IN RE: (2026)

Chapter 7

ORDER SANCTIONING PLAINTIFFS

Pro se parties receive accommodations not afforded to members of the Bar, but they are not immune to the consequences of failing to comply with the rules of this Court. This order addresses a sua sponte Rule to Show Cause, issued pursuant to Fed. R. Bankr. P. 9011(c)(1)(B), ordering Plaintiffs to show cause why the claims made in this case did not violate Fed. R. Bankr. P. 9011(b)(2). The procedural and factual history of this adversary, the underlying bankruptcy case, the prior bankruptcy cases, and Plaintiffs’ various state court actions are lengthy. By reference, this Order incorporates all findings of fact and conclusions of law found in both the Order Denying the Motion to Impose the Automatic Stay,¹ the Order Denying Confirmation and Converting Case to Chapter 7,² and the Order Dismissing the Adversary Proceeding.³

Despite the protracted procedural history, the issue addressed in this Order is straightforward. Did Plaintiffs violate Fed. R. Bankr. P. 9011(b)(2) by asserting a claim for violation of the automatic stay where: (i) no stay existed as a matter of law; (ii) Plaintiffs had knowledge of such, through the entry of numerous Court orders; and (iii) if so, what sanction is necessary to deter repetition?

FACTUAL BACKGROUND

Jacqueline Elizabeth Ard (“Ard”) and Terry Frank Nicola (“Nicola”) (collectively “Plaintiffs”) filed a chapter 13 bankruptcy case on April 10, 2025.⁴ Throughout Plaintiffs’ adversary proceedings, as well as their underlying bankruptcy case, they have repeatedly requested relief unsupported by fact or law ⁵ and have attempted to relitigate issues previously decided by this Court or the state court.⁶ Relevant to this Order are Plaintiffs’ filings related to The Spa on Port Royal Sound Horizontal Property Regime (“Spa”). Spa initiated foreclosure proceedings in Beaufort County as to a condominium owned by Plaintiffs before the underlying case was filed. Typically, such an action is stayed upon the filing of bankruptcy; however, because Plaintiffs’ bankruptcy case is their third filed within a one-year period, the automatic stay would not apply unless it is imposed. 11 U.S.C. § 362(c)(4)(A)(i). The stay was not imposed.⁷ In an attempt to avoid Spa's foreclosure judgment, Plaintiffs filed an objection to Spa's proof of claim,⁸ advancing legal theories previously rejected by the Beaufort County Court and the South Carolina Court of Appeals.⁹ Plaintiffs’ claim objection implicated the Rooker-Feldman doctrine as it sought to undo the result of a state court order. The objection to claim was denied.¹⁰

Plaintiffs also filed a motion under 11 U.S.C. § 362(k) against Spa for alleged violations of the automatic stay. Without alleging supporting facts, they requested that Spa “[c]ease harassment and refrain from any activity interfering with Debtors’ ability to reorganize” and “cancel lis pendens.”¹¹ The Court denied relief because no automatic stay was in effect. The Court also warned Plaintiffs, at a hearing and in the order denying the motion to impose,¹² that their motions would violate Fed. R. Bankr. P. 9011(b) for fundamental misstatements of law.

Prior to filing this adversary, the Court issued five orders confirming there is no automatic stay:

1. In re Ard, C/A 25-01384-JD (Bankr. D.S.C. May 23, 2025) (ECF No. 57) (holding “[t]he automatic stay imposed under 11 U.S.C. § 362(a) is confirmed to have not been effective upon the filing of this case and there is no stay in effect in this case.”);

2. In re Ard, C/A 25-01384-JD (Bankr. D.S.C. Jun. 12, 2025) (ECF No. 81) (holding “[p]ursuant to 11 U.S.C. § 362(c)(4), there is no automatic stay in this case.”);

