In Re The Disciplinary Proceeding of Michael A Younge

• Court: District Court, C.D. California
• Decided: September 15, 2020
• Docket: 2:19-cv-06073
• Status: Unknown

Opinion

1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA—WESTERN DIVISION 10 CASE NO. 2:19-cv-06073-AB

11 In re: DISCIPLINARY PROCEEDING NO. 2:18-mp-00106-BR 12 THE DISCIPLINARY PROCEEDING OF MICHAEL A. YOUNGE 13 ORDER AFFIRMING IN PART AND 14 MICHAEL A. YOUNGE, REVERSING IN PART BANKRUPTCY DISCIPLINARY 15 PANEL’S ORDER AND Appellant, MEMORANDUM OF DECISION 16

17 vs.

18 UNITED STATES TRUSTEE, 19 REGION 16,

20 Appellee. 21 22 I. INTRODUCTION 23 Before the Court is attorney Michael A. Younge’s (“Appellant” or “Younge”) 24 appeal from the bankruptcy disciplinary panel’s (“Panel”) June 27, 2019 Order 25 Imposing Five Year Minimum Suspension of Michael A. Younge and accompanying 26 Memorandum of Decision (“BK Order,” ER1 125–26; “BK Mem.,” ER 102–07). 27

28 1 “ER” refers to Younge’s Excerpts of Record. (Dkt. Nos. 20-1 (Bates Nos. 1–135), 1 Younge filed his opening brief on February 13, 2020, (“AA Br.,” Dkt. No. 19), 2 followed by Peter C. Anderson, U.S. Trustee, (“Appellee” or “U.S. Trustee”) on April 3 28, 2020, (“AE Br.,” Dkt. No. 27). Younge did not file a reply. Having reviewed the 4 parties’ briefing and the record before the bankruptcy court, the Court AFFIRMS in 5 part and REVERSES in part the Panel’s June 27, 2019 order and accompanying 6 memorandum of decision. 7 II. BACKGROUND2 8 A. Younge’s Law Practice. 9 Younge has been member of the State Bar of California since 1994. See State 10 Bar of Cal., Att’y Licensee Profile, Michael Anthony Younge (No. 170929), 11 http://members.calbar.ca.gov/fal/Licensee/Detail/170929 (last visited Aug. 28, 2020)3. 12 Younge has employed his wife Amany Simmonds (“Simmonds”) as his legal assistant 13 since April 2015. (Tr. of Disciplinary Panel’s Proceedings (“Panel Tr.”), ER 169:10– 14 12). Prior to her employment with Younge, Simmonds did not have experience 15 performing substantive legal work. (See id. at 169:13–170:9). 16 Initially, Simmonds’s duties included taking notes at client meetings, assisting 17 with investigations, following up with clients, filling out forms, and serving papers. 18 (See id. at 161:4–8, 170:14–25). These days, Simmonds no longer has contact with 19 clients and her duties are limited to making copies and mailing documents. (See id. at 20 160:6–9, 161:4–12). 21 B. Younge’s Representation of Simmonds. 22 Younge represented Simmonds in four bankruptcy cases between 2011 and 23

24 20-2 (Bates Nos. 136–248)). 25 2 The background of this case is much more extensive. For purposes of this appeal, the Court only includes the relevant facts and procedural history. 26 3 On its own motion, the Court takes judicial notice of Younge’s State Bar profile. 27 See Johnson v. Alhambra & O Assocs., No. 2:19-cv-00103-JAM-DB, 2019 WL 2577306, at *1–2 (E.D. Cal. June 24, 2019) (taking judicial notice of plaintiff’s State 28 Bar profile). 1 2012 and in a fifth case in 2015 that was ongoing at the time of Younge’s alleged 2 misconduct. (See BK Findings,4 ER 18). Only one of those cases resulted in a 3 standard discharge under Chapter 7 in 2012. (Id.). The rest of the cases were 4 dismissed for various reasons; for instance, Simmonds’s fifth case under Chapter 13 5 was dismissed on August 13, 2018 due to her failure to make plan payments.5 (Id.). 6 C. Younge’s Representation of Singh. 7 Younge’s first client as an attorney was Surat Singh (“Singh”). (Panel Tr., ER 8 173:4–10). Since 1994, Younge has represented Singh in 10 to 12 different legal 9 transactions. (Id.). 10 On or about May 27, 2004, Singh secured a loan to purchase the property at 527 11 Westminster Avenue, Newport Beach, California (the “Property”). (SER6 465). 12 Bayview Loan Servicing, LLC (“Bayview”) was the servicing agent for the loan. (BK 13 Findings, ER 19). On July 20, 2017, Younge filed for Chapter 7 bankruptcy on 14 Singh’s behalf in the Central District of California. (See id.; SER 21). On August 8, 15 2017, Younge filed a related adversary proceeding raising several causes of action, 16 including fraud, wrongful disclosure, cancellation of foreclosure instruments, unjust 17 enrichment, and quiet title. (See SER 22, 621). The bankruptcy court dismissed 18 Singh’s adversary proceeding without leave to amend on November 9, 2017. (See id. 19 at 612–14). 20 On June 7, 2018, the bankruptcy court dismissed Singh’s Chapter 7 case with a 21

