In re Calzadilla, Bankruptcy No. 92-10939-BKC-SMW.
| Decision Date | 05 March 1993 |
| Docket Number | Bankruptcy No. 92-10939-BKC-SMW. |
| Parties | In re Elio A. CALZADILLA, Debtor. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Florida |
Robert L. Roth, Standing Chapter 13 Trustee, Miami, FL.
Lynn H. Gelman, Asst. U.S. Trustee, Miami, FL.
Before SIDNEY M. WEAVER, Chief Judge, and A. JAY CRISTOL and ROBERT A. MARK, Bankruptcy Judges.
THIS CAUSE came before the Court for hearing en banc before Chief Judge Sidney M. Weaver, Judge A. Jay Cristol and Judge Robert A. Mark in the afternoon of October 30, 1992. The issue before the Court is the conduct of Daniel Schramek and Sal Davide and a Florida corporation known as the L.A.W. Clinic, Inc. Daniel Schramek and Sal Davide appeared in proper person and were permitted to represent their interests pro se. Mr. Schramek attempted to represent the interests of the L.A.W. Clinic, Inc. but was not permitted to do so based on the long standing doctrine that corporations must be represented by an attorney-at-law, licensed to practice and admitted in this district. 28 U.S.C. § 1654.
Elio A. Calzadilla is a debtor who suffered financial misfortune and, as a result, filed a Chapter 13 petition with this Court on February 14, 1992. A number of motions on a number of different matters were brought before the Court for hearing in this case when it became apparent to the Court that the conduct of Daniel Schramek, Sal Davide and a Florida corporation known as L.A.W. Clinic, Inc. in performing certain services for this Debtor, and the public at large, may rise to the level of practicing law without a license.
On May 29, 1992, the case came before Judge A. Jay Cristol who was sitting for Judge Sidney M. Weaver on that day. The matter came before the Court for confirmation of Debtor's Chapter 13 Plan and upon the Court's Order to Show Cause regarding the unauthorized practice of law. (C.P. 10). The Court confirmed Debtor's plan (C.P. 18) but, by order entered June 23, 1992, titled "Order Continuing Hearing on Order to Show Cause Regarding the Unauthorized Practice of Law and Directing the U.S. Trustee to Investigate" (C.P. 16), the other matters were reset for further hearing.
The order continuing the hearing indicated that there was evidence that the L.A.W. Clinic, Inc., Mr. Sal Davide and Mr. Daniel Schramek were preparing plans (Chapter 13 plans) and giving legal advice regarding issues involved in Chapter 13 proceedings and in connection with other Chapters of the United States Bankruptcy Code. The Court also noted the foregoing parties' failure to comply with Fed.R.Bankr.P. 2014 and 2016. The order temporarily enjoined the L.A.W. Clinic, Inc., Mr. Sal Davide and Mr. Daniel Schramek from performing these activities until the matter was again before the Court at the rescheduled hearing on August 28, 1992 before Chief Judge Sidney M. Weaver. (C.P. 16).
The intervention of Hurricane Andrew resulted in the hearing scheduled August 28, 1992 being rescheduled before Judge Weaver to October 23, 1992 (C.P. 23). On October 23, a hearing was held at which time the Court took testimony and rescheduled a further hearing, en banc, for October 30, 1992.
The issue before the Court in this case is the role of typing services in the United States Bankruptcy Courts. Mr. Daniel Schramek resides in St. Petersburg, Florida. He is the owner and operator of L.A.W. Clinic, Inc., a Florida corporation which offers services to persons wishing to file petitions in United States Bankruptcy Courts. Mr. Schramek describes himself as an "independent paralegal". Mr. Sal Davide operates three or four of the L.A.W. Clinics out of three offices in Dade and Broward County, Florida, in the Southern District of Florida. Mr. Davide stated that he attends brown bag luncheon seminars, as well as various other seminars, subscribes to Colliers, a bankruptcy treatise, and has read other materials about bankruptcy. Mr. Davide considers himself informed.
Unfortunately for Messrs. Schramek and Davide and the public at large, such self-taught lawyering is out-dated and unacceptable as a practice. Although this form of education was acceptable in the days of Abraham Lincoln, it became outmoded by the year 1887, when law schools became popular; and, in the decade of the 1970's, law schools graduated more law graduates than they had in the previous hundred years.