3. In re Ard, C/A 25-01384-JD (Bankr. D.S.C. Jun. 23, 2025) (ECF No. 90) (holding “[d]ebtors wish for the Court to enjoin collection actions taken by creditors, but Debtors lack an automatic stay pursuant to 11 U.S.C. § 362(c)(4). The creditors’ alleged actions are therefore not enjoined by 11 U.S.C. § 362(a). Debtors moved to impose the stay, and that motion was denied. The order denying Debtors’ Motion to Impose is on appeal and this court will not take action regarding the stay while the United States District Court considers the matter.”);

4. In re Ard, C/A 25-01384-JD (Bankr. D.S.C. Sept. 9, 2025) (ECF No. 133) (holding “[w]ith no automatic stay in place, secured creditors should not be impeded in pursuit of their state law remedies, with any proceeds being paid to the estate.”); and

5. In re Ard, C/A 25-01384-JD (Bankr. D.S.C. Sept. 24, 2025) (ECF No. 174) (holding “[c]reditors have alleged that Debtors continue to insist in state court that there is an automatic stay protecting them or property of the estate. To be clear, there is not a stay in place as to Debtors or their property and there has been no such stay during the pendency of this case.”).

Plaintiffs filed a complaint and initiated this action on November 7, 2025. Shortly thereafter, Plaintiffs timely exercised their right to amend the complaint once as a matter of course. The amended complaint (“Complaint”) asserted 11 causes of action against public servants, legal professionals, governmental units, Spa, and Spa's agents. Each action arises out of Plaintiffs’ ownership interest in 239 Beach City Rd., Apt. 3218, Hilton Head Island, South Carolina 29926 (“Property”). The Property was the subject of a pre-petition foreclosure action ¹³ by Spa. In the Complaint, Plaintiffs sought damages against anyone remotely involved in the foreclosure. By separate order, the Court dismissed the Complaint and denied Plaintiffs an opportunity to further amend the Complaint.¹⁴

The allegations levied in Count I and II are the focus of this Order.¹⁵ Therein, Plaintiffs sought damages against Spa and several other defendants for violating the automatic stay in their current bankruptcy case and alleging additional claims to which they have no private right of action.¹⁶ These allegations are, on their face, frivolous. Plaintiffs’ claims that Spa or any other defendant violated 11 U.S.C. § 362(a) in their underlying bankruptcy case were clearly addressed in a previous order denying sanctions under 11 U.S.C. § 362(k).17 Therein, the Court stated that there was no automatic stay in Plaintiffs’ case. Additionally, 11 U.S.C. § 105(a) does not provide Plaintiffs a right of action.

The Court ordered Plaintiffs to appear and show cause why Count I did not violate Fed R. Bankr. P. 9011.¹⁸ Plaintiffs responded to the Rule to Show Cause and alleged that a proposed Second Amended Complaint (“SAC”) cured the issues under Fed. R. Bankr. P. 9011.19 Instead of curing the concerns raised in the Rule to Show Cause, the proposed SAC reasserted Plaintiffs’ legally deficient claims.

Plaintiffs filed an “Emergency Motion to Continue and Request for Reasonable Accommodation Under Title II of the Americans with Disabilities Act.”²⁰ Therein, Plaintiffs asked the Court to continue other unrelated hearings in the main bankruptcy case or to allow Plaintiffs to appear remotely.²¹ The Court construed the request to also apply to the hearings set in this adversary proceeding. To accommodate Plaintiffs, the hearing on sanctions was continued so Plaintiffs could attend in person and offer testimony.²² The Court heard the dismissal portion of the Rule to Show Cause, as scheduled, on February 18, 2026. Plaintiffs appeared remotely and offered arguments in support of continuing the adversary case. During their remote presentation, Debtor Ard acknowledged there was no automatic stay in the underlying bankruptcy case.

The Court heard the Rule 9011 portion of the Rule to Show Cause on March 12, 2026, which Plaintiffs attended in person. At the Rule 9011 hearing, Ard testified that she believed parties were nevertheless obligated to obtain this Court's permission to proceed with collection actions, notwithstanding this Court's prior orders confirming that no automatic stay was in effect.²³ Regarding the causes of action to which there was no private right of action, Ard indicated that she was relying on the statutes as a basis of relief.

