McDermott v. Langevin

• Decision Date: 29 March 2018
• Docket Number: MISCELLANEOUS PROCEEDING No. 16–00504–LRC
• Citation: 587 B.R. 173
• Parties: In the Matter of: Daniel M. MCDERMOTT, Acting United States Trustee, Plaintiff, v. Charles M. LANGEVIN, Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Georgia

587 B.R. 173

In the Matter of: Daniel M. MCDERMOTT, Acting United States Trustee, Plaintiff,

v.Charles M. LANGEVIN, Defendant.

MISCELLANEOUS PROCEEDING No. 16–00504–LRC

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

Signed March 29, 2018

Filed March 30, 2018

R. Jeneane Treace, Office of the United States Trustee, Atlanta, GA, for Plaintiff.

Charles M. Langevin, Jr., pro se.

ORDER

Lisa Ritchey Craig, U.S. Bankruptcy Court JudgeBefore the Court is the Motion for Summary Judgment, filed by Charles M. Langevin ("Defendant"). The Motion arises in connection with an amended complaint (the "Complaint") filed by Guy G. Gebhardt, former Acting United States Trustee and prosecuted by Daniel M. McDermott, United States Trustee ("Plaintiff"). The Complaint seeks a finding that Defendant has violated §§ 110(e) & (f) of the Bankruptcy Code and has "engaged in unfair, deceptive, or fraudulent conduct" and seeks an injunction against further violations and conduct. This matter constitutes a core proceeding, over which this Court has subject matter jurisdiction. See 28 U.S.C. §§ 1334 ; 157(b)(2)(A); see also Gould v. Clippard , 340 B.R. 861, 867 (M.D. Tenn. 2006) ; In re Douglas , 304 B.R. 223, 232 (Bankr. D. Md. 2003) ; In re Webb , 227 B.R. 494, 498 (Bankr. S.D. Ohio 1998).

FACTS ¹ AND PROCEDURAL HISTORY

Defendant, doing business as Simplified Document Solutions, has acted and continues to act as a "bankruptcy petition preparer" in connection with bankruptcy cases filed in this Court. Complaint, ¶¶ 17–18, 20. Defendant is not a member of the State Bar of Georgia and is not licensed to practice law in any state. Id. ¶ 16. Defendant's standard fee for document preparation is $249. Id.

Defendant maintains two websites: www.simplifiedocumentsolutions.net (the "Simplified Documents Website") and www.249bankruptcy.com (the "249 Bankruptcy Website"). Id. ¶¶ 21–22. Defendant uses the word "legal" on the 249 Website. Id. ¶ 33. On the 249 Website, Defendant states:

• "We offer Chapter 7 and Chapter 13 bankruptcy petition preparation for a low fee of only $249.00. We will provide you with all of the documents necessary to obtain immediate bankruptcy protection, stopping lawsuits, foreclosures, wage garnishments, repossessions, creditor harassment and more." Id. ¶ 34.

• "Chapter 7 bankruptcy is often referred to as a total bankruptcy or a fresh start bankruptcy. It is the most popular form of bankruptcy because it eliminates most or all debts within a matter of a 3–4 months. At the end of the 3–4 months, a debtor can begin to rebuild his or her credit and will be eligible to obtain credit cards and auto loans almost instantly. Chapter 13 bankruptcy is a debt repayment plan where a debtor makes monthly payments to a court appointed trustee for a period of 3–5 years under a court supervised plan." Id. ¶ 35.

• "We provide highly effective services that deliver outstanding results at the fraction of the cost law firms and attorneys charge their clients for similar services. We listen to your situation and want you to know that we're here to help make things better and lighter. Unlike many lawyers, we are not here to take advantage of your situation. You can always expect fair and honest service at very affordable rates." Id. ¶ 36.

• "What sets us apart from competition is the fact that we're able to deliver solid results at a fraction of the price of law firms, lawyers, attorneys, and individuals offering the same services we offer." Id. ¶ 37.

• "Bankruptcy is a powerful tool that will give you a ‘fresh start’ financially. The filing of a Bankruptcy petition will immediately stop all collection action, such as foreclosure, repossession, lawsuits, garnishments, and collection calls. The bankruptcy ends with the judge issuing an order that most or all of your debts are permanently discharged and are noncollectable." Id. ¶ 39.

• Simplified Document Solutions can provide you with all of the necessary paperwork for you to obtain a discharge and move on with your life for only $249.00. Simplified Document Solutions does not have an attorney on staff. However, since most bankruptcy cases are pretty simple after the petition is properly prepared, most people can handle their case without one." Id. ¶ 40.

