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Blixseth v. Yellowstone Mountain Club, LLC

United States Court of Appeals, Ninth Circuit

April 18, 2017

Timothy L. Blixseth, Appellant,
v.
Yellowstone Mountain Club, LLC; Ad Hoc Group of Class B Unit Holders; CIP Sunrise Ridge Owner LLC; CIP Yellowstone Lending LLC; CrossHarbor Capital Partners, LLC; Marc S. Kirschner; Credit Suisse AG, Cayman Islands Branch; Yellowstone Club Liquidating Trust, Appellees.

         D.C. No. 11-CV-73-SEH

          Philip H. Stillman, Stillman & Associates, Miami Beach, Florida, for Appellant.

          Michael J. Flynn, Boston, Massachusetts, for himself.

          Paul D. Moore, Duane Morris LLP, Boston, Massachusetts; Michael R. Lastowski, Duane Morris LLP, Wilmington, Delaware; Benjamin P. Hursh, Crowley Fleck PLLP, Missoula, Montana; for Appellees CrossHarbor Capital Partners, LLC, and CIP Sunrise Ridge Owner LLC.

          James A. Patten, Patten Peterman Bekkedahl & Green PLLC, Billings, Montana, for Appellee Yellowstone Mountain Club, LLC.

          Robert R. Bell, Mullin Hoard & Brown LLP, Amarillo, Texas, for Appellees Brian A. Glasser as Trustee, and Yellowstone Club Liquidating Trust.

          Before: Alex Kozinski, Richard A. Paez, and Marsha S. Berzon, Circuit Judges.

         SUMMARY[*]

         Bankruptcy/Sanctions

         The panel filed an order: (1) denying appellant's counsel's motion and amended motion for reconsideration of the Appellate Commissioner's orders awarding attorneys' fees and non-taxable costs under Federal Rule of Appellate Procedure 38 and 28 U.S.C. § 1927 in a bankruptcy case; (2) denying requests for recusal, appointment of a new panel, conversion of the matter to a criminal proceeding, transfer of the matter to the United States Attorney, and holding of the awards in abeyance; and (3) denying, on behalf of the court, counsel's suggestion for reconsideration en banc.

         The panel had ordered appellant and his counsel to pay appellees' attorneys' fees and costs in defending against the appeal under Rule 38; ordered counsel to pay appellees' attorneys' fees and costs in defending against the appeal under § 1927; and referred to the Appellate Commissioner the determination of an appropriate amount of attorneys' fees and costs. The Appellate Commissioner entered orders awarding fees and costs.

         Denying counsel's motion and amended motion for reconsideration of the Appellate Commissioner's orders, the panel held that the Commissioner correctly declined to award fees-on-fees under Rule 38 for the preparation of appellees' statements regarding appellant's pro se response and counsel's response to the court's order to show cause against them, and correctly awarded fees and costs under § 1927 against counsel for preparing the statements regarding counsel's response. The panel held that because Rule 38 is a damage provision authorizing an award of "just damages, " an award of fees and costs under Rule 38 must be limited to appellees' direct fees and costs for defending against the frivolous appeal, and may not include the fees and costs incurred regarding the imposition of sanctions. Agreeing with the Eleventh Circuit, the panel held that, unlike Rule 38, § 1927 is a fee-shifting provision allowing an award of fees-on-fees.

          ORDER

         I

         Background

         We ordered Timothy L. Blixseth and his attorney Michael J. Flynn to pay appellees' attorneys' fees and costs in defending against this appeal under Federal Rule of Appellate Procedure 38, ordered Flynn to pay appellees' attorneys' fees and costs in defending against this appeal under 28 U.S.C. § 1927, and referred to the Appellate Commissioner pursuant to Ninth Circuit Rule 39-1.9 the determination of an appropriate amount of attorneys' fees and costs. See Blixseth v. Yellowstone Mountain Club, LLC, 796 F.3d 1004, 1007-09 (9th Cir. 2015).[1] We also ordered Blixseth and Flynn each to pay $500 in damages to the Clerk of Court as reimbursement for the costs incurred during this frivolous and bad-faith appeal. Id. at 1009. Blixseth and Flynn each have paid $500 to the Clerk, as required.

         The Appellate Commissioner entered a second amended order and amended orders (Docket Entry Nos. 148, 149, 150) awarding attorneys' fees and non-taxable costs as follows:

(1)$105, 881.26 in favor of CrossHarbor Capital Partners, LLC and CIP Sunrise Ridge Owner LLC and jointly and severally ...

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