Young v. Young (In re Young)

Summarized by Bruce Weiner , Rosenberg, Musso & Weiner
11 years 11 months ago

Citation:

2014 WL 944846

Tag(s):

Ruling:

The 8th Circuit BAP affirmed the Bankruptcy Court's imposition of sanctions pursuant to Rule 9011, but reversed the imposition of sanctions under the Bankruptcy Court's inherent powers, holding that counsel did not have notice and an opportunity to a hearing on that issue. The sanctions included a $1000 fine, a six month suspension from practice, and the requirement to take 12 hours of CLE. Debtor's counsel had submitted documents that misrepresented that the Debtor was current with his post-petition domestic support obligations. All chapter 13 debtors are required to be current on those obligations before a plan can be confirmed. The BAP held that the Bankruptcy Court had the authority on its own pursuant to Rule 9011(c)(1)(B) to sanction Debtor's counsel, but could not use the court's inherent powers to independently sanction counsel because counsel was not given sufficient notice and an opportunity to be heard. Although the decision was reversed in part, all of the Rule 9011 sanctions were affirmed.

Procedural context:

Appeal from the United States Bankruptcy Court for the Western District of Arkansas.

Facts:

Debtor owed alimony to his ex-wife. He filed several chapter 13 plans to pay the alimony. In support of his third modified plan, his counsel submitted documents that stated that he was current on his post-petition obligations. That was false. The Court issued an order to show cause as to why the case should not be dismissed and why counsel should not be sanctioned. The bankruptcy court found that counsel had made misrepresentations both in submitting documents and at the hearing on the OSC. The Bankruptcy Court sanctioned counsel both under Rule 9011 and its inherent powers. The sanctions included a $1000 fine, a six month suspension, and the directions to take 12 hours of CLE

Judge(s):

Kressel, Schermer, and Shodeen

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