23 4 “BK Findings” refers to the Hon. Catherine E. Bauer’s Findings of Fact and Conclusions of Law in Support of the Order to Show Cause Referring Attorney 24 Michael A. Younge (SBN 170929) to the Disciplinary Panel for Bankruptcy Courts of the Central District of California issued on December 4, 2018. (ER 17–25). 25 5 The U.S. Trustee requests the Court take judicial notice of unspecified court documents regarding Simmonds’s fifth bankruptcy case. (See AE Br. 9 n.5). The 26 request is denied due to its lack of specificity and the fact that the parties’ excerpts of 27 record are sufficient for the Court to resolve this appeal. 6 “SER” refers to the U.S. Trustee’s Supplemental Excerpts of Record. (Dkt. No. 28 28 (Bates Nos. 1–699)). 1 bar on re-filing for bankruptcy for 180 days. (See id. at 34, 641–42). On June 25, 2 2018, the bankruptcy court granted Bayview’s motion for relief from the automatic 3 stay that had been preventing the foreclosure of the Property. (See id. at 35, 116–18). 4 Bayview promptly scheduled a foreclosure sale for July 23, 2018. (Id. at 454–55). 5 On July 6, 2018, Younge, on Singh’s behalf, filed an application for a 6 temporary restraining order (“TRO”) in California state court. (BK Findings, ER 20; 7 SER 454). Younge asked the court to enjoin the July 23, 2018 sale of the Property. 8 (SER 454–55). On July 9, 2018, the court denied Singh’s application. (BK Findings, 9 ER 20; SER 473). On July 18, 2018, Younge filed a second TRO application on 10 Singh’s behalf in state court, once again seeking to enjoin the foreclosure sale. (BK 11 Findings, ER 20). On July 19, 2018, the court denied Singh’s second TRO 12 application, noting that it was essentially a motion for reconsideration of the first TRO 13 decision. (Id.; SER 505). 14 D. Singh’s Transfer of the Property to Simmonds. 15 On July 20, 2018, Singh executed a quitclaim deed, gifting the Property to 16 Simmonds. (See SER 125). At the time of the transfer, Singh owed approximately 17 $1.7 million on the Property, which was only worth $1.2 million. (ER 59). The 18 transfer was performed without consideration and without the knowledge of the 19 bankruptcy court or Bayview. (See Statement of Cause, ER 4). Due to the automatic 20 stay in place in her ongoing bankruptcy case, Singh’s transfer prevented Bayview’s 21 foreclosure sale of the Property. (See BK Findings, ER 20). 22 According to Younge, Simmonds did not receive any material benefit from the 23 transfer. (ER 59). Younge also attested that he did not advise, counsel, or encourage 24 Singh to transfer the Property and that the transfer was performed without his 25 knowledge. (Id. at 58). Younge testified that he only found out about the transfer 26 when he called Singh a few days after the foreclosure sale was supposed to happen. 27 (Panel Tr., ER 197:10–198:17). Younge confronted Simmonds about the transfer 28 after the call. (See id. at 198:16–24). 1 On August 9, 2018, Bayview filed a motion for relief from the automatic stay 2 on the Property. (BK Findings, ER 19). Younge filed Simmonds’s opposition to 3 Bayview’s motion (the “Opposition”) on August 19, 2018. (Id. at 22; SER 355). 4 Younge argued the same points he had raised on behalf of Singh in his two TRO 5 applications and in the adversary proceeding complaint filed in bankruptcy court. 6 (See BK Findings, ER 22; SER 355–60). 7 On August 21, 2018, the bankruptcy court issued an Order to Show Cause 8 (“OSC”), ordering Simmonds to appear on August 29, 2018 and explain the basis for 9 the Property’s transfer. (SER 430). On August 22, 2018, the bankruptcy court 10 granted Bayview relief from the automatic stay. (Id. at 17). 11 On August 28, 2018, Younge filed a declaration on Simmonds’s behalf (the 12 “Declaration”) in connection with the OSC. (Id. at 158). In her Declaration, 13 Simmonds attested that she had known Singh for approximately three years. (Id. at 14 159). Simmonds was aware of Singh’s legal battles with various banks and agreed to 15 the transfer “for the sole purpose of assisting . . . Singh who is of ill health.” (Id. at 16 158–59). Simmonds sought to help Singh manage his Property and join in his 17 litigation as a co-plaintiff. (Id. at 159). If the Property had sold on July 23, 2018 as 18 scheduled, Simmonds contended she would not have had standing to join Singh’s 19 lawsuit. (Id.). Although Simmonds acknowledged that she was aware the transfer 20 may affect the foreclosure sale, she testified that such outcome was an unintended 21 consequence. (See id. at 160). Finally, Simmonds attested that “[e]ven if the 22 foreclosure sale was stopped, it would have been temporary” because her bankruptcy 23 case was scheduled to be dismissed on July 31, 2018. (Id. at 161). 