UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
JAMES E. COX, JR.
DEBTOR CASE NO. 89-30334
This matter is before the Court on the Rule 11 Motion by Creditors Betty and Charles Cummins and Their Attorney Against Debtor's Attorney, filed herein on February 12, 1993. The Motion seeks to alter or amend an Order of this Court entered herein on February 3, 1993, so as to allow the movants a judgment for attorney's fees and expenses incurred in opposing the debtor's attorney's claim for attorney's fees. The debtor's attorney filed a Response to the Motion on March 9, 1993. Since a motion to alter or amend a judgment is properly brought pursuant to FRCP 59(e), the Court will treat the instant Motion as one for sanctions.
The record in this case reveals that the debtor's attorney, Willie E. Peale, Jr. ("Peale"), filed a Proof of Claim for attorney's fees in the amount of $28,440.00 on January 9, 1992. Objections to the claim were filed by the trustee herein and by Betty and Charles Cummins ("the Cumminses"). The Court heard the objections on January 15, 1993, and on February 3, 1993 entered an Order sustaining the objections and denying Peale's claim for attorney's fees. Peale is in the process of appealing the Court's decision to the United States District Court.
As stated above, the Cumminses' attorney, James P. Benassi ("Benassi") brought the Rule 9011 Motion to recover attorney's fees and expenses incurred in opposing Peale's efforts. Benassi bases his motion on the contention that there was no chance that Peale would prevail. In considering this issue, the Court looks to FRCP 11 case law as it applies to FRBP 9011. Counsel's conduct is measured by an objective standard of reasonableness under the circumstances. Albright v. Upjohn Co., 788 F.2d 1217, 1221 (6th Cir. 1986). The court in Jackson v. Law Firm, 875 F.2d 1224 (6th Cir. 1989), enunciated the obligations of the attorney in light of the requirements of Rule 11. The attorney must make a reasonable inquiry concerning the facts and the law, and he must not file the document in question for any improper purpose. Id, at 1229.
This Court's task, then, is to determine if Peale has failed to meet these requirements. While the sufficiency of Peale's inquiry concerning the facts and the law pertinent to his claim may be questionable, it does not appear to this Court that Peale filed the Proof of Claim for any improper purpose. He did not approach the court in any improper way. His conduct was certainly not on a par with that of the plaintiff/appellant in Danvers v. Danvers, 959 F.2d 601 (6th Cir. 1992).
There the court upheld the imposition of sanctions against a husband who had filed a completely baseless civil rights claim against his wife, alleging a conspiracy between her and the domestic relations court. His purpose was harassment of his wife and the pressuring of the domestic relations judge. One of his tactics was to send a letter to the domestic relations judge and threaten him and his staff with exhaustive discovery. Id, at 604. While Peale may not have had a strong basis in fact or law for filing his Proof of Claim, this Court cannot say that he demonstrated any improper purpose. Taken altogether, counsel's actions do not merit sanctions as they cannot be said to be unreasonable under the circumstances.
In consideration of all of the foregoing it is therefore the opinion of this Court that the Rule 11 Motion should be overruled. An order in conformity with this opinion will be entered separately.
By the Court -
Willie E. Peale, Jr., Esq.
James W. Benassi, Esq.
Mark T. Miller, Esq., Trustee