In re Farris

598 B.R. 411
CourtUnited States Bankruptcy Court, W.D. Louisiana
DecidedFebruary 26, 2019
DocketCase Number: 15-11522
StatusPublished
Cited by2 cases

This text of 598 B.R. 411 (In re Farris) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Farris, 598 B.R. 411 (La. 2019).

Opinion

JOHN S. HODGE, UNITED STATES BANKRUPTCY JUDGE

Before the Court is a motion filed by the United States Trustee (the "UST Motion ") seeking to disgorge fees from, and impose fines on, bankruptcy petition preparer ("BPP ") Cheynita Sneed1 for violations of 11 U.S.C. § 110. (Doc. 63). The Court held an evidentiary hearing on the UST Motion on January 9, 2019. Testimony was given by Ms. Sneed and the debtor, Diane Stokes Farris ("Debtor "). The United States Trustee ("UST ") was represented by counsel, Richard Drew. Ms. Sneed appeared pro se . Subsequent to the hearing, Ms. Sneed and Mr. Drew submitted proposed findings of fact and conclusions of law. (Doc. 72, 73).

*414After due consideration of the parties' arguments, testimony and briefing, for the reasons set forth more fully hereinafter, the Court GRANTS the UST Motion, and ORDERS Ms. Sneed to forfeit the $ 200.00 paid to her by Debtor, and FURTHER ORDERS that Ms. Sneed be fined $ 250.00 for each of her three violations of § 110, for an aggregate fine of $ 750.00, payable to the United States Trustee. The Court FURTHER ORDERS that Ms. Sneed is liable unto Debtor for statutory damages in the amount of $ 2,000.00.

I. Jurisdiction, Venue, Core Status and Authority to Enter Final Order

This Court has jurisdiction over the motions pursuant to 28 U.S.C. § 1334 and by virtue of the reference by the district court pursuant to 28 U.S.C. § 157(a) and LR 83.4.1. Venue is proper pursuant to 28 U.S.C. § 1409. All claims presented to this Court are "core" pursuant to 28 U.S.C. § 157 (b)(2)(A). Gould v. Clippard , 340 B.R. 861, 869 (M.D. Tenn. 2006) (holding that "all Section 110 matters are core proceedings because such matters arise in Title 11."). As one court has held, "there can be no more fundamental exercise of core subject matter jurisdiction by the bankruptcy court than its policing of professionals, such as bankruptcy petition preparers (BPP), whom debtors pay to render services in connection with their cases." In re Douglas , 304 B.R. 223, 232 (Bankr. D. Md. 2003).2

This Court has an independent duty to evaluate whether it has the constitutional authority to enter a final order. The Supreme Court's ruling in Stern v. Marshall, 564 U.S. 462, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), sets forth certain limitations on the constitutional authority of bankruptcy courts to enter final orders. BP RE, L.P. v. RML Waxahachie Dodge, L.L.C., 735 F.3d 279, 286 (5th Cir.2013) (" 'the question is whether the action at issue stems from the bankruptcy itself or would necessarily be resolved in the claims allowance process.' ") (quoting Stern, 564 U.S. at 499, 131 S.Ct. 2594 ). Thus, under Stern , in addition to determining whether each claim is core or non-core, this Court must also determine whether the underlying issue "stems from the bankruptcy itself or it would necessarily be resolved in the claims allowance process." BP RE, 735 F.3d at 286. Absent both statutory and constitutional authority, this Court may not enter a final order, and instead must issue proposed findings of fact and conclusions of law to be considered by the district court.

The matter at bar requires this Court to issue rulings on a motion to disgorge fees and for statutory fines pursuant to the bankruptcy petition preparer statute, which solely concerns federal bankruptcy law. See 11 U.S.C. § 110. Therefore, there are no Stern issues in this case. This Court holds that it has the constitutional and statutory authority to enter a final order or judgment with respect to the matters at bar. In re Wilson-Seafresh, Inc ., 263 B.R. 624, 630 (Bankr. N.D. Fla. 2001) ("While the Bankruptcy Code itself makes no mention of disgorgement of fees, case law clearly recognizes the authority of the bankruptcy court to order the disgorgement of fees under various situations."). Indeed, as the court held in In re Douglas , "when a complaint of misconduct is brought in the bankruptcy court against a professional such as a BPP by the Office *415of the United States Trustee, which is statutorily charged with monitoring the bankruptcy system for the public good, it is obvious that the court has the subject matter jurisdiction to hear and determine it ... any assertion to the contrary is nonsense." 304 B.R. 223, 232 (Bankr. D. Md. 2003) ; see also In re Gross , 2009 WL 2882828 (Bankr. E.D. Va. 2009) (holding that the imposition of sanctions on a BPP is a core proceeding).

II. Findings of Fact

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Bluebook (online)
598 B.R. 411, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-farris-lawb-2019.