24 On August 29, 2018, Younge appeared on behalf of Simmonds before the 25 bankruptcy court to explain the basis for the transfer of the Property. (See OSC Hr’g 26 Tr., ER 90). Simmonds’s testimony was consistent with her Declaration statements. 27 (See generally id. at 89–99). Simmonds added that Younge had introduced her to 28 Singh, that she was Younge’s wife and legal assistant, and that it was Singh’s idea to 1 transfer the Property to her. (Id. at 95:4–17). During the hearing, Judge Bauer 2 commented that the transfer was “outrageous” and “beyond the pale” and that she 3 would be referring Younge to the Panel. (Id. at 94:22–25). Ultimately, Judge Bauer 4 ordered the U.S. Trustee to draft an order to show cause why Younge should not be 5 referred to the court’s Panel and scheduled a follow-up hearing for October 10, 2018. 6 (See id. at 98:1–21). 7 E. The Bankruptcy Judge’s Referral to the Panel. 8 On December 4, 2018, Judge Bauer entered her Findings of Fact and 9 Conclusions of Law in which she concluded that Younge should be referred to the 10 Panel. (BK Findings, ER 24). On December 12, 2018, Judge Bauer issued a separate 11 Statement of Cause formally referring Younge to the Panel pursuant to the bankruptcy 12 court’s Fifth Amended General Order 96-05. (See Statement of Cause, ER 3–6). 13 Judge Bauer made several factual findings for the Panel’s review, including 14 that: (1) The sole purpose of the Property transfer was to hinder, delay, and frustrate 15 Bayview’s July 23, 2018 foreclosure sale; (2) Younge filed Simmonds’s Opposition 16 and Declaration without undertaking a reasonable inquiry into the circumstances and 17 for an improper purpose solely to harass, cause an unnecessary delay, and/or cause a 18 needless increase in the cost of litigation; (3) Younge was credible when he claimed 19 he was unaware that the Property would be transferred; (4) Younge failed to supervise 20 Simmonds by failing to monitor and oversee the surreptitious actions between Singh 21 and Simmonds with respect to the Property transfer; (5) in the Opposition, Younge 22 attempted to relitigate the same arguments that had already been rejected by state and 23 federal courts; and (6) Younge’s actions did in fact cause unnecessary delay and/or a 24 needless increase in the cost of litigation to Bayview. (See BK Findings, ER 21–23). 25 Based on these findings, Judge Bauer concluded that Younge violated Federal 26 Rule of Bankruptcy Procedure (“FRBP”) 9011 and California Rule of Professional 27 Conduct (“CRPC”) 3-110(A). (Id. at 24). Judge Bauer recommended that the Panel 28 prohibit Younge from practicing before the Central District’s Bankruptcy Court. 1 (Statement of Cause, ER 4). 2 F. The Panel’s Sanction. 3 Upon Judge Bauer’s referral under the Fifth Amended General Order 96-05, the 4 clerk of the bankruptcy court randomly selected bankruptcy Judges Barry Russell, 5 Robert N. Kwan, and Mark D. Houle to be part of the Panel. (See ER 50). After a 6 round of briefing, the Panel held a hearing on March 25, 2019. (Panel Tr., ER 136).7 7 During the hearing, Younge acknowledged that he was on probation with the State 8 Bar for failing to properly supervise Simmonds. (Id. at 161:13–162:4). 9 On June 27, 2019, the Panel issued its memorandum of decision. (See BK 10 Mem., ER 102–07). After reviewing Judge Bauer’s findings de novo, the Panel 11 adopted all of them with one exception.8 (Id. at 105). The Panel found Younge’s 12 claim that he was not involved in the Property’s transfer not credible and concluded 13 that he “was involved in and otherwise had knowledge of the transfer at the time it 14 was made.” (Id.). Based on those findings, the Panel unanimously suspended Younge 15 from practicing law before the U.S. Bankruptcy Court for the Central District of 16 California for a minimum of five years. (Id. at 105–06). The Panel further ordered 17 that to be reinstated, Younge would need to complete five hours of continuing legal 18 education on legal ethics. (Id. at 106). That same day, the Panel entered its formal 19 order imposing Younge’s suspension with conditions. (See BK Order, ER 125–26). 20 Younge filed this appeal on July 11, 2019. (See ER 129). 21

