In re Zarco

507 B.R. 247, 2014 WL 1202570, 2014 Bankr. LEXIS 1207
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedMarch 25, 2014
DocketNo. 13 B 25463
StatusPublished
Cited by1 cases

This text of 507 B.R. 247 (In re Zarco) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Zarco, 507 B.R. 247, 2014 WL 1202570, 2014 Bankr. LEXIS 1207 (Ill. 2014).

Opinion

Order Sanctioning Attorney Richard G. Fonfrias

JACQUELINE P. COX, Bankruptcy Judge.

I. Facts and Background

On June 20, 2013 (“Petition Date”), Debtor, Daniel Adam Zarco, Sr. (“Debt- or”), sought bankruptcy relief under Chapter 7 of the Bankruptcy Code. Debtor’s attorney Richard G. Fonfrias has filed three motions for damages herein. On July 1, 2013, he filed a Motion for Damages (“Motion or First Motion”). Docket No. 13.

The Debtor’s bank account at J.P. Morgan Chase (“Chase”) was frozen prepetition after an entity known as Rapid Advance obtained a judgment against him and his business, Toro Builders Corporation. The Debtor complained in the Motion that Rapid Advance’s attorney Patrick Siegfried violated the automatic stay by not releasing Rapid Advance’s prepetition levy on the frozen bank account once bankruptcy protection was sought. The Notice of Motion, as well as a July 8, 2013 Amended Notice of Motion at docket number 15, indicates that Attorney Patrick Siegfried was served at a Bethesda, Mary[249]*249land address and via fax and that Rapid Advance was served at a Bethesda, Maryland address and via fax. There is no indication that the First Motion was served on Chase. The Debtor asked that notice of his Motion be shortened “due to the urgency of needing his bank a[sic] account unfrozen.” Docket No. 13, ¶ 19. The proposed order filed with the Motion asked that the court grant the following relief: compel Attorney Patrick Siegfried to release the levy on Debtor’s personal checking account at Chase; that Attorney Patrick Siegfried be ordered to pay $6000 to Debtor for damages and for such other and further relief as the Court deemed fair and just. See Proposed Order, Docket No. 13.

On July 10, 2013, Mr. Fonfrias filed a second Motion for Damages (“Second Motion”) which sought an order compelling Chase to release the levy and an assessment of actual and punitive damages against Chase. Docket No. 16.

The Notice of Motion filed with the July 10, 2013 Second Motion indicates that two entities were served: Attorney Patrick Siegfried, via fax and Chase at two addresses and at a fax number. See Docket Number 16. No officer or employee of Chase was identified as having received notice of the Second Motion. During a hearing on July 16, 2013, this Court raised concerns that no person at Chase had been served and suggested that Chase’s Chief Executive Officer Jamie Dimon could be served. July 16, 2013 Transcript, p. 4. The Court suggested that an actual person at Chase be served. Id. at 6. The matter was continued to July 23, 2013. Review of the court docket on July 23, 2013 revealed that nothing had been filed indicating that a person at Chase had been served. Neither Mr. Fonfrias nor the Debtor appeared in court on July 23, 2013. See July 23, 2013 Transcript, p. 2.

The matter was continued to July 25, 2013. On July 25, 2013, Attorney Fonfrias directed the Court’s attention to an Amended Notice of Motion, Docket No. 23, filed on July 25. However, that document was also suspect. It indicated that Amanda McCloud had been served at Court Orders & Levies at Chase, without indicating whether she was an agent or officer at Chase. In addition, it stated that it had been mailed on July 10, 2013, prior to this Court’s July 16, 2013 suggestion that the Motion be renoticed. The Court suggested that Mr. Fonfrias renot-ice the matter for August 1, 2013 and file a proof of service. See July 25, 2013 Transcript, p. 3.

On July 25, 2013, an additional Amended Notice of Motion was filed at Docket No. 25. The docketed copy of that pleading does not include a statement indicating when or if it was served. In addition, it fails to indicate whether Amanda McCloud was an agent or officer of Chase.

On August 1, 2013, the Court again suggested serving Mr. Dimon. The Court asked Attorney Toni Dillon, who often represents Chase, to find out if Chase had notice of the Motion. The matter was reset to August 20, 2013.

On August 20, 2013, Ms. Dillon had no information regarding this matter. Mr. Fonfrias did not appear in court on August 20, 2013; the Motion was stricken. See Order at Docket No. 28 striking the Second Motion for Damages.

On August 22, 2013, Mr. Fonfrias filed a Third Motion for Damages (“Third Motion”), complaining of the same situation; it was set for hearing on September 12, 2013. See Docket No. 29. The Third Motion included much of what the First and Second Motions alleged. It sought an order compelling Chase to release the levy on the Debtor’s personal banking account [250]*250and an assessment of actual and punitive damages against Chase. The First Motion had not been resolved.

On September 12, 2013, Attorney Kevin Driscoll appeared on behalf of Chase. He pointed out that while Mr. Fonfrias was trying to access $10,000 from the Chase account in issue, the Debtor’s schedules indicated that there was no money in the account and that the Debtor did not claim an exemption in the funds in the account. Review of the Debtor’s initial petition for relief, at Schedule C, Property Claimed As Exempt, reveals that the Debtor did not exempt the funds in the account. The Debtor’s Schedule B of Personal Property indicated that the account had no funds in it. See Docket No. 1, pp. 9-12. The Debt- or filed Amended Schedules B and C on September 20, 2013, disclosing $8,647.10 in the account and claiming an exemption in those funds. See Docket No. 37. Attorney Driscoll also reported that the account had $10,000 in it on the Petition Date. He also reported that the funds in the account were held pursuant to a garnishment proceeding and that because this is a chapter 7 case, the funds belong to the chapter 7 trustee. The Third Motion for Sanctions was denied on September 12, 2013. Order at Docket No. 31.

II. Discussion

Federal Rule of Bankruptcy Procedure 9014 requires that when relief is requested by motion that the party against whom relief is being sought be given reasonable notice and an opportunity for hearing. Subdivision (b) of F.R.B.P. 9014 provides that motions shall be served in the manner provided for service of a summons and complaint by F.R.B.P. 7004. F.R.B.P. 7004(b)(3) provides that a domestic or foreign corporation may be served by mailing a summons and complaint to the attention of an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process. Mr. Fonfrias should have served the first two motions on Chase through one of its officers or agents.

Local Bankruptcy Rule 9013 — 1(A)(3) requires that motions be properly served on all parties in interest. Since each motion sought relief regarding Chase, Chase should have been served as an interested party.

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Cite This Page — Counsel Stack

Bluebook (online)
507 B.R. 247, 2014 WL 1202570, 2014 Bankr. LEXIS 1207, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-zarco-ilnb-2014.