Opinion
Bankruptcy Case No. 09-01569-JDP.
March 22, 2011
Brian J. Coffey, BEST BANKRUPTCY SERVICE, Boise, Idaho, attorney for Debtor.
Jeremy Gugino, Chapter 7 Trustee.
MEMORANDUM OF DECISION Re: STATUS CONFERENCE
Introduction
On May 12, 2010, counsel for Debtor Jacqueline Antonie, Brian Coffey, filed an Amended Schedule C asserting her claim of exemption in a mobile home. Docket No. 61. The amended schedule was accompanied by what was purported to be Debtor's sworn declaration indicating she had signed the amended schedule ("Declaration"). Docket No. 62.
In response to Debtor's filings, Chapter 7 trustee Jeremy Gugino ("Trustee") objected to the amended claim of exemption. Docket No. 63. Trustee's objection was thereafter briefed by the parties, and an evidentiary hearing was conducted on July 9, 2010, at the conclusion of which the Court issued an oral ruling sustaining Trustee's objection to the claim of exemption. Docket Nos. 66-70. A separate order was entered reflecting the Court's decision. Docket No. 71. Debtor appealed that decision and order to the U.S. District Court, Case No. Civ-10-372-BLW. Docket Nos. 72-79. The appeal remains pending.
Several weeks after the hearing and decision by this Court, the Clerk brought to the Court's attention that counsel for Debtor had never submitted the original, signed version of Docket No. 62, Debtor's Declaration concerning the veracity of her amended schedule C, Docket No. 61. After several requests by the Clerk to the Debtor's attorney to comply with applicable rules, the Court scheduled a Status Conference in the bankruptcy case to discuss this compliance issue with Mr. Coffey. See Minutes, Docket No. 81; Transcript, Docket No. 83. Counsel appeared at the Status Conference and explained that, even though he had indicated on the electronically filed Declaration that Debtor had signed it, he in fact did not have the original, signed Declaration, and so he could not submit it to the Clerk. However, counsel insisted that he had discussed the contents of the amended schedule with his client, and that she had authorized him to file it. Transcript at 3, Docket No. 83.
At Mr. Coffey's request, the Court allowed him to obtain and file an affidavit of Debtor regarding the circumstances surrounding the filing of the amended schedule C and the Declaration. Such an affidavit was filed on February 9, 2011. Docket No. 82. In the affidavit, Debtor stated that she could not remember if Mr. Coffey ever asked her to sign a Declaration concerning the amended claim of exemption filed in May 2010. However, Debtor avers that if he had timely done so, she would have obliged. Id. at ¶ 8. Moreover, Debtor indicated that she has now signed a "print out" of the filed Declaration in an effort to ratify her concurrence in its contents, a copy of which is attached to the affidavit. Id. at ¶ 9.
There is no indication in the docket that the original version of this signed "print out" was ever submitted to the Clerk. Therefore, as things now stand, Mr. Coffey still has not complied with local rules and procedures requiring submission of original documents with "wet" signatures for schedules and amended schedules. See General Order 187, LBR 5003.1 and ECF Procedures 13.A and 13.B.
Mr. Coffey's office practices, as well as his failure to abide by the ECF rules in a large number of bankruptcy cases, was carefully documented recently in Chief Judge Myers' decision in In re Daw et al., Case No. 09-00690-TLM, Docket No. 44 (Jan. 24, 2011). Simply put, as discussed in that decision, through his flawed and cavalier approach to compliance with this Court's procedures concerning signatures on sworn bankruptcy schedules and pleadings, Mr. Coffey has compromised the integrity of the electronic filing process.
In this case, Mr. Coffey's attempt to pass off an unsigned Declaration as a sworn document is likely worthy of discipline. However, the Court is hopeful that Chief Judge Myers' admonitions to Mr. Coffey concerning his shoddy practices, and the sanctions imposed in the Daw decision, are sufficient to address the problem. As such, no additional action will be taken against Mr. Coffey in this case. Of course, Mr. Coffey should know this Court will not tolerate any further excuses or attempts to skate on compliance with the ECF rules.
But there is a further complication in this case occasioned by Mr. Coffey's attempt to use an unsigned schedule to claim an exemption for his client. Here, Trustee and the Court relied upon the amended schedule C filed by Mr. Coffey, and significant proceedings have been undertaken in this Court, and now on appeal, in reliance on the regularity of the record. In retrospect, Mr. Coffey's failure to file a properly signed amended claim of exemption would have served as a separate, independent basis for this Court's order sustaining Trustee's objection to that exemption claim. That Debtor has now purported to "ratify" the unsigned Declaration does not fix the problem. Under these facts, Trustee could now likely argue that the conduct of Debtor and her attorney serve as an independent basis to deny the exemption. See Crawforth v. Bachman (In re Bachman), 07.4 I.B.C.R. 82, 94 (Bankr. D. Idaho 2007) (debtor's bad faith in filing amendment to schedule C warranted denial of exemption); In re Hamilton, 93 I.B.C.R. 227, 229 (Bankr. D. Idaho 1993) (also finding bad faith in late-filed claim of exemption); see also Arnold v. Gill (In re Arnold), 252 B.R. 778 (9th Cir. BAP 2000) (discussing bad faith and prejudice to creditors and trustee in context of late-claimed exemption.)
The conduct of Debtor's attorney may constitute good cause for relief from the Court's order previously entered in this case under Fed.R.Bankr.P. 9024 and Fed.R.Civ.P. 60(b). Of course, the Court's decision concerning Debtor's amended claim of exemption is now on appeal to the District Court, and this Court therefore lacks jurisdiction to consider any request by Trustee to revisit the issues. Davis v. Yageo Corp., 481 F.3d 661, 685 (9th Cir. 2007); Gould v. Mut. Life Ins. Co. of N.Y., 790 F.2d 769, 772 (9th Cir. 1986). However, were Trustee to request relief from the prior order, and were the District Court inclined to grant a limited remand, this Court would promptly schedule a further hearing to allow Trustee and Debtor to be heard concerning whether the amended claim of exemption in question should be disallowed based upon the events unearthed after the Court initially ruled on Trustee's objection. See Davis v. Yageo Corp., 481 F.3d at 685 (providing that if a Rule 60(b) motion is filed after appeal, and the trial court indicates its inclination to consider the motion, the appellate court may grant a limited remand); 1 FED. APPELLATE PRAC. GUIDE, 9TH CIR., § 5.38 (2d ed. 2010).
A copy of this decision will be transmitted to the District Court for its consideration and information.