CONCLUSIONS OF LAW

A. Legal Standard

The issue of sanctions is a core proceeding and this Court may enter a final judgment. 28 U.S.C. §§ 157(b)(A) and (O); In the Matter of Memorial Estates, Inc., 950 F.2d 1364, 1370 (7th Cir. 1991). Fed. R. Bankr. P. 9011(c) requires the Court, when raising the issue of sanctions sua sponte, to describe the conduct forming the basis of the violation and to provide the party with an opportunity to respond.

Leniency afforded to pro se parties in the interpretation of their pleadings does not extend to issues of whether such pleadings comply with Fed. R. Bankr. P. 9011. McGahren v. First Citizens Bank & Trust Co. (In re Weiss), 111 F.3d 1159, 1170 (4th Cir. 1997) (“The fact that [the litigant] represented himself pro se in the proceedings below does not change our analysis ․ a pro se litigant has the same duties under Rule 9011 as an attorney.”); Potter v. Mosteller, 199 F.R.D. 181, 187 (D.S.C. 2000) (“Plaintiffs’ attempts to invoke their pro se status as a shield against imposition of [Rule 11] sanctions is futile”). The rule applies to attorneys and non-attorneys alike. Bus. Guides, Inc. v. Chromatic Commc'ns Enters., Inc., 498 U.S. 533, 548 (1991).

In determining whether a filing violates Fed. R. Bankr. P. 9011(b)(2), the court must determine whether the party filing the motion or pleading conducted an objectively reasonable investigation of the factual and legal basis for his claim before filing. Brubaker v. City of Richmond, 943 F.2d 1363, 1373 (4th Cir. 1991). The determination as to whether a pre-filing investigation was “reasonable” is an objective one. Applying it, the Court explores the reasonableness under the circumstances. In re Sammon, 253 B.R. 672, 678 (Bankr. D.S.C. 2000). “The Court's inquiry as to the merits of the pleading focuses on ‘what was reasonable to believe at the time the pleading, motion, or other paper was submitted.’ ” Id. (quoting Jones v. Int'l Riding Helmets, Ltd., 49 F.3d 692, 695 (11th Cir. 1995)).

Because of the focus on reasonableness, pro se parties are granted some degree of indulgence, not extended to attorneys, in determining whether to issue sanctions. Laremont-Lopez v. SE Tidewater Opportunity Ctr., 968 F.Supp. 1075, 1078 (E.D. Va. 1997). However, pro se status is not a “license [to] recklessly․ disregard the law, particularly where in the process [the pro se litigant] causes others to incur substantial expenses.” Upadhyay v. Burse (In re Burse), 120 B.R. 833, 837 (Bankr. E.D. Va. 1990). A complaint containing allegations unsupported by factual information obtained prior to filing violates Fed. R. Bankr. P. 9011(b)(2). Robeson Def. Comm. v. Britt (In re Kunstler), 914 F.2d 505, 516 (4th Cir. 1990). Further, a filing must set forth a valid legal basis for relief. A filing does not pass muster where it has “absolutely no chance of success under the existing precedent.” Cleveland Demolition Co. v. Azcon Scrap Corp., 827 F.2d 984, 988 (4th Cir. 1987).

B. Application to Plaintiffs’ Conduct

Pursuant to Fed. R. Bankr. P. 9011(c)(3),²⁴ the Court issued the Rule to Show Cause.²⁵ The Rule to Show Cause provided Plaintiffs with specific notice that the Complaint violated Fed. R. Bankr. P. 9011(b) by alleging violations of the automatic stay despite a clear record establishing that no stay is in place in this case and listing at least one cause of action to which there is no private right. The Rule to Show Cause set a response deadline and ordered Plaintiffs to appear for a hearing to show cause why sanctions should not be issued pursuant to Fed. R. Bankr. P. 9011,²⁶ including placing Plaintiffs under a pre-filing injunction. Plaintiffs were afforded a reasonable opportunity to respond and take corrective action.²⁷ They were also granted a continuance so they could appear in person and testify. Notice provided to Plaintiffs was detailed and proper under Fed. R. Bankr. P. 9011(c)(3) and satisfied the requirements of due process.