22 7 Bankruptcy Judge Neil W. Bason submitted a second statement of cause detailing an 23 additional basis to refer Younge to the Panel. (See ER 34). Judge Bason identified a basis for discipline related to Younge’s performance in a separate, unrelated 24 bankruptcy case. (See id.). Judge Bason alleged that in In re Morake (No. 2:17-bk- 15043-NB), Younge submitted incomprehensible, implausible, and unreliable 25 schedules, despite multiple opportunities to cure their deficiencies. (See ER 35). The Panel ultimately determined that the record concerning Judge Bason’s allegations was 26 too factually undeveloped to serve as a basis for discipline. (BK Mem., ER 106). 27 That finding is not before the Court on appeal. 8 Accordingly, in discussing the Panel’s findings, the Court will also cite the findings 28 from Judge Bauer that the Panel adopted. 1 III. LEGAL STANDARD 2 A district court may hear appeals from “final judgments, orders, and decrees” of 3 bankruptcy judges. 28 U.S.C. § 158(a). A bankruptcy court’s decision whether to 4 discipline an attorney is reviewed for abuse of discretion. See In re DeVille, 361 F.3d 5 539, 547 (9th Cir. 2004) (citation omitted). Courts apply a two-part test to determine 6 if the bankruptcy court abused its discretion: First, the Court determines de novo 7 whether the bankruptcy court identified the correct legal rule to apply for the relief 8 requested. See id. (citation omitted). Second, the Court examines the bankruptcy 9 court’s factual findings for clear error. See id. (citation omitted). 10 The bankruptcy court’s factual findings are affirmed unless the Court 11 determines that those findings are “(1) illogical, (2) implausible, or (3) without 12 support in inferences that may be drawn from the facts in the record.” In re Nguyen, 13 447 B.R. 268, 276 (B.A.P. 9th Cir. 2011) (internal quotation marks omitted). The 14 Court must accept the bankruptcy court’s findings of fact unless, “upon review, the 15 court is left with the definite and firm conviction that a mistake has been committed 16 by the bankruptcy judge.” In re Greene, 583 F.3d 614, 618 (9th Cir. 2009). If there 17 are multiple possible views of the evidence, the bankruptcy judge’s choice between 18 them cannot be clearly erroneous. See In re Marshall, 721 F.3d 1032, 1039 (9th Cir. 19 2013) (citation omitted). 20 IV. DISCUSSION 21 Younge seeks the Court’s review of five of the Panel’s findings of fact and 22 conclusions of law, including that: (1) He violated FRBP 9011; (2) he violated his 23 obligation to develop appropriate office procedures and to supervise law staff; (3) he 24 violated CRPC 3-110(A); (4) he was aware of the transfer of the Property prior to its 25 execution and participated in the transfer; and (5) the proper discipline for his 26 misconduct is a five-year suspension. (AA Br. 2). 27 To avoid duplicative analysis, the Court will first address Younge’s argument 28 that he did not violate FRBP 9011, followed by his argument that he did not violate 1 CRPC 3-110(A), and ending with an analysis of his five-year suspension. The Court’s 2 consideration of the second and fourth issues will overlap with its discussion of FRBP 3 9011 and CRPC 3-110(A). 4 A. The Panel Did Not Abuse Its Discretion in Concluding That Younge 5 Violated FRBP 9011. 6 The Panel concluded that Younge violated FRBP 9011 by filing the Opposition 7 and Simmonds’s Declaration in response to Bayview’s motion for relief from the 8 automatic stay. (BK Findings, ER 22–23). Specifically, the Panel found that Younge 9 filed both papers without a reasonable inquiry, for an improper purpose, and without a 10 legal basis. (See id.). 11 To begin, Younge does not dispute the Panel’s application of FRBP 9011(b) to 12 his conduct. (See AA Br. 9). Thus, the only issue before the Court on appeal is 13 whether the Panel clearly erred in applying FRBP 9011(b) to the facts. 