[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
_________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
FEBRUARY 10, 2011
No. 10-12085
JOHN LEY
_________________________
CLERK
D.C. Docket No. 4:10-cv-00039-MP-WCS,
BKCY No. 08-40298-LMK
IN RE:
QUEEN MILLER,
Debtor.
______________________________________________
DAVID H. ABRAMS,
Movant-Appellant,
QUEEN MILLER,
Plaintiff,
versus
EDNY SAINT FELIX,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Northern District of Florida
_________________________
(February 10, 2011)
Before BLACK and HULL, Circuit Judges, and HOWARD,* District Judge.
PER CURIAM:
Appellant David H. Abrams appeals the district court’s order affirming the
bankruptcy court’s award of sanctions against him pursuant to Federal Rule of
Bankruptcy Procedure 9011 (Bankruptcy Rule 9011). Abrams contends that the
bankruptcy court abused its discretion when it granted Appellee Edny Saint Felix’s
motion for sanctions because the motion failed to comply with the notice
requirements set forth in the safe harbor provision of Bankruptcy Rule
9011(c)(1)(A). After review and oral argument, we agree, and therefore reverse
the decisions of the courts below.1
I.
On May 7, 2008, Queen Miller (the Debtor) filed for bankruptcy in the
United States Bankruptcy Court for the Northern District of Florida. The trustee
for the Debtor’s estate, represented by Abrams, filed an adversary complaint
against Saint Felix on July 22, 2008, seeking to recover certain real property
* Honorable Marcia Morales Howard, United States District Judge for the Middle
District of Florida, sitting by designation.
1
We review a bankruptcy court’s decision to impose sanctions for an abuse of discretion.
See Glatter v. Mroz (In re Mroz), 65 F.3d 1567, 1571-72 (11th Cir. 1995). Under an abuse of
discretion standard, we “must affirm unless we find that the [lower] court has made a clear error
of judgment, or has applied the wrong legal standard.” Amlong & Amlong, P.A. v. Denny’s,
Inc., 500 F.3d 1230, 1238 (11th Cir. 2007) (internal quotation omitted). “A decision that is
contrary to the law plainly is an abuse of discretion.” Id.
2
previously conveyed by the Debtor to Saint Felix. On April 17, 2009, Saint Felix
served a motion for sanctions on Abrams asserting that sanctions were warranted,
pursuant to Bankruptcy Rule 9011, for the filing of a frivolous complaint. In its
entirety, the sanctions motion read as follows:
1. The factual and legal assertions set forth in the Plaintiff's
complaint do not give rise to even a colorable claim for relief against
the Defendant, are not warranted by existing law, and are not
supported by the facts of the case.
2. By pursuing their meritless claims against the Defendant, the
Plaintiff and her counsel have unduly vexed, taxed, and brought costs
upon the Defendant.
3. The Debtor, the Plaintiff, and/or their counsel should be ordered
to pay to the Defendant sufficient sums to compensate him for his
costs and expenses in this matter, including but not limited to
attorneys fees as set forth in Federal Rule of Bankruptcy Procedure
9011.
On that same day, Saint Felix filed a motion to dismiss, as well as a memorandum
of law and an affidavit in support of his motion. Saint Felix later withdrew the
motion to dismiss, and on May 6, 2009, filed a motion for summary judgment
instead. In accordance with Bankruptcy Rule 9011's requirement that a motion for
sanctions not be filed until twenty-one days after it has been served on the
opposing party, Saint Felix filed the motion for sanctions with the bankruptcy court
on May 22, 2009. The bankruptcy court held a hearing on the motion for sanctions
on November 24, 2009, and on December 30, 2009, entered an order granting the
3
motion and imposing a sanction of $5,000 in attorney's fees against Abrams.
Abrams appealed the sanctions award to the district court, and the district court
affirmed the bankruptcy court’s order.2 On appeal to this Court, Abrams argues, as
he did before the district court, that Saint Felix failed to comply with Bankruptcy
Rule 9011 because the motion for sanctions Saint Felix served did not state with
specificity the conduct allegedly warranting sanctions nor did it cite any existing
law demonstrating that the claims were frivolous.
