Sheridan v. Michels (In Re Disciplinary Proceedings)

282 B.R. 79, 2002 Bankr. LEXIS 878
CourtBankruptcy Appellate Panel of the First Circuit
DecidedAugust 16, 2002
DocketBAP Nos. NH 01-076, NH 02-005. Adversary No. 00-1140-JMD
StatusPublished
Cited by9 cases

This text of 282 B.R. 79 (Sheridan v. Michels (In Re Disciplinary Proceedings)) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sheridan v. Michels (In Re Disciplinary Proceedings), 282 B.R. 79, 2002 Bankr. LEXIS 878 (bap1 2002).

Opinion

OPINION

PER CURIAM.

INTRODUCTION

This matter comes before us on consolidated appeals from two orders of the United States Bankruptcy Court for the District of New Hampshire (the “Bankruptcy Court”). The first (the “Suspension Order”) suspended the Appellant, William C. Sheridan (“Sheridan”), from practicing law before the Bankruptcy Court for a period of one (1) year. The second (the “Fee Order”) awarded fees and costs incurred by special counsel, Nancy H. Michels (“Special Counsel”), in investigating and prosecuting the disciplinary action. The Bankruptcy Court entered the Suspension Order after trial, having found that Sheridan had committed at least eighty-eight (88) violations of New Hampshire Rules of Professional Conduct (“NHRPC”) 1.1 and 1.15 while serving as counsel for various debtors in bankruptcy cases. Sheridan argues, among other things, that the Bankruptcy Court did not have jurisdiction to commence a disciplinary investigation against him or to suspend him from practice. As to the Fee Order, Sheridan argues that Special Counsel’s fees and expenses were unreasonable, that the Bankruptcy Court lacked authority to make the award, and that it could not properly condition his reinstatement on payment (or, more accurately, reimbursement) of the award.

For the reasons set forth below, we affirm.

BACKGROUND

On June 21, 2000, the Bankruptcy Court, through Chief Judge Vaughn, appointed Special Counsel to investigate Sheridan’s possible violation of NHRPC Rules 1.1 and 1.15. As a result of her investigation, on September 20, 2000, she submitted a report to Judge Vaughn recommending that a disciplinary proceeding be initiated. Judge Vaughn granted Special Counsel leave to institute the proceeding. On October 30, 2000, she filed an adversary proceeding complaint requesting that Sheridan be disciplined. Prior to trial, the parties entered into a stipulation in which Sheridan admitted many of the complaint’s factual allegations.

A. The Suspension Order.

On October 12, 2001, several months following trial, the Bankruptcy Court issued its order suspending Sheridan from practicing before the Bankruptcy Court for a period of one (1) year. The Bankruptcy Court found that during a twenty (20) month period between January 13, 1999 and September 29, 2000, Sheridan committed at least eighty-eight (88) violations of NHRPC. 1.1 and 1.15. 1 See Mi- *83 chels v. Sheridan, 2001 WL 1757058, *23, 2001 Bankr.LEXIS 1383, *69 (Bankr.D.N.H.2001). The violations included (i) failure to file certificates of service for Chapter 13 plans, (ii) failure to file answers to motions to dismiss or convert, (iii) failure to timely file documents, (iv) failure to properly review and advise a client regarding a reaffirmation agreement, (v) failure to pay proper attention to details, (vi) failure to segregate clients’ property from his own, (vii) failure to keep proper records, and (viii) failure to notify the client and deliver to the client property that the client was entitled to receive. These violations involved thirty (30) clients in thirty-three (33) separate cases, plus at least five (5) additional infractions committed during the course of the disciplinary proceeding. 2 The Bankruptcy Court found that Sheridan had demonstrated a continuing unwillingness or inability to competently provide services to his clients and meet his professional obbgations. Id. at *23. The Bankruptcy Court also noted Sheridan had admitted allegations which “at best show a repeated pattern of conduct involving inattention to and neglect in handling client matters.” Id. at *23. Accordingly, the Bankruptcy Court determined it was necessary to impose sanctions.

In fixing the appropriate sanctions, the Bankruptcy Court concluded that, due to Sheridan’s pattern of repeated violations of his obligation to handle client matters competently as required by NHRPC 1.1, he had demonstrated that he was not currently fit to practice law in the Bankruptcy Court, and that he was not immediately capable of improving his conduct. Id. Accordingly, in order to protect the public and the administration of justice, the Bankruptcy Court suspended Sheridan from practicing law before it for a period *84 of one (1) year. 3

The Bankruptcy Court also ordered that prior to Sheridan’s reinstatement, application for which could not be made any sooner than after six (6) months, Sheridan would be required to establish that (i) he is a member in good standing of the bar of the United States District Court for the District of New Hampshire (the “District Court”), (ii) he will be able to competently represent the interests of his clients before the Bankruptcy Court, and (iii) he has reimbursed the government for the cost of the proceedings by paying to the Clerk of the District Court the amount of fees and expenses awarded to Special Counsel. Id. at *24. The Bankruptcy Court authorized Special Counsel to submit an application seeking payment of fees and expenses earned and incurred in the course of her service.

Subsequently, Sheridan filed three separate motions for reconsideration, primarily arguing that the Bankruptcy Court did not have jurisdiction to hear the matter and that the Suspension Order violated the Rehabilitation Act and the Americans with Disabilities Act because the Bankruptcy Court premised its finding of professional misconduct on conduct arising out of Sheridan’s alleged disability. The Bankruptcy Court denied each of the three motions.

B. Fee Order.

Consistent with the Bankruptcy Court’s directions, Special Counsel filed her Final Application For Approval Of Fees Pursuant To Court Order (the “Fee Application”), seeking $30,377.50 in fees and expenses for work performed by her and others in her firm in connection with the disciplinary proceeding. Appended was a detailed statement setting forth the services rendered and the hours spent on the case. On November 29, 2001, the day of the hearing on the Fee Application, Sheridan filed a late objection, 4 arguing, among other things, that the Bankruptcy Court lacked jurisdiction to enter a fee award and that Special Counsel’s fees were unreasonable.

On December 27, 2001, the Bankruptcy Court entered the Fee Order. It rejected Sheridan’s jurisdictional argument, noting that Sheridan was rehashing the same arguments as he had previously raised in opposition to the Suspension Order. It concluded that Special Counsel’s fees were reasonable, awarding her fees and expenses totaling $30,377.50. 5

On January 8, 2002, the Bankruptcy Court entered a supplemental order directing the Clerk to pay the approved fees to Special Counsel as follows: two payments in the amount of $10,125.83 each, payable on or before March 1, 2002 and *85 June 1, 2002 and a final payment in the amount of $10,125.84 payable on or before September 1, 2002.

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Bluebook (online)
282 B.R. 79, 2002 Bankr. LEXIS 878, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sheridan-v-michels-in-re-disciplinary-proceedings-bap1-2002.