Opinion
Case No. 19-10514
02-13-2020
In Re SAVAN THACH Debtor
Chapter 13
ORDER DIRECTING ATTORNEYS H. LEON HEWITT, MARY FOSTER, AND JESSICA GOLDBERGER TO APPEAR AND SHOW CAUSE WHY SANCTIONS SHOULD NOT BE IMPOSED
Attorneys occasionally need a reminder of the importance of the office they occupy in our justice system and the attendant elevated responsibilities. While still serving as Chief Judge of the New York Court of Appeals, Justice Benjamin N. Cardozo once observed: "Membership in the bar is a privilege burdened with conditions. [A lawyer is] received into that ancient fellowship for something more than private gain. He [or she becomes] an officer of the court, and, like the court itself, an instrument or agency to advance the ends of justice." People ex rel. Karlin v. Culkin, 248 N.Y. 465, 470-71, 162 N.E. 487 (1928). The Court is reminded of Justice Cardozo's timeless remarks because the attorneys who represent the Debtor, Savan Thach, in this proceeding appear to have forgotten or simply ignored duties associated with becoming an attorney which, fundamentally, are to follow the published rules of the court, applicable legal authorities, and precedent in the quest "to secure the just, speedy and inexpensive determination of every action and proceeding." Fed. R. Civ. P. 1.
Introduction
On February 20, 2019, the Debtor filed a Chapter 7 case that was later converted to Chapter 13 by Agreed Order entered June 26, 2019 (Doc. 16). On December 19, 2019, a hearing on confirmation on the Debtor's Chapter 13 plan was held. At the hearing, the Chapter 13 Trustee, Margaret A. Burks (the "Trustee"), expressed serious concerns about the Debtor's apparent representation by multiple attorneys. From a review of the docket, the statements of the Trustee, and based upon a colloquy between the Court and the counsel of record for the Debtor in these proceedings, it appears that the Debtor's legal representation has passed indiscriminately between two or more attorneys; these attorneys (until recently) appear not to have been regularly associated or partners in the same law firm; and finally, the attorneys' client (the Debtor) may not have given informed consent to the representation provided or written permission for the attorneys to share fees. The conduct alleged in the Preliminary Findings that follow, if accurate, may constitute multiple serious violations of important provisions of the Bankruptcy Code and Rules, the Ohio Rules of Professional Conduct, and the Local Rules and ECF Procedures. These infractions may warrant sanctions being imposed by this Court against one or more of the attorneys or the law firms involved, including Upright Law, Amourgis & Associates, H. Leon Hewitt, Mary Foster, and Jessica Goldberger.
Preliminary Findings
ECF Procedure 8(a) specifically invokes the provisions of Fed. R. Bankr. P. 9011 and directs:
The Southern District of Ohio Administrative Procedures for Electronic Case Filing can be found on the Court's website at: https://www.ohsb.uscourts.gov/pdffiles/AdminProcs_Clean.pdf
The transmission by a Filer or User to ECF of any document constitutes any required signature of that Filer or User on such document , including the signature on a certificate of service. The Filer need not manually sign a transmitted document. The transmission is the equivalent of a signed paper for all purposes , including , without limitation , the Federal Rules of Bankruptcy Procedure, including Rule 9011, the Bankruptcy Code, and the Local Bankruptcy Rules of this Court. (Emphasis added).
The majority of the Debtor's pleadings have been transmitted using the CM/ECF Filer or User login credentials and electronic signature of attorney H. Leon Hewitt. For example, the petition (Doc. 1), the Statement of Intent (Doc. 4), the Verification of Creditor Matrix (Doc. 5), the Certificate of Creditor Counseling (Doc. 6), Amended Schedules (Doc. 9) and several other documents appear to have been transmitted electronically by Mr. Hewitt. Stunningly, however, at the first confirmation hearing held in the case, Mr. Hewitt stated to the Court that, despite the use of his CM/ECF Filer credentials and electronic signature, and his appearance on behalf of the Debtor at the scheduled hearing, he was, nevertheless, not counsel for the Debtor. Instead, Mr. Hewitt asserted that Ms. Mary Foster is the actual attorney representing the Debtor and that he is simply aiding and providing guidance to Ms. Foster. According to Mr. Hewitt, at the time the petition was filed, he and Ms. Foster had been sharing office space and both had been receiving contract work from an entity called Upright Law. However, Mr. Hewitt conceded that Ms. Foster and he had not been otherwise regularly associated together or law partners in any firm.
