Kulek

Filing 17

ORDER Denying 11 Motion for Sanctions. Signed by District Judge Sean F. Cox. (JMcC)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
In re:
Kevin W. Kulek
Debtor.
_________________________________/
Keith M. Nathanson,
Appellant

Case No. 18-11509
Honorable Sean F. Cox

v.

Bankruptcy Case No. 16-21030
Adversary Case No. 17-02001

Timothy J. Fife,
Appellees.
__________________________________/
ORDER DENYING MOTION FOR SANCTIONS (ECF No. 11)
This action involved an appeal of the bankruptcy court’s decision to impose sanctions under
28 U.S.C. § 1927. On January 11, 2019, the Court affirmed the bankruptcy court’s decision to
sanction Appellant Keith M. Anderson. (ECF Nos. 9 and 10).
Now, Appelle Timothy J. Fife has filed a “motion for sanctions pursuant to Fed. R. Bankr.
Pro. 8020, 28 U.S.C. 1927, and this Court’s inherent authority.” (ECF No. 11). Fife argues that
Nathanson’s appeal was frivolous, taken in bad fath, and unreasonably multiplied these proceedings.
Fed. R. Bankr. Pro. 8020 provides, in pertinent part, that “[i]f the district court ... determines
that an appeal is frivolous, it may, after a separately filed motion or notice from the court and
reasonable opportunity to respond, award just damages and single or double costs to the appellee.”
Bankruptcy Rule 8020 “is materially the same as Federal Rule of Appellate Procedure 38
(‘Appellate Rule 38’), and is intended to provide ... district courts hearing bankruptcy appeals with
coextensive authority to award sanctions for a frivolous appeal.” In re Reese, 485 Fed. App’x 32,
35 (6th Cir. 2012) (citing Fed. R. Bankr. P. 8020 Advisory Committee Notes (1997 Amendment)).
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Under 28 U.S.C. § 1927, an attorney “who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the court to satisfy personally the excess costs,
expenses, and attorneys' fees reasonably incurred because of such conduct.” A court may sanction
an attorney under § 1927 even in the absence of any “conscious impropriety.” Rentz v. Dynasty
Apparel Indus., Inc., 556 F.3d 389, 396 (6th Cir.2009) (citation omitted). The proper inquiry is not
whether an attorney acted in bad faith; rather, a court should consider whether “an attorney knows
or reasonably should know that a claim pursued is frivolous, or that his or her litigation tactics will
needlessly obstruct the litigation of nonfrivolous claims.” Id. An award of fees under the statute thus
requires “a showing of something less than subjective bad faith, but something more than negligence
or incompetence.” Id.
Finally, the Court may sanction under its inherent authority “when a party has acted in bad
faith, vexatiously, wantonly, or for oppressive reasons, or when the conduct is tantamount to bad
faith.” Metz v. Unizan Bank, 655 F.3d 485, 489 (6th Cir. 2011).
The Court finds that sanctions are not appropriate under any of the cited authorities. A
bankruptcy appeal is frivolous if “the result is obvious or when the appellant’s argument is wholly
without merit.” In re Smyth, 470 B.R. 459, 462 (B.A.P. 6th Cir. 2012). While the Court disagreed
with Nathanson’s arguments on appeal, the arguments were not frivolous. Further, the Court
concludes that Nathanson did not take this appeal for wholly improper purposes or out of bad faith.
Accordingly, Fife’s motion for sanctions is DENIED.
IT IS SO ORDERED.
s/Sean F. Cox
Sean F. Cox
United States District Judge
Dated: March 15, 2019

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