Free Order on Motion for Attorney Fees - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ) ) ) M ichael Harvey Lynn, ) Debtor ) _______________________________) ) ) M ichael Harvey Lynn, ) Appellant, ) ) ) vs. ) ) M etwest M ortgage Services, Inc. ) Appellee. ) ) In the M atter of No. CV03-2164-PHX-DGC BK 00-08572 PHX GBN ORDER IN THE UNITED S TATES DIS TRICT COURT FOR THE DIS TRICT OF ARIZONA

Pending before t he Court are Appellant's (1) motion to vacate the order entered on October 23, 2005 that affirmed the Bankruptcy Court's dismiss al of his claim, (2) motion for clarificat ion of the April 26, 2005 Order denying Appellant's Rule 60 motion to reconsider, (3) motion to extend time to file notice of appeal, and (4) mot ions requesting contempt charges against Appellee. Docs. ##32, 34, 35, 33, 36. Also before the Court is Appellee's

motion for award of attorneys fees and costs pursuant to 28 U.S.C. §1927. Doc. #29. Background This case comes before the Court on appeal from Bankruptcy Judge George Nielsen's October 23, 2003 decision denying Appellant's motion for reconsideration of the dismissal of his case. On M arch 31, 2005, the Court affirmed t he Bankruptcy Court's

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October 23, 2003 decision. Doc. #27. On April 26, 2005, the Court denied Appellant's Rule 60 motion to reconsider. Doc. #31. Discussion A. Appellant's Motion for Clarification of the April 26, 2005 Order. Appellant seeks clarificat ion of the April 26 order that denied his motion for relief from the order entered on M arch 31. Doc. #31. A p p ellant appears to question (1) why he does not satisfy the Rule 60(b) requirements when he has not raised any issues different from those pres ent in either his opening or reply brief and (2) why the Court will not consider his supplemental evidence from Dr. Sayegh, supp ort ing his "extraordinary circumstances" claim, when the "issue of extraordinary circumstances was raised in [both] the Bankruptcy Court and in Appellant's opening and reply briefs." Doc. #34. As stated in the April 26 order, motions for reconsideration are disfavored and are not the place for parties to make new arguments not raised in their original briefs. See Northwest Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925-26 (9th Cir. 1988). Nor is it the time to ask the Court to rethink what it has already considered. States v. Rezzonico, 32 F. Supp. 2d 1112, 1116 (D. Ariz. 1998). See United

The Court may grant a

motion for relief from judgment pursuant to Rule 60(b) only "upon a showing of (1) mistake, surpris e, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) a satisfied or discharged judgment; or (6) extraordinary circumst ances which would justify relief." Id. at 1263; see Fed. R. Civ. P. 60(b); Allmerica Fin. Life Ins. & Annuity Co. v. Llewellyn, 139 F.3d 664, 666 (9t h Cir. 1997) (stating that party must show "extraordinary circumstances" to obtain relief under Rule 60(b)(6)). Appellant raised no new issues in his motion for reconsideration. Doc. #34.

A p p ellant admits that the Court had already considered the "issue of extraordinary circumstances. . . raised in the Bankruptcy Court and in Appellant's opening and reply briefs." Id. at 2. Because t here w as no newly discovered evidence presented in the

motion, and the Court had already considered and ruled against Appellant's "extraordinary

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circumstances" argument, the Appellant's motion for relief from the order entered on M arch 31, 2005 was properly denied. Doc. #31. No further clarification is required. B. Appellant's Motions to Reconsider. On M ay 4, 2005, Appellant filed a motion to vacate the Court's M arch 31, 2005 order. Doc. #32. Appellant also filed two mot ions asking the Court to hold Appellee's in

contempt for Appellee's violation of bankruptcy code §524, for damages and punitive damages and for Rule 11 sanctions. Docs. #33, 36. In the present motions, Appellant is

merely asking the Court t o again reconsider what the Court has already considered. Because there was no trial, the Court will construe all three of Appellant's motions as motions to alter or amend judgment pursuant to Rule 59(e) and for relief from judgment pursuant to Rule 60(b). Appellant raises no new issues that have not already been raised and considered by the Court. The M arch 31, 2005, order held that (1) "the bankruptcy court did not err in finding that Appellee did not violate bankruptcy code §524 because Appellee's did not seek fees and sanctions against Appellant in his individual capacity," (2) the bankrup tcy court did not "abuse its discretion in denying Appellant's motion for reconsideration," and (3) the bankruptcy court did not abuse its discretion in refus ing t o entertain issues previously adjudicated by the M aricopa County Superior Court. Doc. #27 at 3-4. In fact,

the Court's April 26, 2005 order has already rejected a request to recons ider t hes e issues. D oc. #31. A p pellant, again tills the ground he did on appeal and in his previous motion for reconsideration and has satisfied none of the grounds for relief set forth in Rules 59(e) and 60(b). T he Court will deny Appellant's motion to vacate and his motions for contempt

against Appellee. C. Appellee's Motion for Attorneys Fees, Pursuant to 28 U.S .C. § 1927. Appellee seeks an order p ursuant to 28 U.S.C. §1927 awarding it attorneys fees and costs incurred as a result of Appellant's ap p eal from bankruptcy court. Doc. #37. Section