A number of other courts have questioned the representation practices of Upright Law. See In re Klitsch, 587 B.R. 287 (Bankr. M.D. Pa. 2018) (counsel affixed e-signatures to documents and filed them without obtaining signatures from their clients); Allen v. Fitzgerald, No. 7:18-cv-00134, 2019 WL 6742996 (W.D. Va. December 11, 2019); In re Blevins, No. 17-60019-rlj7, 2019 WL 575664 (Bankr. N.D. Texas Feb. 12, 2019) (raising concerns related to potential improper fee sharing); In re Vandesande, No. 16-33708, 2017 WL 474320 (Bankr. N.D. Ohio Feb. 3, 2017) (questioning the exclusion of basic bankruptcy services from Upright Law's fee agreements); In re Scharf, No. 17-01442-als7, 2018 WL 3863796 (Bankr. S.D. Iowa March 8, 2018) (counsel was unable to demonstrate he had even met his client prior to the meeting of creditors, thus "[t]he facts demonstrate that UpRight provided only minimal representation to Scharf in his bankruptcy case and do not support a conclusion that the fees charged were reasonable."); In re Cook, No. 14-36424, 2019 WL 6903968 (Bankr. N.D. Ill. Dec. 17, 2019); In re Scott, No. 16-41545-can7, 2018 WL 5905068 (Bankr. W.D. Mo. Oct. 24, 2018); In re Banks, No. 17-10456, 2018 WL 735351, at *17 (Bankr. W.D. La. Feb. 6, 2018) ("The scope of the professional negligence on the part of . . . UpRight in the handling of Banks' Chapter 7 case is substantial. . . . Banks' case should have been simple; in fact, UpRight has admitted as much. . . . Due to lack of legal knowledge, skill, thoroughness, preparation, and general negligence on the part of . . . UpRight, Banks has still not received a discharge."); In re Richard, No. 16-42080-659, 2018 WL 5733508 (Bankr. E.D. Mo. Oct. 10, 2018) (ordering the disgorgement of fees pursuant to 11 U.S.C. § 504); In re White, No. 17-40093-JJR, 2018 WL 1902491 (Bankr. N.D. Ala. April 19, 2018) (ordering disgorgement of fees and barring UpRight from filing cases in the Northern District of Alabama for eighteen months).
Since filing the petition, however, Mr. Hewitt claims that both he and Ms. Foster have discontinued their association with Upright Law. Mr. Hewitt now asserts that both he and Ms. Foster are currently working with the Amourgis & Associates law firm. According to Mr. Hewitt, Jessica Goldberger is the managing attorney for the Cincinnati office of Amourgis & Associates. And, also according to Mr. Hewitt, Ms. Goldberger is in charge of arranging and assigning all attorney court appearances for that firm.
Despite this representation, neither of the attorneys are listed on the Amourgis website, while both attorneys still appear on the Deighan Law/Upright Law website. See https://www.amourgis.com/attorneys/; https://www.uprightlaw.com/bk/bankruptcyattorneys. Moreover, a review of the Ohio Supreme Court Attorney Directory shows Mr. Hewitt as being employed by the Hewitt Foster Legal Group, and Ms. Foster is listed as a "solo practitioner." See https://www.supremecourt.ohio.gov/AttorneySearch/#/72693/attyinfo; https://www.supremecourt.ohio.gov/AttorneySearch/#/81729/attyinfo.
