In re Phillips, 05-1106.

• Decision Date: 09 January 2006
• Docket Number: No. 05-1106.,05-1106.
• Citation: 433 F.3d 1068
• Parties: In re Seena Y. PHILLIPS, Debtor. Ross H. Briggs, Appellant, v. John V. Labarge, Jr., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

433 F.3d 1068

In re Seena Y. PHILLIPS, Debtor Ross H. Briggs, Appellant, v. John V. Labarge, Jr., Appellee.

No. 05-1106.

United States Court of Appeals, Eighth Circuit.

Submitted: November 16, 2005.

Filed: January 9, 2006.

Ross H. Briggs, argued, St. Louis, MO. (Attorney representing himself).

Counsel who presented argument on behalf of the appellee was Diana S. Daugherty of St. Louis, MO.

Before ARNOLD, BEAM, and RILEY, Circuit Judges.

BEAM, Circuit Judge.

Attorney Ross Briggs appeals the bankruptcy court's imposition of sanctions pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure. We affirm the bankruptcy judge's conclusion that Briggs violated Rule 9011, but we find that the court's sanction was an abuse of discretion.

I. BACKGROUND

Debtor Seena Phillips retained Critique Services (Critique), a law firm, to file a Chapter 13 bankruptcy on her behalf. On October 3, 2003, Phillips signed her Chapter 13 voluntary petition and schedules, and Critique filed the bankruptcy petition on October 20, 2003. This case was dismissed on November 5, 2003, because the Critique attorney assigned to the case did not file a plan, attorney disclosure statement and attorney election form as required by the bankruptcy rules. When Phillips' first case was filed on October 20th, Briggs was not legal counsel for Phillips and while he was loosely affiliated¹ with Critique, he was not employed as a full-time attorney for Critique at that time. Briggs was hired as a full-time staff attorney for Critique in November 2003.

Phillips, anxious about impending foreclosure on her home, began contacting Critique in November and early December of 2003 to inquire about the status of her bankruptcy case. Phillips' case was assigned to Briggs in December 2003 based on his physical availability in the office. At this time, Briggs learned that Phillips had retained Critique to file a Chapter 13 bankruptcy, and that a foreclosure sale was pending against her home. Briggs also knew that Phillips had previously met with another attorney at Critique, and that her original signatures were in the file. He also realized that a bankruptcy petition had already been filed and dismissed, and that Phillips was quite upset and calling Critique frequently.

Armed with the knowledge that Phillips had met with a Critique attorney, had signed and authorized the filing of a bankruptcy petition, that her home was subject to impending foreclosure, and that she was frequently calling the firm to inquire about the status of her case, Briggs electronically filed a Chapter 13 bankruptcy for Phillips on December 5, 2003, without meeting or speaking with her. However, due to a typographical error in Phillips' prior documents at Critique, Phillips' home address listed on the petition was incorrect. As a result of this, and because Phillips did not know the petition had been filed, she did not receive notice of any hearings for the case and she did not attend any of the bankruptcy proceedings. Accordingly, the case was dismissed for her repeated failure to appear in bankruptcy court.

Briggs later learned that the original signatures were signed prior to the first filing, and that a second set of signatures had not been obtained. Meanwhile, unaware of the second filing, Phillips retained other counsel in December 2003, and this attorney filed yet another Chapter 13 bankruptcy petition on her behalf on December 29, 2003. A creditor filed a motion to dismiss this filing as a "bad faith" case because it was Phillips' third filing. When Briggs became aware of this problem, he contacted Phillips' new attorney, explained the sequence of events, and offered to testify on her behalf at the hearing on the motion to dismiss the third case.

In February 2004, the Trustee filed a motion for sanctions against Briggs, alleging that he had violated Bankruptcy Rule 9011 by filing a bankruptcy petition for Phillips without meeting with her or obtaining her signature. After an evidentiary hearing, the bankruptcy court concluded that Phillips did not authorize Briggs to file a bankruptcy case and that there was no original voluntary petition bearing Phillips' signature for the second bankruptcy case. The court found that those acts violated Bankruptcy Rule 9011, and that sanctions were warranted. The court ordered Briggs to return all funds paid by Phillips for the first bankruptcy filing,² pay a fine of $750 into the court and pay the Trustee $300 for his attorney fees, and referred the matter for possible criminal prosecution and disbarment proceedings. The Bankruptcy Appellate Panel affirmed.

II. DISCUSSION

We review the bankruptcy court's factual findings for clear error and conclusions of law de novo. In re Hixon, 387 F.3d 695, 700 (8th Cir.2004). A bankruptcy court's decision to impose sanctions is reviewed for an abuse of discretion. In re Kujawa, 270 F.3d 578, 581 (8th Cir.2001).

We agree with the bankruptcy court that Briggs violated Rule 9011 by filing the petition without meeting with Phillips and making certain that he had her authorization for the second bankruptcy petition. Rule 9011 requires every petition to be signed by an attorney of record in the case, and by signing the petition, the attorney certifies that to the best of his or her knowledge, there is a factual and legal basis for the petition. Fed. R....