Walters v. Webre (In Re in Re Webre)

88 B.R. 242, 1988 Bankr. LEXIS 1491, 1988 WL 85166
CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedJune 30, 1988
DocketBAP No. SC 87-1929-AsMoV, Bankruptcy No. 85-3550-ML13, Adv. No. C87-0229-LM13
StatusPublished
Cited by6 cases

This text of 88 B.R. 242 (Walters v. Webre (In Re in Re Webre)) 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
Walters v. Webre (In Re in Re Webre), 88 B.R. 242, 1988 Bankr. LEXIS 1491, 1988 WL 85166 (bap9 1988).

Opinion

OPINION

ASHLAND, Bankruptcy Judge.

Marjorie Lynn Walters and John H. Holloway appeal from the bankruptcy court’s order dismissing their adversary proceeding and imposing sanctions against them in the amount of $2,961.78. We affirm.

FACTS

Prior to bankruptcy, in May of 1980, Marjorie Lynn Walters received a state court judgment for $29,614.91 against the debtor Arnold J. Webre for assault and battery. On July 31, 1985 the debtor filed a Chapter 13 petition. In his plan Webre sought to bifurcate the debt to Walters into a nondischargeable claim for $15,000, representing the punitive damages portion of the award, and payment of ten percent of the unsecured debt in the amount of $34,-663, representing the remainder of the state court judgment plus interest since 1980.

On August 7, 1985 the trustee objected to the plan on several grounds. The plan was modified on September 20, 1985; it no longer distinguished between the $15,000 punitive damages and other unsecured debts and it increased the percentage payout to unsecured creditors to 21 percent. On October 15, 1985 the plan was confirmed.

On the same day Walters filed a complaint to determine dischargeability of debt. The debtor answered and Walters filed an amended complaint. On July 14, 1986 the debtor filed a motion for summary judgment on the ground that, as a matter of law, Walters’ claim was not excepted from discharge pursuant to 11 U.S.C. § 1328. Prior to the hearing on the summary judgment motion, Walters filed a cross motion for summary judgment and a motion to reopen the Chapter 13 confirmation hearing. However, these pleadings *244 were not timely filed and were stricken from the record without prejudice.

A hearing on the summary judgment motion was held on August 5, 1986 and the court entered its order on August 29, 1986. The court found that Walters was given proper notice of the October 15, 1985 confirmation proceeding and should have filed any objection at that time. Nevertheless, the court found the objection to confirmation of the plan contained no argument which would have caused the court not to confirm the plan. It further found that the Chapter 13 plan was binding on all creditors and that all issues raised in the complaint were resolved by the confirmation. Therefore, the complaint failed to state a cause of action upon which relief could be granted. The debtor’s motion for summary judgment was granted, and Walters’ adversary proceeding was dismissed. Walters appealed that order and this court affirmed.

On October 21, 1986 the debtor filed a motion to modify his plan and authorize early payments and an early discharge. The motion was approved by the court over the objection of Walters. Walters objected to the order lodged by the debtor and the debtor responded. However, the order was allowed to stand.

On March 26, 1987 Walters brought a complaint to dismiss or convert the Chapter 13 case to a Chapter 7 and to determine dischargeability of Walters’ state court judgment debt. At this time John H. Holloway, Walters’ father, sought intervention as a pro se party to the action based upon a ten percent undivided interest in Walters’ claim in the Webre bankruptcy. On April 24, 1987 the debtor filed a motion to dismiss the adversary proceeding and award sanctions. Neither Walters nor Holloway responded to this motion. However, Holloway appeared at the hearing on the motion on June 25, 1987.

On September 2, 1987 the bankruptcy court entered its order granting the motion to dismiss the complaint and awarding sanctions. The court found that Holloway was a party to the adversary proceeding but because neither filed any opposition papers Walters and Holloway waived their right to present oral argument in opposition to the debtor’s motions. The court further found that Walters’ complaint fails to state a cause of action, was “utterly frivolous,” and was brought for the purpose of harassing the debtor. The court awarded sanctions in the amount of $2,961.78 against both Holloway and Walters.

Walters and Holloway appealed this order. Since this appeal was taken an order discharging the debtor has been entered.

ISSUES

Although Walters and Holloway list several pages of issues for this court to consider, the only issues of merit are as follows:

Whether the court erred in finding that Walters and Holloway waived their right to argue at the hearing by failing to file written opposition to the debtor’s motion.

Whether the bankruptcy court erred in imposing sanctions for a frivolous complaint against Walters and Holloway and whether the court abused its discretion in awarding sanctions in the amount of $2,961.78.

DISCUSSION

Dismissal for failure to state a claim is a question of law subject to de novo review. Mullis v. U.S. Bankruptcy Court, Dist. of Nevada, 828 F.2d 1385, 1388 (9th Cir.1987). Whether the imposition of sanctions is proper is also a legal question reviewed de novo. In re Walter, 83 B.R. 14, 17 (9th Cir. BAP 1988), citing, Golden Eagle Dist. Corp. v. Burroughs Corp., 801 F.2d 1531, 1538 (9th Cir.1986). However, in determining assessment of a sanction the court has wide discretion and, as such, the award of the sanction is reviewed for an abuse of discretion. Walter, 83 B.R. at 17.

The bankruptcy court found that Walters and Holloway waived their right to argue against the motion to dismiss the adversary proceeding and impose sanctions by failing to file a response to the motions. The court based its finding on Local Rule 9013-5(a). This rule states that “unless an *245 objection to a motion is timely filed, following notice ..., or unless the court directs otherwise, a non-contested motion will be decided on the moving papers without a hearing as provided in District Court Local Rule 220-8(4).” The appropriate district court rule states that if an opposing party fails to properly file its opposition, “his failure may constitute a consent to the granting of a motion.”

As long as a local rule is not inconsistent with any federal law or the Federal Rules of Civil Procedure it may be applied. Miranda v. Southern Pacific Transp. Co., 710 F.2d 516, 521 (9th Cir.1983). The bankruptcy court acted, therefore, within its discretion to deem oral argument waived based upon the failure of Walters and Holloway to file responsive pleadings.

The next question is whether the bankruptcy court erred in imposing sanctions against Walters and Holloway. A bankruptcy court must impose sanctions when it finds a violation of Bankruptcy Rule 9011. In re Lewis, 79 B.R. 893, 896 (9th Cir. BAP 1987); Fed.R.Civ.P. 11.

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Cite This Page — Counsel Stack

Bluebook (online)
88 B.R. 242, 1988 Bankr. LEXIS 1491, 1988 WL 85166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walters-v-webre-in-re-in-re-webre-bap9-1988.