Trulis

AMENDED OPINION

In the primary appeal, we are called on to put an end to a lawsuit that a bankruptcy court in a collateral proceeding has already held is released and barred. In the cross-appeal, we consider how much attorney misconduct a court should tolerate before imposing sanctions.

I.

This case began with the bankruptcy of the Marbella Golf and Country Club (the Country Club), which had operated at a loss since its opening. To fund its operational deficit, the Country Club filed a voluntary bankruptcy petition to restructure the rights of its members. There are several classes of Country Club members: Series A Charter Gold Members, Series B Charter Gold Members, Series C Gold Members, Charter Silver Members, and House Members.

Shortly after the Country Club filed for bankruptcy, Jeffrey S. Benice, then an attorney with Brobeck, Phleger and Harrison, filed the present action on behalf of certain Country Club members. Specifically, the complaint named as plaintiffs Thomas Trulis, Eamon J. McClory, Erv Groseh, Thomas Swarthout, A1 Simon, Tom Ewing, and Michael Barrack. Daniel Callahan was originally named as a plaintiff in the action, but his name was removed as a plaintiff…