Dignity Health v. Seare (In re Seare)

Decision Date10 April 2013
Docket NumberBankruptcy No. BK–S–12–12173–BAM.,Adversary No. 12–01108–BAM.
Citation493 B.R. 158
PartiesIn re Wayne A. SEARE, a/k/a Wayne Andrew Seare; and Marinette Tedoco, a/k/a Marinette Morales Tedoco, Marinette Fitzpatrick, Debtors. Dignity Health, f/k/a Catholic Healthcare West, d/b/a St. Rose Dominican Health Foundation, Plaintiff, v. Wayne A. Seare, Defendant.
CourtU.S. Bankruptcy Court — District of Nevada

OPINION TEXT STARTS HERE

Kurt R. Bonds, Alverson, Taylor, Mortensen, Las Vegas, NV, for Plaintiff.

Anthony Deluca, Las Vegas, NV, for Defendant.

OPINION SANCTIONING ATTORNEY ANTHONY J. DELUCA FOR FAILING TO REPRESENT WAYNE A. SEARE IN THIS ADVERSARY PROCEEDING1

BRUCE A. MARKELL, Bankruptcy Judge.

+---------------------------------------------------+
                ¦I. ¦INTRODUCTION                              ¦170 ¦
                +---+------------------------------------------+----¦
                ¦   ¦                                          ¦    ¦
                +---+------------------------------------------+----¦
                ¦II.¦DETAILED FACTS                            ¦171 ¦
                +---------------------------------------------------+
                
+------------------------------------------------------------+
                ¦    ¦A. ¦The St. Rose Litigation                      ¦171  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦B. ¦The Garnishment                              ¦171  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦C. ¦The Initial Consultation                     ¦171  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦D. ¦The Bankruptcy Case is Filed                 ¦173  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦E. ¦The Adversary Proceeding is Filed            ¦173  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦F. ¦DeLuca's Refusal to Defend                   ¦173  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦G. ¦The Order to Show Cause                      ¦174  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦H. ¦The Evidentiary Hearing                      ¦175  ¦
                +----+---+---------------------------------------------+-----¦
                ¦    ¦I. ¦St. Rose and Seare Settle the Adversary Claim¦176  ¦
                +------------------------------------------------------------+
                
+-------------------------------------------------------------------+
                ¦    ¦                                                       ¦      ¦
                +----+-------------------------------------------------------+------¦
                ¦III.¦THE PARTIES AND THEIR POSITIONS                        ¦176   ¦
                +-------------------------------------------------------------------+
                
+------------------------------------------+
                ¦  ¦A.¦DeLuca's Arguments             ¦176 ¦
                +--+--+-------------------------------+----¦
                ¦  ¦B.¦Seare's Contentions            ¦178 ¦
                +--+--+-------------------------------+----¦
                ¦  ¦C.¦Seare's Credibility            ¦180 ¦
                +------------------------------------------+
                
+---------------------------------------------------+
                ¦   ¦                                          ¦    ¦
                +---+------------------------------------------+----¦
                ¦IV.¦LEGAL ANALYSIS                            ¦181 ¦
                +---------------------------------------------------+
                
+-------------------------------------------------------------------+
                ¦    ¦A. ¦The Nature of the Legal Profession                 ¦181   ¦
                +----+---+---------------------------------------------------+------¦
                ¦    ¦B. ¦The Applicable Law and its Application to the Facts¦182   ¦
                +-------------------------------------------------------------------+
                
+----------------------------------------------------------------------+
                ¦    ¦   ¦1. ¦Interplay Between State and Federal Law           ¦182   ¦
                +----+---+---+--------------------------------------------------+------¦
                ¦    ¦   ¦2. ¦Unbundling                                        ¦183   ¦
                +----+---+---+--------------------------------------------------+------¦
                ¦    ¦   ¦3. ¦Nev. Rule of Prof'l Conduct 1.1—Duty of Competence¦188   ¦
                +----------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a.  ¦Legal Standard                                    ¦188   ¦
                +----+----+---+----+--------------------------------------------------+------¦
                ¦    ¦    ¦   ¦b.  ¦Application                                       ¦190   ¦
                +----------------------------------------------------------------------------+
                