14 FRBP 9011(b) provides that: 15 By presenting to the court (whether by signing, filing, submitting, or later 16 advocating) a petition, pleading, written motion, or other paper, an 17 attorney or unrepresented party is certifying that to the best of the 18 person’s knowledge, information, and belief, formed after an inquiry 19 reasonable under the circumstances,– 20 (1) it is not being presented for any improper purpose, such as to 21 harass or to cause unnecessary delay or needless increase in the cost of 22 litigation; 23 (2) the claims, defenses, and other legal contentions therein are 24 warranted by existing law or by a nonfrivolous argument for the 25 extension, modification, or reversal of existing law or the establishment 26 of new law . . . . 27 In analyzing the reasonableness of an attorney’s inquiry, courts apply an objective 28 standard and compare the conduct in question against that of a “competent attorney 1 admitted to practice before the involved court.” Valley Nat’l Bank of Ariz. v. Needler 2 (In re Grantham Bros.), 922 F.2d 1438, 1441 (9th Cir. 1991). 3 Younge argues that the Panel clearly erred in finding that he violated FRBP 4 9011. First, he contends that, as Judge Bauer originally found, he was not involved in 5 the transfer of the Property. (AA Br. 9–10). Second, he claims that he “made an 6 inquiry into the transfer to determine the effect on future litigation,” as required by the 7 Rule. (Id. at 10). He believed the transfer was reasonable and legal given that Singh 8 was severely sick and needed someone to continue litigating on his behalf. (Id. at 10– 9 11). Third, Younge argues that his filing of the Opposition and Declaration did not 10 cause a delay or needlessly increase the cost of the litigation. (Id. at 11). 11 The U.S. Trustee responds that the Panel’s findings were correct because 12 Younge’s filings reasserted arguments that had already been rejected by other courts. 13 (AE Br. 39–40). The U.S. Trustee also notes that Younge conceded at the disciplinary 14 hearing that he should not have filed the Opposition. (Id. at 40). 15 Younge’s arguments regarding the Panel’s FRBP 9011 findings are misplaced. 16 As a preliminary matter, FRBP 9011 applies to petitions, pleadings, written motions, 17 or other papers, which is why the Panel based its findings on Younge’s filing of the 18 Opposition and Declaration, rather than the fact of the transfer itself. (See BK 19 Findings, ER 22–23). Specifically, the Panel adopted Judge Bauer’s finding that those 20 papers made the same arguments already rejected by the state court—in denying 21 Singh’s applications for TRO—and federal court—in dismissing Singh’s adversary 22 proceeding. (See id. at 22). Younge’s argument that he considered the effect of the 23 transfer on future litigation is unavailing, because he fails to dispute the Panel’s 24 finding that he failed to make a reasonable inquiry into the propriety of relitigating the 25 same arguments he raised in past pleadings before the state and federal courts. Thus, 26 even if the Court agreed with Younge’s arguments regarding his knowledge of the 27 transfer, this undisputed finding serves as an independent basis for a violation of 28 FRBP 9011. 1 In addition, the Panel did not commit clear error to the extent it based its FRBP 2 9011 findings on Younge’s knowledge of the transfer before it occurred. First, 3 although Younge repeatedly points to Judge Bauer’s finding that he was not aware of 4 the transfer at the time it took place, (AA Br. 9–10, 17), the Court’s role on appeal is 5 to review the Panel’s findings rather than Judge Bauer’s. (See generally Notice of 6 Appeal and Statement of Election, Dkt. No. 1 (appealing the Panel’s order dated June 7 27, 2019); BK Mem., ER 105 (noting that the Panel reviewed the matter de novo)). 8 Second, Younge is incorrect that the Panel failed to identify the basis for its finding 9 that he was aware of and involved in the transfer. (See AA Br. 17). On the contrary, 10 in its order, the Panel explained that it reached this conclusion based on: 11 [The Court’s] extensive questioning . . . regarding, among other things, the 12 circumstances of the transfer, the practices of Mr. Younge’s office, Ms. 13 Simmonds’[s] training, a past office incident in 2017 involving an 14 improper action taken by Ms. Simmonds, and the relationships between 15 Mr. Singh, Mr. Younge, and Ms. Simmonds prior to and at the time of the 16 transfer. 17 (BK Mem., ER 105). 