Commonwealth of VA ex rel. Va. State Bar v. Francis (In re Francis)

Decision Date01 December 2022
Docket Number22-11929-BFK,Adversary Proceeding 22-01008-BFK
CourtU.S. Bankruptcy Court — Eastern District of Virginia




No. 22-11929-BFK

Adversary Proceeding No. 22-01008-BFK

United States Bankruptcy Court, E.D. Virginia, Alexandria Division

December 1, 2022

Commonwealth of Virginia ex rel. Virginia State Bar Plaintiff.

Robert B. McEntee, Jr., Esq. Counsel for Plaintiff.

Ernest Paul Francis Pro se Defendant.


Honorable Brian F. Kenney United States Bankruptcy Judge.

This Opinion addresses whether costs assessed by the Virginia State Bar ("the State Bar") in a disciplinary proceeding against the Debtor, a former attorney, are excepted from the Debtor's discharge under Bankruptcy Code Section 523(a)(7). The Court finds that, with the exception of the State Bar's Administrative Fee, the costs are dischargeable. Accordingly, the Court will grant the Debtor partial summary judgment on Count I of the State Bar's Complaint, and will grant the State Bar partial summary judgment on Count I as to its Administrative Fee.

Uncontested Facts

The Court finds that the following facts are not genuinely contested.

1. The Plaintiff is the Virginia State Bar.

2. The Defendant, Ernest Paul Francis ("the Defendant," or "the Debtor"), was a member of the Virginia State Bar.


A. The Disciplinary Proceedings.

3. On January 12, 2021, the Defendant consented to a revocation of his license to practice law in the Commonwealth of Virginia, effective March 23, 2021. Complaint at Ex. A, 1, Docket No. 1; Answer at 1, Docket No. 18.

4. On January 14, 2021, the Clerk of the State Bar assessed costs against the Defendant pursuant to Part 6, Sec. IV, Rule 13-9(E) in connection with the disciplinary proceedings. Complaint at Ex. B; Answer at 2.

5. The costs are set forth in the Notification of Assessment of Costs as follows: Administrative Fee $1,000.00

Administrative Fee


Cert. Mailing Fees


Copying Invoices


Court Reporting Fees





6. In February 2021, the State Bar agreed to a payment plan with the Defendant. Complaint at Ex. C; Answer at 1.

7. Pursuant to the terms of the payment plan, the Defendant made two payments, totaling $1,664.00. The balance of the costs now stands at $3,297.98. Complaint at 3; Answer at 1.

B. The Defendant Files for Bankruptcy.

8. The Defendant filed a Voluntary Petition under Chapter 7 with this Court on November 24, 2021. Case No. 21-11929.


9. The Debtor received a discharge in his case on September 7, 2022, subject to any applicable exceptions. Docket No. 83.

10. The State Bar timely filed a Complaint commencing this adversary proceeding on February 25, 2022. Docket No. 1.

Conclusions of Law

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and the Order of Reference entered by the U.S. District Court for this District on August 15, 1984. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I) (determinations as the dischargeability of particular debts).[1]

Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Bankr.P. 7056 (incorporating Fed. R. Civ. Pro. 56(a)). The moving party has the initial burden of showing that there are no material facts in dispute, and that it is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986). When the moving party has met its initial burden, the burden then shifts to the nonmoving party to present specific facts demonstrating that there is a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-84 (1986). Whether a fact is material or not depends on the substantive law at issue in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Id.


Summary judgment "is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp., 477 U.S. at 327, quoting Fed.R.Civ.P. 1.

Section 523(a)(7) provides an exception to the debtor's discharge for debts "to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss[.]" 11 U.S.C. § 523(a)(7). The State Bar is an administrative agency of the Virginia Supreme Court. Va. Code § 54.1-2910. The Debtor does not contest that the State Bar is a governmental unit. The Court, therefore, will address the other two elements of: (a) whether the debt is a "fine, penalty or forfeiture;" and (b) whether the debt is "compensation for actual pecuniary loss." 11 U.S.C. § 523 (a)(7).

The State Bar's Complaint contains two Counts. Complaint, Docket No. 1. Count I is a claim for a declaration of non-dischargeability as to the State Bar's costs. Id. at 2. Count II is a claim for a declaration of non-dischargeability for funds paid to one of the Debtor's former clients under the Client Protection Fund. Id. at 3-4. At the hearing on November 15, 2022, counsel for the State Bar advised the Court that the State Bar could not locate the former client and, therefore, had not paid anything to the former client. Counsel for the State Bar advised the Court that the State Bar would be seeking a dismissal of Count II under Bankruptcy Rule 7041. Accordingly, this Opinion addresses only the costs assessed by the State Bar in connection with the Debtor's disciplinary proceedings. The Court does not address the dischargeability of funds paid by the State Bar pursuant to the Client Protection Fund, a subject about which there is some disagreement in the case law. Compare Kassas v. State Bar of California (In re Kassas), 49 F.4th 1158 (9th Cir. 2022) (holding client protection fund payments to be dischargeable), with In re Young,


577 B.R. 227 (Bankr. W.D. Va. 2017) (holding client protection fund debt non-dischargeable).

The Court will address the remaining two elements of non-dischargeability under § 523(a)(7), below.

I. Whether the Costs Assessed Are a "Fine, Penalty, or Forfeiture."

The Court will first address whether the costs assessed are a fine, penalty, or forfeiture. In Virginia, the Clerk is required to assess costs against attorneys against whom discipline is imposed or who consent to a revocation. Virginia State Bar Professional Guidelines, 13-9 Clerk of the Disciplinary System (2019), The term "costs" is defined as follows:

"Costs" means reasonable costs paid by the Bar to outside experts, consultants, or guardians ad litem in a proceeding conducted pursuant to subparagraph 13-22; reasonable travel and out-of-pocket expenses for witnesses; Court Reporter and transcript fees; electronic and telephone conferencing and recording costs, if such procedures are requested by Respondent; copying, mailing, and required publication costs; translator fees; and an administrative charge determined by Council.

Virginia State Bar Professional Guidelines, 13-1 Definitions (2021),

In Kelly v. Robinson, the Supreme Court held that restitution obligations imposed as a part of a criminal sentence constitute fines, penalties, or forfeitures, and are not dischargeable under § 523(a)(7). 479 U.S. 36 (1986). The Court was primarily concerned with non-interference by bankruptcy courts...

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