Adell v. John Richards Homes Bldg. Co. (In re John Richards Homes Bldg. Co.)
Decision Date | 20 November 2013 |
Docket Number | No. 12-2013,No. 12-2014,No. 12-2015,No. 12-2012,12-2012,12-2013,12-2014,12-2015 |
Parties | In re: JOHN RICHARDS HOMES BUILDING COMPANY, L.L.C., -Debtor. KEVIN ADELL, -Appellee/Cross-Appellant, v. JOHN RICHARDS HOMES BUILDING COMPANY, L.L.C., -Appellant/Cross-Appellee, and HONIGMAN, MILLER, SCHWARTZ & COHN LLP, -Appellee. |
Court | U.S. Court of Appeals — Sixth Circuit |
File Name: 13a0993n.06
ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF
MICHIGAN
OPINIONBefore: ROGERS, STRANCH, and DONALD, Circuit Judges.
BERNICE B. DONALD, Circuit Judge. The parties, Kevin Adell and John Richards Homes Building Co., cross-appeal the district court's decision affirming in part and reversing in part an order of the bankruptcy court. The bankruptcy court's order granted counsel for the alleged debtor, John Richards Homes Building Co., $1,854,192.73 in attorney's fees for costs incurredenforcing a 2003 judgment of the bankruptcy court pursuant to 11 U.S.C. § 303(i) and, pursuant to both 11 U.S.C. § 105 and the court's inherent power, assessed $2.8 million in punitive damages against Adell, the creditor who filed the initial involuntary bankruptcy petition, for his post-judgment conduct. The district court affirmed the attorney's fee award but reversed the punitive damages award. For the reasons that follow, we AFFIRM the judgment of the district court.
This appeal marks the second time these parties, John Richards Homes Building Co., L.L.C. ("JRH") and Kevin Adell ("Adell"), have come before this Court over the course of an acrimonious eleven-year dispute that has been litigated, at various times, in seven different federal courts and two different state court systems.1 Accordingly, this section begins with the facts as described by this Court in the prior appeal, supplemented by a description of the parties' conduct in the Florida litigation that followed the 2003 judgment of the bankruptcy court and the litigation that led to the instant appeal.
In Adell v. John Richards Homes Bldg. Co., L.L.C. (In re John Richards Homes Bldg. Co., L.L.C.) ("In re JRH I"), 439 F.3d 248 (6th Cir. 2006), this Court summarized the initial factual background of the litigation in the bankruptcy court as follows:
. . .
Id. at 252-54 (citations omitted).
While Adell's direct appeals were pending in the District Court for the Eastern District of Michigan and this Court, he liquidated his assets in Michigan and used the proceeds to purchase a$2.8 million home in Florida in order to take advantage of that State's unlimited homestead exemption. In re John Richards Homes Bldg. Co, L.L.C. ("In re JRH II"), 405 B.R. 192, 203 (E.D. Mich. 2009). Adell admitted under oath that he took this action in order to protect his assets. In re John Richards Homes Builders Co., L.L.C. ("In re JRH III"), 461 B.R. 1, 19 (Bankr. E.D. Mich. 2011). JRH continued its efforts to collect on the bankruptcy court's $6.4 million judgment, but in November of 2003 Adell filed for bankruptcy in Florida, invoking the automatic stay. In re JRH II, 405 B.R. at 204. The parties then litigated various aspects of that bankruptcy filing in the Florida federal courts for the next four years. See id. at 204-07.
After this Court affirmed the initial Michigan bankruptcy court judgment on the involuntary petition on March 1, 2006, Adell paid the $6.4 million judgment in full on April 3, 2006. In re JRH II, 405 B.R. at 206. Subsequently, on April 21, 2006, Honigman, Miller, Schwartz, & Cohn ("HMSC"), counsel for JRH, filed two motions in the Eastern District of Michigan Bankruptcy Court: one for additional punitive damages and a "Second Application for Compensation of Attorney Fees and Expenses" seeking an additional $2 million in fees and costs—mostly incurred during the Florida litigation—under 11 U.S.C. § 303(i). Id. at 207. The bankruptcy court initially denied this fee application, holding that it could not make such an award in light of a split of authority on the issue of "whether § 303(i) authorizes the bankruptcy court to award fees and costs beyond those directly incurred in defending the involuntary petition." Id. at 208. JRH appealed to the district court, and the district court reversed and remanded. Id. at 201.
On remand, the bankruptcy court entered the order at issue in this appeal, granting JRH's second motion for attorney's fees and motion for additional punitive damages. See In re JRH III, 461 B.R. at 14, 22. The bankruptcy court awarded JRH $1,854,192.73 in attorney's fees and $2.8 million in punitive damages. Id. Adell appealed to the district court, which affirmed the award of attorney's fees and reversed the award of punitive damages. (PageID 9308.) Both parties timely appealed to this Court. (Page ID 9338, 9373.)
When we confront an appeal that originated in bankruptcy court, our review takes a different form than an appeal...
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