Count I, to the extent it asserts a stay violation in their current bankruptcy case, has no basis in law or fact. In filing a motion to impose the stay, Plaintiffs demonstrated their understanding of how 11 U.S.C. § 362 operated and a factual recognition that there was no stay. Plaintiffs’ appeal of the order denying the motion further shows their understanding that the stay was not in place. At the hearing on dismissal of this proceeding, Plaintiffs admitted, on the record, that no stay exists in their current bankruptcy case.

Plaintiffs also should have known that the cause of action for violating the automatic stay in the current bankruptcy case lacked any legal support. The language in Section 362 is clear —“if a single or joint case is filed by or against a debtor who is an individual under this title, and if 2 or more single or joint cases of the debtor were pending within the previous year but were dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b), the stay under subsection (a) shall not go into effect upon the filing of the later case.” 11 U.S.C. § 362(c)(4)(A)(i).

To the extent that this statutory language left any doubt, the Court repeatedly informed Plaintiffs, in plain language, that the automatic stay is not in place with respect to them or the property of the estate. And even if there had been a stay in place, Plaintiffs offered no testimony,²⁸ evidence, or even a specific allegation in the Complaint that Defendants undertook collection actions during the pendency of the current bankruptcy case or their prior bankruptcy cases.

The Court entered five orders explicitly stating that the assets of the estate are not protected by an automatic stay in this case before this adversary was filed. One of these orders directly related to Spa. In that order, the Court specifically declined to sanction Spa and found its actions were not enjoined by § 362(a) because Plaintiffs lacked a stay pursuant to § 362(c)(4).²⁹ Ard testified that she believed that Count I was viable, but offered no supporting law for this belief, provided no detail as to what investigation may have led her to this opinion, and gave no explanation why Plaintiffs believed there was a stay in place in spite of this Court's five orders to the contrary.

As a matter of law, Count I had no possibility of success. This was not a mistaken interpretation of a complex statute; it was the assertion of a claim foreclosed by the plain text of § 362(c)(4) and contradicted by multiple prior orders of this Court. Plaintiffs’ assertion of a stay violation—despite the absence of any stay and repeated court orders confirming that fact—was not merely incorrect, it was objectively unreasonable. See Brubaker, 943 F.2d at 1373; Sammon, 253 B.R. at 678. Any reasonable inquiry into the law, even by a lay person, would have revealed that an action for violating 11 U.S.C. § 362(a) was doomed to fail under existing well-established precedent and a plain reading of the statute. Plaintiffs were provided notice that under § 362(c)(4), no automatic stay was imposed in the underlying case; it is implausible to suggest that, at the time this adversary proceeding was filed, Plaintiffs were reasonably mistaken in their insistence that a stay was in place. Nonetheless, Plaintiffs kept presenting arguments that contradict both the prior orders of this Court and the Bankruptcy Code

Plaintiffs, while unrepresented, have demonstrated familiarity with bankruptcy procedures. This action is at least their fifth attempt to sanction creditors and/or their agents for violating the stay. They are well acquainted with the standard required under 11 U.S.C. § 362(k). Members of the Bar and the judiciary frequently disagree on the precise interpretation of a statute or the application of case law. Our law is refined and improved by robust debate and Rule 9011 is not meant to punish those who offer an unorthodox, but good faith argument supported by facts and the law. This is not a case of an unorthodox but good-faith legal argument. It is the assertion of a claim that is foreclosed by the plain language of the statute and repeatedly rejected by prior orders of this Court. No reasonable inquiry—by counsel or by a pro se litigant—could have concluded otherwise. Plaintiffs have repeatedly asked the Court for grace, to excuse any incorrect assertion of law or application of procedure, because they are unrepresented. The Court extends reasonable latitude to pro se litigants, but not to those who attempt to invoke one of the Bankruptcy Code's most potent remedies in clear disregard of both controlling law and court orders.

