (9th Cir. 1994)). Significantly, “[a] bare assertion of an 18 issue does not preserve a claim.” Id. (quoting D.A.R.E. Am. v. 19 Rolling Stone Magazine, 270 F.3d 793, 793 (9th Cir. 2001)). 20 Mr. Reitman identifies the bankruptcy court’s denial of his 21 motion for reconsideration as a point of error and includes the 22 relevant parts of the record in his appendix, yet fails to 23 “specifically and distinctly” argue how the bankruptcy court 24 abused its discretion in his opening brief.14 See id.; Rule 25 14 26 Pleasure Point’s answering brief discusses the motion for reconsideration at length. As a result, Mr. Reitman’s reply 27 brief contains some argument regarding the motion for reconsideration. However, the reply brief still does not 28 (continued...)

28 1 8014(a)(8) (an appellant’s brief must include “the argument, 2 which must contain the appellant’s contentions and the reasons 3 for them, with citations to the authorities and parts of the 4 record on which the appellant relies”). As such, we do not 5 consider Mr. Reitman’s second point of error. 6 Even if we found it appropriate to address Mr. Reitman’s 7 second point of error, we would affirm the bankruptcy court for 8 the reasons stated above. Mr. Reitman argued generally that the 9 court should reverse the sanctions due to his “mistake, 10 inadvertence, surprise, or excusable neglect.”15 However, the 11 motion for reconsideration failed to raise any argument that 12 would alter the bankruptcy court’s decision on the Motion to 13 Compel; rather, it merely rehashed his previous arguments. See 14 Fadel v. DCB United LLC (In re Fadel), 492 B.R. 1, 18 (9th Cir. 15 BAP 2013) (“Even if we considered it, the Reconsideration Motion 16 improperly raised legal arguments and/or alleged new facts that 17 Mrs. Fadel could have raised at the initial hearing, and it 18 improperly rehashed arguments she had already presented.”). We 19 20 14 (...continued) identify any way in which the bankruptcy court allegedly erred. 21 22 Moreover, Mr. Reitman argues that Pleasure Point concedes that the bankruptcy court erred. This is false. Although 23 Pleasure Point addresses the four grounds for sanctions in its discussion of the motion for reconsideration, we construe those 24 arguments as applying to the bankruptcy court’s order on the underlying Motion to Compel, as well. 25 15 26 Mr. Reitman argues that his grounds for appeal of the motion for reconsideration are not limited to Civil 27 Rule 60(b)(1), although that is the only ground identified in the motion for reconsideration. However, he does not identify any 28 additional grounds on appeal.

29 1 have considered all of those arguments and rejected Mr. Reitman’s 2 argument that the bankruptcy court committed reversible error. 3 CONCLUSION 4 For the reasons set forth above, we AFFIRM. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28