II.
Bankruptcy Rule 9011(c)(1)(A) provides that:
[a] motion for sanctions under this rule shall be made separately from
other motions or requests and shall describe the specific conduct
alleged to violate [Bankruptcy Rule 9011(b)]. . . . The motion for
sanctions may not be filed with or presented to the court unless,
within 21 days after service of the motion (or such other period as the
court may prescribe), the challenged paper, claim, defense, contention,
allegation, or denial is not withdrawn or appropriately corrected . . . .
Fed.R.Bankr.P. 9011(c)(1)(A) (emphasis added).3 The rule requires the moving
party to serve the motion for sanctions on opposing counsel at least twenty-one
days prior to filing it with the court. “This process provides a ‘safe harbor’ in
2
We note that although the bankruptcy court imposed a sanction of $5,000, the district
court affirmed the sanction as $5,500. The parties do not address, and we are unable to discern
from the record, the reason for this discrepancy.
3
Bankruptcy Rule 9011 is substantially identical to Federal Rule of Civil Procedure 11
(Rule 11).
4
which the offending party can avoid sanctions by withdrawing or correcting the
challenged document or position after receiving notice of the alleged violation.”
Gwynn v. Walker (In re Walker), 532 F.3d 1304, 1308 (11th Cir. 2008) (per
curiam); see also Peer v. Lewis, 606 F.3d 1306, 1315 (11th Cir. 2010) (“The
purpose of Rule 11(c)(2)’s safe harbor provision is to allow an attorney who
violates Rule 11 to correct the alleged violation within twenty-one days without
being subject to sanctions.” (citing Fed.R.Civ.P. 11, advisory committee note of
1993)). “In that way, the ‘safe harbor’ provision works in conjunction with the
duty of candor, giving the proponent of a questionable claim an opportunity to
assess the claim’s validity without immediate repercussion.” See Ridder v. City of
Springfield, 109 F.3d 288, 294 (6th Cir. 1997). In the instant action, it is
undisputed that Saint Felix complied with the advance service requirement of
Bankruptcy Rule 9011(c)(1)(A) in that he served the motion for sanctions on
Abrams twenty-one days prior to filing it with the bankruptcy court.
In addition to the service requirement of the “safe harbor” provision,
however, the rule also requires that the motion “describe the specific conduct
alleged to violate” the rule. Fed.R.Bankr.P. 9011(c)(1)(A). “Since this
requirement serves a valuable notice function, a failure to do so may result in the
[lower] court rejecting the motion.” 5A Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1337.1 (3d ed. 2004); see also Nagel v. ADM
5
Investor Servs., Inc., 65 F. Supp. 2d 740, 756 (N.D. Ill. 1999) (holding that
“[b]ecause the motion must identify the ‘specific conduct’ that violates Rule 11,
[the defendant] has not preserved any demand for sanctions based on other
allegations of the complaint,” beyond the one specifically mentioned in the motion
for sanctions); Bergquist v. Caskie-Johnson (In re Caskie-Johnson), No. 06-cv-
01431-EWN, 2007 WL 496675, at *3 (D. Colo. Feb. 13, 2007). This notice
requirement “permits the subjects of sanctions motions to confront their accuser
and rebut the charges leveled against them” and to “withdraw the potentially
offending statements before the sanctions motion is officially filed.” See Storey v.
Cello Holdings, LLC, 347 F.3d 370, 389 (2d Cir. 2003). Saint Felix conceded at
oral argument that the motion for sanctions itself was insufficient to satisfy
Bankruptcy Rule 9011. Nevertheless, Saint Felix maintains that the
simultaneously filed motion to dismiss provided Abrams with adequate notice of
the basis for the sanctions motion.
