Robert Konop v. Hawaiian Airlines

FILED
NOT FOR PUBLICATION JUL 08 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROBERT C. KONOP, No. 11-17706
Appellant, D.C. No. 1:08-cv-00405-DAE-
BMK
v.
HAWAIIAN AIRLINES, INC., a Hawaii MEMORANDUM*
corporation,
Appellee.
Appeal from the United States District Court
for the District of Hawaii
David A. Ezra, District Judge, Presiding
Submitted June 8, 2015**
Honolulu, Hawaii
Before: WARDLAW, BERZON, and OWENS, Circuit Judges.
Robert Konop appeals the district court’s order affirming in part and
vacating in part the bankruptcy court’s award of sanctions against him. We have
jurisdiction pursuant to 28 U.S.C. § 158(d)(1), see Congrejo Invs., LLC v. Mann
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
(In re Bender), 586 F.3d 1159, 1163-64 (9th Cir. 2009), and we affirm in part,
reverse in part, and remand.
1. The bankruptcy court improperly granted summary judgment against
Konop on Hawaiian Airlines’ motion for contempt sanctions. Viewing the
evidence in the light most favorable to Konop, see Suncrest Healthcare Ctr. LLC v.
Omega Healthcare Investors, Inc. (In re Raintree Healthcare Corp.), 431 F.3d
685, 687 (9th Cir. 2005), a genuine dispute of material fact exists as to whether
Konop’s statements in the three allegedly misleading disclosure statements were
made in bad faith, see Price v. Lehtinen (In re Lehtinen), 564 F.3d 1052, 1058,
1061 (9th Cir. 2009). Konop’s declarations, proffered in opposition to the
contempt motion and in opposition to the motion for summary judgment, create a
dispute of fact as to whether he engaged in “something more egregious than mere
negligence or recklessness.” Id. at 1058 (internal quotation marks omitted). These
declarations, in combination with the declarations of Paul Boghosian and Dr.
William Spencer and the accompanying financial statements—all of which Konop
claims to have relied upon when making certain representations in the
disclosures—preclude summary judgment. In addition, the email to Boghosian
relied upon as demonstrating knowledge that Boghosian did not have the necessary
financing available is subject to the opposite inference—that Konop believed
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Boghosian did have the financing at hand but had not provided the requisite
documentation.
To the extent that the bankruptcy court purported to make “factual findings,”
it could not do so on summary judgment, which can be granted only where there is
no dispute of material fact and the movant is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56. Thus, the bankruptcy court’s “findings” are insufficient to
support the award of sanctions under its inherent powers. Because genuine issues
of material fact as to whether there was bad faith or willful misconduct remain,
Konop was entitled to an evidentiary hearing. See Zilog, Inc. v. Corning (In re
Zilog, Inc.), 450 F.3d 996, 1007 & n.11 (9th Cir. 2006).
2. Konop had adequate notice of the charges for which he was subject to
contempt. Lehtinen, 564 F.3d at 1060. The contempt motion filed by Hawaiian
Airlines recited clearly the allegations of misrepresentations and bad faith
underlying the contempt charge. The bankruptcy court explained to Konop at the
July and August 2005 hearings the conduct for which Hawaiian Airlines sought
sanctions. Konop was afforded—and took advantage of—multiple opportunities to
respond to Hawaiian Airlines’ allegations.
3. The district court correctly concluded that any available sanctions are
limited to Hawaiian Airlines’ “direct costs” of investigating and opposing the three
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allegedly misleading disclosure statements. See Orange Blossom P’Ship v. S. Cal.
Sunbelt Developers, Inc. (In re S. Cal. Sunbelt Developers, Inc.), 608 F.3d 456,
466 (9th Cir. 2010).
4. We decline to address Konop’s argument, raised for the first time on
appeal, that the bankruptcy judge exhibited bias in the contempt proceedings. See
El Paso v. Am. W. Airlines, Inc. (In re Am. W. Airlines, Inc.), 217 F.3d 1161, 1166
(9th Cir. 2000) (“Absent exceptional circumstances, we generally will not consider
arguments raised for the first time on appeal . . . .”).
Each party shall bear its own costs on appeal.
AFFIRMED in part, REVERSED in part, and REMANDED.
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