18 Third, the Panel’s finding that Younge knew of and was involved in the transfer 19 was not illogical, implausible, or without support in the record. It was not illogical, 20 for instance, for the Panel to question why Singh would go behind Younge’s back to 21 execute the transfer with Simmonds, even though Younge was his attorney on the 22 bankruptcy case. (See Panel Tr., ER 181:3–11). Younge’s version of events is even 23 more incredible because Singh had been seeking Younge’s legal advice since 1994, 24 whereas he had only known Simmonds, a legal assistant, since 2016 and had no 25 apparent connection to her. (See id. at 171:20–173:18, 176:19–177:9). Further, even 26 if Singh did not tell Younge about the transfer, it was equally if not more unlikely that 27 Simmonds would hide it from Younge, her husband and attorney, given that she had 28 an ongoing bankruptcy case and had also caused him to have a “very close call” with 1 the State Bar just the year before. (See id. at 176:3–10). When confronted by the 2 Panel about these inconsistencies, Younge’s responses were less than forthcoming. 3 (See id. at 179:13–180:11 (offering “I did not participate in this transfer” in response 4 to inconsistencies raised by the Panel); id. at 180:12–181:11 (responding “[t]hat’s my 5 testimony” after the Panel explained its incredulity)). 6 Although the transfer itself cannot serve as a basis for sanctions under FRBP 7 9011(b), the Panel did not err in finding that Younge’s involvement in it made his 8 filings all the more problematic. In other words, although Younge conceded that the 9 transfer was improper because it frustrated the foreclosure sale, (id. at 215:22–217:3), 10 he failed to cooperate with Bayview to allow the foreclosure sale to go forward 11 without additional litigation costs; instead, he assisted Simmonds with opposing 12 Bayview’s motion for relief. Younge contends that he was simply doing his job as 13 Simmonds’s attorney in filing the Opposition and Declaration. (AA Br. 12). But he 14 ignores that he also has a duty as an officer of the court to ensure that his papers are 15 supported by the law and facts. See In re Jones, 41 B.R. 263, 267 (Bankr. C.D. Cal. 16 1984) (“As an officer of the Court, attorneys owe an ethical duty to the judicial system 17 not to abuse it.”). Without such ethical boundaries, attorneys would be free to file 18 frivolous papers to satisfy even the most problematic of their clients’ whims. 19 Accordingly, the Court concludes that the Panel did not commit clear error in finding 20 that, because of his involvement in the transfer, Younge filed the Opposition and 21 Declaration for an improper purpose and without a legal basis. 22 Finally, the Panel did not clearly err in finding that Younge’s filings caused 23 unnecessary delay and needlessly increased the cost of the litigation. (See BK 24 Findings, ER 22–23). As previously discussed, Younge offers no persuasive reason 25 why it was appropriate to drag Bayview through yet another round of briefing in order 26 to foreclose on the Property. Instead, Younge argues that there was no delay at all 27 because Bayview’s motion for relief from stay was already set for hearing when he 28 filed the papers. (AA Br. 11). But Younge ignores that there are faster and less 1 expensive ways to resolve a motion short of hearing and decision. For instance, 2 Younge could have negotiated directly with Bayview to undo the problematic transfer 3 and schedule the foreclosure sale with as little further delay and expense as possible. 4 For these reasons, the Court affirms the Panel’s findings that Younge violated 5 FRBP 9011 by filing the Opposition and Simmonds’s Declaration. 6 B. The Panel Abused Its Discretion in Concluding That Younge Violated 7 CRPC 3-110 By Failing to Supervise Simmonds. 8 The Panel concluded that Younge violated CRPC 3-110 by failing to develop 9 appropriate office procedures and supervise Simmonds, his legal assistant. (See BK 10 Findings, ER 24). In addition, the Panel found that based on his disciplinary record, 11 Younge demonstrated a pattern and practice of failing to properly supervise law office 12 staff. (Id.). 13 1. The Panel Identified the Correct Legal Rule. 14 Younge argues that the Panel did not have the authority to apply CRPC 3-110 15 because only the State Bar can enforce its professional rules. (See AA Br. 16). In 16 addition, Younge contends that only a client can bring charges against him for failing 17 to act competently. (Id.). The U.S. Trustee responds that the bankruptcy court has 18 adopted California’s professional rules as the standards for its attorney members. (See 19 AE Br. 33–34). 