On the day of the confirmation hearing, Mr. Hewitt explained that Ms. Foster was unavailable because Ms. Goldberger had sent her to attend a scheduled hearing in a different court. Following the conclusion of the confirmation hearing and after being admonished by the Court of the potential rules violations, Mr. Hewitt filed a Notice Confirming Attorney Representation (Doc. 48) (the "Notice") seeking to correct his mistakes, but as it turns out the filing only added to the confusion. It states:
Now comes Debtor (s) (sic.) Savan Thach who gives notice that he wishes to be represented by attorney H. Leon Hewitt. Prior to this, debtor paid Upright Law who then was referred to Mr. Hewitt's office. Mary T. Foster had been the attorney handling debtor's Chapter 13 case but she has since left for another firm. In the interest of continuity, Debtor names Mr. Hewitt as attorney of record.
The Law
Resolution of this matter requires review of several Bankruptcy Code provisions, Bankruptcy Rules, and ECF procedures which were adopted by this Court and carry the force of law. Among these are 11 U.S.C. §§ 329 and 504, Fed. R. Bankr. P. 2016 and 9011, Ohio Prof. Cond. Rules 1.1 and 1.5(e), and ECF Procedures 8(a) and 8(c). Each may be directly implicated by the conduct of Mr. Hewitt, Ms. Foster, and Ms. Goldberger based upon the record compiled in this case.
Section 329 and Rule 2016
Foremost on the list of Bankruptcy Code provisions and Rules potentially violated are 11 U.S.C. § 329 and Rule 2016. Section 329(a), in relevant part, provides:
(a) Any attorney representing a debtor in a case under this title, or in
connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation.
"Section 329 of the Bankruptcy Code not only recognizes the bankruptcy court's traditional concern for the need to carefully scrutinize the compensation paid to the debtor's attorney, but also underscores that the court has a duty to do so, sua sponte and even in the absence of objections." 3 Collier on Bankruptcy ¶ 329.01 (Richard Levin & Henry J. Sommer eds. 16th ed.); see also In re Williams, 304 B.R. 191, 194 (Bankr. N.D. Ohio 2007).
Rule 2016 establishes the procedure for filing the statement required by § 329. In pertinent part, Rule 2016 provides:
(a) Application for Compensation or Reimbursement. An entity seeking interim or final compensation for services , or reimbursement of necessary expenses , from the estate shall file an application setting forth a detailed statement of (1) the services rendered , time expended and expenses incurred , and (2) the amounts requested. An application for compensation shall include a statement as to what payments have theretofore been made or promised to the applicant for services rendered or to be rendered in any capacity whatsoever in connection with the case, the source of the compensation so paid or promised, whether any compensation previously received has been shared and whether an agreement or understanding exists between the applicant and any other entity for the sharing of compensation received or to be received for services rendered in or in connection with the case, and the particulars of any sharing of compensation or agreement or understanding therefor, except that details of any agreement by the applicant for the sharing of compensation as a member or regular associate of a firm of lawyers or accountants shall not be required. . .
(b) Disclosure of Compensation Paid or Promised to Attorney for Debtor. Every attorney for a debtor , whether or not the attorney
applies for compensation , shall file and transmit to the United States trustee within 14 days after the order for relief , or at another time as the court may direct , the statement required by § 329 of the Code including whether the attorney has shared or agreed to share the compensation with any other entity. The statement shall include the particulars of any such sharing or agreement to share by the attorney, but the details of any agreement for the sharing of the compensation with a member or regular associate of the attorney's law firm shall not be required. A supplemental statement shall be filed and transmitted to the United States trustee within 14 days after any payment or agreement not previously disclosed. (Emphasis added).
