United States District Court, D. Connecticut
IN RE GARY M. GIBLEN, and ANNA MARIE GIBLEN, Debtors. SCOTT M. CHARMOY, Appellant.
RULING AND ORDER CONCERNING APPEAL FROM SUA SPONTE
ORDER IMPOSING SANCTIONS
R. UNDERHILL, UNITED STATES DISTRICT JUDGE.
M. Charmoy, Esq. (“Attorney Charmoy”) timely
appealed an order of Chief United States Bankruptcy Judge
Julie A. Manning dated March 29, 2017. Doc. No. 1-1, Notice
of Appeal from Bankruptcy Court, Order, at 1-5. The order
instructs Attorney Charmoy to compensate Attorney Merrie
Hawley, acting as committee for sale (“the
Committee”) for all fees and expenses incurred in a
related foreclosure action in state court. See Doc.
No. 1-1, Notice of Appeal from Bankruptcy Court, Order, at
Order Granting Relief from Automatic Stay and Imposing
Sanctions After Show Cause Hearing, Chief Judge Manning held
that Attorney Charmoy had “committed violations of the
duty of candor to the Court and violations of Federal Rule of
Bankruptcy Procedure 9011 and Federal Rule of Civil Procedure
11.” Doc. No. 1-1, Notice of Appeal from Bankruptcy
Court, Order, at 3. Attorney Charmoy correctly pointed out a
few technical problems regarding the procedures employed in
connection with the sanctions issue by the Bankruptcy Court.
In addition, the Bankruptcy Court erred in ordering Attorney
Charmoy to pay a Rule 11 sanction to the Committee.
Accordingly, I remand the matter to the Bankruptcy Court for
further proceedings consistent with this Order.
December 18, 2017, Attorney Charmoy filed a Chapter 7
bankruptcy case in United States Bankruptcy Court on behalf
of Gary and Anna-Marie Giblen (“the Giblens” or
“the Debtors”). March 23, 2017 Transcript
(“Transcript”), Doc. No. 10, at 104:1-9. On
December 3, 2017, more than two weeks before the Chapter 7
case was filed, the Giblens' home was sold in a
foreclosure sale approved by the Stamford Superior Court.
Transcript, Doc. No. 10, at 4:8-13. The foreclosure sale of
the Giblens' property occurred prior to the filing of the
Debtors' case, but Chief Judge Manning did not find out
about the foreclosure sale until March 7, 2017, during a
hearing at which the Chapter 7 Trustee objected to the
Debtors' claim of exemptions and sought to employ a
realtor to market and sell their property. Doc. No. 1-1,
Notice of Appeal from Bankruptcy Court, Order, at 3;
Transcript, Doc. No. 10, at 3:22-4:4; 5:5-13, 5:20-6:9.
March 23, 2017, after learning that the foreclosure had taken
place before the Chapter 7 case was filed, Chief Judge
Manning ordered a show cause hearing to determine, among
other things, whether Attorney Charmoy should be sanctioned
for his failure to inform the Court about the foreclosure
sale. Transcript, Doc. No. 10, at 6:10-18.
Judge Manning made a factual finding that Attorney Charmoy
knew that the Connecticut Superior Court had entered a
judgment of foreclosure by sale in a foreclosure action in
state court at the time the Objection, the Application to
Employ Realtor, and the Response to Objection were filed in
the Chapter 7 bankruptcy. Doc. No. 1-1, Notice of Appeal from
Bankruptcy Court, Order, at 3; Transcript, Doc. No. 10, at
88:6-18. She held that Attorney Charmoy did not disclose any
information about the foreclosure action or the pre-petition
foreclosure sale to the Bankruptcy Court. Transcript, Doc.
No. 10, at 177:2-178:3.
conclusion of the March 23, 2017 hearing, Chief Judge Manning
ordered that sanctions be imposed on Attorney Charmoy, for a
total of $8, 074.86, to be paid to the Committee in full on
or before April 6, 2017, and leaving open the possibility for
additional fees and expenses to be paid to the Committee
within 14 days of April 6, 2017. Doc. No. 1-1, Notice of
Appeal from Bankruptcy Court, Order, at 4. Attorney Charmoy
timely appealed Chief Judge Manning's sanctions order.
Standard of Review
federal district court has jurisdiction to hear appeals of
“final judgments, orders, and decrees” of the
bankruptcy court for the same district pursuant to 28 U.S.C.
§ 158(a). When reviewing bankruptcy appeals, the
district court reviews conclusions of law de novo
and applies the clearly erroneous standard to findings of
fact. In re Ionosphere Clubs, 922 F.2d 984, 988 (2d
Cir. 1990). The district court may “affirm, modify, or
reverse a bankruptcy court's judgment, order, or decree[,
] or remand with instructions for further proceedings.”
In re Indicon, 499 B.R. 395, 400 (D. Conn. 2013)
(quoting former Federal Rule of Bankruptcy Procedure 8013).
court has jurisdiction to hear the present appeal. A district
court has jurisdiction to hear appeals “from final
judgments, orders, and decrees” of the bankruptcy
court. 28 U.S.C. § 158(a).
Judge Manning's Order Granting Relief from Automatic Stay
and Imposing Sanctions After Show Cause Hearing did not
intend to leave open any issues pertaining to the order for
sanctions, and thus is treated as a final order. Doc. No.
1-1, Notice of Appeal from Bankruptcy Court, Order, at 4-5.
Even if that order is not final because it leaves open the
issue of whether the Debtors' case should be dismissed as
a bad faith filing, and is rather an ...