+-------------------------------------------------------------------------+
                ¦    ¦    ¦4. ¦Nev. Rule of Prof'l Conduct 1.2(c)—Scope of Services¦192   ¦
                +-------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a.  ¦Reasonable Under the Circumstances                ¦192   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦   ¦   ¦   ¦(1)  ¦Legal Standard                                ¦192   ¦
                +----+---+---+---+-----+----------------------------------------------+------¦
                ¦    ¦   ¦   ¦   ¦(2)  ¦Application                                   ¦194   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦b.  ¦Informed Consent                                  ¦196   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦   ¦   ¦   ¦(1)  ¦Legal Standard                                ¦196   ¦
                +----+---+---+---+-----+----------------------------------------------+------¦
                ¦    ¦   ¦   ¦   ¦(2)  ¦Application                                   ¦203   ¦
                +----------------------------------------------------------------------------+
                
+------------------------------------------------------------------+
                ¦    ¦   ¦5.¦Nev. Rule of Prof'l Conduct 1.5—Attorneys' Fees¦206   ¦
                +------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a.  ¦Legal Standard                                    ¦206   ¦
                +----+----+---+----+--------------------------------------------------+------¦
                ¦    ¦    ¦   ¦b.  ¦Application                                       ¦206   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦6. ¦Nev. Rule of Prof'l Conduct 1.4—Communication with    ¦207    ¦
                ¦    ¦    ¦   ¦Clients                                               ¦       ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a.  ¦Legal Standard                                    ¦207   ¦
                +----+----+---+----+--------------------------------------------------+------¦
                ¦    ¦    ¦   ¦b.  ¦Application                                       ¦208   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------+
                ¦   ¦   ¦7.¦The Bankruptcy Code                 ¦209 ¦
                +----------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a.  ¦Section 707(b)(4)(C )                             ¦209   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦   ¦   ¦   ¦(1)  ¦Legal Standard                                ¦209   ¦
                +----+---+---+---+-----+----------------------------------------------+------¦
                ¦    ¦   ¦   ¦   ¦(2)  ¦Application                                   ¦211   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦b.  ¦Sections 526–528                                ¦213   ¦
                +----------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦   ¦   ¦   ¦(1)  ¦Legal Standard                                ¦213   ¦
                +----+---+---+---+-----+----------------------------------------------+------¦
                ¦    ¦   ¦   ¦   ¦(2)  ¦Application                                   ¦214   ¦
                +----------------------------------------------------------------------------+
                
+-----------------------------------+
                ¦  ¦                            ¦   ¦
                +--+----------------------------+---¦
                ¦V.¦SANCTIONS                   ¦216¦
                +-----------------------------------+
                
+------------------------------------------+
                ¦  ¦A.¦The Purpose of Sanctions       ¦216 ¦
                +--+--+-------------------------------+----¦
                ¦  ¦B.¦The Range of Sanctions         ¦217 ¦
                +--+--+-------------------------------+----¦
                ¦  ¦C.¦The ABA Standards              ¦219 ¦
                +------------------------------------------+
                
+----------------------------------------------------+
                ¦   ¦   ¦1.¦The Duties Violated                 ¦220 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦2.¦DeLuca's Mental State               ¦221 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦3.¦Seriousness of the Injury           ¦221 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦4.¦Aggravating or Mitigating Factors   ¦223 ¦
                +----------------------------------------------------+
                
+------------------------------------------+
                ¦  ¦D.¦The Sanctions Imposed          ¦224 ¦
                +------------------------------------------+
                
+--------------------------------------------------------------+
                ¦    ¦   ¦1.¦Disgorgement of Fees                        ¦224  ¦
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