Unpublished Disposition, 936 F.2d 578 (9th Cir. 1989)

MEMORANDUM^** 

William E. MacFaden, as trustee for the Small Business Administration (SBA), appeals from the order of the district court affirming the judgment of the bankruptcy court. MacFaden contends that affirmance of the bankruptcy court's judgment was an improper sanction for violation by his attorney of the court's rules regarding the contents of briefs. We agree and vacate the district court's judgment with directions.

In its order dated April 26, 1989, the district court ruled that the brief submitted by the SBA violated Rule 8010 of the Federal Rules of Bankruptcy Procedure. Rule 8010 sets forth the standards which must be followed in preparing a brief on appeal.

The district court found that the SBA had not provided a sufficient statement of the case and the facts, with adequate citation to the record, so that the alleged errors could be reviewed. The district court stated that "appellant's failure to comply with these rules forms a basis for dismissing this appeal and for affirming the decision of the bankruptcy court." While the district court purported to affirm the judgment of the bankruptcy court, it is clear, from the court's statement of the basis for it's ruling, that it concluded that dismissal of the appeal was required because the SBA's brief was deficient.

"This court reviews the district court's dismissal for non-compliance with non-jurisdictional bankruptcy rules for an abuse of discretion." In Re Fitzsimmons, 920 F.2d 1468, 1471 (9th Cir. 1990) (citing, Sierra Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705, 706-07 (9th Cir. 1986)).

We have previously held that prior to dismissing an appeal on non-jurisdictional grounds, the Bankruptcy Appellate Panel (BAP), or district court, must first consider "alternative sanctions or whether the mistake of counsel deserved to be imputed to the client." In Re Donovan, 871 F.2d 807, 808 (9th Cir. 1989) (dismissal by BAP). Failure to do so without explanation constitutes an abuse of discretion by the court absent a showing of egregious circumstances. Id. at 808-809. See also, Greco v. Stubenberg, 859 F.2d 1401, 1404 (9th Cir. 1988) (dismissal by district court); In Re Hill, 775 F.2d 1385, 1387 (9th Cir. 1985) (" [W]hen any court is considering the imposition of sanctions for non-jurisdictional, procedural defaults and deficiencies ..., the selection of the sanction to be imposed must take into consideration the impact of the sanction and the alternatives available to achieve assessment of the penalties in conformity with fault. Absent such considerations, there is an abuse of discretion.")

The record reveals that the district court did not give counsel an opportunity to file a proper brief, consider alternative sanctions, or weigh the impact on the client of a dismissal because of his attorney's errors.¹  The record does not disclose any egregious circumstances. Thus, the district court abused its discretion in imposing the sanction of dismissal.

Appellees argue that the district court did not dismiss the SBA's appeal, but rather affirmed on the merits. In support of this proposition, our attention has been directed to the following paragraph in the district court's order under the heading "Merits of the Appeal":

Nor has appellant demonstrated that he is entitled to the relief sought on the merits. The bankruptcy judge found six independent bases for granting summary judgment in favor of appellees. Appellant asserts that the bankruptcy judge overlooked genuine issues of material fact in granting summary judgment in favor of appellees. However, appellant fails to point to the evidence in the extensive record which the bankruptcy judge overlooked. This court finds no basis for reversing the bankruptcy judge.

Accordingly, the decision of the bankruptcy court is affirmed.

It appears from this language that the district court was not able to review the merits of the appeal because of the inadequacy of the SBA's briefs. As discussed above, the district court should have considered the remedy of requiring counsel to amend the deficiencies in his brief, and an award of attorney's fees, before imposing the ultimate sanction of rejecting the appeal because counsel failed "to point to the evidence" to demonstrate error in the proceedings before the bankruptcy court.

The order of the district court is VACATED with directions to consider sanctions that will punish the proper person for failure to comply with Rule 8010, and whether, under these circumstances it is appropriate to impute his attorney's errors to the client.