ORDER DENYING REQUEST FOR ADDITIONAL FEES AND COSTS

MICHAEL E. RIDGWAY, Bankruptcy Judge.

At Minneapolis, Minnesota, January 7, 2016.

This adversary proceeding came on for hearing before the Court on November 4, 2015, on the motion of Howard Lapides ("Defendant" or "Mr. Lapides") to "confirm attorneys' [sic] fees in the bankruptcy court and for additional attorney's fees and costs relating to plaintiff's appeals,"1 (the "Motion"), together with the response thereto by Venture Bank ("Plaintiff"). At the conclusion of the hearing, the Court ruled as follows:

Based on all the files, records, and proceedings herein, together with the supplemental memoranda from the parties, the matter is now ready for disposition.

DISCUSSION

The main issue presented is whether the act of taking an appeal from an order finding a violation of the discharge injunction is a further violation of the discharge injunction, and secondarily, whether the Court has the authority to award the Appellate Fees at issue.

Section 524(a)(2) of the Bankruptcy Code provides that "[a] discharge in a case under this title— . . . (2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived[.]" 11 U.S.C. § 524(a)(2). Defendant maintains that the taking of an appeal4 from an order finding a violation of the discharge injunction is a further violation of the discharge injunction. In his supplemental memorandum, Defendant concedes that "if the Court determines that the appeals are not violations of the discharge injunction as the Court did in In re Clay, then no further analysis needs to be done since Lapides's motion seeks sanctions for violations of the discharge injunction. See In re Clay, 334 B.R. 623, 626 (Bankr. C.D. Ill. 2005)." ECF No. 118 at 3.

Generally speaking, the

Feeney, Williamson, and Stepan, Bankruptcy Law Manual § 8:2 (5th ed. 2015) (footnotes omitted).

Unlike § 362(k),5 which specifically provides for an award of attorney's fees, § 524 lacks such counterpart. The Court is reluctant to extend Schwartz-Tallard's reasoning regarding an appellate fee award, even in a corollary sense, to the facts underlying a discharge violation.6 But even in a more basic sense, to suggest that the mere act of taking an appeal from an order finding a violation of the discharge injunction is a further violation of the discharge injunction, absent some other indicia of bad faith, e.g., such as a truly frivolous appeal, cuts against the grain of a litigant's right to appeal. It is also contrary to the concept of fundamental fairness regarding a litigant's right to appeal an adverse ruling. Moreover, Defendant's argument conveniently ignores the fact that he also cross-appealed in this case. ECF No. 85.7 Here, because Defendant concedes that it is not seeking an award based on a frivolous appeal by Plaintiff [ECF No. 118 at p.2], the Court concludes that the act of taking an appeal from an order finding a violation of the discharge injunction is not a further violation of the discharge injunction in this case. In short, what's good for the goose is good for the gander.

Even if an appeal from an order finding a violation of the discharge injunction could be considered a continuing violation of the injunction, there is a more fundamental reason to deny debtor's motion: Defendant is seeking the Appellate Fees in the wrong court, per Fed. R. Bankr. P. 8020 (district court or bankruptcy appellate panel may award) and per Fed. R. App. P. 38 (court of appeals may award). "Trial courts lack authority to impose sanctions for an appellant's behavior." In re Wonder Corp. of Am., 81 B.R. 221, 225 (Bankr. D. Conn. 1988). In a case directly on point, the Bankruptcy Appellate Panel for the Ninth Circuit ("BAP") ruled that the bankruptcy court is precluded from awarding appellate attorney fees by the Federal Rules of Appellate Procedure. In re Wallace, No. BA NV-10-24125-LBR, 2014 WL 5438826, at *1 (B.A.P. 9th Cir. Oct. 28, 2014). In Wallace, the bankruptcy court found a party in contempt for violating the § 524 discharge injunction, and awarded damages and attorney fees, which were upheld on appeal. Thereafter, the debtors moved to reopen their case to request additional sanctions for attorney fees and costs incurred in defending the contempt order on appeal. The BAP ruled that "bankruptcy courts have discretionary authority to award fees at the trial level under § 105(a) and not on appeal." Id. at *3. The only authority for awarding fees on appeal belongs to the appellate courts under Rule 38 of the Federal Rules of Appellate Procedure and Rule 8020 of Federal Rules of Bankruptcy Procedure. This Court has no business usurping such authority. Awarding appellate attorney's fees is solely a function of the appellate courts. Neither the district court nor the court of appeals has done so here.

Defendant's reliance on § 105(a) is also unavailing. Indeed, Wallace relied on In re Del Mission Ltd., in which the Ninth Circuit held "§ 105(a) does not authorize an award of previously incurred appellate fees as a sanction." In re Del Mission Ltd., 98 F.3d 1147, 1152 (9th Cir. 1996). And as the Ninth Circuit found, §105 does not authorize an award of previously incurred appellate fees as a sanction. See also In re Vasseli, 5 F.3d 351, 353 (9th Cir. 1993) ("The appellate court, not the bankruptcy court, has the authority under Rule 38 to award damages for a frivolous appeal."). The Ninth Circuit reasoned that:

