In re Smith

462 B.R. 783, 2011 Bankr. LEXIS 4252, 2011 WL 5239691
CourtUnited States Bankruptcy Court, D. Nevada
DecidedOctober 28, 2011
DocketNo. BK-S-11-16383-BAM
StatusPublished
Cited by1 cases

This text of 462 B.R. 783 (In re Smith) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Smith, 462 B.R. 783, 2011 Bankr. LEXIS 4252, 2011 WL 5239691 (Nev. 2011).

Opinion

OPINION SANCTIONING GWYNNE R. DUMBRIGUE1

BRUCE A. MARKELL, Bankruptcy Judge.

I. FACTS

A. The Marsh Case

The court first became aware of attorney Gwynne R. Dumbrigue’s (“Dum-brigue”) failings through a letter sent to the court by one of his clients. Milissa Michelle Marsh (“Marsh”), a bankruptcy debtor in another chapter 7 case,2 wrote to the court and relayed certain deficiencies in the representation provided by Dum-brigue. On February 10, 2009, Marsh’s bankruptcy case had been closed without discharge because the required form regarding completion of a post-petition -personal financial management course was never filed. In her letter to the court, Marsh alleged that this failing was Dum-brigue’s alone. Marsh claimed that before the clerk closed her case without issuing a discharge, she had completed the required class and given the required documentation to Dumbrigue to file with the court. Despite Marsh’s repeated requests, Dum-brigue failed to file the certificate as required. Once Marsh learned that her case was closed without discharge, she contacted Dumbrigue again. Dumbrigue assured Marsh that he would resolve the issue. She went on with her life assuming that Dumbrigue had done what he said he would and that she had received her discharge.

When Marsh began receiving collection letters for debts she thought had been discharged, she suspected Dumbrigue had failed to file the certificate as he was supposed to. In the spring of 2010, she repeatedly attempted to contact Dumbrigue. She finally received a voice mail from him, stating that he was working on the matter and would resolve it within a week. Like all of Dumbrigue’s previous representations to Marsh, this proved untrue. No action had been taken in Marsh’s case since February 2009, when it was closed without discharge. Worse, it was not until Marsh contacted the bankruptcy court the end of July 2010 that she discovered this fact.

Confronted with continued and purposeful deception by her attorney, Marsh contacted the court directly. In an email which the court ordered placed on the docket in her case, she detailed Dum-brigue’s failings and requested relief. In response, the court set a hearing for September 9, 2010 to determine whether Dumbrigue should be ordered to disgorge the fees he received from Marsh pursuant to Section 329(b). Marsh appeared on her own behalf. Dumbrigue failed to appear. After listening to Marsh’s account of Dum-brigue’s conduct, the court determined that the services rendered by Dumbrigue [787]*787to Marsh were so utterly inadequate that they were of no value to Marsh, as Dum-brigue’s actions had deprived Marsh of the central benefit of her chapter 7 bankruptcy, and had unnecessarily exposed her to dunning creditors. The court ordered Dumbrigue to disgorge all fees Marsh paid him by October 7, 2010 and to file proof of compliance by October 14, 2010.3 The court explicitly placed Dumbrigue on notice that failure to timely file the required proof of compliance could result in a finding that Dumbrigue was in contempt of court and could lead to further sanctions against him.

1. Dumbrigue Fails to Comply with the Order to Disgorge Fees

Dumbrigue failed to file the required proof of compliance by October 14. The court ordered him to appear and show cause why he should not be held in contempt of court. Dumbrigue responded to the court’s order, admitting that he had failed to repay Marsh. He alleged that he was unable to comply with the order because he lacked the funds to do so. He claimed he was waiting for family members from overseas to wire money to him, which finally occurred on the afternoon of November 5, 2010. Dumbrigue further alleged that he would comply with the court’s order by the time the court held the hearing on its order to show cause.

The court held the hearing on November 8, 2010. At the hearing, the court determined that Dumbrigue had in fact tendered repayment of all funds to Marsh via cashier’s check. After considering all of the relevant factors then known, the court found that Dumbrigue had failed to properly manage his time and his practice. The court ordered him to complete a total of six hours of continuing legal education (“CLE”) classes, of which at least half were to have time management or case management as their subject. The November 12, 2010 order specified that the classes were to be taken in an in-person, classroom setting and set a March 31, 2011 deadline for Dumbrigue to file proof of completion. The required proof of completion was to consist of: (1) a declaration detailing the subject, time, instructor, and number of credits earned for each of the classes taken; and (2) evidence of completion in the form of a certificate of completion signed by the course instructor or an attendance sign-off signed by the course instructor.

Because of Dumbrigue’s history of failing to comply with court orders, the court also provided that additional sanctions would be immediately implemented if Dumbrigue failed to comply with any of the above requirements. Specifically, the order provided that if Dumbrigue failed to complete the required classes or to timely or properly file the required proof of completion, the court would immediately enter an order barring Dumbrigue from filing new bankruptcy cases in the United States Bankruptcy Court, District of Nevada. This suspension was to last until such time as he had complied with the court’s order and for such additional time as the court deemed a proper sanction for his continued and repeated disregard of court orders.

2. Dumbrigue does not Complete the Required CLE Classes

Regrettably, Dumbrigue failed to comply with the court’s order. As it stated it would, the court entered an order on April 6, 2011, implementing the additional sanctions. Dumbrigue was barred from filing any new bankruptcy cases in the United States Bankruptcy Court, District of Neva[788]*788da until such time as he complied with the court’s previous order requiring him to complete continuing legal education classes. Furthermore, the court barred Dumbrigue from filing new cases for an additional three months as a penalty for his noncompliance, such penalty period to begin once he filed the required proof of completion. The order also provided Dumbrigue an opportunity to seek relief from the penalty period upon a sufficient showing of mitigating circumstances. The order did not affect Dumbrigue’s ability to use the court’s Case Management and Electronic Filing System (“ECF”) to file documents in other cases he filed prior to the order’s entry.

B. The Smith Case

Notwithstanding' the court’s April 6, 2011 order barring him from filing new cases, Dumbrigue filed a voluntary petition on behalf of Jessie Lynne Smith (“Smith”) on April 27, 2011. The petition was filed using Dumbrigue’s ECF credentials and thus he was listed as Smith’s attorney of record.4 However, attorney Eric P. Roy’s (“Roy”) electronic signature appeared on the filed petition.5 There was no explanation for this discrepancy filed with the petition.

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In Re Spickelmier
469 B.R. 903 (D. Nevada, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
462 B.R. 783, 2011 Bankr. LEXIS 4252, 2011 WL 5239691, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-smith-nvb-2011.