Commercial Litigation and Arbitration

Inherent Power Sanctions — Bankruptcy Court Possesses the Authority to Impose Inherent Power Sanctions for Bad Faith or Willful Misconduct

In re Den Beste (Den Beste v. Harrington), 2017 U.S. App. LEXIS 5316 (9th Cir. Mar. 27, 2017):

*   This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

Paul Den Beste appeals pro se from the district court's order affirming the bankruptcy court's order granting appellee's motion for attorney's fees as a sanction. We have jurisdiction under 28 U.S.C. §§ 158(d) and 1291. We review de novo the district court's decision on appeal from the bankruptcy court and apply the same standard of review applied by the district court. In re AFI Holding, Inc., 525 F.3d 700, 702 (9th Cir. 2008). We affirm.

Contrary to Den Beste's assertion, a bankruptcy court possesses the authority to sanction a party for bad faith or willful misconduct. See Price v. Lehtinen (In re Lehtinen), 564 F.3d 1052, 1058 (9th Cir. 2009) (inherent power of bankruptcy court allows court to impose sanctions and provide compensation for improper litigation tactics).

The bankruptcy court did [*2]  not abuse its discretion by sanctioning Den Beste because the record supports the bankruptcy court's finding that Den Beste filed the adversary proceeding in bad faith and for the sole purpose of harassing appellee. See id. (bankruptcy court's sanction decision reviewed for abuse of discretion); Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1188 (9th Cir. 2003) (bankruptcy court's factual finding reviewed for clear error).

To the extent that Den Beste challenges the bankruptcy court's order granting appellee's motion for summary judgment, the bankruptcy court's order annulling the automatic stay rendered the adversary proceeding moot. See Vegas Diamond Props., LLC v. FDIC, 669 F.3d 933, 936 (9th Cir. 2012) ("An appeal is moot if no present controversy exists as to which an appellate court can grant effective relief.").

We do not consider matters not specifically and distinctly raised and argued in the opening brief. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009).


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