Zeddun v. Fiore (In re Szadziewicz), Adv. Case No. 16-15, Bankr. Case No. 14-10716-7 (Bankr. W.D. Wis. April 17, 2017).
Trustee filed an adversary complaint against Fiore alleging conveyance of a home constituted a fraudulent transfer. On August 23, 2016, the Trustee moved to dismiss her Complaint with prejudice. Fiore moved for sanctions under Fed. R. Bankr. P. 9011 arguing the Trustee’s Complaint lacked an evidentiary foundation. The Court denied Fiore’s motion for sanctions concluding Fiore did not comply with Rule 9011’s safe-harbor. In addition, the Court concluded Fiore’s motion for sanction was untimely. While Rule 9011 does not set a specific time for bringing a sanctions motion, in the Seventh Circuit, a party should file a motion for sanctions “as soon as practicable after discovery of a Rule 11 violation.” Kaplan v. Zenner, 956 F.2d 149, 151 (7th Cir. 1992). Fiore asserted the Trustee violated Rule 9011 on February 22, 2016, but did not move for sanctions until September 7, 2016, over six months after the first Complaint and over four months after the Amended Complaint. Accordingly, the Court denied Fiore’s motion for sanctions.
Fed. R. Bankr. P. 9011 -- Sanctions
11 U.S.C. § 544(b)
Wis. Stat. § 242.04 – Transfers fraudulent as to present and future creditors