In Re New River Dry Dock, Inc.
461 B.R. 642
Bankr. S.D. Florida2011Background
- Unsecured creditor MMS seeks sanctions against Gleason for filing a Claim of Exemption on behalf of Denison that the court previously ordered to be sequestered and paid to the Plan Administrator.
- Gleason filed the Claim on November 2, 2010; the court had already sequestered and directed disbursement of the funds.
- MMS moved to strike the Claim on November 3, 2010; an agreed order later struck the Claim on December 6, 2010.
- MMS filed a sanctions motion on November 29, 2010; Gleason argued MMS violated the 21-day safe harbor by filing too early.
- The court denied the sanctions motion for procedural reasons (failure to comply with the 21-day safe harbor), but directed Gleason to show cause for possible non-monetary sanctions.
- The court declined to award monetary sanctions due to the already-disposed-of offending claim and ordered a show-cause hearing on non-monetary sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MMS complied with the 21-day safe harbor for Rule 9011 sanctions | MMS complied with timing requirements | Gleason contends MMS filed prematurely | Yes, MMS violated the safe harbor; motion denied |
| Whether a renewed sanctions motion was permissible after the Claim was struck | Renewal allowed after safe harbor but the prior claim was resolved | Renewal not permitted once the claim was stricken | Denied; renewal not allowed under Rule 9011 |
| Whether the court may impose non-monetary sanctions on its own initiative | N/A (not directly argued by MMS) | Court may impose sanctions suiting the conduct | Court may impose non-monetary sanctions; show-cause order issued for Gleason |
Key Cases Cited
- In re Szabo Contr., Inc., 283 B.R. 242 (Bankr.N.D.Ill.2002) (sanctions safe harbor framework; need for specificity)
- Robinson v. Alutiq-Mele, LLC, 643 F. Supp. 2d 1342 (S.D. Fla. 2009) (renewed Rule 11 motion timing; final disposition matters)
- Gwynn v. Walker (In re Walker), 532 F.3d 1304 (11th Cir. 2008) (Rule 9011 safe harbor timing and renewal implications)
- Amlong & Amlong, P.A. v. Denny's Inc., 500 F.3d 1230 (11th Cir. 2007) (decision invalidating meritless filing under Rule 9011)