"Federal Rule of Bankruptcy Procedure 2016 is designed to require an applicant for compensation provide the bankruptcy court with sufficient information to allow the court to respond appropriately to the application. The rule also encourages the applicant to comply with the Code and Rules in order to avoid losing any entitlement to compensation." 9 Collier on Bankruptcy ¶ 2016.01 (Richard Levin & Henry J. Sommer eds. 16th ed.); see also In re Dental Profile, Inc., 441 B.R. 885, 908 (Bankr. N.D. Ill. 2011). "Rule 2016 is part of a statutory and rule-based framework designed to provide fair compensation to persons working in the bankruptcy arena while protecting bankruptcy estates from over-reaching." Id.
The arrangement between Mr. Hewitt, Ms. Foster, Upright Law, and Amourgis & Associates calls into question who the Debtor's attorney is, and whether any of the compensation he or she has received should be subject to disgorgement. Indeed, the Amended Disclosure of Compensation of Attorney for Debtor form (Doc. 25) shows that Mr. Hewitt was paid $1,225 for his representation of the Debtor before this case was filed, and states he is still owed $2,475. The Amended Disclosure, however, appears to contradict several assertions made in the Notice. See Doc. 48. Moreover, as noted, Mr. Hewitt, prior to filing the Notice and despite his appearance at the hearing on behalf of the Debtor, disclaimed having possessed any knowledge of the Debtor's financial affairs, the circumstances surrounding the Debtor's need to file bankruptcy, chapter choice, or anything about the case. Based on the record presented, several legal questions arise regarding Mr. Hewitt's conduct and whether he and the other attorneys and law firms involved in this case are in compliance with § 329 and Rule 2016. These are questions Mr. Hewitt, Ms. Goldberger, and Ms. Foster will need to answer.
The Application attached to the Amended Disclosure of Compensation indicates Mr. Hewitt provided a myriad of services to the Debtor, including an initial client interview, analysis of the Debtor's financial condition, advising on which chapter of bankruptcy to file under, advising the Debtor of his obligations under the Bankruptcy Code, preparation of the bankruptcy petition and schedules, preparation of the Debtor's chapter 13 plan, representation of the Debtor at his § 341 Meeting of Creditors, review of claims, and answering routine phone calls and questions. All of these services are encompassed by this District's"no look fee" codified in L.B.R. 2016-1(b)(2)(a). See In re Williams, 357 B.R. 434, 439 n. 3 (6th Cir. BAP 2007) (concluding "that 'no-look' fees are permissible and should be encouraged in appropriate circumstances") (citing In re Boddy, 950 F.2d 334 at 338 (6th Cir. 1991) (other citations omitted); see also, Boone v. Derham-Burk (In re Eliapo), 468 F.3d 592 (9th Cir. 2006) (approving issuance of and reliance upon presumptive guideline fees for routine services in chapter 13 cases); In re Cahill, 428 F.3d 536, 541 (5th Cir.2005) (approving the use of a "precalculated lodestar" as a basis for awarding attorney's fees in "typical" chapter 13 cases); In re Kindhart, 160 F.3d 1176 (7th Cir.1998) (approving use of presumptive fees in routine cases).
The Notice (Doc. 48) proclaims that the Debtor paid Upright Law, rather than Mr. Hewitt as stated in the Amended Disclosure. Compare Doc. 25 and Doc. 48. The Notice also proclaims that Ms. Foster discontinued handling the Debtor's case because she left Upright Law for another law firm, even though she and Mr. Hewitt both are now associated with Amourgis & Associates and are being assigned cases and supervised by Ms. Goldberger, the Cincinnati based managing attorney for that firm.
A less well known but extremely important provision of the Bankruptcy Code implicated by the law firms' and attorneys' conduct in this case is 11 U.S.C. § 504. In relevant portion, § 504 provides:
(a) Except as provided in subsection (b) of this section, a person receiving compensation or reimbursement under section 503(b)(2) or 503(b)(4) of this title may not share or agree to
share --
(1) any such compensation or reimbursement with another person; or
(2) any compensation or reimbursement received by another person under such sections.
