In re Wenk

Decision Date16 July 2002
Docket NumberNo. 02-60035-DOT.,No. 02-60033-DOT.,02-60033-DOT.,02-60035-DOT.
Citation296 B.R. 719
CourtU.S. Bankruptcy Court — Eastern District of Virginia
PartiesIn re Sandra F. WENK.

James E. Kane, Richmond, VA, for debtor.


DOUGLAS O. TICE, Jr., Chief Judge.

Hearing was held on April 10, 2002, on James E. Kane's motion to rehear and reconsider the court's sanctions order of March 5, 2002.


On January 3, 2002, the court received two electronically filed chapter 13 petitions for debtor Sandra F. Wenk. Case Number 02-60033-T was filed on January 3, 2002, at 12:18 p.m. by attorney James E. Kane. Case Number 02-60035-T was filed at 1:21 p.m. on same day by attorney Bruce W. White. The cases were filed with both debtor's and counsel's electronic signature ("slash s" name). Both counsel are members of the Bar of this court, and both are approved participants in the court's electronic case filing system (ECF).

On January 4, 2002, White contacted chambers and informed the court of his belief that Kane had filed case number 02-60033-T without a petition having been signed by debtor. On January 10, after making several attempts to contact Kane to no avail, the court issued a show cause order compelling Kane and White to appear before the court and show cause why debtor's cases should not be dismissed.


Hearing was held January 30, 2002, for Kane and White to show cause why cases which they filed for debtor on January 3, 2002, should not be dismissed.

At hearing held on January 30, 2002, Kane stated to the court that he had represented debtor and her husband in their joint chapter 7 case that was discharged in December 2001. He stated that he had been negotiating with the attorney representing the Wenks' mortgage company in an effort to halt a foreclosure on debtor's residence that was scheduled to occur on January 3, 2002.

According to Kane, debtor indicated that she wanted to file a chapter 13 case to prevent foreclosure and that he had scheduled an appointment for her to come in to sign her petition at 1:30 p.m. on January 3. On January 3, Kane did not arrive at his office until noon due to the snowstorm the night before. He stated that his paralegal called him at home on the morning of January 3 to let him know that debtor had called and wanted to make sure he was still going to file her petition. He also stated that debtor told his paralegal that she was not sure if she could make her 1:30 p.m. appointment due to the weather.

Kane stated that because of the weather, he asked his paralegal to file the petition from her home, advising her that debtor would come to the office at 1:30 p.m. to execute the bankruptcy papers. The petition was filed at 12:18 p.m. on January 3. Kane left a message for debtor on January 3 after she did not show up for her appointment. However, he never heard from her.

Kane stated he did not find out that White had filed a duplicate case until January 14 when Kane returned from vacation.

At hearing on January 30, White stated that debtor contacted him on January 3, concerned about an impending home foreclosure that was to occur that afternoon at 4 p.m. and her inability to get in touch with Kane. Debtor told White that she had an appointment with Kane at 1:30 p.m. on January 3, but she was unable to reach anyone at Kane's office other than a paralegal. Debtor and debtor's husband arrived at White's office around noon on January 3, and debtor signed her bankruptcy petition. The petition was filed at 1:21 p.m.

White stated that he attempted to contact Kane on the afternoon of January 3, but Kane was not in the office. White asserted that debtor advised him she had not authorized a filing by Kane as she had not been able to get in touch with him on January 3 regarding her petition.


On February 14, 2002, the court issued an order dismissing case 02-60033-T. On March 1, 2002, the court issued a Memorandum Opinion supplementing its February 14 dismissal order based upon its finding that Kane, a member of the Bar of this court and an approved participant under the court's electronic case filing system, had filed case 02-60033-T on January 3, 2002, with a petition that had not been signed by debtor. The court's determination was based upon Kane's remarks to the court at hearing on January 30, 2002.

Also on March 1, the court issued an order of sanctions suspending Kane and any member of his law firm from filing any new bankruptcy petition in the Eastern District of Virginia for the period of March 11, 2002, through March 31, 2002, and requiring Kane and his assistant to attend ECF training prior to April 1, 2002. On March 5, 2002, the court amended its sanctions order to defer the suspension period to April 1, 2002.


