Edwards, Matter of
| Citation | 327 S.C. 148,488 S.E.2d 864 |
| Decision Date | 02 April 1997 |
| Docket Number | No. 24660,24660 |
| Court | United States State Supreme Court of South Carolina |
| Parties | In the Matter of Kenneth L. EDWARDS, Respondent. . Heard |
Attorney General Charles Molony Condon, Senior Assistant Attorney General James G. Bogle, Jr., Columbia, for Complainant.
In this attorney disciplinary matter, the Hearing Panel ("Panel") and Executive Committee ("Committee") found Edwards committed misconduct in connection with: (1) several personal bankruptcy filings in which he represented himself or in which he assisted his lawyer; and (2) two of the bar applications he submitted to the Committee on Character and Fitness. Specifically, the Panel and Committee found that Edwards committed misconduct by failing to appear for a 2004 examination 1 and for a civil contempt hearing; in transferring certain property to his parents during the pendency of his Chapter 13 case and without the permission of the Bankruptcy Court; and in failing to amend his own filings to keep his address updated. The Panel and Committee did not conclude, however, that Edwards' actions in the bankruptcies constituted intentional abuse of the bankruptcy system. Finally, the Panel and Committee found Edwards had failed to reveal on his bar applications the existence of a lawsuit and, later, a judgment, against him.
After considering its findings of misconduct and Edwards' prior disciplinary sanctions, the Panel recommended he receive a six-month suspension and be required to attend all ethics CLEs offered by the South Carolina Bar for two years. Opining that Edwards "has no appreciation for the ethical practice of law," the Committee recommended We have considered the convoluted facts of this case and concur with the Panel and Committee's findings of misconduct. Additionally, we find that Edwards intentionally abused the bankruptcy system. After consideration of all pertinent facts and circumstances, we conclude an eighteen-month suspension is the appropriate sanction.
by a vote of five to two, that Edwards be disbarred. The two dissenting members of the Committee voted for imposition of an indefinite suspension.
The State alleges Edwards committed the following misconduct in relation to his bankruptcy filings: (1) intentional abuse of the bankruptcy system; (2) fraud and deceit in conveying certain property to his parents; (3) inappropriate behavior in telling a process server there would be "bloodshed" over the bankruptcy and in threatening the bankruptcy trustee and his lawyer; and (4) failure to comply with orders of the bankruptcy court despite receiving notice of meeting dates and times. The Panel and Executive Committee found misconduct as to allegations (2) and (4), but not as to allegations (1) and (3). To determine the extent of Edwards' misconduct, a thorough review of the testimony and evidence presented at the Panel hearing is necessary.
Edwards was not licensed to practice law until June 1, 1992. Many events relating to his bankruptcy filings occurred before that date. Therefore, conduct occurring before the date Edwards was admitted to the bar is not sanctionable.
On February 26, 1991, Charleston Joint Ventures obtained a judgment in state court 2 against Edwards in connection with the lease of business property at Citadel Mall. Edwards' motion for reconsideration was denied on August 20, 1991.
On November 8, 1991, Edwards transferred two properties ("the Kiawah Island properties") to his aunt and brother. The consideration for each transfer was $5.00.
Approximately two months later, on January 2, 1992, Edwards filed his first Chapter 13 Petition in the federal bankruptcy court. According to testimony presented at the disciplinary hearing, Edward Brown represented Edwards during this first Chapter 13 petition.
On August 26, 1992, Edwards transferred a piece of property ("the Bees Ferry Road property") to his parents, in contravention of the Bankruptcy Code. Brown testified that he advised Edwards to transfer this property. The rationale for the transfer was that the parents had an unrecorded mortgage on the Bees Ferry Road property anyway, and the transfer would allow the parents to be paid. Brown testified that he thought the trustee would agree that the transfer would be an acceptable way to dispose of the debt "outside the Plan."
Ultimately, the first Chapter 13 Petition was dismissed by the bankruptcy court because Edwards failed to make certain required payments to the bankruptcy trustee. During a particular period, these payments were set as least as high as $1,658.00 per month, payable by Edwards to the trustee. Although Edwards obviously tried to make some of these payments, he fell behind and was unable to catch up. For that reason, the bankruptcy court dismissed the first Chapter 13 Petition on October 29, 1992.
