Submitted September 8, 2014
Appeal from United States District Court for the Western District of Missouri - Jefferson City.
For Noel Bisges, Appellant: Matthew G. Koehler, Thomas Michael Ward, Brown & James, Saint Louis, MO.
For Nancy J. Gargula, United States Trustee, Appellee: Wendy Cox, Executive Office for U.S. Trustees, Washington, DC; Adam Eric Miller, U.S. Trustee's Office, Kansas City, MO; P. Matthew Sutko, Associate General Counsel, U.S. Department of Justice, Executive Office for United States Trustees, Office of General Counsel, Washington, DC.
Before RILEY, Chief Judge, SMITH and KELLY, Circuit Judges.
KELLY, Circuit Judge.
Noel Bisges appeals the decision of the
district court upholding the bankruptcy court's denial of Bisges's motion to dismiss and the imposition of sanctions against him. We have jurisdiction under 28 U.S.C. § 158(d). We conclude that the bankruptcy court did not abuse its discretion in denying Bisges's motion or imposing sanctions, and we affirm the judgment.
Bisges represented Anne Clink in her Chapter 7 bankruptcy case. After the case was closed, United States Trustee Nancy Gargula moved to reopen the case because she learned that Clink possibly had failed to disclose in her bankruptcy petition that she owned horses. Clink explained that Bisges had told her not to disclose the horses. Clink paid the trustee $1,000 to settle the matter. Gargula then moved for disgorgement of fees paid to Bisges and sanctions under 11 U.S.C. § § 105(a) and 526(c)(1).
Bisges moved to dismiss, as a spoliation sanction, Gargula's motion for disgorgement and sanctions because, he argued, Gargula had destroyed the only recording of Clink's meeting with her creditors that took place during her bankruptcy proceedings under 11 U.S.C. § 341. He asserted that his right to due process had been violated and that, " [o]ther than dismissal of the claims, there is no sanction that can cure the significant harm caused by the spoliation of this evidence."
The bankruptcy court noted that Gargula " knew or should have known that the recording was potentially relevant and should have been preserved." But because the bankruptcy court found no evidence of bad faith by Gargula, it denied Bisges's motion and declined to sanction Gargula with dismissal of her motions. The bankruptcy court granted Gargula's motions and ordered Bisges to disgorge $1,411 in fees that Clink had paid him. The court also sanctioned Bisges under 11 U.S.C. § 105(a) for ...