Opinion
Case No. 99-11782-SSM
August 12, 1999
MEMORANDUM OPINION AND ORDER
This matter is before the court on the motion of Karen Asprinio Blatter, the debtors' former attorney, for reconsideration of this court's order of July 28, 1999, imposing monetary sanctions against her in the amount of $500.00 for her failure to appear for examination as ordered by this court. Upon consideration of the motion, which the court treats as a motion under Federal Rule of Bankruptcy Procedure 9023, to alter or amend the July 28, 1999, order, the court concludes that grounds have not been shown to modify or set aside the order.
The order was entered on the docket on July 29, 1999. The deadline for filing a Rule 9023 motion is ten days from entry of the order on the docket. In this instance, the tenth day fell on a Sunday, and the deadline was therefore extended to Monday, August 9, 1999. F.R.Bankr.P. 9006(a). Since Ms. Blatter's motion was filed on that date, it is timely and is properly treated under Rule 9023. See Dove v. CODESCO, 569 F.2d 807, 809 (4th Cir. 1978) ("[I]f a post-judgment motion is filed within ten days of the entry of judgment and calls into question the correctness of that judgment it should be treated as a motion under Rule 59(e), however it may be formally styled.").
Background
Karen Asprinio Blatter, an attorney at law and member of the bar of this court, filed a voluntary chapter 13 petition in this court on April 7, 1999, on behalf of Jeffrey and Diane Kmonk. This was the third chapter 13 case she had filed for them in the span of two months. The first case, No. 99-11782-SSM, was filed on February 8, 1999, and was dismissed by the clerk on March 1, 1999, under the authority of Local Bankruptcy Rule 1007-1(A) for failure to timely file and serve a plan. The second case, No. 99-11267-SSM, was filed on March 15, 1999. It was dismissed by the clerk on March 22, 1999, under the authority of Local Bankruptcy Rule 5005-1(E) for failure to cure a filing deficiency, namely the requirement that the list of creditors be submitted in machine-readable form on computer diskette. According to Ms. Blatter, this dismissal was in error, since she had in fact submitted a diskette. However, rather than seek relief from the dismissal order, she elected to file a new case because one of Mr. and Mrs. Kmonk's creditors was about to garnish their bank account, and a new chapter 13 petition could be filed (thereby automatically staying the garnishment efforts) more quickly than a motion to vacate the dismissal order could be heard. The third petition was accompanied by complete schedules and a plan.
Because of the multiple filings, the chapter 13 trustee requested leave to conduct examinations under Federal Rule of Bankruptcy Procedure 2004 not only of the debtors but of Ms. Blatter. The court granted the motion with respect to the debtors but directed that a hearing be set with regard to the motion to examine Ms. Blatter. Ms. Blatter filed a written response to the motion explaining why there had been three filings, but she did not appear at the hearing on May 25, 1999, at which the trustee's motion was considered. The court granted the motion, and on May 27, 1999, entered an order directing that Ms. Blatter appear for examination by the trustee on June 9, 1999. A copy of that order was mailed by the clerk to Ms. Blatter both at her address listed on the petition as well as an address in Providence, Rhode Island, to which she was believed to have moved. On June 14, 1999, new counsel entered his appearance on behalf of the debtors, and an order was signed the following day substituting counsel.
Ms. Blatter testified that she moved to Rhode Island on May 1, 1999.
The plan that had been prepared by Ms. Blatter was denied confirmation on June 15, 1999. However, the debtors, now represented by new counsel, timely filed a modified plan on June 15, 1999. That plan was denied confirmation on August 10, 1999, with leave to file a modified plan within twenty days.
Ms. Blatter did not appear for examination on the date specified in the order. She did not appeal the order, nor did she file any pleadings seeking to modify the order. According to her testimony, she received a copy of the order only four or five days before she had to appear. She further testified that she telephoned someone in the chapter 13 trustee's office to explain that she had a conflict on the date specified but could appear on a subsequent date. She testified she was told that the trustee was unwilling to continue the examination to another date. She further testified that she then telephoned chambers and was advised that the judge was on vacation. She apparently concluded that a motion for a continuance could not be heard before the date set for the examination, and therefore did not file such a motion.
The judge was not in fact on vacation but rather was attending a training course in San Antonio, Texas, during the period June 7 through June 10, 1999. Except for June 10th, the judge was in daily contact with chambers. It is not unusual for the court to hear emergency matters by telephone, and the court is confident that if an express request had been made for an emergency hearing, chambers staff would have arranged for one to be held by telephone.