On March 7, 2002, Kane filed a motion to rehear and reconsider the sanctions order of March 5, 2002. In his motion, Kane states that there were unusual circumstances surrounding the filing of case 02-60033-T that should excuse his filing of an electronic petition including debtor's electronic signature when debtor had not signed an original paper petition.

Additionally, Kane asserts that: 1) the order of sanctions went beyond the scope of the show cause hearing conducted on January 30, 2) the sanctions are disproportionate to the alleged infraction, and 3) the sanctions ordered against other members of Kane's firm exceed the scope of the proceedings and the infraction.

On March 15, the court granted Kane's motion to rehear and reconsider. On same day the court issued an order vacating its amended order of sanctions dated March 5, 2002.


Show cause rehearing was held on April 10 to determine why sanctions, including monetary sanctions, should not be imposed.

At hearing, Thomas Papa appeared as counsel for Kane. In essence, counsel for Kane argues that the circumstances surrounding the filing are unique in that: 1) debtor was about to lose her home, 2) debtor had made several frantic phone calls to Kane's office, 3) a snowstorm had virtually shut down the city, 4) debtor was unable to make it to Kane's office, 5) Kane experienced trouble making it to the office, and 6) this petition, though unsigned, had been prepared many weeks before and Kane was very familiar with the parties.

Counsel asserts that the mere purpose of debtor's signature on the petition is to affirm that the information contained in the petition is true and correct. Counsel argues that there was no wrong committed because the information on the petition was correct. Lastly, counsel argues that had Kane not filed the petition, debtor would likely have sued Kane for malpractice.

At rehearing, Kane testified to essentially the same facts leading up to the filing of case 02-60033-T as he stated at hearing on January 30. However, Kane testified to the following facts for the first time at rehearing, some of which contradict his testimony of January 30.

At rehearing, Kane said that it was not his intention to file an electronic petition purporting to have debtor's signature, but to file a deficient petition1 without any signatures on it — debtor or attorney. Kane stated that he planned to fix the deficient petition upon his return to the country on January 14 and that he had instructed his paralegal to have debtor sign the original petition while he was away. However, at previous show cause hearing on January 30, Kane stated that it was his intention to first file the electronic petition and that debtor would come into the office afterwards to sign the original petition.2

Kane further stated that it was his practice to sometimes file petitions without a debtor's signature because the debtor could receive the benefit of the automatic stay during the pendency of the court's issuance of a deficiency notice and ten day time to cure.3

Kane testified that he was unable to retrieve voicemail messages from his cellular phone while out of the country and first learned of a problem with the petition on January 13 when he was flying back into the United States. He stated that when he returned to the office on January 14 he noticed that there was an electronic signature on the petition. He notified his paralegal of the error, and she informed Kane that the electronic filing program's default is to place electronic signatures on petitions.

Kane testified that he has never received a filing fee from debtor for dismissed case 02-60033-T, and the firm paid the $185.00 filing fee in the case.

Robert Van Arsdale, Assistant U.S. Trustee, appeared on behalf of the U.S. Trustee's office and cross-examined Kane. Van Arsdale questioned Kane about his April 10 testimony that it was his intention to file a deficient petition unsigned by both he and debtor. The U.S. Trustee focused on Kane's January 30 testimony, at which time Kane stated that he had signed the petition at the time it was filed.4 In response, Kane asserted his belief that the court was inquiring whether he had signed the petition by January 30, the date of the hearing, not January 3.

Van Arsdale argued that the court should suspend Kane from filing new petitions for 180 days.

Conclusions of Law.


Federal Rule of Bankruptcy Procedure 5005(a)(2) provides that "[a] document filed by electronic means in compliance with a local rule constitutes a written paper for the purpose of applying these rules, the Federal Rules of Civil Procedure made applicable by these rules, and § 107 of the Code." Fed. R. Bankr.P. 5005(a)(2) (emphasis added). A case filed electronically is no different from a paper case filed in person at the counter. As such, the electronically filed petition must comply with Local Bankruptcy Rule 5005-1,5 which specifically states that "[e]ach petition filed must include an unsworn declaration with the signature of all debtors...." L.B.R. 5005-1(D)(1). Local...

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