Dennis J. Stolfo v. Kindercare Learning Centers, LLC

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted February 28, 2018
Decided March 27, 2018
Before
DANIEL A. MANION, Circuit Judge
DIANE S. SYKES, Circuit Judge
DAVID F. HAMILTON, Circuit Judge
No. 17-2479
DENNIS J. STOLFO,
Debtor-Appellant,
v.
KINDERCARE LEARNING
CENTERS, LLC, et al.,
Creditors-Appellees.
Appeal from the United States District
Court for the Northern District of Illinois,
Eastern Division.
No. 17 C 854
Harry D. Leinenweber,
Judge.
No. 18-1364
IN RE: DENNIS J. STOLFO,
Debtor-Appellant.
Appeal from the United States District
Court for the Northern District of Illinois,
Eastern Division.
No. 17 CV 0843
Jorge L. Alonso,
Judge.
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

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O R D E R *
Attorney Dennis Stolfo has been filing frivolous motions and pleadings in both
state and federal courts since 2011, trying to avoid paying sanctions he incurred for
prosecuting a baseless lawsuit. The sanctions award was held nondischargeable in his
Chapter 7 bankruptcy, yet Stolfo persisted in refusing to pay it. Most recently he has
attempted to relitigate meritless issues by filing motions to reopen proceedings in his
bankruptcy and related adversary case. The bankruptcy judge denied those two
motions, and two district judges affirmed in separate appeals. We have consolidated
Stolfo’s two appeals from the district court for decision. We affirm the bankruptcy
judge’s rulings and reject Stolfo’s transparent attempt to avoid paying the sanctions.
In 2004 Stolfo sued KinderCare Learning Centers and two of its employees in the
Circuit Court of Cook County. His client, Mary Iacovetti, alleged that the defendants
had defamed her and cast her in a false light by lying about the reasons for firing her
from KinderCare. But in Iacovetti’s deposition she admitted that two of the events they
described were true and that she had no personal knowledge of the third. Iacovetti’s
testimony destroyed the factual basis for her complaint, but Stolfo continued litigating
the case on her behalf and opposed a motion for summary judgment. After the court
granted the defendants’ motion, they moved for sanctions against Stolfo under Rule 137
of the Illinois Supreme Court Rules.
Rule 137 is designed to prevent false or frivolous filings by “penalizing claimants
who bring vexatious and harassing actions,” Krautsack v. Anderson, 861 N.E.2d 633, 648
(Ill. 2006) (quotation marks omitted), and it provides two grounds for sanctions. First, if
a lawyer prosecutes an action that is not “well grounded in fact” or is not “warranted
by existing law or a good-faith argument for the extension, modification, or reversal of
existing law,” a court can impose sanctions. ILL . SUP. C T . R. 137(a). Second, if a lawyer
files pleadings or motions “for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation,” sanctions are
appropriate. Id. Stolfo filed ten frivolous motions after KinderCare’s request for
sanctions, seriously delaying the circuit court’s decision on the matter. The circuit court
ultimately entered sanctions against Stolfo—nearly $140,000 in attorney’s fees—after
* The court orders these appeals consolidated for purposes of disposition. In
appeal No. 18-1364, no appellees were served with process in the district court and
none are participating in the appeal. We agreed to decide the cases without oral
argument because the appeals are frivolous. FED. R. A PP. P. 34(a)(2)(A).