Upon review, we find that Saint Felix’s deficient motion for sanctions
cannot be cured by looking to his motion to dismiss.4 Permitting a party to rely on
some other motion to satisfy the notice requirements of Bankruptcy Rule
4
Notably, Saint Felix withdrew the motion to dismiss prior to the filing of the motion for
sanctions. To the extent Saint Felix contends that his later filed motion for summary judgment
provided adequate notice, this argument fails because the motion for summary judgment was not
filed twenty-one days prior to the motion for sanctions. See Macort v. Prem, Inc., 208 F. App’x
781, 786 (11th Cir. 2006) (per curiam) (finding that the “failure to give [plaintiff] the twenty-one
day safe harbor period forecloses Rule 11 sanctions for the initial filing of a frivolous suit”).
6
9011(c)(1)(A) would circumvent the plain language of the rule. See
Fed.R.Bankr.P. 9011(c)(1)(A) (“A motion for sanctions under this rule shall be
made separately from other motions or requests . . . .”). Moreover, motions to
dismiss and motions for sanctions serve different purposes and are governed by
different standards. Compare Acosta v. Campbell, 309 F. App’x 315, 317 (11th
Cir. 2009) (per curiam) (unpublished decision) (“A Rule 12(b)(6) motion to
dismiss tests the sufficiency of the complaint against the legal standard set forth in
Rule 8: ‘a short and plain statement of the claim showing that the pleader is
entitled to relief.’”), and Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288-
90 (11th Cir. 2010) (discussing the applicable standard for evaluating the
sufficiency of a complaint on a motion to dismiss), with Kaplan v.
DaimlerChrysler, A.G., 331 F.3d 1251, 1255 (11th Cir. 2003) (“The purpose of
Rule 11 sanctions is to reduce frivolous claims, defenses, or motions, and to deter
costly meritless maneuvers.” (internal quotation omitted)). Indeed, a court may
assess Bankruptcy Rule 9011 sanctions only “when (1) the papers are frivolous,
legally unreasonable or without factual foundation, or (2) the pleading is filed in
bad faith or for an improper purpose.” See In re Mroz, 65 F.3d at 1572; see also
Kaplan, 331 F.3d at 1255 (discussing the circumstances warranting Rule 11
sanctions). Thus, many arguments which might support a motion to dismiss would
fail to provide a sufficient basis for a motion for sanctions. As such, the mere
7
filing of a motion to dismiss in conjunction with the service of a motion for
sanctions does not provide a party with specific notice as to which of its factual or
legal claims allegedly violate the Bankruptcy Rule 9011 standards.5 See generally
AI Consulting LLC v. Cellco P’ship, No. 304CV1841, 2006 WL 860947 (D. Conn.
Mar. 31, 2006); see also Weiss v. Weiss, 984 F. Supp. 682, 685 (S.D.N.Y. 1997)
(“[D]efendant’s previously-filed papers . . . are equally unspecific in that they fail
to address the Rule 11 standards . . . .”). Therefore, under the facts of this case,
neither the bare-bones motion for sanctions, nor the simultaneously filed motion to
dismiss, provided Abrams with notice of the specific conduct alleged to warrant
the imposition of sanctions. Because Abrams was entitled to notice under the rule,
we find that the bankruptcy court’s decision to award sanctions in this case was
based on an erroneous view of Bankruptcy Rule 9011 and thus, amounted to an
abuse of discretion.6
REVERSED.
5
We emphasize the fact that Saint Felix’s Motion for Sanctions did not reference the
Motion to Dismiss at all. Thus, this is not a case where a party has specifically incorporated
certain of its arguments for dismissal into a motion for sanctions and explained why those
arguments also support the imposition of sanctions.
6
On July 9, 2010, Saint Felix filed a Motion for Damages and Costs pursuant to Federal
Rule of Appellate Procedure 38. Appellate Rule 38 provides that “[i]f a court of appeals
determines that an appeal is frivolous, it may . . . award just damages and single or double costs
to the appellee.” Fed.R.App.P. 38. Because Saint Felix did not prevail on appeal, his Motion for
Damages and Costs is DENIED.
8