Higashi v. Takazawa
Filing
25
ORDER GRANTING APPELLEE'S MOTION FOR RULE 8020 "JUST DAMAGES" FOR MERITLESS APPEAL 16 Motion. Signed by JUDGE LESLIE E. KOBAYASHI on 02/02/2018. Plaintiff-Appellee Hale Takazawa's Motion for R ule 8020 "Just Damages" for Meritless Appeal, filed July 30, 2017, is HEREBY GRANTED and Appellee is AWARDED $3,821.99 in attorney's fees as just damages associated with Appellant's appeal of the bankruptcy court's order s.Appellant and his counsel are ORDERED to pay Appellee, through Appellee's counsel, $3,821.99 by March 15, 2018.IT IS SO ORDERED. (eps, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIVIL 16-00479 LEK-RLP
STERLING G. HIGASHI,
)
)
Appellant,
)
)
vs.
)
)
HALE TAKAZAWA,
)
)
)
Appellee.
_____________________________ )
ORDER GRANTING APPELLEE’S MOTION FOR
RULE 8020 “JUST DAMAGES” FOR MERITLESS APPEAL
Plaintiff-Appellee Hale Takazawa (“Appellee”) filed his
Motion for Rule 8020 “Just Damages” for Meritless Appeal
(“Motion”) on July 30, 2017.
[Dkt. no. 16.]
Plaintiff-Appellant
Sterling G. Higashi (“Appellant”) filed his memorandum in
opposition on August 14, 2017.
[Dkt. no. 18.]
Appellee filed
his reply on August 27, 2017 and a supplemental exhibit to the
Motion (“Supplemental Exhibit”) on September 8, 2017.
nos. 22, 24.]
[Dkt.
The Court finds this matter suitable for
disposition without a hearing pursuant to Rule LR7.2(d) of the
Local Rules of Practice of the United States District Court for
the District of Hawai`i (“Local Rules”).
In an Entering Order filed on September 5, 2017, the
Court granted the Motion (“9/5/17 EO Ruling”).
[Dkt. no. 23.]
The instant Order supersedes the 9/5/17 EO Ruling.
Appellee’s
Motion is hereby granted because the Court concludes that
Appellant’s appeal was frivolous.
BACKGROUND
The background of this matter is set forth in this
Court’s July 20, 2017 Order Affirming the Bankruptcy Court’s:
(1) Order Granting Plaintiff’s Motion for Rule 37(c)(2) Expenses;
and (2) Order Denying Defendant’s Objections to Certain Items of
Plaintiff’s Bill of Costs (“7/20/17 Order”), [dkt. no. 15,1] and
this Court’s July 19, 2017 Order Affirming the Bankruptcy Court’s
Findings of Fact and Conclusions of Law and the Judgment in
Higashi v. Takazawa, CV 16-00368 LEK-RLP (“CV 16-00368 Order”).
2017 WL 3075130.
The facts pertinent to the matter at hand are as
follows: in the underlying matter, the creditor for Appellant’s
business required Appellant’s wife, Victoria Higashi, to sign the
promissory note at issue in the litigation. This note was
tendered for payment and, when Appellant did not pay it and
Appellee was assigned the promissory note by the creditor,
Appellee demanded payment.
In its Findings of Fact and
Conclusions of Law (“FOF/COL”) issued on June 7, 2016, the
bankruptcy court found that Appellant had forged his wife’s
signature on the note and concluded that Appellant’s debt was
non-dischargeable.
The FOF/COL was affirmed on appeal.
CV 16-
00360 Order, 2017 WL 3075130, *9.
1
The 7/20/17 Order is also available at 2017 WL 3097771.
2
On August 15, 2016, the bankruptcy court issued its
Order Granting Plaintiff’s Motion for Rule 37(c)(2) Expenses
(“Rule 37(c)(2) Order”) and its Order Denying Defendant’s
Objections to Certain Items of Plaintiff’s Bill of Costs
(collectively “Sanctions Orders”).
