Opinion
No. 10-13558 A.P. No. 11-1136
09-26-2011
In re Paul and Melody Den Beste, Debtor(s). Paul Den Beste, Plaintiff(s), v. Lynn Searle, et al. Defendant(s).
Entered on Docket
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Memorandum on Motion for Sanctions
Debtor and plaintiff Paul Den Beste filed a Chapter 13 petition on June 15, 2010. Incredibly, he failed to schedule as a creditor either defendant Elizabeth Mazzaferi or defendant Lynn Searle as creditors even though Mazzaferi had a lawsuit pending against him in state court and Searle represented a plaintiff in state court litigation against him. In addition, Den Beste lied on his schedules by asserting he was not involved in any litigation in the year before filing. Notwithstanding his false bankruptcy papers, Den Beste commenced this adversary proceeding in pro se seeking damages against Searle and Mazzaferi for willful violation of the automatic stay.
Searle is an attorney representing the beneficiary of a living trust in a state court lawsuit, also unscheduled. On April 18, 2011, she sent a letter to nine persons, including Den Beste, seeking to resolve her client's claims for elder abuse. Instead of amending his schedules to reflect the disputed claims against him, Den Beste commenced this adversary proceeding. Searle filed a motion to dismiss the complaint along with her declaration that she did not know about the pending bankruptcy when she sent her letter.
In order to state a claim for damages for violation of the automatic stay, a plaintiff must show that the defendant knew about the automatic stay. In re Ozenne, 337 B.R. 214, 220 (9th Cir. BAP 2006). Since Den Beste did not plead any facts showing that Searle had knowledge of the bankruptcy and did not file a declaration to refute Searle's declaration, the court granted judgment in favor of Searle and dismissed the case. Searle has now filed a motion for sanctions pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure. Incredibly, Den Beste has made a countermotion for sanctions.
The court has no difficulty finding that Den Beste's complaint against Searle was entirely unwarranted, both factually and legally, and was commenced against Searle solely for the purposes of harassment. However, Searle has made no showing that she complied with the "safe harbor" provision of Rule 9011(c)(1) by demanding that the complaint be withdrawn when it was filed or before she filed her motion to dismiss. See In re Fraga, 2007 WL 7532279 (9th Cir. BAP 2007). It does not appear that Rule 9011 applies to a complaint itself after it has been dismissed; there are other remedies for litigants who have been sued without cause. Moreover, Searle has made no showing that she incurred $18,000.00 in attorneys' fees, or that an attorney who represented herself is entitled to recover attorneys' fees. While Searle has not met her burden as to these issues, the court does not find her motion frivolous or sanctionable because it is clear that Den Beste has engaged in a pattern of sanctionable conduct.
As Den Beste himself points out, the court has inherent power to sanction. The court will accordingly deny both Searle's motion and the countermotion and order Den Beste to appear and show cause why he should not be sanctioned.
Alan Jaroslovsky
U.S. Bankruptcy Judge
CERTIFICATE OF MAILING
I, the undersigned, a regularly appointed deputy clerk of the United States Bankruptcy Court for the Northern District of California, at Santa Rosa, hereby certify: That I, in the performance of my duties as such clerk, served a copy of the foregoing document by depositing it in the regular United States mail at Santa Rosa, California on the date shown below, in a sealed envelope bearing the lawful frank of the Bankruptcy Judge, addressed as listed below.
By : Katie Andersen
Deputy Clerk
Paul Den Beste
P.O. Box 742
Cloverdale, CA 95425
Edith Mazzaferri
599 Oregon St.
Sonoma, CA 95426
Lynn Searle
220 Bush St. #1200
San Francisco, CA 94104