Clements v. Early

438 B.R. 334, 2010 U.S. Dist. LEXIS 106071
CourtDistrict Court, N.D. Alabama
DecidedSeptember 29, 2010
DocketBankruptcy No. 07-71774-CMS-13; No. 7:09-CV-2323-SLB
StatusPublished
Cited by1 cases

This text of 438 B.R. 334 (Clements v. Early) is published on Counsel Stack Legal Research, covering District Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clements v. Early, 438 B.R. 334, 2010 U.S. Dist. LEXIS 106071 (N.D. Ala. 2010).

Opinion

MEMORANDUM OPINION

SHARON LOVELACE BLACKBURN, Chief Judge.

This case is before the court on Appellant’s Notice of Appeal, (doc. I),1 from the August 21, 2009, Memorandum Opinion and Order of the United States Bankruptcy Court for the Northern District of Alabama, see In re Church, No. BK 07-71774-CMS-13, 2009 WL 2600546 (Bankr. N.D.Ala. Aug.21, 2009). The Memorandum Opinion and Order required debtors’ attorney, appellant Tessie P. Clements, to “pay $1,200 to the Chapter 13 Trustee to be applied to the Debtors’ bankruptcy case,” and “denied her entitlement to the portion of her $850 fee that the Chapter 13 Trustee has not yet disbursed.” Id. at *9. Upon consideration of the record, the submissions of the parties, and the relevant law, the court is of the opinion that the Memorandum Opinion and Order of the bankruptcy court is due to be reversed. The case will be remanded for further proceedings in accordance with this decision.

I. STANDARD OF REVIEW

This court has appellate jurisdiction pursuant to 28 U.S.C. 158(a). The applicable standard of review regarding findings of fact is set out in Rule 8013 of the Federal Rules of Bankruptcy Procedure, which provides:

On an appeal, the district court ... may affirm, modify, or reverse a bankruptcy judge’s judgment, order, or decree, or remand with instructions for further proceedings. Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of witnesses.

Fed. R. Bankr.P. 8013. A factual finding is not clearly erroneous unless “this court, after reviewing all of the evidence, [is] left with the definite and firm conviction that a [337]*337mistake has been committed.” In re Int’l Admin. Servs., Inc., 408 F.3d 689, 698 (11th Cir.2005) (citation omitted). Review of the bankruptcy court’s legal conclusions and mixed questions of law and fact is de novo. See In re Cox, 493 F.3d 1336, 1340 n. 9 (11th Cir.2007) (citing In re Calvert, 907 F.2d 1069, 1071 (11th Cir.1990)); In re Club Assocs., 951 F.2d 1223, 1228 (11th Cir.1992).

II. STATEMENT OF FACTS

The bankruptcy court set forth the following Findings of Facts:

This matter is before the court on the [Administrator’s] Motion for Examination of Debtors’ Transactions with Attorney. The [Administrator] became concerned about the accuracy of the Disclosure of Compensation of Attorney for Debtor (“Disclosure Statement”) filed by Attorney Clements when [Ms. Church]2 called the [Administrator’s] office to assert a grievance against Attorney Clements. During the course of the phone call, [Church] stated that she was frustrated because she had paid Attorney Clements $1,200 to file a bankruptcy petition and now Attorney Clements refused to communicate with her or her husband, the joint debtor. This statement caused the [Administrator] concern because the $1,200 figure cited by [Church] was inconsistent with Attorney Clements’ Disclosure Statement, which stated that Attorney Clements was paid $0.00 by the Debtors prepetition. Whether this unsolicited statement by [Church] is true is at the center of this controversy.
The Debtors made an initial appointment with Attorney Clements in early-to mid-September, 2007, because they wished to breach a real estate contract to sell their residential home located at 4126 Keene Mill Drive, Tuscaloosa, Alabama 35404. The closing on the sale of the Debtors’ home was to take place shortly after the Debtors’ initial meeting with Attorney Clements,3 and the Debtors were behind on other bills, so Attorney Clements decided that filing a bankruptcy petition was in the Debtors’ best interests. These two facts comprise the vast majority of undisputed facts in this case. From this point on, the Debtors and Attorney Clements tell two very different versions of the events.
The Debtors assert that during the initial meeting with Attorney Clements they were told the fee to file a bankruptcy petition was $1,200, and that the $1,200 would have to be paid before such petition would be filed. Debtors did not have that kind of money on hand. Therefore, in an effort to fund Attorney Clements’ attorney fees, the Debtors assert that they borrowed $4,636.45 from Acceptance Loan Company, Inc. (“Acceptance”) on September 18, 2007; of the $4,636.45, $3,383.87 was used to payoff a lien on Mr. Rancher’ vehicle, which was used as collateral for the loan, and $1,252.58 was given directly to the Debtors in the form of a check, which the Debtors cashed immediately. The Debtors further testified that they went by Attorney Clements’ office on the afternoon of September 18, 2007, and gave [338]*338the $1,200 to Attorney Clements’ secretary, a young white female of medium build, while Attorney Clements was present. The Debtors testified that they received a receipt for the $1,200, but they were not able to produce the receipt at the hearing because it had been misplaced.
Attorney Clements’ version of events differs markedly from the Debtors’. Attorney Clements testified that no payments were made to her or to her office prior to the filing of the Debtors’ bankruptcy petition. The Debtors’ voluntary chapter 13 bankruptcy petition, which was filed by Attorney Clements on October 5, 2007, supports Attorney Clements’ testimony. Attorney Clements’ Disclosure of Compensation, filed as part of the Debtors’ bankruptcy petition, supports Attorney Clements’ testimony because it certifies that Attorney Clements agreed to accept $850.00 as compensation for handling Debtors’ case and also certifies that Attorney Clements received no money from Debtors prepetition. The Debtors’ Statement of Financial Affairs, filed as part of the Debtors’ bankruptcy petition, also supports Attorney Clements’ testimony: Question 9 of the Debtors’ Statement of Financial Affairs requires the Debtors to list all prepetition payments related to debt counseling or bankruptcy; no payments were listed' — not the alleged $1,200 attorney fee, and not the $35 credit counseling fee. The Debtors’ plan, filed by Attorney Clements on October 5, 2007, is also consistent with Attorney Clements’ testimony: the plan listed total attorney fees at $850.00 and listed $0.00 as the amount of money paid by the Debtors prepetition. Unfortunately for Attorney Clements, this court will not be able to give these documents the weight they are normally given: The evidence shows that in this case, the Debtors never signed the petition, the schedules, or the chapter 13 plan.4

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Related

In Re Church
438 B.R. 334 (N.D. Alabama, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
438 B.R. 334, 2010 U.S. Dist. LEXIS 106071, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clements-v-early-alnd-2010.