The bankruptcy court
concluded Appellant had no reasonable basis to deny the request
for admission that he had forged his wife’s signature, and
ordered Appellant to pay $19,662.30 for reasonable expenses
(including
attorney’s fees) and $2,946.94 for taxable costs
incurred by Appellee to prove the fact of the forgery.
7/20/17
Order, 2017 WL 3097771, at *1.
Appellant appealed from the Sanctions Orders.
appeal was denied and the sanctions were affirmed.
This
Appellee then
filed the instant Motion, under Fed. R. Bankr. P. 8020(a),
seeking damages and costs for defending the Sanctions Orders
appeal and asserting damages of $3,821.99 incurred in attorney’s
fees.
[Suppl. Exh. at 5.]
STANDARD
Fed. R. Bankr. P. 8020(a) governs awards of damages and
costs incurred in a frivolous appeal and provides, in relevant
part, that “[i]f the district court . . . determines that an
appeal is frivolous, it may . . . award just damages and single
or double costs to the appellee.”
Motions for damages under Rule
8020(a) are governed by the same standard applicable to a Fed. R.
3
App. P. 38 motion:2
An appeal is frivolous “if the results are
obvious, or the arguments of error are wholly
without merit.” George v. City of Morro Bay (In
re George), 322 F.3d 586, 591 (9th Cir. 2003)
(quoting Maisano v. United States, 908 F.2d 408,
411 (9th Cir. 1990)). “[A] finding of bad faith
is not necessary to impose sanctions” for a
frivolous appeal, though bad faith may counsel in
favor of the court exercising its discretion to
grant sanctions. United States v. Nelson (In re
Becraft), 885 F.2d 547, 549 (9th Cir. 1989).
Ly v. Che, 601 F. App’x 494, 496–97 (9th Cir. 2015) (alteration
in Ly) (applying Rule 38 standard to a Rule 8020(a) motion).
The purpose of awarding damages is “to penalize an
appellant who takes a frivolous appeal and to compensate the
injured appellee for the delay and added expense of defending the
district court’s judgment.”
Burlington N. R.R. Co. v. Woods, 480
U.S. 1, 7 (1987) (Rule 38 context).
“The award of fees and costs
under Rule 38 . . . may not include the fees and costs regarding
the imposition of sanctions.”
Blixseth v. Yellowstone Mountain
Club, LLC, 854 F.3d 626, 630-31 (9th Cir. 2017).
DISCUSSION
I.
Liability
In a nutshell, Appellee’s Motion turns on whether
Appellant’s appeal of the Sanctions Orders was frivolous.
2
Rule 38 provides: “If a court of
an appeal is frivolous, it may, after a
or notice from the court and reasonable
award just damages and single or double
4
It
appeals determines that
separately filed motion
opportunity to respond,
costs to the appellee.”
was.
When Appellant appealed the Sanctions Orders, his
opening brief failed to identify any part of the bankruptcy
court’s orders that was clearly erroneous.
WL 3097771, at *4.
7/20/17 Order, 2017
Appellant’s Opening Brief was required to
contain “the argument, which [means] appellant’s contentions and
the reasons for them, with citations to the authorities and parts
of the record on which the appellant relies.”
P. 8014(a)(8).
See Fed. R. Bankr.
If Appellant fails to state the grounds for
appeal, this Court cannot manufacture them. Greenwood v. F.A.A.,
28 F.3d 971, 977 (9th Cir. 1994) (“We review only issues which
are argued specifically and distinctly in a party’s opening
brief.
We will not manufacture arguments for an appellant, and a
bare assertion does not preserve a claim” (internal citation
omitted)). As Appellant’s opening brief was devoid of authority
as to why the bankruptcy court’s ruling was purportedly “clearly
erroneous”, the appeal was frivolous.
See Ly, 601 F. App’x at
496.
Even looking beyond Appellant’s failure to identify
portions of the Sanctions Orders that were clearly erroneous, the
arguments Appellant raised on appeal were also frivolous.
