OPINION

KARLIN, Chief Judge.

Robert Lane appeals an order of the bankruptcy court imposing monetary sanctions against him for interfering with the sale of estate assets. The order required that the sanctions be deducted from the money that would otherwise be available to distribute to Lane after payment of all claims and completion of final administration of his bankruptcy estate. The issue is whether the bankruptcy court abused its discretion in imposing sanctions, notwithstanding Lane's main argument that he does not have the present ability to pay those sanctions.

I. Background

When Robert Lane filed his Chapter 7 bankruptcy petition in April 2011, his statements and schedules disclosed no nonexempt assets for the Trustee to administer. Over the next (almost) five years, following a tip received from Lane's former wife detailing significant undisclosed assets, the Trustee uncovered millions of dollars of assets including numerous pieces of art, valuable coins, and two multi-million dollar homes located in California and Wyoming. Lane now admits it is a "40+ million bankruptcy estate."1

The Trustee filed multiple adversary proceedings against Lane, his family members, and family-controlled entities, seeking to revoke Lane's discharge and to recover assets for the benefit of the estate. In April 2013, the Trustee reached two settlements (collectively, the "Settlement Agreements"). One was with Lane and the other with several close family members. The Settlement Agreements allowed Lane to retain significant assets, including retirement accounts in an amount up to $2.5 million; continued use of both homes until the Trustee could sell them; and retention of some artwork, valuable coins, furnishings, and three automobiles.

One term of the Settlement Agreement with Lane that was especially valuable to the Trustee was a requirement that Lane stand down and stop interfering with the further administration of the estate. The purpose of this provision was to allow the Trustee to more expeditiously liquidate significant assets and pay creditors without further litigation and interference from Lane.2 That "no interference" promise came in the form of a paragraph where Lane expressly waived standing in his bankruptcy and further agreed to "not take any action, directly or indirectly, to obtain standing...."3 Lane also agreed that he would

But Lane did not stand down. Instead, Lane filed numerous pro se pleadings (to which the Trustee had an obligation to respond), including a pleading essentially objecting to the Trustee's compromise of a creditor's claim, objecting to the sale of estate property, objecting to the Trustee's fees, objecting to the sale of art, and objecting to relief regarding the sale of assets located in California.5 In addition, Lane proceeded to file seventeen appeals from orders of the bankruptcy court, and then nine appeals to the Tenth Circuit Court of Appeals — all of which the Trustee was required to defend.6 This is one of those appeals, and it centers around just two of his efforts to interfere with the smooth administration of his estate.

To give context to this dispute, it is important to note that on April 4, 2014, the Trustee, understandably fatigued with Lane's attempts to interfere with the estate's administration, filed his first motion for contempt (the "First Contempt Motion"). He alleged that the estate had suffered $16,897 in fees and costs as a result of the breach of Lane's promise, contained in the Settlement Agreement.7 The Trustee requested the bankruptcy court award $12,000 as an "appropriate sanction[]."8 Lane defended by saying he did not have $12,000.

The bankruptcy court nevertheless, after a hearing, entered its First Contempt Decision listing six separate acts that justified the finding of contempt and the finding that the Trustee had been harmed as a result of Lane's violation of the Settlement Order. The bankruptcy court noted that the Trustee and his counsel had been required to address Lane's "numerous pleadings rather than pursue assets of the estate" and that the estate had, as a result, incurred unnecessary expenses.9 The bankruptcy court awarded a $12,000 money judgment against Lane. "Taking [Lane's] financial condition into consideration,"10 the bankruptcy court further ordered the sanctions be deducted from any surplus distribution that might be payable to Lane at the conclusion of estate administration or from further undisclosed assets the Trustee might find, rather than ordering Lane to immediately pay.

The bankruptcy court found "incredulous" Lane's testimony that he was not intentionally being obstructive and was only trying to "help."11 The bankruptcy court then ordered filing restrictions be placed on Lane similar to those that had been placed on him by the United States District Court for the District of Wyoming12 (in an order dismissing one of his numerous appeals). Lane did not appeal the First Contempt Decision.

Although the Trustee had filed his First Contempt Motion in early April, 2014, thus officially putting Lane on notice that similar actions in violation of the Settlement Agreement could result in sanctions against him, this did not stop Lane. On April 11, 2014, following an evidentiary hearing, the bankruptcy court entered an order (the "Art Sale Order") authorizing the sale of artwork ("the Estate Art") that had not been set over to Lane in the Settlement Agreements. The Art Sale Order specifically noted the Estate Art would be sold free and clear of liens, and the court had previously authorized the employment of Heather James Fine Art ("Heather James") to effectuate the sale.13 As Heather James was attempting to market the Estate Art, in May 2015, Lane emailed Heather James stating, "If you cho[o]se to sell any of this art between now and the Court's ruling (for which a has not yet been determined), you may be required to purchase it back .... I do not think this would be advisable."14