In summary, Plaintiffs brought an action for damages under 11 U.S.C. § 362(k)(1) after the Court ruled that such an action was legally impossible under § 362(c)(4). Plaintiffs failed to articulate any basis to pursue damages under § 362(k)(1) from the defendants named in Count I. Rather than seeking to withdraw the asserted claim, Plaintiffs doubled down and insisted that the proposed SAC remedied the issue; however, the SAC merely repeats the same baseless claim.³⁰ Therefore, the Court finds that Count I, as it alleges a stay violation in their underlying bankruptcy case, violates Fed. R. Bankr. P. 9011(b)(2). In re Kunstler, 914 F.2d at 516.

Having found a violation of Rule 9011(b) in Count I, the Court need not address other potential bases for sanctions identified in the Rule to Show Cause.

C. Appropriate Sanction

When Fed. R. Bankr. P. 9011(b) is violated, the Court has the authority to sanction Plaintiffs pursuant to Fed. R. Bankr. P. 9011(c) after appropriate notice. Such sanctions may be in the form of penalty paid into the court or directives of a non-monetary nature. The sanction must fit the nature and severity of the rule violation. 5A WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 1336.3 (3d ed. 2004). Sanctions must be limited to “what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated.” Fed. R. Bankr. P. 9011(c)(2). In deciding the appropriateness of a sanction, the Court must consider the factors set forth in In re Kunstler, 914 F.2d at 523, including, but not limited to the minimum sanction necessary to deter, ability to pay any monetary sanction, and the severity of the violation. In this case, monetary and nonmonetary sanctions are warranted.

The Court finds $2,000.00 is the minimum amount necessary to deter Plaintiffs’ conduct, particularly in light of prior warnings that failed to deter similar conduct. Plaintiffs did not alter their filing practices, after being warned and provided with specific notice of the violation. Lesser sanctions would be inadequate given Plaintiffs’ repeated filings because they have not been deterred by explicit warnings and prior adverse rulings.

Plaintiffs have the ability to pay. They have paid various appeal fees and previously testified that they have surplus income of several thousand dollars monthly, above and beyond expenses, that could have been used to fund a chapter 13 plan. Plaintiffs’ sworn schedules also reflect a substantial monthly surplus, based largely on fixed income. Plaintiffs’ fixed income alone, reflected in their schedules, evidences an ability to pay the sanction amount.

Finally, the violation of Fed. R. Bankr. P. 9011 was severe. Plaintiffs knew, in no uncertain terms, that no automatic stay existed in this case, yet persisted in pursuing claims against anyone associated with the enforcement of Spa's state court remedies. Plaintiffs’ attempts to sanction the attorneys and Beaufort County officials who participated in the state foreclosure case are notably inappropriate.

Non-monetary sanctions are also warranted. Faced with similar circumstances, other courts have placed litigants under a pre-filing injunction and barred further filing without leave. Potter, 199 F.R.D. at 187; Green v. Prince George's Cnty. Office of Child Support, 641 B.R. 820, 842 (D.Md. 2022). In Green, the Maryland District Court considered the burden placed on the bankruptcy clerk's office by a litigant who frequently filed frivolous and vexatious pleadings. Green, 641 B.R. at 835-36.³¹ The Green court ultimately imposed monetary sanctions and issued filing restrictions on the litigant. Id. at 845–46.

The effective functioning of the court system depends on adherence to its rules. Frivolous filings impede the efficient administration of justice. Fewer than ten operations staff members administer the 5,000 plus bankruptcy cases filed annually in this District. The docket in the main proceeding is over 300 entries, an unusual amount for a consumer chapter 7 case. Each of these entries must be reviewed and processed by clerk's staff and by chambers. Repeatedly seeking relief on grounds that lack merit taxes the limited resources of the Court, a factor courts may consider in tailoring Rule 9011 sanctions. Id. at 843. The swell of pro se filings—up more than 70% in this District compared to the prior year—underscores the imperative that unrepresented parties adhere to the same standards imposed on attorneys under Fed. R. Bankr. P. 9011.

