Weinstein, Pinson & Riley v. Elizabeth Nelson

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAY 26 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In the Matter of: ELIZABETH BLANCHE No. 14-56103
NELSON,
Debtor,
D.C. No. 5:13-cv-02386- DSF
---------------------------------------
WEINSTEIN, PINSON & RILEY, P.S. and Adv. No. 6:12-ap-01480-SC
WILLIAM S. WEINSTEIN, Bankruptcy No. 6:12-bk-30664-SC
Plaintiffs - Appellants,
MEMORANDUM *
V.
ELIZABETH BLANCHE NELSON,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Dale S. Fischer, District Judge, Presiding
Submitted May 6, 2016**
Pasadena, California
Before: M. SMITH and NGUYEN, Circuit Judges and GORDON, *** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Andrew P. Gordon, District Judge for the U.S. District
Court for the District of Nevada, sitting by designation.
Weinstein, Pinson & Riley, P.S. (WPR) and William S. Weinstein appeal the
district court’s ruling affirming in part and reversing in part the bankruptcy court’s
imposition of sanctions under Federal Rule of Bankruptcy 9011. We have
jurisdiction under 28 U.S.C. § 158(d)(1). We affirm in part, and reverse and
remand in part.
1. We agree with the district court that the bankruptcy court did not abuse
its discretion in finding that WPR filed a frivolous adversarial complaint. WPR
argues that the court abused its discretion by deeming its three-count complaint
frivolous because two of its counts were factually supported. As noted by the
district court, one baseless allegation provides a sufficient basis for Rule 9011
sanctions. See Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1362–63
(9th Cir. 1990).1 Nor do we find that the imposition of monetary sanctions and a
public reprimand were impermissibly punitive in nature. See Fed. R. Civ. P. 11,
Adv. Comm. Notes (1993); Gotro v. R & B Realty Grp., 69 F.3d 1485, 1488 (9th
Cir. 1995). Instead, the sanctions here were “limited to what is sufficient to deter
repetition of such conduct or comparable conduct by others similarly situated.”
1
“Because FRCP 11 and Bankruptcy Rule 9011 use virtually identical language,
we often rely on cases interpreting the former when construing the latter.” In re
Marsch, 36 F.3d 825, 829 (9th Cir. 1994).
2
FED. R. BANKR. P. 9011(c)(2).
2. However, the district court erroneously upheld the portion of the
bankruptcy court’s order that directed Weinstein to publicly report that he had been
sanctioned. The district court reversed the sanctions that the bankruptcy court
imposed against Weinstein because the bankruptcy court failed to give Weinstein
notice. Consequently, the bankruptcy court’s order that directed Weinstein to
publicly report that he had been sanctioned contained a factual inaccuracy: that he
had been sanctioned. The district court thus erred in ordering Weinstein to
publicly report that factual inaccuracy. We therefore remand to the district court
with instructions to remand to the bankruptcy court to determine whether its order
should be revised or whether further proceedings against Weinstein are
appropriate.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
The parties shall bear their own costs.
3