United States District Court, D. Idaho
In re ALLEN L. WISDOM, Debtor,
v.
JEREMY J. GUGINO, Appellee. ALLEN L. WISDOM Appellant,
ORDER RE: MOTION FOR ATTORNEY FEES
David
C. Nye U.S. District Court Judge
I.
INTRODUCTION
Pending
before the Court is Appellee Jeremy J. Gugino's Motion
For Award of Attorney Fees. Dkt. 14. The Motion is fully
briefed and ripe for the Court's review. Having fully
reviewed the record herein, the Court finds the parties have
adequately presented the facts and legal arguments in the
briefs and record. Accordingly, in the interest of avoiding
further delay, and because the Court finds that the
decisional process would not be significantly aided by oral
argument, the Court decides this Motion without oral
argument. For the reasons set forth below, the Court GRANTS
the Motion IN PART, and DENIES the Motion IN PART.
II.
BACKGROUND
On
December 20, 2017, the Court entered a Memorandum Decision
and Order affirming the Bankruptcy Court's decision (1)
denying Appellant Allen Wisdom's Motion to Recuse and (2)
denying Wisdom's Renewed Motion for Order to Turnover
Funds to Debtor.[1] Dkt. 13. Therein, the Court provided an
extensive description of the history of this case, and
several related cases. Id. The Court incorporates
that background by reference here.
III.
STANDARD OF REVIEW
Federal
Rule of Bankruptcy Procedure 8020(a) provides that a district
court “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” if the court “determines that an appeal
is frivolous.” “An appeal is frivolous if the
results are obvious, or the arguments of error are wholly
without merit.” Maisano v. United States, 908
F.2d 408, 411 (9th Cir. 1990) (citation omitted). Attorney
fees under Rule 8020(a) may also be “warranted where
the overwhelming weight of precedent was against
appellant's position, where appellant could set forth no
facts to support its position, or where, in short, there
simply was no legitimate basis for pursuing an
appeal.'” In re Benham, 220 F.Supp.3d
1033, 1044 (C.D. Cal. 2016). “[A] finding of bad faith
is not necessary to impose sanctions” for filing a
frivolous appeal. United States v. Nelson (In re
Becraft), 885 F.2d 547, 549 (9th Cir. 1989).
IV.
ANALYSIS
Gugino
has requested $12, 249.50 in attorneys' fees. The Court
has some concern about whether this figure is just based on
Wisdom's status. Wisdom initially appeared with counsel
in the original bankruptcy case. See Case No.
1:11-bk-01135. However, on December 30, 2011, Wisdom notified
the Bankruptcy Court that he would be proceeding pro se.
Id. at Dkt. 74. Wisdom has proceeded without an
attorney since that time in all of his appeals and related
cases, see Case Nos. 1:12-cv-530-BLW (D. Idaho);
1:13-ap-06045-TLM (Bank. D. Idaho); 1:14-cv-279-BLW (D.
Idaho); 15-35013 (9th Cir.); 1:14-cv-497-EJL (D. Idaho);
1:16-cv-251-EJL (D. Idaho); except when the Ninth Circuit sua
sponte appointed Wisdom pro bono counsel, see Case
Nos. 13-35409 (9th Cir.); 17-35339 (9th Cir.). The Court is
concerned that Wisdom cannot afford to pay the requested
attorney fees if he also cannot afford counsel and recently
went through bankruptcy proceedings. However, the Court notes
Wisdom's current financial status is not clear from the
record.
While
this is of some concern to the Court, the Ninth Circuit has
made clear that while “a court can properly consider [a
litigant's] ability to pay monetary sanctions as one
factor in assessing sanctions, ” the court cannot
“decline to impose any sanction, where a violation has
arguably occurred, simply because plaintiff is proceeding pro
se.” Warren v. Guelker, 29 F.3d 1386, 1390
(9th Cir. 1994). The Ninth Circuit has explained that
“[a] contrary conclusion would effectively place all
unrepresented parties beyond the reach of” any rule or
statute permitting sanctions.” Id. Thus, the
Court must look past its concerns. Nevertheless, the Court
acknowledges that “what is objectively reasonable for a
pro se litigant and for an attorney may not be the
same.” Bus. Guides, Inc. v. Chromatic Commc'ns
Enters., Inc., 892 F.2d 802, 811 (9th Cir. 1989). With
these principals in mind, the Court turns to the question of
whether Wisdom's appeal was frivolous.
As
noted in the Court's previous decision, Wisdom argued on
appeal that the Bankruptcy Judge Terry Myers erred below in
(1) denying his motion to recuse; (2) allowing Elam &
Burke to appear as Gugino's legal counsel; and (3)
denying his second turnover motion. The Court addresses each
argument in turn.
As to
the first argument, prior to this appeal, Judge Myers had
already issued multiple detailed and thoughtful decisions
resolving the issues raised in Wisdom's motion to recuse.
Wisdom appealed these decisions and they were affirmed. In
light of these multiple decisions and appeals addressing and
resolving the request to recuse, the Court finds the first
issue raised in this appeal was frivolous. The Court notes
that not only has this issue been addressed multiple times,
but this Court has previously found Wisdom's earlier
appeal of this issue constituted a frivolous appeal
warranting an award of attorney fees. See Case No.
1:16-cv-251-EJL, Dkt. 22, at 7.
Whether
Wisdom's second argument-that Judge Myers erred in
allowing Elam & Burke to file pleadings in the bankruptcy
case-is frivolous is not as clear cut. Federal Rule of
Bankruptcy Procedure 9010(b) provides: “An attorney
appearing for a party in a case under the Code shall file a
notice of appearance with the attorney's name, office
address and telephone number, unless the attorney's
appearance is otherwise noted in the record.” Elam
& Burke did not file a formal “notice of
appearance” in the bankruptcy case, so the Court had to
determine whether Elam & Burke's appearance was
“otherwise noted in the record.” The Court noted
the dearth of case law addressing this exact issue and
ultimately had to look outside of this District and the Ninth
Circuit for guidance. In light of the lack of precedential
case law, the Court finds this argument was not frivolous.
Finally,
the Court finds Wisdom's third argument-that Judge Myers
erred in denying his second turnover motion-was frivolous.
The Court concluded in its earlier decision that the law of
the case doctrine prevented it from reconsidering
Wisdom's arguments. This result was obvious. This Court
and the Ninth Circuit have explicitly ruled on the issues
...