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Higashi v. Takazawa

United States District Court, D. Hawaii

February 2, 2018

STERLING G. HIGASHI, Appellant,
v.
HALE TAKAZAWA, Appellee.

          ORDER GRANTING APPELLEE'S MOTION FOR RULE 8020 “JUST DAMAGES” FOR MERITLESS APPEAL

          Leslie E. Kobayashi United States District Judge

         Plaintiff-Appellee Hale Takazawa (“Appellee”) filed his Motion for Rule 8020 “Just Damages” for Meritless Appeal (“Motion”) on July 30, 2017. [Dkt. no. 16.] Plaintiff-Appellant Sterling G. Higashi (“Appellant”) filed his memorandum in opposition on August 14, 2017. [Dkt. no. 18.] Appellee filed his reply on August 27, 2017 and a supplemental exhibit to the Motion (“Supplemental Exhibit”) on September 8, 2017. [Dkt. nos. 22, 24.] The Court finds this matter suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”).

         In an Entering Order filed on September 5, 2017, the Court granted the Motion (“9/5/17 EO Ruling”). [Dkt. no. 23.] The instant Order supersedes the 9/5/17 EO Ruling. Appellee's Motion is hereby granted because the Court concludes that Appellant's appeal was frivolous.

         BACKGROUND

         The background of this matter is set forth in this Court's July 20, 2017 Order Affirming the Bankruptcy Court's: (1) Order Granting Plaintiff's Motion for Rule 37(c)(2) Expenses; and (2) Order Denying Defendant's Objections to Certain Items of Plaintiff's Bill of Costs (“7/20/17 Order”), [dkt. no. 15, [1] and this Court's July 19, 2017 Order Affirming the Bankruptcy Court's Findings of Fact and Conclusions of Law and the Judgment in Higashi v. Takazawa, CV 16-00368 LEK-RLP (“CV 16-00368 Order”). 2017 WL 3075130.

         The facts pertinent to the matter at hand are as follows: in the underlying matter, the creditor for Appellant's business required Appellant's wife, Victoria Higashi, to sign the promissory note at issue in the litigation. This note was tendered for payment and, when Appellant did not pay it and Appellee was assigned the promissory note by the creditor, Appellee demanded payment. In its Findings of Fact and Conclusions of Law (“FOF/COL”) issued on June 7, 2016, the bankruptcy court found that Appellant had forged his wife's signature on the note and concluded that Appellant's debt was non-dischargeable. The FOF/COL was affirmed on appeal. CV 16-00360 Order, 2017 WL 3075130, *9.

         On August 15, 2016, the bankruptcy court issued its Order Granting Plaintiff's Motion for Rule 37(c)(2) Expenses (“Rule 37(c)(2) Order”) and its Order Denying Defendant's Objections to Certain Items of Plaintiff's Bill of Costs (collectively “Sanctions Orders”). The bankruptcy court concluded Appellant had no reasonable basis to deny the request for admission that he had forged his wife's signature, and ordered Appellant to pay $19, 662.30 for reasonable expenses (including attorney's fees) and $2, 946.94 for taxable costs incurred by Appellee to prove the fact of the forgery. 7/20/17 Order, 2017 WL 3097771, at *1.

         Appellant appealed from the Sanctions Orders. This appeal was denied and the sanctions were affirmed. Appellee then filed the instant Motion, under Fed.R.Bankr.P. 8020(a), seeking damages and costs for defending the Sanctions Orders appeal and asserting damages of $3, 821.99 incurred in attorney's fees. [Suppl. Exh. at 5.]

         STANDARD

         Fed. R. Bankr. P. 8020(a) governs awards of damages and costs incurred in a frivolous appeal and provides, in relevant part, that “[i]f the district court . . . determines that an appeal is frivolous, it may . . . award just damages and single or double costs to the appellee.” Motions for damages under Rule 8020(a) are governed by the same standard applicable to a Fed. R. App. P. 38 motion:[2]

An appeal is frivolous “if the results are obvious, or the arguments of error are wholly without merit.” George v. City of Morro Bay (In re George), 322 F.3d 586, 591 (9th Cir. 2003) (quoting Maisano v. United States, 908 F.2d 408, 411 (9th Cir. 1990)). “[A] finding of bad faith is not necessary to impose sanctions” for a frivolous appeal, though bad faith may counsel in favor of the court exercising its discretion to grant sanctions. United States v. Nelson (In re Becraft), 885 F.2d 547, 549 (9th Cir. 1989).

Ly v. Che, 601 F. App'x 494, 496-97 (9th Cir. 2015) (alteration in Ly) (applying Rule 38 standard to a Rule 8020(a) motion).

         The purpose of awarding damages is “to penalize an appellant who takes a frivolous appeal and to compensate the injured appellee for the delay and added expense of defending the district court's judgment.” Burlington N. R.R. Co. v. Woods, 480 U.S. 1, 7 (1987) (Rule 38 context). “The award of fees and costs under Rule 38 . . . may not include the fees and costs regarding the ...


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