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finding that he had both (1) continued prosecuting a case that was “not well grounded
in fact and was not warranted by existing law,” and (2) filed unsupported motions “to
delay the hearing” on the sanctions. Stolfo appealed, but the Illinois Appellate Court
found his appeals frivolous and ordered him to pay further sanctions.
Stolfo then filed for bankruptcy under Chapter 7 of the bankruptcy code seeking
to have the sanctions award, among other debts, discharged. But KinderCare and the
two employees filed an adversary complaint, alleging that the unpaid sanctions were a
nondischargeable debt under 11 U.S.C. § 523(a)(6) because they were intended to
remedy a “willful and malicious injury” inflicted by Stolfo. The bankruptcy court
agreed and held the debt nondischargeable, finding that the sanctions judgment
conclusively established the existence of a “willful and malicious injury.” Stolfo did not
appeal the nondischargeability finding.
When KinderCare returned to state court to enforce its sanctions judgment,
Stolfo responded with a flurry of motions in the Circuit Court of Cook County and the
Illinois Appellate Court, making arguments that both courts found patently frivolous.
These included contentions that KinderCare lacked “standing” to receive the sanctions
judgment and that the debt to KinderCare had been discharged in bankruptcy (despite
the nondischargeability finding). The Illinois courts ordered still more sanctions against
Stolfo for making these arguments. By July 2016 they had seen enough. The Appellate
Court told Stolfo to stop raising these issues “in any forum” and to “cease and desist
from frivolous actions and repetitive pleadings.” The court observed, however, that this
order was unlikely to have an effect on Stolfo:
It is abundantly clear that attorney Dennis James Stolfo is an unrepentant
serial filer who will use any argument, no matter how repetitive,
redundant, previously resolved, incomplete, incoherent, inane, frivolous
or just plain concocted to continue to delay having to pay the properly
ordered sanctions.
Accordingly, in December 2016 the Illinois Attorney Registration and Disciplinary
Commission instituted proceedings against Stolfo, alleging that he had filed frivolous
pleadings and appeals. As far as we can tell, those proceedings are ongoing, and Stolfo
remains (as yet) licensed to practice law.
Foiled in the state courts, Stolfo turned back to the bankruptcy court. More than
three years after that court held in the adversary case that the sanctions award was
nondischargeable, Stolfo filed motions in both the adversary case and the bankruptcy

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case. His motions, though hard to decipher, essentially sought the same relief—he
wanted to reopen his bankruptcy to file his own adversary complaint against
KinderCare and its employees to, as he put it, “enforce the discharge” of his debt to
them. In the motions he raised many of the arguments already rejected by the state
courts. He contended that his debt to KinderCare actually had been discharged because
KinderCare did not file a “proof of claim” in his bankruptcy and that KinderCare did
not have “standing” to receive the sanctions award. He also referred to an order
purportedly issued by a state court for the parties to “file motions” in the bankruptcy
court—although he did not submit this supposed court order.
The bankruptcy judge heard both motions at the same time. She denied them
summarily, noting that the motions were “all wrong procedurally” and that the Illinois
courts already had found against Stolfo on most of the issues he raised.
Stolfo separately appealed the denial of both motions to the district court. The
appeal from the denial of his motion in the closed adversary case went to Judge
Leinenweber, who affirmed the bankruptcy judge’s decision and referred Stolfo for
disciplinary proceedings. The appeal from the denial of his motion in the closed
bankruptcy case went to Judge Alonso, who followed suit. We now resolve Stolfo’s
appeals of both Judge Leinenweber’s decision (appeal No. 17-2479) and Judge Alonso’s
decision (appeal No. 18-1364).
The issues in these appeals are simple, even if Stolfo’s presentation of them is
muddled and sometimes impenetrable. First, we consider whether the bankruptcy
judge properly denied Stolfo’s motions to reopen the adversary and bankruptcy cases.
Stolfo contends that his motions were “based on” In re Kewanee Boiler Corp., 270 B.R. 912
(Bankr. N.D. Ill. 2002). In that case, the bankruptcy court allowed a debtor to reopen its
bankruptcy case to file an adversary complaint against a creditor to enforce the
statutory discharge injunction. See 11 U.S.C. § 524. But comparing Kewanee Boiler to this
case is absurd. First, we note that Kewanee Boiler could arguably support only Stolfo’s
motion to reopen the bankruptcy case; it provides no basis for reopening a previously
closed adversary case. See 270 B.R. at 915. But Stolfo’s motion to reopen the bankruptcy
case was meritless. Unlike the creditor in Kewanee Boiler, KinderCare and its employees
already have obtained a ruling from the bankruptcy court that Stolfo’s debt to them is
nondischargeable. In other words, there is no “discharge injunction” for Stolfo to
enforce with respect to the sanctions judgment. Given that the motion to reopen was
meritless and three years late, the bankruptcy judge did not abuse her discretion in
denying it. See Redmond v. Fifth Third Bank, 624 F.3d 793, 797 (7th Cir. 2010).

