In re T.H.

• Decision Date: 18 March 2015
• Docket Number: Case No. 13–73077–SCS
• Citation: 529 B.R. 112
• Court: U.S. Bankruptcy Court — Eastern District of Virginia
• Parties: In re : T.H.,Debtor.

529 B.R. 112

In re : T.H.¹ Debtor.

Case No. 13–73077–SCS

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

Signed March 18, 2015

Peter F. Zooberg, Law Office of Philip R. Boardman PC, Hampton, VA, for Debtor.

MEMORANDUM OPINION

STEPHEN C. ST. JOHN, Chief United States Bankruptcy Judge

This matter came before the Court upon the Amended Motion to Impose Sanctions under 11 U.S.C. § 105 against Peter F. Zooberg, Esquire, and the Law Office of Philip R. Boardman, P.C., (the “Amended Motion to Impose Sanctions”) filed on May 1, 2014, by Judy A. Robbins, United States Trustee for Region Four. Docket No. 19. At the conclusion of the evidentiary hearing held on October 29, 2014, the Court took this matter under advisement. The Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(A) and 1334(b). Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409(a). This Memorandum Opinion constitutes the findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52, as incorporated into the Federal Rules of Bankruptcy Procedure by Federal Rule of Bankruptcy Procedure 7052.

I. PROCEDURAL HISTORY

A voluntary petition (the “Petition”) under Chapter 13 of the United States Bankruptcy Code was filed by Peter F. Zooberg, Esquire (“Zooberg”), of the Law Office of Philip R. Boardman, P.C., purportedly on behalf of T.H. on August 20, 2013.² Docket No. 1. The Court issued a Notice of Deficiency pursuant to Local Bankruptcy Rules 1007–1 and 3015–2 (“Notice of Deficiency”) on August 23, 2013, due to the incomplete filing made on August 20, 2013; the notice warned of the possibility of dismissal if certain documents were not timely filed.³ Id . No. 8. The Court also issued a Notice to Cure Credit Counseling Certification Deficiency on August 23, 2013, due to the failure to file a copy of the certificate of credit counseling with the Petition.⁴ Id . No. 9. The Court entered an Order Dismissing Case on September 6, 2013, pursuant to the Notice of Deficiency issued on August 23, 2013, because the required schedules, statements, and Chapter 13 plan were not timely filed. Id. No. 12. The Chapter 13 case was closed on September 20, 2013. Id . No. 15.

Judy A. Robbins, United States Trustee for Region Four (the “U.S. Trustee”), by counsel, filed a Motion to Expunge Bankruptcy Filing (the “Motion to Expunge”) on May 1, 2014. Id . No. 17. The U.S. Trustee alleged in the Motion to Expunge that the Petition was filed by Zooberg without T.H's signature or authorization in violation of Local Bankruptcy Rule 5005–2 and the Case Management/Electronic Case Files Policy Statement made effective on July 30, 2012 (the “CM/ECF Policy Statement”).⁵ Motion to Expunge at 6–7. The Motion to Expunge further alleged that the Petition contained several misrepresentations, including the representation made in Exhibit D, accompanying the Petition, that T.H. had completed the required pre-filing credit counseling course requirement when T.H. had not in fact fulfilled this requirement. Id . at 2–3.

The U.S. Trustee also filed a Motion to Impose Sanctions under 11 U.S.C. § 105 (the “Motion to Impose Sanctions”) against Zooberg and his employer, the Law Office of Philip R. Boardman, P.C., (the “Boardman Firm”) on May 1, 2014 (Docket No. 18), which it amended the same day (the “Amended Motion to Impose Sanctions”). Docket No. 19. In the Amended Motion to Impose Sanctions, the U.S. Trustee alleged that Zooberg violated Local Bankruptcy Rule 5005–2 and the CM/ECF Policy Statement by filing the Petition containing T.H.'s electronic signature without T.H.'s authorization or wet signature. Id . at 8. The U.S. Trustee prayed for the imposition of an appropriate sanction, including a monetary sanction of at least $1,000.00, against Zooberg and the Boardman Firm. Id . at 11. Zooberg and the Boardman Firm filed a Response to the Motion to Expunge and the Amended Motion to Impose Sanctions (the “Response”) on May 23, 2014. Docket No. 25. In the Response, Zooberg and the Boardman Firm admitted the failure to produce a signed petition but denied that the Petition was filed without T.H.'s authorization. Response at 5. Zooberg and the Boardman Firm consented to the entry of an order granting the Motion to Expunge. Id . at 6–7.

