WMS Motor Sales v. Reese (In re Reese)

WMS Motor Sales v. Reese (In re Reese), Case No. 11-3572 (6th Cir. June 13, 2012) (Not for publication)
AFFIRMING the decision of the Bankruptcy Appellate Panel (the “BAP”) of the Sixth Circuit that imposed sanctions against the attorney for a Chapter 7 debtor in the amount of $7,613.85. The Court of Appeals found that (i) the BAP did not abuse its discretion in granting the Appellee’s motion for sanctions under Bankruptcy Rule 8020; and (ii) the bankruptcy court’s award of $7,613.85 was reasonable.
Procedural context:
Appeal by an attorney for a Chapter 7 debtor from a BAP decision imposing sanctions against that attorney under Bankruptcy Rule 8020 for filing a frivolous appeal.
A creditor in a debtor’s chapter 7 bankruptcy case obtained an order finding the debt owed to it was not dischargeable. After the time to appeal that order passed, the debtor’s attorney filed a notice of appeal and a motion to extend the time to file a notice of appeal. The bankruptcy court denied the motion to extend the time to appeal. Debtor’s counsel moved the bankruptcy court to reconsider, which motion was also denied. Debtor’s counsel then filed an “amended” notice of appeal to the BAP, challenging the bankruptcy court’s denial of the motion to extend time to file a notice of appeal. The BAP dismissed the appeal pursuant to the debtor’s request. The creditor-appellee then filed a motion for sanctions against the debtor’s counsel in the BAP under Bankruptcy Rule 8020 for having pursued a frivolous appeal. The BAP granted the creditor’s motion, finding that the arguments of the debtor’s attorney in support of the appeal “lack[ed] any conceivable merit.” The BAP remanded the case to the bankruptcy court to determine the appropriate amount of damages. On remand and after a hearing, the bankruptcy court awarded $7,613.85 in damages and costs to the creditor for having to defend the meritless appeal. The BAP affirmed that award. The debtor’s attorney appealed the BAP’s decision and award to the Sixth Circuit Court of Appeals.
MOORE, ROGERS, and GRIFFFIN, Circuit Judges

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