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Stolfo argues, though, that the sanctions debt was discharged as a matter of law
because neither KinderCare nor the two employees filed proof of their claims in his
bankruptcy. Stolfo never raised this argument during the underlying proceedings, so he
waived it. See In re Outboard Marine Corp., 386 F.3d 824, 828 (7th Cir. 2004) (noting that a
party waives arguments by not raising them until the motion for reconsideration). Even
if he had not, his contention is wrong. Creditors were not required to file proof of claims
in Stolfo’s bankruptcy as he had no assets with which to pay claims. See FED. R. BANKR .
P. 2002(e); see also In re Mendiola, 99 B.R. 864, 866–68 (Bankr. N.D. Ill. 1989) (noting that it
is unnecessary to file proof of claims in “no asset” bankruptcy). Stolfo cites 11 U.S.C.
§ 523(a)(3), but that statute merely provides a discharge exception for creditors who are
not notified of a bankruptcy in time to file proof of claims or adversary complaints. It
does not impose affirmative requirements on creditors. Id. The claims-allowance
process, which relates to the distribution of assets from the bankruptcy estate, was
simply irrelevant to KinderCare’s adversary complaint alleging nondischargeability for
willful and malicious injury. See In re Mendiola, 99 B.R. at 866–68.
To the extent Stolfo contends that his motions sought reconsideration of the
original nondischargeability finding under Rule 60(b) of the Federal Rules of Civil
Procedure, this argument fares no better. Reconsideration under Rule 60(b) is left to the
bankruptcy judge’s discretion. Stoller v. Pure Fishing Inc., 528 F.3d 478, 480 (7th Cir.
2008); see FED. R. BANKR . P. 9024. It is an inappropriate vehicle in which to rehash
arguments that were or could have been dealt with during the adversary proceeding.
See Stoller, 528 F.3d at 480; In re Outboard Marine Corp., 386 F.3d at 828. Stolfo has been
told countless times that his arguments are meritless, so the bankruptcy judge did not
err by rejecting his latest attempt to avoid paying the sanctions.
There is thus no reason to address any of the other arguments Stolfo makes in his
nearly incoherent appellate briefs, particularly his request that we “order that all orders
and sanctions entered against Stolfo in Illinois trial courts and Appellate Courts are
Void.” Under the Rooker-Feldman doctrine, we cannot overturn the state courts’
underlying sanctions judgments. See D.C. Court of Appeals v. Feldman, 460 U.S. 462
(1983); Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923); cf. Richardson v. Koch Law Firm, P.C.,
768 F.3d 732, 733–34 (7th Cir. 2014) (explaining that the Rooker-Feldman doctrine applies
when the state court’s judgment, as opposed to collection attempts, “is the source of the
injury of which plaintiffs complain”).
Stolfo raises no issue in these appeals that he has not already waived or been
repeatedly told is frivolous. We now sanction Stolfo with a fine of $1,000 in each appeal

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for a total of $2,000. If the fines are not paid within two weeks, we will enter an order
under Support Systems International, Inc. v. Mack, 45 F.3d 185, 186 (7th Cir. 1995), barring
him from filing papers in any federal court within this circuit except for defense of
criminal cases or applications for writs of habeas corpus on behalf of clients. We also
direct the clerk of this court to transmit a copy of this order to Illinois’s Attorney
Registration and Disciplinary Commission for any action it deems appropriate.
The judgments of the district court are AFFIRMED.

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