20 Central District Local Bankruptcy Rule 2090-2(a) provides that “[a]n attorney 21 who appears for any purpose in this court is subject to the standards of professional 22 conduct set forth in Local Civil Rule 83-3.” Central District Local Civil Rule 83-3.1.2 23 adopts the California’s professional rules, including “the decisions of any court 24 applicable thereto,” as the standards of professional conduct for attorneys practicing in 25 the Central District. “[A]ny breach or violation thereof may be the basis for the 26 imposition of discipline.” C.D. Cal. Loc. Civ. R. 83-3.1.2. 27 At the time of the events in question, CRPC 3-110(A) provided that “[a] 28 member shall not intentionally, recklessly, or repeatedly fail to perform legal services 1 with competence.”9 This rule encompasses an attorney’s duty to supervise the work 2 of subordinate attorneys and non-attorney employees or agents. Cal. R. Pro. Conduct 3 3-110, Discussion (citing multiple California Supreme Court decisions). For example, 4 in Trousil v. State Bar of California, the California Supreme Court found that the 5 petitioning attorney had willfully breached his fiduciary duty where his secretary had 6 failed to promptly mail the client’s settlement check. 38 Cal. 3d 337, 342 (1985). The 7 court concluded that even if there was no deliberate wrongdoing, “where fiduciary 8 violations occur as a result of lapses in office procedure, they may be deemed 9 ‘wil[l]ful’ for disciplinary purposes.” Id. (citation omitted). 10 Because the Panel formulated the issue in question as whether Younge failed to 11 supervise his law staff, it correctly identified CRPC 3-110 as the legal rule to apply. 12 Contrary to Younge’s arguments that the Panel did not have the authority to apply 13 CRPC 3-110, the local rules of the bankruptcy and district courts clearly provide that a 14 violation of any of the California professional rules serves as a basis for discipline in 15 this district. See C.D. Cal. Bankr. Loc. R. 2090-2(a); C.D. Cal. Loc. Civ. R. 83-3.1.2. 16 Further, Younge cites no authority for his contention that only a client can assert a 17 violation of the California professional rules. Indeed, the relevant local rules give 18 bankruptcy judges the discretion to initiate disciplinary proceedings without a third 19 party complaint. See C.D. Cal. Bankr. Loc. R. 2090-2(b) (providing that bankruptcy 20 judges may refer attorneys to the court’s disciplinary panel if they have “cause to 21 believe” that they have engaged in unprofessional conduct); C.D. Cal. Loc. Civ. R. 22 83-3.1 (allowing judges to initiate disciplinary proceedings). 23 24

25 9 Younge’s alleged misconduct occurred prior to the State Bar’s amendments to its rules in November of 2018. See generally Cal. R. Pro. Conduct (amended 2018). The 26 Court will analyze his conduct pursuant to the Rules in place at the time of the events 27 in question. Accordingly, unless otherwise noted, the Court’s citations are to the 1992 version of the rules, which was in effect until 2018. See generally Cal. R. Pro. 28 Conduct (amended 1992). 1 2. The Panel’s Application of CRPC 3-110 Was Clearly Erroneous. 2 Younge argues that he did not violate FRBP 9011 because he did not authorize 3 or direct the transfer of the Property. (AA Br. 16). In support of his position, he 4 raises the same arguments concerning his knowledge of the transfer that the Court 5 already rejected in the previous section. (Id. at 17). He adds that the Panel’s finding 6 that he was aware of and participated in the transfer is inconsistent with the finding 7 that he failed to supervise Simmonds. (Id.). 8 The U.S. Trustee counters that Younge can be sanctioned for Simmonds’s 9 actions whether or not he was aware of the Property’s transfer. (See AE Br. 35, 37). 10 The U.S. Trustee also argues that even if Younge knew of the transfer, he can be 11 sanctioned under CRPC 3-110 because “[h]is awareness of the transfer simply made 12 the failure to supervise more egregious.” (Id. at 36 n.11). 