(b)
(1) A member, partner, or regular associate in a professional association, corporation, or partnership may share compensation or reimbursement received under section 503(b)(2) or 503(b)(4) of this title with another member, partner, or regular associate in such association, corporation, or partnership, and may share in any compensation or reimbursement received under such sections by another member, partner, or regular associate in such association, corporation, or partnership. (Emphasis added).
Given the concessions on the record already made by counsel, it would appear that the compensation sharing exceptions contained in § 504(b) for attorneys regularly associated in a law firm or law partners do not apply. The Court must therefor scrutinize the conduct potentially engaged in by the attorneys under § 504(a). "Section 504 of the Bankruptcy Code prohibits any person receiving compensation or reimbursement of expenses under subsection 503(b)(2) or (b)(4) from sharing such compensation with another person." 4 Collier on Bankruptcy ¶ 504.01[1] (Richard Levin & Henry J. Sommer eds. 16th ed.); see also In re Fair, 2016 WL 3027264, at *12 (Bankr. N.D. Tex. May 18, 2016) ("Section 504 clearly applies in chapter 13 cases"). The rationale is straight-forward. "Whenever fees or other compensation is shared among two or more professionals, there is incentive to adjust upward the compensation sought in order to offset any diminution to the share of either. Consequently, sharing of compensation can inflate the cost of a bankruptcy case to the bankruptcy estate, and therefore to the creditors." Id, at ¶ 504.01.
Similar to the concerns expressed by the Court under the portion of the Order addressing § 329 and Rule 2016, it also appears on the surface at least that Mr. Hewitt, Ms. Foster, Upright Law, and Amourgis & Associates may have engaged in an unlawful fee sharing arrangement prohibited by § 504(a). Mr. Hewitt's odd response that he has no knowledge of this case despite pleadings being repeatedly transmitted under his ECF Filer credentials and electronic signature does nothing to advance the interests of the Debtor and needlessly delays these proceedings, inconveniencing not only the Debtor but this Court and the Trustee's office. The delays created by the anomalous manner in which this case has been handled by the attorneys and law firms raises serious questions about whether they should be compensated at all or have the attorney's fees substantially reduced. See 11 U.S.C. §§ 329 and 330. Instead, it appears from the conduct described in this Order that the attorneys may warrant sanctions being imposed against them. The Court will be especially concerned with whether evidence exists that the joint representation provided by the attorneys inflated the costs to the estate and diminished the return to creditors, in contravention of § 504(a)'s anti-fee sharing provisions.
Section 330(a)(4)(B) applies all of the provisions of § 330(a) to debtors' counsel in chapter 12 and 13 cases. Section 330(a)(2) allows courts to reduce counsel fees upon its own motion or the motion of any party in interest.
Courts consider violations of Rule 9011 among the more serious. The nature of these infractions cut to the core of the attorney-client relationship and an attorney's responsibilities as an officer of the court. Sanctions can be imposed against the attorney who violates the Rule, his or her law firm or a party. Rule 9011, in pertinent part, provides:
(a) Signature. Every petition, pleading, written motion, and other paper, except a list, schedule, or statement, or amendments thereto, shall be signed by at least one attorney of record in the attorney's individual name. A party who is not represented by an attorney shall sign all papers. . .
(b) Representations to the Court. By presenting to the court
(whether by signing , filing , submitting , or later advocating) a petition , pleading , written motion , or other paper , an attorney or unrepresented party is certifying that to the best of the person's knowledge , information , and belief , formed after an inquiry reasonable under the circumstances ,—
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims , defenses , and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension , modification , or reversal of existing law or the establishment of new law ;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
(c) Sanctions. If , after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated , the court may , subject to the conditions stated below, impose an appropriate sanction upon the attorneys , law firms , or parties that have violated subdivision (b) or are responsible for the violation. (Emphasis added).
