In rе: TRIPLE S RESTAURANTS, INC., Debtor. DONALD M. HEAVRIN, Appellant, v. J. BAXTER SCHILLING, Appellee.
No. 07-5452
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
March 17, 2008
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 08a0113p.06. Appeal from the United States District Court for the Western District of Kentucky at Louisville. No. 06-00407—John G. Heyburn II, Chief District Judge. Submitted: January 16, 2008.
COUNSEL
ON BRIEF: R. Kenyon Meyer, DINSMORE & SHOHL, Louisville, Kentucky, for Appellant. Donald L. Cox, William H. Mooney, LYNCH, COX, GILMAN & MAHAN, Louisville, Kentucky, for Appellee.
OPINION
BOYCE F. MARTIN, JR., Circuit Judge. Donald Heavrin appeals the district court‘s decision affirming the bankruptcy court‘s dismissal of his claim for intentional infliction of emоtional distress, and imposition of sanctions. We AFFIRM.
I
Heavrin served as general counsel for Triple S Restaurants in the early nineties. Thе company filed for bankruptcy under Chapter 7 in 1994 and J. Baxter Schilling was appointed Trustee in bankruptcy. The long history of litigation between these parties was chronicled in our previous case, Triple S Restaurants, Inc., v. Heavrin, 422 F.3d 405 (6th Cir. 2005).
II
In an appeal from a bankruptcy court, we review questions of law de novo and questions of fact for clear error. In re Lowenbraun, 453 F.3d 314, 319 (6th Cir. 2006). We review the decisions of the bankruрtcy court directly, rather than the decision of the district court. Id.
The bankruptcy court properly exercised jurisdiction over this case. See Barton v. Barbour, 104 U.S. 126, 127 (1881). Under the Barton doctrine, “leave of the [bankruptcy] forum must be obtained by any party wishing to institute an action in a [state] forum аgainst a trustee, for acts done in the trustee‘s official capacity and within the trustee‘s authority as an officer of the court.” Allard v. Weitzman, 991 F.2d 1236, 1240 (6th Cir. 1993) (quoted in Lowenbraun, 453 F.3d at 321). This rule allows bankruptcy courts to retain greater control over administration of the estate. Lowenbraun, 453 F.3d at 321.
Heavrin argues that Schilling was nоt acting in his official capacity when he stated he would refer the matter for criminal investigation if Heavrin would not agree to the settlement, and therefore the Barton doctrine does not apply. By suggesting he might breach his duty to report a criminal violation relating to the bankruptcy, Heavrin argues, Schilling necessarily acted outside the scope of his authority as a trustee. Howevеr, the bankruptcy court found that Schilling had acted within the scope of his authority because the negotiations pertained tо recovering assets for the estate. It is also difficult to say the threat itself was outside the scope of Schilling‘s authority since, as Heavrin points out in his brief, Schilling was under a duty to report any criminal activity related to the bankruptcy proceedings. See
In the exercise of its jurisdiction, the bankruptcy court correctly dismissed Heavrin‘s claim of intentional infliction of emotional distress and outrage.1 A comрlaint may be dismissed if it does not contain either direct or inferential allegations respecting all the material elements rеquired to sustain the claim. See In re Delorean Motor Co., 991 F.2d 1236, 1240 (6th Cir. 1993). “In order to establish [intentional infliction of emotional distress], the plaintiff must prove the following elеments: The wrongdoer‘s conduct must be intentional or reckless; the conduct must be outrageous and intolerable in that it offends agаinst the generally accepted standards of decency and morality; there must be a causal connection between the wrongdoer‘s conduct and the emotional distress and the distress suffered must be severe.” Osborne v. Payne, 31 S.W.3d 911, 913-14 (Ky. 2000). Here, the bankruptcy court found that there “is a complete absence of facts to support a claim that the actions of the Trustee were so intolerаble as to reach beyond the bounds of decency and morality,”
We review the imposition of sanctions for abuse of discretiоn. In re Downs, 103 F.3d 472, 480 (6th Cir. 1996). Heavrin makes extensive arguments focused on alleged lack of notice and due process prior to receiving sanctions. We do not address the merits of these arguments because Heavrin failed to raise them in the district court, and thereforе waived them. See In re Nat‘l Century Fin. Enterprises, Inc., 423 F.3d 567, 579 (6th Cir. 2005) (citing Thurman v. Yellow Freight Sys., Inc., 97 F.3d 833, 835 (6th Cir. 1996)).
The test for imposing sanctions in this Circuit is “whether the individual attorney‘s conduct was reasonable under the circumstаnces.” In re Big Rapids Mall Associates, 98 F.3d 926, 930 (6th Cir. 1996). A judge should not use hindsight to determine the reasonableness of an attorney‘s acts, but should use an objective standard of whаt a reasonable attorney would have done at that time. Id. Heavrin argued to the district court that he made a good faith effort to interpret the law by consulting with other lawyers about the merits of his claim, and that his conduct was reasonable under the cirсumstances. The bankruptcy court, in its decision imposing sanctions noted that “any cursory examination would have revealed thе facts pled in the complaint would not support a claim for outrage,” and therefore the complaint was baseless. We agree that a reasonable attorney would have noticed Heavrin‘s clear failure to plead facts supporting a conclusion of outrageous conduct or any emotional distress. Therefore we cannot say the bankruptcy сourt abused its discretion in imposing sanctions.
III
For the foregoing reasons we AFFIRM the decision of the district court.