Itria Ventures LLC v. JD Hunt Properties LLC et al

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
In re:
JD HUNT CUSTOM HOMES,
INC.; JASON DUANE HUNT AND
KRISTIN NICOLE HUNT,
Debtors.
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Case No. 25-10700-cgb
Chapter 11
ITRIA VENTURES, LLC
Plaintiff,
v.
JD HUNT CUSTOM HOMES,
INC.; JD HUNT PROPERTIES,
LLC; JD HUNT VENTURES LLC;
PATRICK BOYLE
AND ELANA
BOYLE,

Defendants.
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Adv. No. 25-01035-cgb

SCHEDULING ORDER ON RESOLUTION OF POTENTIAL ETHICS
VIOLATION BY PLAINTIFF’S COUNSEL

Dated: August 10, 2026.
__________________________________
CHRISTOPHER G. BRADLEY
UNITED STATES BANKRUPTCY JUDGE
________________________________________________________________
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On July 23, 2026, the Court held a hearing on Defendant JD Hunt Custom
Homes, Inc.’s (“JD Hunt”) Motion to Strike Portions of Plaintiff’s Amended
Complaint (the “Motion to Strike”) [ECF No. 113] filed in response to the Plaintiff’s
Amended Complaint [ECF No. 109].
1
The Plaintiff filed its Response to Defendants’
Motion to Strike Portions of Plaintiff’s Amended Complaint (the “Response”) [ECF
No. 122] requesting that the Court deny the Motion to Strike and consider sanctions
against JD Hunt’s counsel.
2
The proposed order attached to the motion included a
provision finding that the Motion to Strike violated Rule 11(b)(1) and (b)(2).
3

Specifically, the Plaintiff accused JD Hunt of filing a “recycled motion” and
asked the Court to invoke its authority under Federal Rule of Civil Procedure
11(c)(3) to consider whether JD Hunt violated Federal Rules of Civil Procedure
11(b)(1) and (b)(2).
4
The Plaintiff accused JD Hunt of filing a recycled motion
because the Motion to Strike lists Jason Duane Hunt in its case caption,
5
requests
that the Court “enter an order denying the Motion for Leave,” and is dated
incorrectly.
6
But notably, the Plaintiff did not follow the relevant rules for seeking
sanctions despite, in fact, seeking sanctions (albeit indirectly)—including, as noted
on the record, requesting that the Court enter the proposed order attached to the
Plaintiff’s Response which would find that the Motion to Strike violated Rule
11(b)(1) and (b)(2).
The Court resolved the Motion to Strike for the reasons stated on the record
on July 23, 2026, and by the order entered on July 29, 2026.
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The Court issues this
scheduling order (the “Scheduling Order”) separately to address its concerns
regarding the Plaintiff’s counsel’s conduct. Namely, among other aspects of
counsel’s conduct in this case, the Court is troubled by their apparent disregard for
the proper procedure by which a party may request that a court impose sanctions on
another party.

1
The Motion to Dismiss the Amended Complaint (the “Motion to Dismiss”) [ECF No. 112] filed
by defendants Elana and Patrick Boyle (the “Boyles”) was also before the Court on July 23, 2026.
The Court denied the Motion to Dismiss at ECF No. 127 for the reasons stated on the record.
2
ECF No. 122.
3
ECF No. 122-1 at 2.
4
ECF No. 122 at 2.
5
Jason Duane Hunt was dismissed from this Adversary Proceeding on January 2, 2026, under an
Agreed Order of Dismissal [ECF No. 60].
6
ECF No.122 at 3.
7
ECF No. 129.
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Federal Rule of Bankruptcy Procedure 9011 (“Bankruptcy Rule 9011”), the
bankruptcy counterpart to Federal Rule of Civil Procedure 11 (“Rule 11”), exists to
protect the integrity of the court and parties prejudiced by violations of its rules.
8
In
the Response, Plaintiff’s counsel referenced Rule 11 rather than Bankruptcy
Rule 9011.
9
The rules are, admittedly, similar, and bankruptcy courts are often
guided by Rule 11 cases when considering sanctions under Bankruptcy Rule 9011.
10

However, the Court notes that it is at best ironic that in pointing out the sloppiness
of opposing counsel, Plaintiff’s counsel appears to have made their own mistake and
not even cited the correct rule.
11

In any case, Bankruptcy Rule 9011 allows a party to request sanctions by
motion.
12
However, a party requesting sanctions must comply with the safe
harbor provisions which mandate that the motion for sanctions be filed
separately from other requests for relief and prohibiting it from being filed
without giving the offending party at least 21 days to respond or withdraw the
offending document.
13
Bankruptcy Rule 9011 explicitly disallows a sanctions
motion if the proper procedure is not followed:

[A] motion for sanctions must not be filed or presented to
the court if the challenged document, claim, defense,
contention, allegation, or denial is withdrawn or
appropriately corrected within 21 days after the motion
was served (or within another period as the court may
order).
14