After receiving this email, representatives of Heather James contacted the Trustee and expressed concern about the legal ramifications if they continued to market and sell the Estate Art. After consulting with the Trustee and confirming that the bankruptcy court had, in fact, approved the sale of the Estate Art, Heather James continued its work. Lane then sent Heather James a second email. This time he indicated that the Estate Art was subject to numerous liens and falsely stated that the Art Sale Order did not permit the sale free and clear of liens. He also suggested that the sale would create "unnecessary liability for your firm or yourself personally."15

Lane's interference with the Trustee's attempts to sell estate assets did not end there. In July 2014, the bankruptcy court entered its order authorizing the sale of the California property for $6.9 million. Before the sale closed, Lane filed a notice of lis pendens in the California real estate records. As a result of the notice, the purchaser refused to close. Ultimately, following further negotiations and a loss of several months, the purchaser closed on the sale but at a purchase price of $6.5 million, or $400,000 less than the original purchase price.

Immediately upon learning of the second of the two emails in late May 2014, the Trustee filed his second motion for contempt seeking monetary sanctions in an amount to be determined after the Trustee provided an accounting of fees and costs incurred. After hearing evidence, the bankruptcy court found that Lane had interfered both with the sale of the Estate Art by sending the May 2015 email to Heather James and with the sale of the California property by recording the lis pendens.

As a result of its findings that Lane had violated the Lane Settlement Agreement, the Art Sale Order, and his duties as a debtor under 11 U.S.C. § 521, the bankruptcy court held that monetary sanctions were necessary (the "Second Contempt Decision"). The bankruptcy court stated that Lane "displays a complete disregard for the Bankruptcy Code and procedures. The court finds his actions to be in bad faith, reckless, abusive and grossly disobedient."16 It also noted that Lane's email to Heather James reflected "a pattern of intimidation."17 The bankruptcy court directed the Trustee to submit a Bill of Costs.

The Trustee's Bill of Costs requested $455,125 in attorneys' fees plus $400,000 in additional damages (the "Sale Reduction Damages") based on the alleged diminution in value of the California property that resulted after Lane filed the lis pendens notice. After Lane objected to the Bill of Costs, the bankruptcy court conducted another evidentiary hearing (the "Sanctions Hearing") to determine the appropriate amount of sanctions.18

During the trial, the court inquired whether the attorneys' fees sought as a sanction would ultimately become part of the administrative claims, thus possibly reducing the recovery of Lane's prepetition unsecured creditors, or whether the Trustee was asking for Lane to pay it, personally. The Trustee's counsel agreed that the sanctions would be payable only from any surplus funds that Lane might be entitled to receive, after payment of all claims, and not from assets of the estate needed to pay other claims.19

At trial, Lane's main defense to the award of sanctions was that he was unable to pay any amount. He argued that any award would, therefore, be improper. He also claimed that because he was "sorry"20 his actions had caused damages and because he is not an attorney, no sanctions should be awarded.

The bankruptcy court awarded the requested sanctions for attorneys' fees, but reduced the amount to $321,659. The bankruptcy court denied approximately $133,466 in fees it determined that the Trustee had either failed to prove were directly attributable to Lane's contemptible conduct, or that were not adequately described in the Bill of Costs. The bankruptcy court also denied the Trustee's request for the Sale Reduction Damages, finding that the Trustee failed to meet his burden to prove that Lane's actions (in filing the lis pendens notice) caused the reduction in the sale price of the California property.

Although the order awarding sanctions (the "Second Sanctions Decision") did not make specific findings regarding Lane's ability to pay, it expressly noted that Lane had "argued monetary sanctions may not be entered against him due to his lack of income."21 In addition, the bankruptcy court had, just six months earlier in its First Contempt Decision, discussed Lane's financial circumstances.

The Second Sanctions Decision stated that, despite Lane's alleged inability to pay, his "behavior is not without ramifications and the Court finds the sanctions appropriate."22 It then prohibited the Trustee from collecting the sanctions from Lane personally, without further order of the court — just as it had done earlier for the $12,000 sanctions award. It instead again ordered that the sanctions could be deducted from any surplus ultimately available to Lane at the conclusion of the administration of his estate or from any further undisclosed assets that might be recovered.23

II. Standard of Review

We review a bankruptcy court's decision to issue monetary sanctions under an abuse of discretion standard.24

III. Discussion

A. The bankruptcy court did not abuse its discretion in ordering sanctions against Lane notwithstanding his claim he has no present ability to pay them.

Lane argues that the bankruptcy court abused its discretion in ordering sanctions because it failed to consider his ability to pay and failed to make express findings on that issue.25 The Trustee counters that the bankruptcy court admitted — and obviously considered — the evidence of Lane's alleged inability to pay, as it ultimately declined to require Lane to pay the sanctions forthwith but instead only required they be paid from any estate surplus or newly discovered assets.

