WILLIAM M. CONLEY, District Judge.
On January 22, 2018, this court granted appellant's motion to dismiss his bankruptcy appeal and awarded statutory costs to the appellee. (See Jan. 22, 2017 Order (dkt. #49) 1.) On February 6, the court explained that having "already awarded costs to HSBC," it "ha[d] not yet determined whether appellant Lisse, Attorney Nora or both should be obligated to pay those costs should HSBC seek them." (See Feb. 6, 2018 Order (dkt. #54).) In accordance with the briefing schedule for a request for statutory costs, HSBC moved "to recover damages and costs of frivolous appeal pursuant to Bankruptcy Rule 8020 and 28 U.S.C. § 1927" in the amount of $3,675 (double attorneys' fees), with half to be paid by counsel and half by client.
HSBC first moves for an attorney's fees award under Bankruptcy Rule 8020. (Mot. Recover Damages & Costs (dkt. #72) 1.) Following "a separately filed motion or notice from the court and reasonable opportunity to respond," a district court may "award just damages and single or double costs to the appellee." Fed. R. Bankr. P. 8020(a). This would include an award of attorneys' fees. See In re Bussom-Sokolik, 635 F.3d 261, 271 & n.5 (7th Cir. 2011) (recognizing "the reasonableness of the decision to award sanctions and the reasonableness of [appellee's] fees" and that "an award of attorney's fees may be necessary to fulfill the deterrent purposes of Rule 8020" (internal citation and quotation marks omitted)).
The second basis under which HSBC requests fess is § 1927 (see Mot. Recover Damages & Costs (dkt. #72) 1), which provides that an attorney "who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927.
Jolly Grp., Ltd. v. Medline Indus., Inc., 435 F.3d 717, 720 (7th Cir. 2006) (alteration in original) (internal citations omitted). Importantly, as Lisse points out, this sanction is applicable only to attorneys. (Lisse Resp. (dkt. #85) ¶¶ 10-12.)
HSBC argues that it is appropriate to sanction both Nora and Lisse because "this case is not a situation where an attorney's misconduct occurred without the knowledge or consent of the client." (Mot. Recover Damages & Costs (dkt. #72) 2.) As HSBC explains, throughout the state foreclosure action — beginning with the Lisses' pro se answer — and continuing through this bankruptcy appeal in federal district court, the Lisses have asserted "some variation" of the forged note argument. As a result, their own dilatory conduct "began before" and "continued since" Attorney Nora's involvement and permitted the Lisses to maintain possession of the property for over six years without mortgage payments. (See id. at 3.) As elaborated elsewhere in the record, this appeal was frivolous. (See Jan. 22, 2018 Order (dkt. #49) 1; Jan. 18, 2018 Order (dkt. #46) 1; see also Supp. Not. (dkt. #66) 1-3 (describing principal basis for February order to show cause).)
Nora and Lisse raise a number of other objections to HSBC's request for an award of attorneys' fees, although none have merit. Their primary argument is that HSBC's request for attorneys' fees is untimely. (See Lisse Resp. (dkt. #85) ¶¶ 7-8; Nora Resp. (dkt. #84) ¶¶ 21.
Likewise, both Nora and Lisse request that HSBC provide the engagement letter between HSBC and Johnson Blumberg & Associates, LLC, with Nora arguing that she has "evidence in her possession" that Attorney Bach and his firm "did not represent" the appellee "in the State Court Foreclosure Action . . . or in this appeal." (Nora Resp. (dkt. #84) ¶ 22; Lisse Resp. (dkt. #85) ¶ 9.) Of course, Attorney Bach and his firm's role, if any, in representing HSBC in the state foreclosure action is irrelevant to its request to be reimbursed for that firm's work on this appeal. In fact, Attorney Bach and his colleague from the same firm, Christina E. Demakopoulos, are each listed on ECF as HSBC's "lead attorney," and Bach has made numerous filings on HSBC's behalf on this appeal. Further, the request for fees at $175/hour for only 10.5 hours is reasonable, if not modest, in terms of both rate and hours spent, especially in light of the satellite skirmishes dredged up by Attorney Nora.
Finally, Nora and Lisse attempt to revive arguments that the court already rejected. For example, both again argue that the conclusion that Lisse's appeal was "frivolous or, at best vexatious" was not supported by the record because the court has not held a hearing. (Nora Resp. (dkt. #84) ¶ 10; Lisse Resp. (dkt. #85) 1.)
Nora and Lisse also reprise their argument that (1) the note was fraudulent and (2) Lisse only obtained evidence of the forgery after the bankruptcy confirmation hearing. (Lisse Resp. (dkt. #85) ¶¶ 14-15; see also Nora Resp. (dkt. #84) ¶ 11 (arguing that the statement in the motion to dismiss concerning "additional facts" becoming known after the confirmation hearing was not disingenuous but rather a "candid and simply frank [statement]"); ¶ 32 (stating she had a duty to help Lisse get "admissible evidence" that the note "was a forgery").)
Next, Nora again argues that she was required to file the document examiner's expert report under 18 U.S.C. § 4 because she, Lisse and Wickstrom "had personal knowledge that one or more federal felonies had been committed in WI WB Case No. 16-10935." (Nora Resp. (dkt. #84) ¶ 33.) Considering the facts and circumstances, as well as Nora's history of dilatory litigation in foreclosure-related cases, this argument is frivolous as well. So, too, is Nora's attempt to reprise her argument that Attorney Peterson drafted the motion to dismiss, and she merely had given permission for him to attach her electronic signature thereto. (Id. ¶¶ 2, 9.) As the court explained at the order to show cause hearing, Nora is responsible for papers filed with her signature.
Lastly, Nora alleges that she filed Lisse's bankruptcy appeal "so that he could reorganize in Chapter 13." (Id. ¶ 34.) As Lisse's motion to stay (dkt. #45) acknowledges, however, his case "involve[d] the same fundamental issue" as his wife's appeals before Judge Peterson. See Lisse v. Select Portfolio Serv., Inc., Nos. 17-cv-206-jdp, 17-cv-207-jdp, 17-cv-208-jdp, 2017 U.S. Dist. LEXIS 200196, at *12-*18 (W.D. Wis. Dec. 5, 2017). So this argument is unconvincing. As HSBC aptly observed, "[o]ne would have to imagine that, if Appellant was here to have Judge Martin's ruling overturned, he would have moved expeditiously to place the issue before this Court to get the vindication he claims to seek. Justice delayed is, after all, justice denied." (Supp. Br. (dkt. #87) 2.)
As this court has already, repeatedly explained, the appropriate forum for Lisse to challenge the state court decision concerning the note was the state court. The only federal court able to review state-court decisions is the United States Supreme Court — not the federal district court for the Western District of Wisconsin.
Thus, the award of HSBC's attorneys' fees is appropriate.
IT IS ORDERED that Appellee HSBC's request for costs and damages (dkt.#72) is GRANTED IN PART AND DENIED IN PART. Appellant Steven Lisse and Attorney Wendy Alison Nora are ORDERED jointly and severally liable for $1,837.50.