8
Hamm v. Hiler (In re Smyth), 242 B.R. 352, 362 (W.D. Tex. 1999).
9
ECF No. 122 at 3.
10
Cadle Co. v. Pratt (In re Pratt), 524 F.3d 580, 586 (5th Cir. 2008).
11
The Plaintiff cites to Rule 11, which is not applicable to this Adversary Proceeding. The
appropriate basis for sanctions in bankruptcy proceedings is Bankruptcy Rule 9011. Long v.
Thommessen (In re Tjontveit), 204 F. App’x 439, 441 (5th Cir. 2006). The Federal Rules of Civil
Procedure only apply to bankruptcy proceedings “to the extent provided by the Federal Rules of
Bankruptcy Procedure.” Fed. R. Civ. P. 81(a)(2). While Bankruptcy Rule 9011 is bankruptcy’s
analogue to Rule 11, it does not incorporate Rule 11 to bankruptcy proceedings but rather provides
bankruptcy courts with separate authority under which they may impose sanctions. Keiter v.
Stracka, 192 B.R. 150, 155 (S.D. Tex. 1996); see also Law v. Siegel, 571 U.S. 415, 427 (2014)
(citing Fed. R. Bankr. P. 9011).
12
Fed. R. Bankr. P. 9011(c)(2).
13
Askins v. Hagopian, 713 F. App’x 380, 381 (5th Cir. 2018).
14
Fed. R. Bankr. P. 9011(c)(2)(B).
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The Fifth Circuit applies a standard of strict compliance to motions for
sanctions under Bankruptcy Rule 9011.
15
Strict compliance under Bankruptcy
Rule 9011 requires that the party seeking sanctions must serve the motion on the
opposing party at least 21 days before filing the motion with the court.
16
This
procedure is mandatory and courts do not have discretion to award sanctions absent
compliance with the safe-harbor provisions.
17
The plain language of Bankruptcy
Rule 9011(c)(1) forbids such action by conditioning the imposition of sanctions on
the moving party providing the party against whom it is seeking sanctions with
“notice and a reasonable opportunity to respond.”
18
Here, the Plaintiff’s counsel
admitted on the record that they did not provide JD Hunt’s counsel with any notice,
formal or informal, prior to filing their Response.

The purpose of Bankruptcy Rule 9011 is to “deter baseless filings in
bankruptcy court and thus avoid unnecessary judicial effort.”
19
But the rule is
carefully calibrated to ensure that the rule does not, itself, become an excuse for
filings that impose unnecessary effort on the court and the parties. Sanctions are
serious business and should not be sought or imposed without careful consideration
and proper process. The rule’s important procedures are imposed to ensure, among
other things, that allegations concerning sanctions are not slung back and forth
heedlessly, becoming a rancorous and unpleasant part of the normal course of
litigation. As the Advisory Committee’s notes to the analogous procedure in Rule
11 state, the elaborate procedure is structured “[t]o stress the seriousness of a motion
for sanctions and to define precisely the conduct claimed to violate the rule.”
20
The
Court does not believe that this rule was intended to allow an easy end run by
casually appending a request for sanctions at the end of a response to an unrelated
motion and including a finding that sanctions are warranted into a proposed order.

Here, the Plaintiff’s counsel failed to comply with the applicable requirements
under Bankruptcy Rule 9011. Plaintiff’s counsel did not inform JD Hunt’s counsel
that it intended to suggest that the Court impose sanctions or provide JD Hunt’s

15
In re Pratt, 524 F.3d at 586 (holding that informal service did not satisfy the 21-day service
requirement under Bankruptcy Rule 9011, which require service in compliance with Bankruptcy
Rule 7004).
16
Id.
17
Brickwood Contractors, Inc. v. Datanet Eng’g, Inc., 369 F.3d 385, 389 (4th Cir. 2004) (citing
Elliott v. Tilton, 64 F.3d 213, 216 (5th Cir. 1995) and noting that “failure to comply with the
procedural requirements precludes the imposition of the requested sanctions”).
18
Fed. R. Bankr. P. 9011(c)(1).
19
10A COLLIER ON BANKRUPTCY ¶ 9011.01 (16th ed. 2026).
20
Fed. R. Civ. P. 11(b) and (c), advisory committee’s note to 1933 amendment.
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counsel with any opportunity to withdraw or correct the offending document.
21

Plaintiff’s counsel also failed to file a separate motion explicitly asking the Court to
impose sanctions.
22
Rather, Plaintiff’s counsel attempted a backdoor request for
sanctions by suggesting that the Court exercise its authority under Rule 11(c)(3) and
impose sanctions “on its own”—without the requisite motion under Bankruptcy Rule
9011(c)(2)(A). The request for the Court to exercise its own authority to impose
sanctions reflects an awareness that the Response had not followed the proper
procedure. In other words, Plaintiff’s counsel made a willful, not accidental, choice
to subvert the lawful regime for imposition of sanctions related to frivolous court
filings.