Appellant made four arguments: first, that if his appeal was
granted, then reversal of the bankruptcy court’s FOF/COL would
trigger reversal of the Sanctions Orders and thus he believed
5
that he would not be subject to the sanctions; second, that he
falls within the exception to Rule 37(c) sanctions because he
believed that he might prevail at trial; third, he relied on the
bankruptcy court’s statements that attorney’s fees would not be
imposed if his appeal was granted and the decision was reversed,
and therefore imposing sanctions because he took the appeal would
be unfair; fourth, that sanctions are inappropriate because he
did not have an improper purpose when he filed his appeal of the
Sanctions Order; and last, imposing sanctions on him would be
unfair because the bankruptcy court did not warn him when he
informed that court of his intentions to appeal the Sanctions
Orders.
The Court addresses each argument in turn.
A. Belief that if his appeal was granted, then Sanctions
Orders would have to be reversed
Appellant’s Opening Brief failed to cite authority or
present argument in support of his assertion that reversal of the
bankruptcy court’s FOF/COL should cause reversal of the Sanctions
Orders.
“Issues raised in a brief which are not supported by
argument are deemed abandoned.”
Crime Justice & Am., Inc. v.
Honea, 876 F.3d 966, 978 (9th Cir. 2017) (internal citation and
quotation marks omitted).
B. Exception to Rule 37(C) sanctions because he believed
that he might prevail at trial
Under Rule 37(c)(2), courts look to whether a party’s
refusal to admit had a reasonable belief that he might prevail on
6
the matter of the requested admission that was refused.
See,
e.g., Foster Poultry Farms, Inc. v. SunTrust Bank, 377 F. App’x
665, 672 (9th Cir. 2010).
Appellant’s apparent belief that he
would prevail as to issues other than the fact which he was asked
to admit (i.e., that he forged his wife’s signature) does not
constitute reasonable belief that he might prevail on the issue
contained in the requested admission.
Therefore, his belief that
he would possibly succeed in his other claims does not protect
him from sanctions here for failing to admit the requested Rule
37(c) admission.
Appellant argues that he falls within the
exception to Rule 37(c) sanctions for a party failing to admit
because the Advisory Committee Notes explain that the test is
not whether a party prevailed at trial but whether he acted
reasonably in believing he might prevail, but this merely repeats
an argument rejected in the 7/20/17 Order.
at *3.
See 2017 WL 3097771,
As the 7/20/17 Order explained, because Appellant never
challenged the bankruptcy court’s factual finding that he
committed the forgery, he did not have “‘good reason for the
failure to admit’” that he committed the forgery.
Id. (quoting
Rule 37(c)(2)(C)-(D)).
C. Reliance on the bankruptcy court’s statements
Appellant argues that he relied on the bankruptcy
court’s statements when he decided to appeal the Sanctions Orders
and thus requiring him to pay attorney’s fees and costs as
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sanctions is unfair.
After reviewing the statements at issue,
this Court concludes that the bankruptcy court did not mislead
Appellant.
The bankruptcy court correctly suggested that, if its
factual finding that Appellant forged his wife’s signature were
reversed, then the Sanctions Orders could be reversed.3
D. No improper purpose when he filed his appeal of the
Sanctions Order
Appellant argues that sanctions are inappropriate
because his appeal of the Sanctions Orders did not involve an
improper purpose.
In support, he cites B&H Med., LLC v. APB
Assoc. Admin, Inc., 526 F.3d 257, 271 (6th Cir. 2008).
purpose is not relevant here.
Improper
In B&H, the issue was whether to
impose sanctions under Fed. R. Civ. P. 11.
By contrast, to
impose sanctions for a frivolous appeal under Rule 8020, “[a]
finding of bad faith is not necessary.”
Ly, 601 F. App’x at 497.
E. The bankruptcy court did not warn him about possible
sanctions should he appeal
Appellant argues that sanctions would be unfair
because, when he informed the bankruptcy court that he would
3
The bankruptcy court stated that it may “impose sanctions
if a reasonable person would not have believed that the denial
[of the forgery] would be upheld,” and later stated, “if there is
a reversal, then the attorney’s fees award could be corrected.”