On June 21, 1999, an order to show cause was issued on motion of the chapter 13 trustee requiring Ms. Blatter to appear on July 20, 1999, to show cause why she should not be disbarred from further practice before this court or why other sanctions, including disgorgement of fees received from the debtors, should not be imposed for her failure to appear for examination. No response was filed by Ms. Blatter either to the motion for show cause order or to the order itself. On the morning of July 20, 1999, she telephoned chambers and represented that her flight from Rhode Island had been canceled and that she could not be present for the hearing that day. The court agreed to continue the hearing to July 27, 1999.
On July 27, 1999, Ms. Blatter appeared and orally presented her explanation. The court allowed the chapter 13 trustee to examine her on the record concerning the circumstances surrounding the filing not only of Mr. and Mrs. Kmonk's case but also of seven other cases in which she had filed petitions that were ultimately dismissed or in which other counsel subsequently entered appearances. During the hearing, counsel arrived who had previously made arrangements with the court to present an emergency motion for relief from the automatic stay in an unrelated case. After Ms. Blatter stepped down from the witness stand, the court announced it would recess the hearing to take up the other matter in open court. After hearing from counsel in the other matter, the court took a brief recess to prepare an order. When the court returned to the bench, Ms. Blatter was not present and could not be located in the courthouse. The court, after reviewing the file in Mr. and Mrs. Kmonk's prior and present case, ruled that the trustee had not shown sufficient grounds either for disbarment or for disgorgement of fees, but the court did conclude that Ms. Blatter should be sanctioned for her failure to appear for the Rule 2004 examination. An order reflecting that ruling was signed the following day.
Ms. Blatter was late for the hearing and was not present when the matter was first called. The court ruled that, based on her failure to appear that day and for the Rule 2004 examination, she would be barred from further practice before the court. When Ms. Blatter appeared shortly thereafter, the court rescinded its ruling and considered the matter de novo.
The file for their first case had already been sent to the Federal Records Center.
Discussion
Federal Rule of Bankruptcy Procedure 9023 incorporates Rule 59, Federal Rules of Civil Procedure. A motion under Rule 59(e) to alter or amend an order requires a showing that relief is proper (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice. Hutchinson v. Staton, 994 F.2d 1076, 1081 (4th Cir. 1993). Neither of the first two grounds is even remotely applicable, and the question therefore resolves to whether the court's ruling constitutes a clear error of law or will result in manifest injustice.
As a threshold matter, it is important to emphasize that Ms. Blatter's leaving of the courthouse on July 27th prior to the conclusion of the show cause hearing was not the basis for the imposition of sanctions. Ms. Blatter represents in her motion that she is hard of hearing and could not hear the court's comments, and that the bailiff (court security officer) "indicated" that she was free to leave. Why, as an experienced attorney, she would have thought the hearing concluded when the court had not yet made a ruling is a mystery. In any event, the court, although commenting unfavorably on her absence, did not rely on it as a basis for imposing sanctions. Nor were sanctions based on her decision to file a third case for Mr. and Mrs. Kmonk after the first two were dismissed. Her explanation of why she did so was at least plausible and was not rebutted by the trustee.
The sole basis for imposition of sanctions was Ms. Blatter's failure to appear for examination on June 9, 1999, as ordered by the court. While the court accepts that Ms. Blatter may have had relatively short notice and that she may have had a previously scheduled conflict, that did not excuse her failure to seek — by formal motion, if it could not be accomplished informally by agreement with the trustee — a continuance of the examination. Had a written continuance motion been filed by Ms. Blatter immediately upon her receiving a copy of the order, it is very likely that it could have been heard telephonically in advance of the scheduled examination. Even if a telephone hearing could not have been held prior to June 9th, the court could have granted relief retroactively if — as she now represents — she was required to be in another court that day and there was no reasonable opportunity to have the matter heard prior to the scheduled date. But Ms. Blatter did nothing. She did not file a motion for continuance prior to the hearing, nor did she file a motion after June 9th to reschedule examination. She did not file any response to the trustee's motion for a show cause order, and did not present any explanation for her failure to appear until she appeared (late) for the hearing on July 27th, some 48 days later. Based on her testimony that she received the order to appear for examination at least four days prior to the scheduled date of the examination, she has not shown good cause for her failure to seek a continuance from the court.
ORDER
For the foregoing reasons, it is
ORDERED:
1. The motion for reconsideration is denied.
2. The clerk will mail a copy of this memorandum opinion and order to the parties listed below.