United States District Court, D. Nevada
IN RE KATHERINE GRISWOLD-STANTON Debtor.
KATHERINE GRISWOLD-STANTON, Appellees. CIT BANK, N.A. Appellants,
before the court is CIT Bank, N.A.'s (“CIT”)
appeal from the decision of the United States Bankruptcy
Court for the District of Nevada (“the bankruptcy
court”). Appellant CIT filed an opening brief. (ECF No.
5). Appellee Katherine Griswold-Stanton filed an answering
brief (ECF No. 7), to which CIT replied (ECF No. 10).
appeal arises from a dispute regarding an order sanctioning
CIT and awarding attorney's fees.
November 22, 2016, Stanton filed a voluntary petition for
relief under chapter 13 of the bankruptcy code. (ECF No.
6-44). Stanton also filed a chapter 13 plan of
reorganization. Id. At the time she filed her
petition, she owned and resided in a residential property
located at 9847 Mount Madera Street, Las Vegas, Nevada.
Id. Pursuant to a deed of trust dated July 28, 2006,
CIT held a claim against Stanton and her estate, secured by
Stanton's residential property. (ECF No. 6-16).
November 29, 2016, CIT filed an objection to confirmation of
Stanton's chapter 13 plan. Id. CIT argued that
Stanton's plan did not specifically provide for the
curing of CIT's pre-petition arrearage amount of $69,
February 15, 2017, CIT filed a first notice of post-petition
mortgage fees, expenses, and charges pursuant to Federal Rule
of Bankruptcy Procedure 3002.1(d). (ECF No. 7 at 7). On June
9, 2017, CIT filed a second notice of mortgage fees,
expenses, and charges (“the second notice”). (ECF
No. 6-14). In the second notice, CIT informed Stanton and the
bankruptcy court that it intended to assess a total of $1,
406 in post-petition fees and expenses against Stanton.
Id. The charges included attorneys' fees of
$850, bankruptcy/proof of claim charges of $400,
appraisal/broker's opinion fees of $145, and property
inspection fees of $11. Id.
19, 2017, Stanton prepared and mailed a letter to CIT
pursuant to Bankruptcy Rule 9011 demanding that CIT withdraw
the second notice or “amend or supplement the notice
with documentation supporting the asserted post-petition
charges.” (ECF No. 6-24). Stanton attached a copy of a
proposed motion for sanctions to the letter. Id.
21, 2017, Stanton filed a motion for sanctions for violation
of Bankruptcy Rule 9011. (ECF No. 6-24). The motion alleged
that CIT's filing of the second notice violated
Bankruptcy Rule 9011 (b)(3). Id. On August 15, 2017,
CIT filed an opposition to Stanton's sanctions motion.
(ECF No. 6-28). Moreover, on August 18, 2017, CIT withdrew
the second notice. (ECF No. 6-29). On August 22, 2017,
Stanton filed a reply in support of the sanctions motion.
(ECF No. 6-31).
August 30, 2017, the bankruptcy court held a hearing on the
motion. (ECF No. 6- 43). On September 19, 2017, the
bankruptcy court entered its oral ruling. (ECF No. 6-41). In
the oral ruling, the bankruptcy court held that CIT violated
Bankruptcy Rule 9011 and awarded Stanton's counsel its
attorneys' fees and expenses incurred in connection with
the sanctions motion. Id.
September 22, 2017, the bankruptcy court's order granting
the motion for sanctions was entered on the docket. (ECF No.
6-33). The order incorporated the findings of fact and
conclusions of law entered into the record in the oral
ruling. Id. On September 23, 2017, Stanton's
counsel filed a declaration setting forth attorneys' fees
in the amount of $9, 603. (ECF No. 6-36).
on October 11, 2017, the bankruptcy court entered its amended
order, in which it imposed sanctions in the amount of $9, 603
against CIT. (ECF No. 6-38).
October 26, 2017, CIT filed its notice of appeal. (ECF No.
6-39). CIT appeals the final judgment arising from the
bankruptcy court's granting of Stanton's motion for
sanctions for violations of Bankruptcy Rule 9011.
district court has jurisdiction over a bankruptcy appeal from
the bankruptcy court's “final judgments, orders, or
decrees.” 28 U.S.C. § 158(a)(1), (3). “An
order is final if it constitutes a complete adjudication of
the issues at bar and clearly evidences the judge's
intention that it be final.” In re Wiersma,
483 F.3d 933, 938 (9th Cir. 2007).
Standard of Review
court acts as an appellate court in reviewing a bankruptcy
court's decision, applying the same standards of review
applied by the Ninth Circuit. In re Mortg. Store,
Inc., 773 F.3d 990, 994 (9th Cir. 2014).
appellate court applies an abuse of discretion standard in
reviewing a bankruptcy court's order granting sanctions.
See Retail Flooring Dealers of Am., Inc. v. Beaulieu of
Am, LLC, 339 F.3d 1146, 1150 (9th Cir. 2003). “A
bankruptcy court abuses its discretion if it applies the law
incorrectly or if it rests its decision on a clearly
erroneous finding of a material fact.” In re
Brotby, 303 B.R. 177, 184 (9th Cir. BAP 2003).
Conclusions of law are subject to de novo review. In re
Rains, 428 F.3d 893, 900 (9th Cir. 2005). Factual
findings are clearly erroneous only if the findings leave the
definite and firm conviction that the bankruptcy court made a
appellate court may affirm a bankruptcy court's decision
“on any ground fairly supported by the record.”
In re Warren, 568 F.3d 1113, 1116 (9th Cir. 2009).
However, the bankruptcy court must explain its reasons for
granting or denying a motion. See Liti v. C.I.R.,
289 F.3d 1103, 1105 (9th Cir. 2002).