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In re Wisdom

United States District Court, D. Idaho

February 5, 2018

In re ALLEN L. WISDOM, Debtor,
JEREMY J. GUGINO, Appellee. ALLEN L. WISDOM Appellant,


          David C. Nye U.S. District Court Judge


         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.


         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.


         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 ...

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