In Re Michael T. Morrissey, Debtor, Michael T. Morrissey v. Diana A. Stuteville

We must decide what effect we should give to sanctions imposed by the Bankruptcy Appellate Panel.

I

Michael T. Morrissey is a practicing attorney and has acted on his own behalf throughout this litigation. In 1994, Mor-rissey sought relief under Chapter 7 of the Bankruptcy Code in the Bankruptcy Court for the Northern District of California. His former office manager and longtime employee, Diana A. Stuteville, filed a timely proof of claim for $1,940.67 in vacation pay and expenses, which she claimed was owed her when she left Morrissey’s employment. Morrissey objected to her claim. Stuteville, in turn, amended the proof of claim, adding several additional claims and seeking a total of $26,582.33 plus certain fees arising under state law.

The bankruptcy court held a trial on Morrissey’s objection to the amended claim. In a detailed memorandum decision, it overruled Morrissey’s objection and allowed Stuteville’s claim. Both parties moved for retrial — Morrissey because the court decided against him, and Stuteville because the post-petition interest had been miscalculated. The bankruptcy court granted Stuteville’s motion. Upon retrial, the court filed an amended judgment in favor…