Franken v. Trustee ( 2011 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 11-10908 ELEVENTH CIRCUIT
OCT 5, 2011
Non-Argument Calendar
JOHN LEY
________________________ CLERK
D.C. Docket No. 0:10-cv-61207-FAM
BKCY No. 0:08-bkc-19067-JKO
CHARLES D. FRANKEN,
CHARLES D. FRANKEN PA,
Plaintiffs-Appellants,
versus
TRUSTEE,
Barry E. Mukamal,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(October 5, 2011)
Before HULL, PRYOR and BLACK, Circuit Judges.
PER CURIAM:
Charles D. Franken and his law firm, Charles D. Franken, P.A. (collectively,
Franken), appeal an order of the bankruptcy court sanctioning Franken for ethical
violations committed while representing a debtor in underlying bankruptcy
proceedings. On appeal, Franken argues that (1) the bankruptcy court abused its
discretion in sanctioning him, and (2) he was denied due process because the
bankruptcy court was “inconsistent” and evidenced bias against him by mocking
him at the sanctions hearing. We address these arguments in turn.
I.
Franken first contends the bankruptcy court abused its discretion in
sanctioning him because (1) the court’s findings that he acted in bad faith and
violated court orders were not supported by the record and issued without
warning, (2) Franken’s submissions were not frivolous, and (3) the court erred in
determining the amount of the sanction award. Federal courts, including
bankruptcy courts, possess inherent authority to impose sanctions against
attorneys and their clients. In re Walker, 532 F.3d 1304, 1309 (11th Cir. 2008).
“This power is derived from the court’s need to manage [its] own affairs so as to
achieve the orderly and expeditious disposition of cases.” In re Sunshine Jr.
Stores, Inc., 456 F.3d 1291, 1304 (11th Cir. 2006) (alteration in original)
(quotation omitted). Further, a bankruptcy court has the authority to “sua sponte,
tak[e] any action or mak[e] any determination necessary or appropriate to enforce
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or implement court orders or rules, or to prevent an abuse of process.” 11 U.S.C. § 105(a).
We review the exercise of these powers for abuse of discretion. In re
Sunshine Jr. Stores, 456 F.3d at 1304. Under this standard, “we ask whether [the
court] ‘applie[d] the wrong legal standard or ma[de] findings of fact that are
clearly erroneous.’” Id. (some alterations in original) (quoting Byrne v. Nezhat,
261 F.3d 1075, 1103 (11th Cir. 2001)).
The bankruptcy court did not abuse its discretion in sanctioning Franken.
The record is replete with evidence that Franken repeatedly sought to represent
parties with directly opposing interests both in the bankruptcy action and in
outside litigation. Franken also was responsible for submitting false and
misleading documents to the court, and for filing several frivolous pleadings
without conducting any diligence to determine their legal or factual validity. To
the extent Franken challenges the amount of the sanction award, we cannot review
the bankruptcy court’s findings relating to the Trustee’s counsel’s time sheets
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because Franken has not provided the time sheets necessary to review these
findings.1 Thus, we affirm the sanction award against Franken.2
II.
Next, Franken asserts the bankruptcy court denied him due process and was
biased against him. “We review constitutional challenges, including alleged due
process violations, de novo.” Lapaix v. U.S. Att’y Gen., 605 F.3d 1138, 1143
(11th Cir. 2010). We review for abuse of discretion a judge’s decision whether to
1
“If the appellant intends to urge on appeal that a finding or conclusion is unsupported by
the evidence or is contrary to the evidence, the appellant must include in the record a transcript of
all evidence relevant to that finding or conclusion.” Fed. R. App. P. 10(b)(2). We “must affirm
the district court when an appellant fails to provide all the evidence that the trial court had before
it when making various contested evidentiary rulings.” Loren v. Sasser, 309 F.3d 1296, 1304
(11th Cir. 2002).
2
On August 23, 2011, Franken moved for a limited remand, arguing newly discovered
evidence contradicts testimony presented to the bankruptcy court at the sanction hearing.
Franken has not filed a motion for reconsideration in the bankruptcy court. See Fed. R. Bank. P.
9024; Fed. R. Civ. P. 60(b). “The court of appeals is not the proper forum in which to present
new facts or proffer new evidence.” Local Union No. 59, Int’l Bhd. of Elec. Workers, AFL-CIO
v. Namco Elec., Inc., 653 F.2d 143, 146 (5th Cir. 1981). A party proffering newly discovered
evidence may obtain an indicative ruling from a district court concerning relief from judgment
pending appeal. See Fed. R. Civ. P. 62.1; Fed. R. App. P. 12.1. After filing a motion for relief
from judgment, a party then must file a motion to stay the appeal. 11th Circuit Rule 12.1-1(a).
Franken failed to follow these procedures, completely bypassing the district court. Further, even
if we were to assume the facts as presented in the affidavit, Franken’s other contemptible conduct
before the bankruptcy court supports the sanctions order. We therefore deny his motion for
remand.
In his response to the motion for limited remand, the Trustee requests sanctions for the
filing of Franken’s “frivolous” motion. Although a response may include a motion for
affirmative relief, such a motion “must state with particularity the grounds for the motion, the
relief sought, and the legal argument necessary to support it.” Fed. R. App. P. 27(a)(2) &(3)(B).
The Trustee’s perfunctory and conclusory request for sanctions fails to meet the particularity
requirement and is therefore denied.
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recuse himself based on allegations of pervasive bias. See In re Walker, 532 F.3d
1304, 1310-11 (11th Cir. 2008).
Due process requires that a party have adequate notice of the consequences
of the conduct for which he has been sanctioned. See Link v. Wabash R.R. Co.,
370 U.S. 626, 632 (1962). “The adequacy of notice and a hearing respecting
proceedings that may affect a party’s rights turns, to a considerable extent, on the
knowledge which the circumstances show such party may be taken to have of the
consequences of his own conduct.” Carlucci v. Piper Aircraft Corp., 775 F.2d
1440, 1452 (11th Cir. 1985) (quoting Link, 370 U.S. at 632).
Franken received more than adequate notice of the possibility of sanctions
against him. Franken appeared at several hearings to argue in defense of his
conduct, including the sanctions hearing. Despite numerous warnings and several
opportunities to defend his actions, Franken persisted in an unethical and
conflicted representation of the Debtor and parties with interests directly opposed
to the Debtor. To the extent Franken asserts the bankruptcy judge was biased
against him, the argument is frivolous and belied by the record. As evidence of
bias, Franken cites only the judge’s various rulings, questions at the hearing, and a
stray comment in which Franken felt “mock[ed]” by the judge. However, “judicial
rulings alone almost never constitute a valid basis for a bias or partiality motion.”
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Liteky v. United States, 510 U.S. 540, 555 (1994). And even if the judge made a
comment “mocking” Franken, “expressions of impatience, dissatisfaction,
annoyance, and even anger, that are within the bounds of what imperfect men and
women . . . sometimes display,” do not establish bias or partiality. Id. at 555-56.
Franken received due process and failed to show any evidence of judicial bias.
Thus, we affirm.
AFFIRMED.
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