On March 10, 1993, Charleston Joint Ventures, Edwards' judgment creditor, filed an action in state court seeking to have set aside the transfers of the two Kiawah Island properties to Edwards' brother and aunt. Less than two weeks later, on March 19, 1993, Edwards, acting pro se, filed a second Chapter 13 Petition. After a hearing held on May 20, 1993, the bankruptcy judge issued an Order on May 28, 1993 dismissing the second Chapter 13 Petition. The judge's Order dismissing the Petition stated [Edwards] has been a debtor in a previous Chapter 13 case pending within 180 days of the filing of the Petition herein. Further, [Edwards] has failed to show any change in circumstances arising subsequent to the dismissal of the previous action and has failed to offer any justification for his failure to comply with the previous Orders of this Court.
Further, this Court finds that the Petition of [Edwards] herein was filed in bad faith, for an improper purpose and in an attempt to abuse the bankruptcy system, in that the Petition was filed for the purpose of preventing, hindering, and delaying the legitimate collection efforts of Charleston Joint Venture, and without any intention of financial rehabilitation. Therefore, the Petition of [Edwards] is hereby dismissed with prejudice.
The bankruptcy judge had stated from the bench on May 20, 1993 that he would dismiss the Petition.
On May 24, 1993, four days before Edwards' second Chapter 13 Petition was dismissed, Edwards filed a Chapter 7 Petition. He listed his address on the Chapter 7 Petition as 82 1/2 Spring Street, which at one point had been Edward Brown's office. Edwards occasionally worked and slept in that office.
On July 9, 1993, the first meeting of creditors was held in Edwards' Chapter 7. At the meeting, the trustee said he intended to investigate the transfers of the Kiawah Island properties and the Bees Ferry Road property. If the conveyances were fraudulent, the trustee planned to have them set aside. Shortly after the first meeting of creditors, Edwards had the case converted to a Chapter 11. The trustee successfully had the case reconverted to a Chapter 7 on September 14, 1993.
On October 4, 1993, the bankruptcy judge issued an Order requiring Edwards to be present to answer questions at a 2004 meeting to be held on November 10, 1993. On October 18, 1993, notice of the 2004 meeting was mailed to 82 1/2 Spring Street, Edwards' listed address. 3 Edwards did not show up for the 2004 meeting. He also had not shown up for a 341 meeting 4 scheduled for November 5, 1993.
On November 17, 1993, the bankruptcy court issued a Rule to Show Cause for Contempt. The Rule to Show Cause ordered Edwards to appear on December 13, 1993 at 11:00 a.m. to show why he should not be held in contempt for his failures to attend the 341 meeting and the 2004 meeting and for his abuse of bankruptcy procedures. Edwards was served by first class mail at 82 1/2 Spring Street. Personal service was also attempted, but was not effected before the meeting.
Edwards did not show up at the hearing on the Rule to Show Cause for Contempt. The bankruptcy judge rescheduled the hearing for 2:30 p.m. the same day and told the trustee's attorney to attempt personal service. Chris Mullen, a process server, finally served Edwards at 12:09 p.m. According to Mullen, Edwards got very angry and launched into a diatribe against the justice system. Edwards told Mullen he would not go to the hearing. Mullen said that Edwards said there would be "bloodshed" over this matter. Mullen testified to the bankruptcy court that Edwards threatened the bankruptcy trustee and the trustee's lawyer. At the disciplinary hearing, however, Mullen claimed he should not have characterized Edwards' diatribe as "threatening" anyone.
On January 4, 1994, the bankruptcy judge issued a civil contempt order against Edwards for failure to appear at the 2004 examination. The Order did not address Edwards' failure to appear at the 341 meeting held on November 5, 1993, or Edwards' alleged abuse of the bankruptcy system. Finally, on January 10, 1994, the bankruptcy judge had United States Marshals take Edwards into custody, forcing Edwards to answer
questions from the trustee and from creditors about Edwards' assets and the property transfers. The incident with Mullen, as well as the subsequent contempt order and the involvement of the United States Marshals, were reported in the Charleston Post & Courier.
The Panel and Executive Committee found misconduct in Edwards' (1) failure to appear for the 2004 examination and for the civil contempt hearing; (2) transfer of the Bees Ferry Road property to his parents during the pendency of his Chapter 13 case; and (3) failure to provide the bankruptcy court with an accurate address. They did not find, however, that there was clear and convincing evidence Edwards intentionally abused the bankruptcy system. Rather, they observed the evidence "equally suggests a newly admitted attorney's doubtful...
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IN THE MATTER OF EDWARDS
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