[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 08-11226 ELEVENTH CIRCUIT
FEBRUARY 19, 2009
Non-Argument Calendar
THOMAS K. KAHN
________________________
CLERK
D. C. Docket Nos. 07-22679-CV-ASG,
BKCY No. 06-14878-BKC-AJ
In Re: ENRIQUE ANTONIO OCON,
Debtor.
_________________________________________________
ENRIQUE ANTONIO OCON,
Plaintiff-Counter-Defendant
Appellant,
versus
EQUINAMICS, CORP.,
Defendant-Counter-Claimant,
Cross-Claimant-Appellee,
JANINE OCON,
Defendant-Cross-Defendant,
SHERRI B. SIMPSON,
JAMES A. BONFIGLIO,
Interested Parties-Appellants.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(February 19, 2009)
Before BIRCH, HULL and PRYOR, Circuit Judges.
PER CURIAM:
Enrique Antonio Ocon and his attorneys, Sherri Simpson and James
Bonfiglio, appeal a decision that affirmed the imposition of sanctions by the
bankruptcy court in an adversary proceeding. The bankruptcy court awarded
Equinamics sanctions based on misrepresentations by Simpson and the defense of
those misrepresentations by Bonfiglio. Ocon, Simpson, and Bonfiglio argue that
the bankruptcy court abused its discretion when it imposed sanctions. We affirm
the sanctions against Simpson and Bonfiglio, reverse the sanctions against Ocon,
and remand.
Federal courts possess inherent authority to impose sanctions against
attorneys and their clients. In re Sunshine Jr. Stores, Inc.,
456 F.3d 1291, 1304
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(11th Cir. 2006). We review the exercise of that power for abuse of discretion.
Id.
“‘When employing an abuse-of-discretion standard, we must affirm unless we find
that the district court has made a clear error of judgment, or has applied the wrong
legal standard.’” Amlong & Amlong, P.A. v. Denny’s, Inc.,
500 F.3d 1230, 1238
(11th Cir. 2007) (quoting United States v. Frazier,
387 F.3d 1244, 1259 (11th Cir.
2004)). This standard “recognizes there is a range of choice within which we will
not reverse the district court even if we might have reached a different decision.”
Schiavo ex. rel. Schindler v. Schiavo,
403 F.3d 1223, 1226 (11th Cir. 2005).
The bankruptcy court did not abuse its discretion when it sanctioned
Simpson and Bonfiglio. A court may exercise its inherent power to punish bad
faith conduct. Chambers v. NASCO, Inc.,
501 U.S. 32, 46,
111 S. Ct. 2123, 2133
(1991). “In this regard, if a court finds ‘that fraud has been practiced upon it, or
that the very temple of justice has been defiled,’” the court may impose sanctions
against the responsible party.
Id. (quoting Universal Oil Prods. Co. v. Root Ref.
Co.,
328 U.S. 575, 580,
66 S. Ct. 1176, 1179 (1946)). A party commits a fraud on
the court when the falsehood mires the “judicial machinery” such that it “cannot
perform in the usual manner its impartial task of adjudging cases . . . .” Travelers
Indem. Co. v. Gore,
761 F.2d 1549, 1551 (11th Cir. 1985). Because sanctions are
measured against objective standards of conduct, “objectively reckless conduct is
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enough to warrant sanctions even if the attorney does not act knowingly and
malevolently.” Amlong,
500 F.3d at 1241. The record establishes that both
Simpson and Bonfiglio acted in bad faith.
Simpson misrepresented to the bankruptcy court that Ocon had not received
payments of $5000 and $2800 from Equinamics and she later admitted she did not
know whether Ocon had been paid. Simpson argues on appeal that it was
reasonable to make false representations to “protect[] . . . her client’s rights” and
based on her “reluctanc[e] to concede facts that had not yet been established,” but
that argument ignores Simpson’s overarching duty of candor to the court. See
Burns v. Windsor Ins. Co.,
31 F.3d 1092, 1095 (11th Cir. 1994) (“Every lawyer is
an officer of the court. And, in addition to his duty of diligently researching his
client’s case, he always has a duty of candor to the tribunal.”). Simpson later failed
to question Ocon and correct the misrepresentation, even though Equinamics
submitted documents with its motion to dismiss that established it had paid Ocon.
See Byrne v. Nezhat,
261 F.3d 1075, 1117 n.83 (11th Cir. 2001) (“‘[A]s an officer
of the court[, counsel has] a “continuing duty to inform the Court of any
development which may conceivably affect the outcome of litigation.”’” (quoting
United States v. Shaffer Equip. Co.,
11 F.3d 450, 457 (4th Cir. 1993)); see also
Barnes v. Dalton,
158 F.3d 1212, 1214 (11th Cir. 1998) (“If particularly egregious,
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the pursuit of a claim without reasonable inquiry into the underlying facts can be
the basis for a finding of bad faith.”). Simpson’s misconduct also multiplied the
proceedings unnecessarily. See Amlong,
500 F.3d at 1241 (“[A] district court may
impose sanctions for egregious conduct . . . even if the attorney acted without the
specific purpose or intent to multiply the proceedings.”).
Bonfiglio perpetuated Simpson’s fraud. The day after Simpson made her
false statements, Bonfiglio failed to make reasonable inquiries before the hearing
and defended Simpson’s false statements. Bonfiglio’s actions needlessly forced
Equinamics to prove that it had paid Ocon. See id.; Barnes,
158 F.3d at 1214.
Bonfiglio argues that he was not notified that Equinamics sought to sanction
him, but this is contrary to the record. “Due process requires that the attorney be
given fair notice” from either the court or the complaining party “that his conduct
may warrant sanction” and an opportunity to respond. In re Mroz,
65 F.3d 1567,
1575 (11th Cir. 1995). Equinamics sought sanctions against Ocon and his counsel,
the motion discussed Bonfiglio’s conduct at the second hearing, and Bonfiglio
appeared at the motion hearing. Bonfiglio failed to respond to the motion or
address the bankruptcy court at the hearing.
Id. Bonfiglio received due process.
Although we affirm the sanction against Simpson and Bonfiglio, we
conclude that the bankruptcy court abused its discretion when it imposed sanctions
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against Ocon. The bankruptcy court did not mention any misconduct by Ocon in
its order; instead, the court sanctioned Ocon based on the misrepresentations of
Simpson and Bonfiglio. “Sanctionable conduct by a party’s counsel does not
necessarily parlay into sanctionable conduct by a party.” Byrne, 261 F.3d at 1123.
We reverse that portion of the order that sanctioned Ocon.
We AFFIRM the sanctions against Simpson and Bonfiglio, REVERSE the
sanctions against Ocon, and remand for further proceedings.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
FOR FURTHER PROCEEDINGS.
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