The courts of the various states and the federal courts have for many years regulated who may practice before them and the qualifications necessary to appear and represent other people. Although the systems vary widely from state to state, and even from federal district to federal district, it is generally a uniform minimum standard that persons practicing law in state or federal courts at least be members of a state bar or admitted to the highest court of a state of the United States or a federal court. Persons practicing law are held to the same commercial and business standards of all other persons doing business throughout the United States. In addition, persons practicing law are held to a higher standard which requires them to comply with certain ethical criteria and codes of conduct prescribed generally by the American Bar Association and adopted in various modified forms by state bar associations throughout the United States.
Mr. Schramek sees the Florida Bar Association as a business entity in the nature of a closed business organization or association which limits trade and violates the antitrust laws. He argues that the Florida Bar should be abolished and he has filed a lawsuit in United States District Court for the Middle District of Florida, entitled Emilio J. Ippolito et al. v. The State of Florida, et al., Case No. 92-880 CIV-T-22A. Mr. Schramek sees himself as a crusader on behalf of the poor and oppressed. If that is his sole motive, then surely he has the blessings of the entire bankruptcy judicial system upon his head. In contradiction to his self-serving representations, however, it appears that in doing good on behalf of poor folks, he takes compensation from the afflicted.
It was the intent of Congress to relieve the burden of the afflicted debtor and grant a potential for a new start when it first enacted the Bankruptcy Act and when it later enacted the Bankruptcy Code in 1978. This Court, and all of the bankruptcy courts in the United States, look with favor on any system or method of offering assistance to debtors who have suffered financial misfortune and who seek help through the bankruptcy system.
Congress in its wisdom, or perhaps as a result of life time experience, was also aware that when death is about to occur, vultures circle the dying, waiting for an opportunity to personally profit from the misfortune of another. Congress enacted a number of safeguards to prevent the financially distressed from being preyed upon by the vulture type in our society. Federal Rules of Bankruptcy Procedure 2014 and 2016, and 11 U.S.C. §§ 327-330, were created in an effort to make certain that help provided to afflicted victims of financial distress is provided at a fair and reasonable rate. Gouging, overreaching or taking advantage of the financially afflicted is to be avoided whenever possible. The Court has taken judicial notice of the situation in California where so-called typing services have taken outrageous advantage of clients and creditors and have distorted the intent of the Bankruptcy Code for their own personal profit, notwithstanding the fallout upon the debtors to whom they provide services and the creditors that they sometimes abuse in the process.
Now we come to the issue before the Court: the role of typing services, in general, and the typing services, in particular, offered by Mr. Schramek and his corporation, L.A.W. Clinic, Inc. and provided with the help of Mr. Davide in this district. In any area where Mr. Schramek or Mr. Davide can provide needed services to financially distressed individuals and do so at a fair and reasonable cost, and the services are of value and are services which they are capable of providing, they should be encouraged and commended and the road paved for them to make easier their way. On the other hand, in any area where Mr. Schramek and Mr. Davide wish to provide services which they are not qualified to provide or wish to charge exorbitant or excessive fees or charges for the services, this Court has a Congressionally mandated duty to oversee those activities and to prevent abuse of debtors and creditors.
The issue of what typing services can and can not do or may and may not do has been dealt with in this district in In re Bachmann, 113 B.R. 769 (Bankr.S.D.Fla. 1990). The Bankruptcy Court for the Southern District of Florida, sitting en banc, adopts the Bachmann decision and restates the guidelines set forth therein for the benefit of any who wish to provide services to financially distressed persons in connection with filing bankruptcy petitions.
Typing or secretarial businesses in the State of Florida may sell printed materials purporting to explain legal practice and procedure to the public in general and may sell sample legal forms. Such businesses may provide secretarial services and may type bankruptcy forms for clients, provided they only copy the written information furnished by the clients. They may not engage in personal legal assistance in conjunction with typing service business activities, including "correcting" what they believe to be errors or omissions. These businesses may not advise clients as to various remedies and procedures available in the bankruptcy system, and may not make inquiries or answer questions as to the completion of particular bankruptcy forms or schedules. Moreover, they may not advise how best to fill out the bankruptcy forms or otherwise complete the bankruptcy schedules.
One problem the courts are confronted with is determining...
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