A hearing was held on the Motion to Expunge and the Amended Motion to Impose Sanctions on July 9, 2014. Docket No. 28. At the July 9, 2014 hearing, both Zooberg and Philip R. Boardman, Esquire (“Boardman”), of the Boardman Firm appeared without counsel. Id . Neither Zooberg nor the Boardman Firm presented any opposition to the Motion to Expunge, and both consented to the granting of the Motion to Expunge. Transcript of Hearing on July 9, 2014, on Motion to Expunge Bankruptcy Filing and Amended Motion to Impose Sanctions under 11 U.S.C. § 105 against Peter Zooberg and the Law Offices of Philip R. Boardman, P.C., (the “July 9, 2014 Transcript”) at 4, 5, 12. Zooberg and the Boardman Firm admitted their failure to retain the signed documents in violation of the applicable rules and consented to the imposition of the $1,000.00 monetary sanction proposed by the U.S. Trustee.⁶ Id . at 2, 5. Upon review of the pleadings filed by the U.S. Trustee and with the consent of all of the parties, the Court granted the Motion to Expunge to afford relief to T.H.⁷ Docket No. 28; see also July 9, 2014 Transcript, at 12. The Order Granting the Motion to Expunge was entered on July 18, 2014. Docket No. 30. The hearing on the Amended Motion to Impose Sanctions was continued to afford Zooberg and the Boardman Firm the opportunity to retain counsel in defense of the Amended Motion to Impose Sanctions.⁸ July 9, 2014 Transcript, at 9–10.

The continued hearing on the Amended Motion to Impose Sanctions was held on October 29, 2014. Docket No. 33.⁹ In advance of the continued hearing, on October 27, 2014, counsel for Zooberg and the Boardman Firm filed a Report of Pre–Hearing Investigation.¹⁰ Id. No. 32. At the continued hearing, Zooberg and the Boardman Firm appeared represented by counsel. Id . No. 33. The U.S. Trustee, represented by counsel, and T.H. also appeared at the continued hearing. Id . The U.S. Trustee moved for entry of a series of exhibits into evidence, which the Court admitted without objection from counsel for Zooberg and the Boardman Firm. Transcript of Hearing on October 29, 2014, on Amended Motion to Impose Sanctions under 11 U.S.C. § 105 against Peter Zooberg and the Law Offices of Philip R. Boardman, P.C., (hereinafter “Tr.”) at 2. T.H. and Zooberg testified at the hearing, and following arguments by counsel, the Court took the matter under advisement. Docket No. 33.

II. FINDINGS OF FACT

The Court, having considered the evidence, makes the following findings of fact.

A. Authorization to File Petition on T.H.'s Behalf

It is not disputed that neither Zooberg nor the Boardman Firm have been able to produce the wet signature¹¹ of T.H. on any document filed in this case.¹² Tr. at 7–8. Counsel for Zooberg and the Boardman Firm conceded at the hearing that neither Zooberg nor the Boardman Firm retained or has been able to produce the original or a copy of the original Petition containing T.H.'s wet signature. Id .; see also July 9, 2014 Transcript, at 2–4. The Court agrees with the concession of counsel for Zooberg and the Boardman Firm that the failure to produce the wet signature on a petition leads to the conclusive presumption that the signature does not exist.¹³ Tr. at 8. Disputed in this matter is whether, despite failing to produce T.H.'s wet signature on any document in the bankruptcy case, Zooberg nonetheless obtained T.H.'s authorization to file a bankruptcy petition on her behalf. The voluntary Chapter 13 petition (the “Petition”) was filed by Zooberg purportedly on T.H.'s behalf on August 20, 2013.

UST Ex. 2, Petition, Exhibit D, and list of creditors filed August 20, 2013. T.H.'s electronic signature was affixed to the Petition and to Exhibit D, the Individual Debtor's Statement of Compliance with Credit Counseling Requirement, filed with the Petition. Id .

The events leading to the filing of the Petition began on the morning of August 20, 2013. T.H. came to the Boardman Firm's office during the late morning that day on instruction from Janice Parker,¹⁴ a representative at Home Meditation Services.¹⁵ Earlier that morning, T.H. received a text message from Parker regarding paperwork that T.H. needed to complete on behalf of her estranged husband for a short sale of his house (the “Greenfield Crescent property”). Tr. at 17, 25. Although T.H. was separated from her estranged husband at the time, she was helping him arrange a short sale while he was deployed with the United States Navy; T.H. had a power of attorney authorizing her to execute any necessary documents on his behalf. Id . at 18–20; see also UST Ex. 3, Motion to Impose Sanctions under 11 U.S.C. § 105 and Supporting Memorandum, at 3–4. When T.H. telephoned Parker in response to her text message, Parker instructed T.H. to come to the Home Meditation Services' office located in Virginia Beach, Virginia, to complete paperwork for the Greenfield Crescent property. Tr. at 25–26. When T.H. explained that she was unable to go to the office on that day, Parker instructed T.H. to go instead to an attorney's office—the Boardman Firm—in Hampton, Virginia, which T.H. agreed to do. Id . at 17, 25–27. T.H. believed that she was going to the attorney's office to sign the paperwork related to the Greenfield Crescent property. Id . at 17. T.H. had no prior contact with or knowledge of Zooberg or the Boardman Firm prior to her conversation with Parker on August 20, 2013. Id . at 27.

According to Zooberg, in the late morning of August 20, 2013, he received a few brief telephone calls from an individual who identified himself as Joshua Blum.¹⁶ Id. at 47, 49–50. Prior to these conversations, Zooberg had never had any contact with or knowledge of Blum. Id . at 47. Blum...