1927 provides that any "attorney [or pro se litigant] who so multiplies the proceeding in

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any case unreas onably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reas onably incurred because of such conduct." 28 U.S.C. §1927; see Wages v. IRS, 915 F.2d 1230, 1235-36 (9th Cir. 1990). The imp os it ion of sanctions under § 1927 requires a finding of bad faith. See In re Keegan Mgmt. Co., Sec. Litig,. 78 F.3d 431, 436 (9th Cir. 1996). Bad faith is assessed under a

subjective standard. See MGIC Indem. Corp. v. Moor e, 952 F .2d 1120, 1121-22 (9th Cir. 1991). "Bad faith is present when an attorney knowingly or recklessly raises a frivolous

argument or argues a meritorious claim for the purpose of harassing an opponent." Estate of Blas v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986) (observing that a finding of bad faith is crucial because a frivolous argument by itself is insufficient to support an award of sanctions under §1927); see Wages, 915 F.2d at 1235-36. The Appellee asserts that Appellant acted in bad faith because he unreasonably and vexatiously multiplied the proceedings through "calculat ed legal maneuvers . . . spanning the years of 1999-2004, in three different courts, whereby Ap p ellant has made concerted efforts to continually evade Appellee's actions to determine collectibility and ultimately to execute a judgment and two separate orders for sanctions." Doc. #37.

Appellee complains that Appellant 's "s ix year litigation campaign against [it]" has forced it to invest significant "t ime and labor in planning the appeal strategy, researching the legal issues, and drafting the res p onse to Appellant's Opening Brief, M otion in Limine, and M otion to Strike" for which they should be reimbursed. Doc. # 37. App ellee seeks attorneys fees as a sanction against Appellant for the filing of his appeal in this Court. Appellee does not seek reimbursement for fees and costs arising

subsequent to the Court's M arch 31 order, including Appellant's mot ion t o vacate, Appellant's contempt motions against Appellee, or A p p ellant 's motion to extend time to file notice of appeal. While the Court is sympathetic to the lengthy litigation between the

parties, § 1927 limits a federal court 's ability to sanction an attorney for conduct occurring in another court. See Grid Sys. Corp. v. John Fluke Mfg. Co., Inc., 41 F.3d 1318 (9th Cir.

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1994) (holding that a suit filed in state court is an entirely separate action and not subject to the sanctioning power of the dis t rict court, and that § 1927 cannot reach the conduct of a party who is not involved in an action before the sanctioning court at the time of the conduct.) Therefore, despite Appellee's citation to Appellant's litigious behavior in both

the state and bankrup t cy courts, this Court will consider only whether Appellant's appeal constituted bad faith. Doc. #37. Appellant has a right to appeal from a judgment, order, or decree of a bankruptcy judge to a district court, pursuant to Rule 8001 of the Federal Rules of Bankruptcy Procedure. Appellant, on appeal, asserted that t he bankruptcy court had abused its

discretion by (1) granting Appellee's Rule 59(a) motion to reconsider, (2) denying appellant's motion for reconsideration, and (3) refusing to exercise jurisdiction over Appellant's ERISA claim previously adjudicated by the M aricopa County Superior Court. Doc. #9. The Court cannot conclude that Appellant's exercise of his right of appeal was

so vexatious and frivolous as to ris e t o t he level of bad faith, sufficient to warrant § 1927 sanctions . Even t hough the Court was not persuaded by Appellant's argument on appeal,

A p p ellant was entitled to appellate review. See Fed. R. Bankr.P. 8001. Therefore, becaus e § 1927 sanctions requires a finding of bad faith, the Court will deny Appellee's request for attorneys fees. D. Appellant's Motion to Extend Time to File his Notice of Appeal. On M ay 25, 2005, Appellant filed a timely mot ion t o extend time to file his notice of

21 appeal pursuant to Rule 4 of t he F ederal Rules of Appellate Procedure. Doc. #35. Notices 22 of appeal generally "must be filed w it h the district clerk within 30 days after the judgement 23 or order appealed from is entered." Fed. R. A p p . P . 4(a). Rule 4(a)(4)(B), however, tolls the 24 time within which Appellant must file his appeal providing in pertinent part: 25 26 27 28 -5Filed 09/28/2005 If a party files a notice of appeal after the court announces or enters a judgment ­ but before it disposes of any motion listed in [FRAP] 4(a)(4)(A) ­ the notice becomes effective to appeal a judgment or order, in whole or in part, when the order disposing of the last such remaining motion is entered.

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1 Fed. R. App. P. 4(a)(4)(B)(i)(emphasis added).