The Simplified Document Solutions Website contains information about Defendant's experience as a paralegal and his "love for the law." Id. ¶ 41. The Simplified Document Solutions Website contains "Helpful Links," such as a link to a paper that lists Georgia bankruptcy exemptions. Id. ¶¶ 42–43. On the Simplified Document Solutions website, Defendant invites prospective assisted persons to "Click Here to Compare our Success to our 3 Biggest Attorney Competitors." The linked materials include PACER reports with tallies of "Successful Discharges," "Dismissals," and "Discharges Withheld" in cases in which Defendant prepared documents as compared to cases filed by three law firms: Clark & Washington, Debt Stoppers, and King & King. Id. ¶¶ 63–64.

The Simplified Document Solutions Website also has a link to Defendant's blog: http://249bankruptcy.blogspot.com/ (the "Blog"), which includes the following "labels": Bankruptcy, Bankruptcy Attorney, Bankruptcy Paralegal, Chapter 13, Chapter 7, Cheap Bankruptcy, Petition Preparer. Id. ¶¶ 44–45. On June 16, 2013, Defendant posted an article titled: "Atlanta debtors are saving thousands using paralegal services." In that article, Defendant stated: "The average attorney in Atlanta is now charging $1500 for even the most simple Chapter 7 bankruptcy petitions, and many are charging in excess of $2500. These same attorneys will hand your file off to a paralegal to do everything. Depending on the attorney you select, you may not even get the chance to meet with the attorney, as everything is done by the paralegal. More and more often, Debtors are choosing to go directly to the paralegal, avoiding the attorney markup." Defendant suggested that, "the best...option is to hire an experienced bankruptcy paralegal, or petition preparer. The bankruptcy code permits non-attorneys to assist pro-se individuals pursuant to 11 U.S.C. 110." Id. ¶ 47.

On January 30, 2014, Defendant posted an article titled: "What will bankruptcy do to my credit?" He advised: "These people go into bankruptcy with a very low credit score and they actually see an increase in their credit score, simply because it has nowhere to go but up...When creditors see that you have filed for bankruptcy, they see you as a good credit risk." Id. ¶ 48.

On August 24, 2014, Defendant posted an article titled: "Ten Things that your bankruptcy attorney won't tell you." Defendant declared: "Most bankruptcy petition preparers are current or former bankruptcy paralegals. Because of the scrutiny that petition preparers are subject to, someone that doesn't know what they are doing will quickly be shut down." Defendant opined that attorneys "will put out untrue information about petition preparers in hopes [they] can convince someone to use an attorney rather than a petition preparer... [or] get judges and U.S. Trustee's to use taxpayer money to slander my competition and put unreasonable restrictions on petition preparers." Id. ¶ 49.

On December 26, 2014, Defendant posted an article titled: "Things You Should Know Before Filing Bankruptcy in the Winter." This article explains that certain credit card charges and cash advances might not be dischargeable. Defendant also suggested that "(i)f you generally get large tax refunds, it might make sense to wait to file your taxes until after you have received and spent most or all of the tax refund." Id. ¶ 50.

On July 18, 2015, Defendant posted an article titled "What is the best type of bankruptcy to file?" He discussed the "different types of bankruptcies" and listed various "benefits," "limitations," and "downfalls" of each. Defendant stated: "Chapter 7 bankruptcy generally only lasts 3–4 months and has almost a 100% success rate. Generally, all a debtor has to do is file the appropriate paperwork (professionally prepared by Simplified Document Solutions or a competitor), go to a quick hearing to verify the identity of the person and verify the paperwork, and wait for the discharge." Id. ¶ 51.

Defendant posts advertisements on Yelp (the "Yelp Advertisement"), Groupon (the "Groupon Advertisement"), and "Angie's List (the "Angie's List Advertisement"), and advertises in the Yellow Pages (the "Yellow Page Advertisement"). Id. ¶¶ 23–26. Defendant also maintains a listing with the Better Business Bureau (the "BBB Listing"). Id. ¶ 27.

The Yelp Advertisement for Simplified Document Solutions includes the following statements: "For only $249, you can be debt-free in as little as 3 months through Chapter 7 bankruptcy or restructure your debts over time through Chapter 13 bankruptcy. We can immediately stop wage garnishments, repossessions, creditor harassment, and foreclosure with our same-day bankruptcy filings. Our success rate is better than most of the bankruptcy attorneys and paralegals in Atlanta and we are happy to give you a free comparison right from the Bankruptcy Court's website. Our bankruptcy program is better than credit repair and cheaper than the lowest priced bankruptcy attorney....[Defendant] has successfully handled literally tens of thousands of cases and helped people obtain relief from millions of dollars in crushing debt." Id. ¶ 52.

The Groupon posting features a plaque for "United States Bankruptcy Court." In response to the inquiry "What services does your business offer and what makes your business stand out from the competition," Defendant indicates "Simplified Document Solutions gives our valued customers 1–on–1 support for a fraction of the price of our competitors." The Groupon Advertisement does not disclose that Defendant is a non-attorney BPP. Id. ¶ 54. The Groupon Advertisement includes an "In a Nutshell" description of the business, which states that it is: "Affordable Chapter 7 and Chapter 13 Bankruptcy...