United States District Court, D. Hawaii
In re GERTRUDE NGIT WUN UNG, Debtor.
GERTRUDE NGIT WUN UNG, Appellant/Defendant. GARY K. TAKATA, TRUSTEE OF THE LAURA NGIT CHAU UNG REVOCABLE LIVING TRUST, Appellee/Plaintiff,
FINDINGS AND RECOMMENDATION TO DENY PLAINTIFF'S
MOTION FOR SANCTIONS
RICHARD L. PUGLISI, Magistrate Judge.
the Court is Plaintiff's Motion for Sanctions, filed on
February 4, 2016 ("Motion"). ECF No. 13. Defendant
filed an Opposition to the Motion on February 22, 2016. ECF
No. 15. Plaintiff filed his Reply on March 4, 2016. ECF No.
16. After carefully reviewing the parties' submissions
and the relevant legal authority, the Court FINDS and
RECOMMENDS that Plaintiff's Motion be DENIED.
is the Trustee of the Laura Ngit Chau Ung Revocable Living
Trust (the "Trust"). ECF No. 11 at 2. Defendant is
Laura Ung's sister and one of four beneficiaries of the
Trust. Id . At the time of Laura Ung's death,
the property held in the Trust included, in part, the subject
property where Defendant lived. Id . Defendant
refused to vacate the subject property and a summary
possession action commenced in state court to evict
Defendant. Id. at 3. During the course of the
summary possession action, Defendant filed a Chapter 13
bankruptcy petition, claiming an interest in the subject
property and liability on the reverse mortgage debt on the
subject property. Id . The state court summary
possession action settled, resulting in a judgment for
possession in favor of Plaintiff, and granting Defendant a
limited time to submit an offer to purchase the subject
property. Id. at 3-4.
commenced the underlying adversary action in the United
States Bankruptcy Court, District of Hawaii, against
Defendant by filing a "Complaint for Damages,
Termination of Beneficial Trust Interest and Dismissal of
Bankruptcy Case With Prejudice" against Defendant.
Id. at 4. Defendant asserted a Counterclaim.
Id. at 4-5. The bankruptcy court granted motions for
summary judgment in favor of Plaintiff and against Defendant,
thereby terminating Defendant's "rights and
interests as a beneficiary under the Trust, " dismissing
with prejudice Defendant's Counterclaim, barring
Defendant from filing another bankruptcy proceeding for six
months, and dismissing without prejudice all remaining
claims. Id. at 5 (citing ECF No. 4-5). Defendant
sought reconsideration of the bankruptcy court's order,
which was denied, and Judgment was entered that same day. See
ECF Nos. 8-7, 8-8.
days later, well after the expiration of the fourteen-day
time limit to appeal pursuant to Federal Rule of Bankruptcy
Procedure 8002(a)(1), Defendant filed an Ex Parte Motion to
Extend Time for Filing a Notice of Appeal and later filed a
Notice of Appeal of the Judgment in an Adversary Proceeding.
Id. at 6. The bankruptcy court denied
Defendant's Ex Parte Motion noting that Defendant failed
to establish "excusable neglect" for her tardiness
and immediately dismissed Defendant's appeal as untimely.
Id . Defendant appealed the bankruptcy court's
Order Denying Extension of Time to the district court.
Id. at 7.
district court issued its Order Affirming Bankruptcy
Court's Denial of Defendant-Appellant Gertrude Ngit Wun
Ung's Ex Parte Motion to Extend Time for Filing a Notice
of Appeal on January 20, 2016 ("January 20 Order").
ECF No. 11. In the January 20 Order, the district court held
that the bankruptcy court "set forth and specifically
addressed" the controlling authority. Id. at 9.
The district court noted that the bankruptcy court considered
each of the four factors in the required analysis.
Id. at 9. Specifically, the district court noted
that the bankruptcy court considered the "serious
prejudice" that the Trust beneficiaries are suffering
because of Defendant's "frivolous litigation, "
the fact that the delay was "entirely within the
control" of Defendant's counsel and that his late
filing error "would have been instantly obvious to any
careful attorney, " that the reason for the late filing
was "so thin that it is difficult to believe it is made
in good faith, " and even though the delay was
relatively short, the contrary factors overwhelmingly
supported denial of Defendant's request. Id. at
district court found that the bankruptcy court's decision
was "fully supported by evidence in the record."
Id. at 9-10. In so finding, the district court
stated that "[t]he record is replete with evidence that
Defendant opposed Plaintiff's attempts to sell the
subject property in order to repay a reverse mortgage loan
and prevent foreclosure by (1) refusing to vacate the subject
property, necessitating a summary possession action to evict
her, (2) filing a bankruptcy action based on specious claims
of entitlement to and/or an interest in the subject property
and liability on the reverse mortgage, and (3) engaging in
other litigation tactics designed to thwart Plaintiff's
attempts to close the Trust and distribute Trust assets to
all beneficiaries." Id. at 10-11. The district
court concluded that Defendant's counsel's
explanation for why the notice of appeal was filed late
"carries little weight" and that "a simple
review of the rules would have disclosed the fourteen-day
time period." Id. at 12.
present Motion, Plaintiff asks the Court to award sanctions
in the form of attorneys' fees and costs against
Defendant and her counsel for filing a frivolous appeal and
for violating several court rules.
Court FINDS and RECOMMENDS that Plaintiff's Request for
Sanctions Under Federal Rule of Bankruptcy Procedure 8020(a)
Rule of Bankruptcy Procedure 8020(a) provides that "[i]f
the district court... determines that an appeal is frivolous,
it may, after a separately filed motion or notice from the
court and reasonable opportunity to respond, award just
damages and single or double costs to the appellee."
Fed.R.Bankr.P. 8020(a). "An appeal is frivolous if the
results are obvious, or the arguments of error are wholly
without merit.'" Blixseth v. Yellowstone
Mountain Club, LLC, 796 F.3d 1004, 1007 (9th Cir. 2015)
(quoting Glanzman v. Uniroyal, Inc., 892 F.2d 58, 61
(9th Cir. 1989)); see also George v. City of Morro Bay
(In re George), 322 F.3d 586, 591 (9th Cir. 2003).
"A finding of bad faith is not necessary to impose
sanctions" but it may weigh in favor of the court
exercising its discretion to award sanctions. United
States v. Nelson (In re Becraft), 885 F.2d 547, 549 (9th
detailed above, the district court determined that the
bankruptcy court applied the correct legal standard and that
its conclusion was "fully supported by evidence in the
record." ECF No. 11 at 9-10. However, the district court
did not make a finding that Defendant's arguments on
appeal were wholly without merit. Instead, the district court
considered Defendant's argument and concluded that it
"carries little weight." Id. at 12. The
one reference in the district court's January 20 Order to
"frivolous litigation" was quoting the bankruptcy
court's decision. Id. at 10; see also ECF No.
8-2 at 2. Because the district court's January 20 Order
does not make a finding that Defendant's appeal was
frivolous, the Court FINDS and RECOMMENDS that the district
court DENY Plaintiff's request for sanctions under Rule
Court FINDS and RECOMMENDS that Plaintiff's Request for
Sanctions Under Federal Rule of ...