M oreover, a district court may extend the

2 time for filing a notice of ap p eal up on a showing of excusable neglect or good cause if the 3 party moves for an extension no later than t hirt y days after the appeal time has expired. Fed. 4 R. App. P. 4(a)(5)(A). 5 Appellant filed his first motion for reconsideration on April 19, 2005, within the

6 required ten days of the M arch 31, 2005 order that denied him relief on appeal from 7 bankruptcy court. Docs. ## 27-28. Within thirty days of t he Court's denial of Appellant's 8 first motion for reconsideration on April 26, 2005, he filed a timely motion reques t ing an 9 extension of time for his appeal, in compliance with Rule 4(a)(5)(A) of the Federal Rules of 10 Appellate Procedure. Doc. #31. Therefore, because Appellant's motion for extension was

11 timely, the Court must decide whether or not Appellant has met his burden and shown 12 "excusable neglect" or "good cause" sufficient to justify granting his extension. 13 4(a)(5)(A)(ii). 14 Factors relevant to an excusable-neglect decision in a motion to extend the t ime for See Rule

15 filing a notice of appeal include "the danger of prejudice t o t he moving party, length of the 16 delay and its potential imp act on judicial proceedings, reason for the delay, including 17 whether it was within the reasonable control of the movant and whether movant acted in 18 good faith." Bishop v. Corsentino, 371 F.3d 1203 (10t h Cir. 2004) (quoting City of Chanute 19 v . Williams Natural Gas Co., 31 F.3d 1041, 1045 (10th Cir, 1994)). The concept of good

20 cause is applied to a narrow class of cas es in which "there is no fault ­ excusable or 21 otherwise . . . and t he need for an extension is usually occasioned by something that is not 22 within the control of the movant." Fed. R. App. P. 4(a)(5) advisory committee's note (2002 23 Amendments). 24 Appellant argues that if he filed his notice of appeal within the thirty days as required

25 by Rule 4(a), then this Court would have been divested of juris dict ion over the motions 26 pending at the time. D oc. #35. At the time of Appellant's filing of his motion to extend time 27 for appeal, the pending motions included: (1) Appellee's "motion for an award of attorney s 28 -6Filed 09/28/2005

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1 fees and non-t axable costs," (2) Appellant's "motion for appellee and its attorneys to be 2 held in contempt of court and for Rule 11 sanctions," (3) Appellant's "motion to vacate this 3 court's order entered on M arch 31, 2005," and (4) A p p ellant's motion for "clarification of the 4 order entered on April 26, 2005 ." 5 In effect, Appellant argues that the appeal time should be extended so that this Court

6 can consider his repeated motions for reconsideration and his motions for sanctions against 7 Appellee. While the Court might be more inclined to grant such an extension to a pro se

8 litigant unfamiliar with court procedures and relevant arguments, Appellant is an at t orney. 9 A lt hough not currently practicing, Appellant has legal training and is familiar with the court 10 procedures. Appellant chos e t o file repetitive motions in district court instead of filing a He knowingly assumed the risk that this Court might deny his

11 t imely notice of appeal.

12 request for an extension of time for lack of good cause or excusable neglect. 13 The Court concludes that Appellant's repetitive motions and request for sanctions

14 do not constitute good cause or excusable neglect for ext ending the time for appeal. When 15 the motions were filed the Court had already addressed the merits of A p p ellant's arguments 16 twice. Appellant should have filed a timely notice of appeal if he intended t o s eek ap pellate 17 review rather than cont inuing to litigate repetitively and unnecessarily in district court. 18 Because A p pellant has failed to show circumstances beyond his control or other good 19 cause or excusable neglect that prevented him from filing a t imely notice, the Court will deny 20 his request for an extension of time to file a notice of appeal. 21 22 23 24 IT IS ORDERED: 1. 2. 3. Appellant's M otion to Vacate Court's Order filed 3/31/05 (Doc. #32) is denied. Appellee's M otion for Attorney Fees and Costs (Doc. #29) is denied. Appellant's M otion for Clarification of this Court 's O rder Entered April 26,

25 2005 (Doc. #34) is granted. 26 4. Appellant's M otion to Extend Time to File Notice of Appeal (D oc. #35) is

27 denied. 28 -7Filed 09/28/2005

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1

5.

Appellant's M otion for Appellee and it s counsel to be held in contempt of

2 court for its violation of Bankrup t cy Code Section 524, for damages and punitive damages, 3 and for Rule 11 sanctions (Doc. # 33) is denied. 4 6. Appellant's motion for entry of order holding the appellee and its attorneys

5 in contempt of court and entering judgment against them for damages and punitive damages 6 (Doc. #36) is denied. 7 8 7. 8. Appellee's M otion to Strike (Doc. #39) is denied as moot. Appellant's M otion to Strike Appellee's Reply to Res p ons e M otion (Doc. #46)

9 is denied as moot. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8Filed 09/28/2005 Dated this 28th day of September, 2005.

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