In support of his position, Lane relies almost entirely on case law addressing sanctions imposed under Federal Rule of Civil Procedure 11 ("Rule 11"). Case law interpreting Rule 11 provides that courts must consider (1) the opposing party's reasonable expenses incurred as a result of the violation, including reasonable attorneys' fees; (2) the minimum amount necessary to adequately deter future misconduct; (3) and "[t]he offender's ability to pay...."26 At the time the bankruptcy court issued the Second Sanctions Decision, however, the Tenth Circuit had declined to apply the Rule 11 requirements to other available sanctions specifically authorized by rule or statute, or sanctions that a court may impose inherent to its authority.27 Approximately one month after the Second Sanctions Decision was issued, however, the Tenth Circuit decided Farmer v. Banco Popular of North America.28 For the first time, the Tenth Circuit applied the Rule 11 factors set forth in White v. Gen. Motors Corp.29 to an award of sanctions made under 28 U.S.C. § 1927 or the court's inherent powers. The Tenth Circuit specifically held that, as in White,

The record here indicates the bankruptcy court did properly admit and consider evidence offered by Lane regarding his ability to pay. The Trustee also introduced evidence suggesting that Lane might well have the ability to pay.32 Although the bankruptcy court did not make a specific factual finding regarding Lane's ability to pay, the bankruptcy court did state that it had "carefully considered the applicable pleadings, evidence and legal arguments presented" before concluding that sanctions were appropriate notwithstanding Lane's defense he lacked regular income. In addition — and perhaps the most telling proof that the bankruptcy court considered Lane's poverty defense — is that the court specifically prohibited the Trustee from any attempts to collect the sanctions from Lane personally, unless it sought and received further order of the court, and directed that the sanctions be paid only from any surplus distribution or any additional undisclosed assets recovered by the Trustee.

Finally, consideration of ability to pay is just one factor that a bankruptcy court must consider in imposing sanctions. The other factors, including the history of the parties and the severity of the sanctionable conduct, all support the bankruptcy court's decision to impose sanctions. As a result, we hold that the bankruptcy court did not abuse its discretion in imposing sanctions against Lane, and in deferring collection of those sanctions until surplus estate assets are available to pay them.

B. The bankruptcy court did not abuse its discretion in ordering that the sanctions could be paid from any estate surplus or newly found assets.

Lane next argues that the bankruptcy court abused its discretion in awarding sanctions because he claims the bankruptcy court "deceived him" when it elected to order those sanctions be paid from any surplus assets.33 He apparently believes the court was required to warn him this was a possibility so he could more clearly address it. Substantively, Lane's argument seems to be that the surplus distribution, if there is one, would be derived from "prepetition" assets, and that the court cannot satisfy a sanctions award entered against him after the petition was filed from those assets.

As a preliminary matter, Lane appears not to have been deceived at all; in fact, he made the identical argument in his initial pleading opposing the Bill of Costs — months before the conversation he had with the judge who he now contends deceived him.34 Second, case law supports the proposition that a postpetition creditor is entitled to execute against any surplus from the estate of its debtor to pay its postpetition claim.35 Accordingly, the bankruptcy court did not abuse is discretion in ordering that the sanctions award could be paid from the amount that Lane will receive if there are surplus funds.

C. The bankruptcy court did not abuse its discretion in imposing sanctions in spite of Lane's contention the Trustee's motion was filed for an improper purpose.

Lane contends that the bankruptcy court erred in imposing sanctions because he claims the evidence showed that the Trustee's efforts to sanction him were part of a "campaign of harassment."36 The Trustee counters that the bankruptcy court considered Lane's arguments and testimony presented at the Sanctions Hearing, and rejected those arguments when it awarded sanctions. We agree. The record supports a finding that the Trustee sought sanctions due to Lane's well-documented history of interference with the Trustee's sale of estate assets and administration of the estate, much of which is in direct breach of the commitment he made in the Settlement Agreement to not interfere with the sale of estate assets.

In addition, Lane had leveled much the same accusations at the Trustee earlier in the case, and on November 5, 2014, after an evidentiary hearing, the court entered an order denying Lane's motion for sanctions against the Trustee.37 The bankruptcy court at that time dismissed Lane's claim that the Trustee continued to "demonize" him. Accordingly, the bankruptcy court had already ruled against Lane on many, if not all of his claims, and the bankruptcy court simply did not believe that the Trustee, in bringing the sanctions motion, was proceeding with an improper purpose. The record amply supports that conclusion.

IV. Conclusion

The bankruptcy court did not abuse its discretion in assessing $321,659 in sanctions against Lane, which amount represented the reasonable attorneys' fees incurred by the Trustee caused by Lane's improper interference in the sale of estate assets. The bankruptcy court clearly took Lane's financial situation into account when ordering the sanctions, and thus did not abuse its discretion in ordering that these sanctions be paid from any surplus distribution that may be available at conclusion of the administration of his estate. Finally, the bankruptcy court did not abuse its discretion in declining to find the Trustee's request for sanctions was brought for any improper purpose. Accordingly, the Second Sanctions Decision is affirmed.