Fed. R. Bankr. P. 9011 seeks to "deter baseless filings in bankruptcy court and thus avoid unnecessary judicial effort, the goal being to make proceedings in that court more expeditious and less expensive." 10 Collier on Bankruptcy ¶ 9011.01 (Richard Levin & Henry J. Sommer eds. 16th ed.); see also Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). These prudential tenets appear to have been trampled upon by counsel in this case without regard for or sadly even an awareness of the rules governing the conduct by all attorneys who practice in this Court.
As previously mentioned, Mr. Hewitt's electronic signature upon the various pleadings transmitted in this matter constitute certifications to this Court that he had conducted reasonable investigations into the bases for the relief sought. Yet, Mr. Hewitt has admitted that he had performed no such investigation whatsoever at the time any of those pleadings were transmitted. Instead, Mr. Hewitt indicates that he simply allowed another attorney to transmit documents using his ECF Filer credentials and electronic signature, although he had done no investigation of the facts in the Debtor's case. Then, when appearing in Court, Mr. Hewitt professed to lack any knowledge regarding the facts or circumstances in the case. The manner in which this case has been prosecuted has caused needless expense and a waste of time, not only potentially to the estate, but also as a drain upon finite judicial resources-the very things Rule 9011 is intended to prevent.
LBR 9011-4 states: "The transmission by an ECF filer or user to the ECF System of any document constitutes the signature of that filer or user for purposes of Rule 9011."
Ohio Rules of Professional Conduct
Having transmitted documents electronically with the Court and then claiming to lack knowledge of legal contentions therein, Mr. Hewitt may have also violated the Ohio Prof. Cond. Rule 1.1. That Rule provides:
Local Bankruptcy Rule 2090-2 of the United States Bankruptcy Court for the Southern District of Ohio expressly provides that the Ohio Rules of Professional Conduct apply to proceedings in bankruptcy. The Ohio Rules of Professional Conduct can be found on the Ohio Supreme Court website at: http://www.sconet.state.oh.us/LegalResources/Rules/ProfConduct/profConductRules.pdf
A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. (Emphasis in original).Moreover, if Ms. Foster was not fully capable of representing the Debtor, she too may have violated this Rule. "Competent handling of a particular matter includes inquiry into and analysis of the factual and legal elements of the problem, and use of methods and procedures meeting the standards of competent practitioners. It also requires adequate preparation." Ohio Prof. Cond. Rule 1.1, cmt. 5 (emphasis added). Finally, if Ms. Goldberger was aware of the arrangement between Mr. Hewitt and Ms. Foster and sent Ms. Foster to a different court knowing Mr. Hewitt was ill-prepared and lacked the requisite competence to proceed on the Debtor's case, Ms. Goldberger may also be in violation of the Rule. See Ohio Prof. Cond. Rule 5.1(c)(1) ("A lawyer shall be responsible for another lawyer's violation of the Ohio Rules of Professional Conduct if . . . the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved. . . .) (emphasis in original).
Similar to 11 U.S.C. § 504(a) discussed above, Ohio Prof. Cond. Rule 1.5(e), generally disfavors fee splitting by attorneys from different firms and allows it only under very specific circumstances.
Ohio Prof. Cond. Rule 1.5(e) provides in pertinent part:
Lawyers who are not in the same firm may divide fees only if all of the following apply : . . . (2) the client has given written consent after full disclosure of the identity of each lawyer , that the fees will be divided, and that the division of fees will be in proportion to the services to be performed by each lawyer or that each lawyer will assume joint responsibility for the representation. (Emphasis added.).No evidence of the client's written consent has been provided to show that the Debtor agreed to the form of representation that has heretofore taken place. For the same reasons discussed above, Mr. Hewitt and Ms. Foster may have violated Ohio Prof. Cond. Rule 1.5(e).
Even if Mr. Hewitt and Ms. Foster did not violate Rule 1.5(e), they may have violated Rule 1.6(a) which provides, in pertinent part, "A lawyer shall not reveal information relating to the representation of a client, including information protected by the attorney-client privilege under applicable law, unless the client gives informed consent. . . ." (Emphasis in original). Just as there has been no showing that the Debtor agreed to a fee splitting arrangement, there has also been no showing that the Debtor gave his informed consent, prior to the Notice, of Ms. Foster disclosing any privileged information to Mr. Hewitt.