In re Del Mission Ltd., 98 F.3d 1147, 1154 (9th Cir. 1996); In re Clay, 334 B.R. 623, 626 (Bankr. C.D. Ill. 2005) (Debtor's counsel in Clay argued—just like Mr. Lapides has argued in the case at bar—that "the additional fees can be awarded pursuant to the original finding of contempt. This Court disagrees. Although it is clear that this Court can punish contempt and that the original findings of contempt against Beneficial have been affirmed, this Court does not find that Beneficial's appeal of the prior contempt order constituted further contempt which would be punishable by further sanctions."). See also In re Hoxie, 370 B.R. 288, 293 (S.D. Cal. 2006) (request for appellate fees-in the district court-denied under Rule 8020; citing Del Mission). And see In re Horne, No. 14-12047, 2015 WL 6500754, at *4 (11th Cir. Oct. 28, 2015) (discussing appellate fees in context of recusal motion, violation of stay, and discharge injunction) (citing In re Hardy, 97 F.3d 1384 (11th Cir. 1996)). Cf. In re John Richards Homes Bldg. Co., 552 F. App'x 401 (6th Cir. 2013), cert. denied sub nom, 134 S.Ct. 2136 (2014) (11 U.S.C. § 303(i) authorizes bankruptcy courts to award fees for services rendered in direct appeals and in collateral proceedings enforcing judgment after dismissal of involuntary petition).

And as recently stated by the Supreme Court:

Law v. Siegel, 134 S.Ct. 1188, 1194-95 (2014) (footnote omitted). In short, § 105(a) does not support Defendant's request for the Appellate Fees sought.

Additionally, Defendant cites the Supreme Court case of Chambers v. NASCO, Inc., 501 U.S. 32, 56-57 (1991), for the proposition that a district court may grant sanctions for conduct outside of its courtroom. However, that case involved sanctions for repeated bad behavior outside the litigation itself, not for sanctions arising from technical violations of a discharge order. In Chambers, the Supreme Court went on to find that sanctions could be awarded for conduct before other tribunals, because the actions complained of were in direct disobedience of a district court order. Specifically, the contemnor attempted to gain the FCC's permission to build a new transmission tower after he had been specifically ordered by the district court to maintain the status quo. The facts in Chambers could not be more dissimilar than those here—Defendant is claiming that Plaintiff's appeal, which it had a clear, legal right to file, was a continuation of its sanctionable conduct. Defendant has not claimed, nor could he, that an award of attorney's fees is warranted due to the "frequency and severity" of Plaintiff's "abuses of the judicial system," i.e., of the sort that concerned the Supreme Court in Chambers. Id. at 56. Under the directly applicable authority already recited, this Court does not have the authority to award appellate sanctions. In re Allen-Main Associates, Ltd. P'ship, 229 B.R. 577, 578 (Bankr. D. Conn. 1999) ("a bankruptcy court does not have statutory authority to award attorney's fees and costs incurred in an appeal from the bankruptcy court"). Moreover, as noted, the Supreme Court has recently stated that: "Courts' inherent sanctioning powers are likewise subordinate to valid statutory directives and prohibitions." Law v. Siegel, 134 S.Ct. 1188, 1194 (2014) (citing, inter alia, Chambers v. NASCO, Inc., 501 U.S. 32, 47 (1991)).

One remaining policy argument made by Defendant requires comment. Defendant maintains that if the Court does not grant him attorney's fees for the appeals in this case, Defendant will be paying the price for Plaintiff's actions for years to come, a result that is in direct contradiction to the "fresh start" concept of bankruptcy law. The Court disagrees.

At the outset, it must be noted that Defendant still has the protection of his chapter 7 discharge, which remains central to his "fresh start." Additionally, if merely maintaining an appeal of a finding of violation of the discharge order was enough to override the traditional American Rule regarding attorney's fees,8 it would not simply chill the right to appeal, it would practically extinguish it. Such a result would be in contravention of both the law and the equities in this matter. "A rule permitting a district court to sanction an attorney for appealing an adverse ruling might deter even a courageous lawyer from seeking the reversal of a district court decision." Matter of Emergency Beacon Corp., 790 F.2d 285, 288 (2d Cir. 1986). In other words, the appellate court,

Sierra Club v. U.S. Army Corps of Eng'rs, 776 F.2d 383, 392 (2d Cir. 1985). To the extent that Defendant relies on the inherent authority of this Court, rather than statutory authority provided by § 524 or § 105, the applicable case law states that this Court does not have the authority to award appellate fees. The appellate courts are the appropriate forums to decide those matters.

Plaintiff's appeal was not frivolous, as effectively conceded by Defendant in his supplemental memorandum [ECF No. 118 at 2]; therefore, Plaintiff had every right to challenge the bankruptcy court's factual and legal determinations, and to not be sanctioned for that challenge-unless, of course, the appeal was itself found to be frivolous. No such determination was ever made, nor could such a determination be supported. Furthermore, Defendant conveniently ignores the fact that he cross-appealed in this case. ECF No. 85. In short, Defendant has provided no sustainable reason to depart from the American Rule with respect to the Appellate Fees in this case. All other arguments made by Defendant for the award of the Appellate Fees are unconvincing, and the Court rejects them.

Accordingly, and for the reasons just articulated,

IT IS HEREBY ORDERED THAT Defendant's remaining requests for an award of attorney's fees in the District Court and the United States Court of Appeals for the Eighth Circuit and for attorney's fees in bringing the Motion are DENIED.