Opinion
23-11020
04-17-2024
IN THE MATTER OF: ANNETTE S. NAIR Debtor
DECISION AND ORDER ON ORDER TO SHOW CAUSE
Robert E. Grant United States Bankruptcy Court Judge
On March 25, 2024, the court held a hearing on the trustee's motion to extend time to object to amended exemptions and the debtor's objection thereto. The trustee, Yvette Kleven, appeared for the hearing in person and through her counsel, Ed Kos. Debtor's counsel, Dennis Golden, was nowhere to be seen. As a result, the court overruled the debtor's objection, and, on its own motion, issued an order requiring Mr. Golden to show cause, in writing, why he should not be sanctioned for to his failure to attend the scheduled hearing. Mr. Golden filed a timely response to the order to show cause and it is that response which brings the matter before the court for a decision.
A court's most fundamental expectations of the attorneys who appear before it are to show up and be prepared. Thus, an attorney who fails to appear for proceedings scheduled because of something they have filed, or who appears but is substantially unprepared to participate in those proceedings, may be sanctioned either through the court's inherent authority or through Rule 16(f) of the Federal Rules of Civil Procedure. See, G. Heileman Brewing Co., Inc. v. Joseph Oat Corp., 871 F.2d 648, 651-53 (7th Cir. 1989); Matter of Sanction of Baker, 744 F.2d 1438 (10th Cir. 1984); Matter of Philbert, 340 B.R. 886 (Bankr. N.D. Ind 2006). In bankruptcy cases this is true for both adversary proceedings and contested matters. Philbert, 340 B.R. at 889. See also, N.D. Ind. L.B.R. B-9014-2(b).
The failure to appear is specifically identified by Rule 16(f) as the basis for sanctions. Unless non-compliance was "substantially justified" or other circumstances would make them "unjust" sanctions may be appropriate. As a result, the imposition of sanctions under the rule does not depend upon a finding of bad faith, willfulness, or contumaciousness. Matter of Sanction of Baker, 744 F.2d 1438, 1440-41 (10th Cir. 1984). A negligent failure to comply will suffice. Id. at 1441. See also, Harrell v. U.S., 117 F.R.D. 86, 88 (D. E.D. N.C. 1987); Barsoumian v. Szozda, 108 F.R.D. 426 (D. S.D. N.Y. 1985).
Counsel's response forthrightly acknowledges that his failure to appear for the scheduled hearing was not substantially justified but was, admittedly, negligent because the hearing date was not noted on counsel's calendar. He does, however, argue that sanctions are not needed because the trustee did not incur any additional costs due to counsel's absence and, given counsel's long history before the court, there is no deterrent value to a sanction. As for the first argument, the court should hear from the trustee before acting upon it. To begin with, she is in a better position to determine if that is so than he is. Furthermore, the court frequently addresses such seemingly routine requests for additional time as that filed by the trustee without a hearing - either by acting on the request itself or through an order giving opposing counsel the opportunity to object to it before scheduling a hearing. Here, counsel filed his objection to the requested extension the day after it was filed thereby immediately prompting the need for a hearing. As for the second argument, the deterrent value of sanctions extends not only to the sanctioned party but also to third parties, and that is also an appropriate consideration. See, National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643, 96 S.Ct. 2778, 2781 (1976); United States v. Dominguez, 810 F.2d 128, 129 (7th Cir, 1987); Tolliver v. Northrop Corp., 786 F.2d 316, 319 (7th Cir. 1986).
The court understands that Mr. Golden's absence was not willful or contumacious. It was simply negligent because his office's internal procedures failed. That may make counsel's absence understandable, but it does not make it "substantially justified." The court sees nothing unjust about requiring an attorney who may have caused its opposition to unnecessarily devote time and trouble to a matter to reimburse them for the reasonable value of their labors. In the court's opinion such a result is necessary, not only as a matter of economic and procedural fairness, but also in order to impress upon litigants the importance of appearing for and being prepared for proceedings scheduled with regard to the things they file.
Mr. Golden shall, therefore, pay the reasonable attorney fees and expenses incurred by the trustee as a result of preparing for and attending the hearing held in this matter on March 25, 2024. Furthermore, in order to compensate the United States for the costs he has unnecessarily imposed upon it and the additional time and attention he has required the court to devote to this matter, thereby depriving other litigants of its attention, and to deter similar conduct, see, BondPro Corp. v. Siemens Power Generation, Inc., 466 F.3d 562, 563 (7th Cir. 2006) ("The time has come to impose an exemplary public sanction in the hope of deterring further violations."), he shall also pay the clerk of this court the sum of $150.00.
The amounts due the clerk of this court shall be paid within fourteen (14) days. The trustee shall have fourteen (14) days from this date within which time to file and serve affidavits itemizing any recoverable fees and expenses. Mr. Golden shall have ten (10) days thereafter in which to file any objections thereto. In the absence of objection, the court will determine the reasonable amount of any fees and expenses without further notice or hearing.
SO ORDERED.