- Case Type:
- Case Status:
- BAP No. CC-18-1267-SFL (9th Circuit, Mar 11,2019) Not Published
- Ninth Circuit BAP reversed decision of bankruptcy court granting creditor’s Rule 9011 motion for sanctions against chapter 7 debtor, holding that such claim for fees was property of creditor’s separate chapter 7 bankruptcy estate. Because the claim was never scheduled as an asset in his bankruptcy case, it continued to be estate property when his bankruptcy case was closed. As a result,only his chapter 7 trustee had standing to pursue recovery of the fees.
- Procedural context:
- Bankruptcy Court granted motion pursuant to Rule 9011. Debtor appealed. Ninth Circuit BAP reversed.
- Case involved two individuls, Miller and Gilliam, with a long history of litgation against each other. Gilliam commenced three chapter 13 bankruptcy cases in 2008. He also filed a chapter 7 bankruptcy petition in 2017. The chapter 7 trustee in that case filed a no asset report, and the bankruptcy court entered a discharge order in Gilliam’s favor on July 3, 2017. Miller had commenced six bankruptcy cases. The only ne relevant to this appeal wase sixth and final case, which she commenced in 2013. Shortly after commencement, Gilliam moved to ismiss this case on the ground that the bankruptcy was filed in bad faith nd solely for the purpose of impeding him from collecting on his udgments. Gilliam additionally alleged that Miller had grossly nderstated her income in her bankruptcy schedules. After holding a trial on the motion to dismiss, the bankruptcy court ruled in favor of Gilliam nd entered an order dismissing the case in September 2015. Gilliam filed a motion for sanctions under § 105 and Rule 9011. According o Gilliam, Miller’s latest bankruptcy filing was one in a series of abusive nd improper bad faith bankruptcy filings Miller had initiated as part of her campaign to defeat his judgment collection efforts. Gilliam also relied n Miller’s understatement of her gross income, as the bankruptcy court ad found when it dismissed her bankruptcy case.
- Spaker, Faris, and Lafferty
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