Nonmonetary sanctions are appropriate when necessary to deter future abuse. Hunter v. Earthgrains Co. Bakery, 281 F.3d 144, 151 (4th Cir. 2002). This action represents Plaintiffs’ fifth unsuccessful attempt to sanction creditors or their agents for pursuing lawful collection activities.³² Though a pre-filing injunction appears warranted, the Court, at this time, will limit non-monetary sanctions to an admonishment, hopeful that this lesser sanction is sufficient to achieve deterrence. If this Order is not an effective deterrent, the Court hereby warns Plaintiffs that other pleadings violating Fed. R. Bankr. P. 9011 will result in sanctions consistent with the factors in In re Kunstler.

The integrity of the judicial process requires that litigants—represented or not—refrain from asserting claims that are directly contradicted by controlling law and prior court orders. Plaintiffs have not presented a close question of statutory interpretation; they have continued asserting a claim that is foreclosed by the plain language of 11 U.S.C. § 362(c)(4) and by multiple prior orders of this Court. Therefore, Plaintiffs are admonished and provided a warning that they must comply with Fed. R. Bankr. P. 9011. Plaintiffs are sanctioned $2,000.00 to be paid to the United States Bankruptcy Clerk, 1100 Laurel Street, Columbia, South Carolina 29201 within ten (10) days of the entry of this Order. The sanction shall be paid into the United States Treasury pursuant to Fed. R. Bankr. P. 9011(c).

AND IT IS SO ORDERED.

FOOTNOTES

1.   ECF No. 57, C/A 25-01384-JD. Plaintiffs appealed this order 9:25-cv-04500-BHH-MHC.

2.   ECF No. 133, C/A 25-01384-JD. Plaintiffs appealed this order 9:25-cv-12567-BHH-MHC.

3.   ECF 101.

4.   ECF No. 1, C/A 25-01384-JD. Plaintiffs’ petition and schedules are signed under penalty of perjury. These filings are rife with inconsistencies and misstatements too numerous to summarize in this Order and not necessary for the holding this Order; however, Plaintiffs schedules may be materially false.

5.   For example, Plaintiffs claimed exemptions unsupported by any statute. ECF No. 48, C/A 25-01384-JD. These exemptions were disallowed. ECF Nos. 104 and 213, C/A 25-01384-JD. Plaintiffs thereafter filed misleading pleadings about their efforts to correct the exemptions. ECF Nos. 220 and 221, C/A 25-01384-JD. Following the chapter 13 confirmation hearing, Plaintiffs sought to remove the chapter 13 trustee and disgorge his fees. ECF No. 127, C/A 25-01384-JD. This request was premised on the incorrect notion that the chapter 13 trustee neglected his duties by failing to make distributions to creditors, which is prohibited under 11 U.S.C. § 1326 when, as in their case, the chapter 13 plan has not been confirmed. Plaintiffs also filed numerous claim objections once this case was converted to chapter 7, even though they were not the proper party in interest to object to claims. ECF Nos. 132, 146, 147, 148, and 149, C/A 25-01384-JD

6.   Plaintiffs also engaged in conduct prohibited by the Bankruptcy Code. Following the chapter 13 confirmation hearing and, without leave of the Court, Plaintiffs transferred property of the estate, with a scheduled value of $1,005,600.00, to an LLC in violation of 11 U.S.C. § 549. These transfers were voided by consent order. ECF No. 206, C/A 25-01384-JD

7.   ECF No. 57, C/A 25-01384-JD.

8.   ECF No. 132, C/A 25-01384-JD.

9.   See Spa on Port Royal Sound Horizontal Prop. Regime, Inc. v. Jacqueline E. Ard, Appellate Case No. 2025-000648 (S.C. Ct. App. Oct. 21, 2025).