13 The Court agrees with Younge’s argument regarding the consistency of the 14 Panel’s findings. The Panel’s finding that Younge was involved in the transfer 15 conflicts with its finding that he failed to properly supervise Simmonds by not 16 monitoring her “surreptitious” arrangement with Singh. (Compare BK Mem., ER 105 17 with BK Findings, ER 24). If Younge was involved in the transfer, then the Court 18 sees no basis to charge him with failing to supervise an employee who was on the 19 same page as him. In other words, Younge is directly responsible for the misconduct, 20 rather than vicariously through Simmonds. If the Panel wishes to sanction that direct 21 misconduct, it must find another basis to do so. 22 The outcome might be different if the Panel had only found that Younge was 23 aware of, but not involved in, the transfer. In that case, it would not be implausible to 24 conclude that Younge, being aware of the impending transfer, violated his duty to 25 supervise Simmonds by failing to prevent it. See Vaughn v. State Bar of Cal., 6 Cal. 26 3d 847, 857–59 (1972) (affirming discipline for attorney who failed to prevent 27 unethical acts by his staff). 28 Therefore, the Court concludes that the Panel abused its discretion in finding 1 that Younge violated CRPC 3-110 given the Panel’s factual findings. 2 C. The Panel Did Not Abuse Its Discretion In Determining Younge’s 3 Sanction. 4 Younge argues that the Panel’s decision to suspend him for five years is 5 excessive because its findings of fact are erroneous. (AA Br. 18). He acknowledges, 6 however, that the sanction would be appropriate if he had participated in the transfer. 7 (Id.). 8 In response, the U.S. Trustee argues that Younge essentially conceded that the 9 sanction is appropriate given that the Panel found he was involved in transferring the 10 Property. (AE Br. 41). In addition, the U.S. Trustee contends that the sanction is 11 reasonable based on Younge’s misconduct and his past disciplinary history. (Id.). 12 Namely, Younge was on probation with the State Bar at the time of the Property’s 13 transfer and his filing of the Opposition and Declaration. (Id. at 42). The U.S. 14 Trustee argues that the discipline imposed is closely tailored to protect litigants before 15 the bankruptcy court only, so Younge is still free to practice in other state and federal 16 courts. (Id.). 17 Younge does not dispute the Panel’s authority to suspend him from practicing 18 before the bankruptcy court or the fairness of the Panel’s proceedings. See In re 19 Brooks-Hamilton, 400 B.R. 238, 250–52 (B.A.P. 9th Cir. 2009), modified on other 20 grounds by In re Nguyen, 447 B.R. 268 (B.A.P. 9th Cir. 2011) (discussing the 21 appellant’s arguments concerning due process and the court’s authority to sanction). 22 Most importantly, Younge waives his reasonableness argument in the event the Court 23 affirms the Panel’s finding that he was aware of and involved in the transfer. Because 24 the Court affirms that finding, there are no other legal or factual issues related to the 25 propriety of his sanction for the Court to review on appeal. 26 On the other hand, the Panel may impose additional sanctions on Younge upon 27 reconsideration of its CRPC 3-110(A) findings on remand. If so, the Panel must 28 identify the authority for those additional sanctions. ] Accordingly, the Court affirms the Panel’s imposition of a five-year suspension 2 | for Younge’s misconduct. 3 Vv. CONCLUSION 4 ‘‘As reprehensible as is the conduct of a debtor who abuses the process, the 5 | assisting in this course of action by an attorney, represents a far more serious problem, 6 | because an attorney is involved in many cases other than merely the debtor’s.” Jn re 7 | Jones, 41 B.R. at 267. Regardless of what legal rules apply to Younge’s conduct, it 8 | was clearly unethical and unacceptable, especially for an experienced attorney like 9 | him. Younge has only himself to blame for the predicament he now faces; not 10 | Simmonds, Singh, Bayview, or the bankruptcy court. 11 For the foregoing reasons, the Court AFFIRMS in part and REVERSES in 12 | part the Panel’s order and accompanying memorandum of decision. Younge’s five- 13 | year suspension from practice in the Central District’s Bankruptcy Court stands. The 14 | case is REMANDED to the Panel to reconsider whether Younge committed 15 | additional ethical violations by his direct involvement in the transfer of the Property. 16 (sd □□ 18 | Dated: September 15, 2020 . 19 HONORABLE ANDRE BIROTTE JR. UNITED STATES DISTRICT COURT JUDGE CC: BK Court 22 23 24 25 26 27 28 17.