ECF Pocedures
Finally, as previously mentioned in the Preliminary Findings supra, ECF Procedure 8(c) specifically disallows the activity which Mr. Hewitt admitted to in this case, namely allowing another attorney to transmit documents under his ECF Filer credentials and electronic signature. It provides:
No Filer or User may knowingly permit or cause to permit a Filer's or User's password to be used by anyone other than an agent specifically authorized by the Filer or User.The activities of Mr. Hewitt, Ms. Foster, Ms. Goldberger, and the Amourgis & Associates and Upright Law firms outlined in this order appear to display a blatant disregard of this procedure and the safeguards it is intended to ensure-namely, that this Court should be aware of who it is that is serving as the attorney of record and providing legal representation to the parties appearing before it.
Conclusion
Based on the foregoing, IT IS THEREFORE ORDERED that attorneys H. Leon Hewitt, Mary Foster, and Jessica Goldberger shall appear before the Honorable Jeffery P. Hopkins, U.S. Bankruptcy Judge, in Suite #816, Courtroom #2, Atrium Two, 221 East Fourth Street, Cincinnati, Ohio on March 31, 2020 at 10:00 am to SHOW CAUSE why sanctions should not be imposed under Rule 9011 or the Court's inherent authority to impose sanctions against attorneys deemed to have committed infractions of the rules under 11 U.S.C. § 105. See In re Wenk, 296 B.R. 719 (Bankr. E.D. Va. 2002); In re Boyd, 143 B.R. 237 (Bankr. C.D. Ca. 1992); In re Jerrels, 133 B.R. 161, 164 (Bankr. M.D. Fla. 1991) ("reasonable inquiry includes at least an actual initial contact and conference with the client."); In re Beinhauer, 570 B.R. 128 (Bankr. E.D.N.Y. 2017) (counsel "cannot absolve himself of the duty to conduct a reasonable investigation by affirmatively allowing clients to bring in only the bare minimum of information and them claiming that it is not his fault that he did not have sufficient information to review.") (citing In re Moffett, No. 10-71920, 2012 WL 693362, at *3 (Bankr. C.D. Ill. Mar. 2, 2012)).
IT IS FURTHER ORDERED that prior to the hearing to SHOW CAUSE, Mr. Hewitt, Ms. Foster, Ms. Goldberger, and their counsel should familiarize themselves thoroughly with the cases and Bankruptcy Code provisions and Rules cited in this Order. Counsel should come fully prepared to discuss the potential violations of these authorities. In addition, not later than seven (7) days prior to the Hearing to SHOW CAUSE, the parties who are the subject of this Order or their attorneys may file any documents, pleadings, or affidavits they deem appropriate in defense of or to ameliorate the conduct described in this Order or to otherwise clarify, complete or correct the record in this case.
IT IS FURTHER ORDERED that not later than seven (7) days prior to the Hearing to SHOW CAUSE, the attorneys who are the subject of this Order shall file with the Court a document certifying what corrective measures have been taken to avoid future infractions of the authorities identified in this Order.
IT IS FURTHER ORDERED that the Hearing on Confirmation of the Debtor's Chapter 13 plan shall be continued to the same date and time by separate order.
Failure by the attorneys who are the subject of this Order to comply with any of its terms shall result in the imposition of further sanctions by this Court.
This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
/s/ _________
Jeffery P. Hopkins
United States Bankruptcy Judge Dated: February 13, 2020 Copies to: Default List plus additional parties Mary T Foster
8044 Montgomery Rd., Suite 700
Cincinnati, OH 45236
mtf.fosterlegal@gmail.com Jessica Goldberger
Amourgis and Associates
300 E. Business Way, Ste 200
Cincinnati, OH 45241
bk_Cincinnati@amourgis.com