10.   ECF No. 137, C/A 25-01384-JD.

11.   ECF No. 88, C/A 25-01384-JD.

12.   ECF No. 57, C/A 25-01384-JD.

13.   Spa on Port Royal Sound Horizontal Prop. Regime, Inc., v. Jacqueline Ard, Case No. 2023-CP-07-01818 (S.C. Ct. of Common Pleas, Sept. 25, 2023).

14.   ECF 101.

15.   While other causes of action raised in the Complaint may also violate Fed. R. Bankr. P. 9011, the Court has limited its focus to Count I because of Plaintiffs are familiar with 11 U.S.C. § 362(k)(1), have been instructed multiple times that they are not eligible to recover damages under § 362(k)(1) in the underlying case, and have proceeded anyway with this adversary. This combination of factors renders Plaintiffs’ conduct particularly egregious. The Court also notes that Count II seeks relief under 11 U.S.C. § 105(a), which does not provide Plaintiffs with a cause of action.

16.   ECF No. 14 p. 3, ¶ 6; p. 4, ¶ 9; p. 7, ¶ 29; p. 8, ¶ 1; p. 9, ¶ 5; and p. 15 unnumbered statement referencing “authorized foreclosure” that allegedly occurred in October, 2025. The Court notes that the Property was not sold at foreclosure and the Foreclosure Action has been stayed pending disposition of the property of the estate.

17.   ECF No. 90, C/A 25-01384-JD.

18.   The Rule to Show Cause also asked Plaintiffs to respond, appear, and show cause why Defendants’ motions to dismiss the adversary proceeding should not be granted.

19.   ECF No. 45.

20.   ECF No. 247, C/A 25-01384-JD. Plaintiffs were previously provided with notice that request to appear remotely or continue must comply with applicable Chambers Guidelines. ECF No. 90, C/A 25-01384-JD. Like other delays sought by Plaintiffs, this request was made shortly before the hearing and did not comply with Chambers Guidelines.

21.   In the main bankruptcy case, hearings were set at the same time of the Rule to Show Cause on the chapter 7 trustee's application to sell assets of Plaintiffs and on Plaintiffs’ motion to vacate an order denying their original exemptions.

22.   ECF No. 248, C/A 25-01384-JD. The request to appear remotely was denied to the extent Plaintiffs intended to offer evidence.

23.   ECF No. 14 p.3, ¶ 6.

24.   Fed. R. Bankr. P. 9011(c)(3) provides, “On its own, the court may enter an order describing the specific conduct that appears to violate [9011](b) and directing an attorney, law firm, or party to show cause why it has not violated [9011](b).”

25.   ECF No. 37.

26.   The Rule to Show Cause hearing was set on the same date as other matters pending in Plaintiffs’ underlying bankruptcy case.

27.   The safe harbor provision of Fed. R. Bankr. P. 9011(b) does not apply when the issue of sanctions is raised sua sponte. The Rule to Show Cause presented Plaintiffs with an opportunity to take curative action, which they did not do.

28.   Plaintiffs appeared via video at the February 18, 2026, hearing. Debtor Ard stated that Spa engaged in collection actions between October 4, presumably 2024, and November 19, 2024; and between January 31, 2025, and April 10, 2025. Plaintiffs filed the petition in the underlying case on April 10, 2025. At no point in this case have Plaintiffs articulated an allegation of specific conduct that would violate the automatic stay in the prior bankruptcy cases.

29.   ECF No. 90, C/A No. 25-01384-JD.

30.   ECF No. 33 (SAC p. 3, ¶¶ 6(a); p. 4, ¶¶ 24-25; p. 8, ¶ 31; and p. 10, ¶¶ 4-7)

31.   Plaintiffs, like the litigant in Green, have continued to argue that a secured claim was “somehow illegal, invalid, or fraudulent” despite also losing on those issues in state court. Green, at 836.

32.   Plaintiffs unsuccessfully brought actions in their 2024 bankruptcy case for alleged stay violations. See ECF No. 118, C/A 24-03611-JD; ECF No. 54, Adv. Pro. No. 25-80005-JD; and ECF No. 41, Adv. Pro. No. 25-80006-JD.