[Mem. in Opp., Exh. A (Trans. of 8/5/16 hearing on Plaintiff’s
Motion to Approve Reasonable Expenses Pursuant to Rule 37(c)(2);
Defendant’s Opposition to Bill of Costs) (“8/15/16 Hearing
Trans.”) at 24-25.]
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appeal the Sanctions Orders, he was not warned that such conduct
would be unacceptable.
In support, he relies on Pac. Dunlop
Holdings, Inc. v. Barosh, 22 F.3d 113, 119 (7th Cir. 1994) for
the proposition that Rule 11 sanctions are inappropriate “once an
attorney expressly informs the court of a proposed course of
conduct which does not violate a rule of procedure, local rule,
court order, or case law, and the district court does not
indicate any disapproval.”
Again, Rule 11 sanctions are separate
and apart from “just damages” permitted by Rule 8020.
Appellant
fails to provide controlling authority that Rule 8020 damages
cannot be awarded because, when he advised that he would appeal
the Sanctions Orders, the bankruptcy court was required to warn
him about his conduct.
Accordingly, Appellant’s appeal from the bankruptcy
court’s Sanctions Orders was frivolous, and Appellee is entitled
to recover just damages under Rule 8020.
II.
Damages
“[T]he trial court must provide adequate explanation
for the appellate court to review an award of fees and costs, but
‘a brief explanation of how the court arrived at its figures will
do.’”
In re S. Cal. Sunbelt Developer’s Inc., No. SACV 06-00270
DDP, 2009 WL 2138490, at *1 (C.D. Cal. July 15, 2009) (quoting
Cunningham v. Cty. of Los Angeles, 879 F.2d 481, 484 (9th Cir.
1988)).
“Fees ‘are to be calculated according to the prevailing
9
market rates in the relevant community, regardless of whether
plaintiff is represented by private or nonprofit counsel.’”
Id.
at *2 (quoting Blum v. Stenson, 465 U.S. 886, 895, 104 S. Ct.
1541, 79 L. Ed. 2d 891 (1984)).
Appellee’s counsel has submitted documentation of 14.6
hours billed to defend Appellant’s frivolous appeal.
Exh. at 5.]
[Suppl.
Appellee’s counsel’s hourly rate is $250, and
Appellee’s total attorney’s fees, including general excise tax,
were $3821.99.
[Id.]
Appellee’s counsel states that he has over
forty years experience practicing law in Hawai`i, and that he
personally provide all of the legal services to defend the appeal
at issue in the instant Motion.
4.]
[Id., Decl. of Counsel at ¶¶ 3-
The Court concludes that an hourly rate of $250 is
consistent with the prevailing rate for an attorney with over
forty years experience in Honolulu, and that billing 14.6 hours
was reasonable to defend the appeal at issue.
Moreover,
Appellant has not contested Appellee’s counsel’s hourly rate or
billing items.
Imposing liability for an award of sanctions under Rule
8020 “against client and counsel jointly and severally is
preferred since the sanctioned parties are in the best position
to determine who caused the frivolous appeal to be taken.”
In re
S. Cal. Sunbelt, 2009 WL 2138490, at *3 (citing Int’l Union of
Bricklayers, 752 F.2d 1401, 1407 n.8 (9th Cir. 1985)).
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Such is
the case here.
Accordingly, Appellant and his counsel are
liable, jointly and severally, for Appellee’s just damages.
CONCLUSION
On the basis of the foregoing, Plaintiff-Appellee
Hale Takazawa’s Motion for Rule 8020 “Just Damages” for Meritless
Appeal, filed July 30, 2017, is HEREBY GRANTED and Appellee is
AWARDED $3,821.99 in attorney’s fees as just damages associated
with Appellant’s appeal of the bankruptcy court’s orders.
Appellant and his counsel are ORDERED to pay Appellee, through
Appellee’s counsel, $3,821.99 by March 15, 2018.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, February 2, 2018.
/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
STERLING G. HIGASHI VS. HALE TAKAZAWA; CIVIL 16-00479; ORDER
GRANTING APPELLEE’S MOTION FOR RULE 8020 “JUST DAMAGES” FOR
MERITLESS APPEAL
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