At the Hearing, the Plaintiff’s counsel defended this approach, stating that
they did not intend to file a motion requesting sanctions under Bankruptcy Rule
9011(c)(2) but rather were suggesting to the Court that it should exercise its authority
under Bankruptcy Rule 9011(c)(3) to order sanctions. The Court reiterates, as stated
on the record, that asking the Court to order sanctions through a motion that does
not otherwise comply with Rule 9011 belies the plain language of the rule,
undermines the important protections and procedures of that rule, and is an improper
approach to pursing sanctions. To put it plainly, the Court is not acting “on its own”
(as the text of Bankruptcy Rule 9011 and Rule 11 provide), or “on the Court’s
initiative” (as the heading to section Rule 11(c)(3) provides), if the Court acts in
response to a “suggestion” of a party, contained in a court filing and included in a
party’s proposed order. When you ask the Court to do something and include it in
the order you want the Court to sign (as the Plaintiff’s did here), you are seeking that
relief: The Court is not doing it “on its own.” The Court notes as well that if the
Court had entered the proposed order attached to the motion, it would have been
acting in violation of the rule, which requires the Court to enter a show cause order
specifically describing the potentially sanctionable conduct.
23
Imposing sanctions in

21
While Plaintiff’s counsel acknowledged at the Hearing on July 23, 2026, that they had failed to
confer with JD Hunt’s counsel whatsoever, it is worth noting that formal service in accordance
with Bankruptcy Rule 7004 is required under Bankruptcy Rule 9011(c)(2)(A). Fed. R. Bankr. P.
9011(c)(2)(A).
22
“ A motion for sanctions must be made separately from any other motion or request, describe the
specific conduct alleged to violate (b), and be served under Rule 7004.” Id.
23
Fed. R. Bankr. P. 9011(c)(3); In re Stomberg, 487 B.R. 775, 809 (Bankr. S.D. Tex. 2013) (noting
that the proper procedure by which a court may impose sanctions under Bankruptcy Rule 9011 sua
sponte is by first issuing an order to show cause under Bankruptcy Rule 9011(c)(3)). See also
Wright & Miller’s Federal Practice & Procedure, § 1337 (4th ed. 2026) (“A district judge
considering sua sponte sanctions must issue an order specifically describing the conduct allegedly
in violation of the rule and requiring the party subject to sanctions to show cause why he or she

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the manner requested by the Plaintiff’s counsel—that is, without the requisite show
cause order or adherence to other procedural mandates—would likely have
constituted an abuse of discretion for failure to provide the opposing party with due
process.
24

Thus, for the reasons stated on the record, and as discussed above, the Court
finds that the following Scheduling Order should be entered. That said, because it
takes the imposition of sanctions very seriously, under the circumstances of the case,
the Court believes that the avoidance of sanctions may be preferable and thus
provides an option for Plaintiff’s counsel to avoid the Court issuing an order to show
cause and potentially awarding sanctions.

ACCORDINGLY, IT IS ORDERED AS FOLLOWS:
1. If they so choose, the two lawyers whose names were on the Response
to the Motion to Strike—Geoffrey H. Bracken (Texas Bar
No. 02809750) and Macey A. McCann (Texas Bar No. 24150399)—
may take five hours of continuing legal education (CLE) on legal ethics
and/or professionalism, and may file with this Court certification that
they have each completed the required ethics CLE classes within three
months of the entry of this Order. For the avoidance of doubt, if both
lawyers take the step in this paragraph, this will not constitute an award
of sanctions against them. Further, if both lawyers take the step in this
paragraph, the Court will not proceed to order them to show cause why
they should not be sanctioned for the Response to the Motion to Strike.
(That said, should they engage in further potentially sanctionable
litigation conduct in this case, the Court will consider all relevant facts
and actions undertaken throughout the course of this litigation.)

2. If they do not choose to take the course of action above, then Plaintiff’s
counsel must, no later than two weeks from the date of entry of this
order, file with this Court a thoroughly researched memorandum of law
detailing how their failure to proceed under the correct rule and their
request for sanctions in their Response to the Motion to Strike complies

has not violated Rule 11. As noted above, Rule 11 also expressly requires notice and a reasonable
opportunity to respond before the court can impose sanctions.”); Goldin v. Bartholow, 166 F.3d
710, 722 (5th Cir. 1999) (“[I]mposing Rule 11[ ] sanctions without notice and hearing would
constitute an abuse of discretion by the district court.”).
24
Martens v. Thomann, 273 F.3d 159, 178 (2d Cir. 2001).

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with Rule 11 and/or Bankruptcy Rule 9011 as well as all governing
ethics standards. Both Mr. Bracken and Ms. McCann should be
individually and thoroughly informed about this filing and be prepared
individually to discuss it with the Court on the record at an in-person
hearing. If after that hearing, the Court find that Plaintiff’s counsel’s
conduct did not in fact comply with all ethics rules, it will enter an order
requiring Plaintiff’s counsel to show cause as to why they should not
be sanctioned under Federal Rule of Bankruptcy Procedure 9011(c)(3)
for their failure to comply with applicable federal rules of ethics and
will award sanctions in due course if appropriate.

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