MEMORANDUM OPINION AND ORDER
Before the Court is Appellant's1 appeal from the order of the United States Bankruptcy Court for the Eastern District of Texas, Sherman Division, making findings of fact, conclusions of law, and imposing injunctive relief and internal controls against Appellant Freeman Saxton, P.C. ("Freeman"); a finding of contempt against Natasha Bascus; monetary fines against Freeman and Ms. Bascus; the requirement to complete certain continuing legal education in ethics against attorneys Dan Saxton and David McKeand; and referring the matter to the United States Trustee for further investigation pursuant to 11 U.S.C. §§ 526, 527 and 528.
Appellant has filed 11 issues generally aiming at certain findings of fact and conclusions of law, repetitively in some respects. Nonetheless, Appellant's ultimate aim is reversal of the Bankruptcy Court's Findings of Fact, Conclusions of Law, and Orders, including the sanctions it imposed. See Appellant's Brief (Doc. No. 16) at 27 (Conclusion).
Appellant has requested oral argument in this matter; Appellee has not. Pursuant to Fed. R. Bankr. P. 8019(b), "[o]ral argument must be allowed in every case unless the district judge . . . examine[s] the briefs and record and determine[s] that oral argument is unnecessary because . . . (3) the facts and legal arguments are adequately presented in the briefs and record, and the decisional process would not be significantly aided by oral argument." The Court has examined the briefs and the record of this bankruptcy case and has determined that the facts and legal arguments are adequately presented therein. Oral argument will not aid the decisional process. Accordingly, Appellant's request for oral argument is DENIED.
After reviewing the parties' briefs,2 the record in this case, and the applicable law, the Court AFFIRMS the order of the Bankruptcy Court.
The Bankruptcy Court in this instance conducted a dismissal hearing on a pending Chapter 13 bankruptcy petition, which had been filed in May 2015 without the required bankruptcy schedules. In the course of the dismissal hearing, the Bankruptcy Court learned that the debtor, Rocio Herrera, had filed the bankruptcy petition on Freeman's advice and with the assistance of a bankruptcy petition preparer, Ms. Bascus, that Freeman also arranged, all to avoid a foreclosure of Ms. Herrera's home as described further below. The Bankruptcy Court then seta Show Cause hearing as a miscellaneous matter (USBC Miscellaneous Proceeding Case No. 15-00403) arising out of the dismissal proceeding. The Bankruptcy Court's Order to Appear and Show Cause recited the basic facts of Ms. Herrera's original bankruptcy filing and its dismissal and issued the following orders:
IT IS THEREFORE ORDERED that Natasha Bascus, Freeman Saxton, P.C., and Karla Rojas, who appears to be an employee of Freeman Saxton, P.C., appear on July 8, 2015, at 1:30 p.m. at the Plano Bankruptcy Courtroom, the Courtroom of the Honorable Brenda T. Rhoades, 660 N. Central Expressway, Third Floor, Plano, TX 75074, for a hearing on this Order to Appear and Show Cause (the "Show Cause Hearing").
IT IS FURTHER ORDERED that Karla Rojas, Natasha Bascus, and Freeman Saxton, P.C. shall appear at the Show Cause Hearing and show cause why they should not be sanctioned pursuant to Federal Rule of Bankruptcy Procedure 9011, 11 U.S.C. § § 105(a) and 362, 28 U.S.C. § 1927, and/or the Court's inherent powers arising from their conduct in this case, including any violations of the automatic stay and unauthorized use of estate funds.
IT IS FURTHER ORDERED that Karla Rojas, Natasha Bascus, and Freeman Saxton, P.C. shall appear at the Show Cause Hearing and show cause why this Court should not (1) sanction them for violating 11 U.S.C. §§ 110 or 362; (2) sanction them for the unauthorized use of estate funds; (3) order the disgorgement of any funds withdrawn from the debtor's bank account postpetition; (4) order the payment or repayment of all costs and fees incurred by the debtor in connection with her bankruptcy case; (5) refer these matters to the U.S. Trustee and/or the U.S. Attorney for further investigation and potential criminal prosecution, and/or (6) bar Karla Rojas, Natasha Bascus, and Freeman Saxon [sic], P.C., and any individual or entity working under their direction or control, from filing on behalf of themselves or anyone else a petition for relief under the Bankruptcy Code in this District without first obtaining permission to file from the Chief United States Bankruptcy Judge for the Eastern District of Texas.
See Order to Appear and Show Cause (USBC Doc. No. 1)3 at 2. The Bankruptcy Court conducted a total of three hearings in this matter, between July and October 2015.
On December 15, 2015, the Bankruptcy Court issued Findings of Fact, Conclusions of Law, and Orders (the "Findings of Fact") (USBC Doc. No. 21; Doc. No. 5, at 000332)4 in the miscellaneous bankruptcy case. It is this order from which Appellant appeals.
Appellate jurisdiction is proper in this Court pursuant to 28 U.S.C. § 158(a) and Federal Rules of Bankruptcy Procedure 8001, et seq. See In re Babcock & Wilcox Co., 425 B.R. 266, 274 (E.D. La. 2010); Earwood v. Bodenheimer, Jones, Szwak & Winchell, L.L.P., 2013 WL 5234116, at *1 (W.D. La. Sept. 16, 2013).
In order to provide the fullest background in this matter, the Court will recite pertinent portions of the Bankruptcy Court's Findings of Fact, and specifically the portion entitled "Procedure before this Court":
1. The Court initiated this proceeding after a dismissal hearing on June 17, 2015 in a bankruptcy case filed by Rocio Herrera. Ms. Herrera filed her bankruptcy case pro se. However, at the dismissal hearing, Ms. Herrera informed the Court of the involvement of Jeffrey Freeman & Associates, P.C. d/b/a J Freeman Law Firm (collectively "Freeman") and Natasha Bascus ("Bascus"). The Court initiated this miscellaneous proceeding, and issued an order for the defendants to appear and show cause why they should not be sanctioned.
2. On July 8, 2015, the Court held the first show cause hearing. The Court set the matter for an evidentiary hearing to be held on August 25, 2015.
3. On August 25, 2015, Natasha Bascus appeared by phone with her attorney. David McKeand appeared in person for Freeman. John Vardeman appeared for the United States Trustee. Karla Rojas failed to appear, andwas held in contempt. After the Court heard opening arguments and the direct examination of Ms. Herrera, the Court continued the matter to a final hearing on October 13, 2015. The Court ordered Natasha Bascus and her attorney, Donald Harris, to appear in person at the October 13 hearing.
4. On October 13, 2015, the Court heard Ms. Herrera's cross examination and heard all remaining witnesses and testimony.
5. Freeman appeared with designated representatives. Karla Rojas appeared. Although Donald Harris appeared as counsel for Natasha Bascus, Ms. Bascus failed to appear in person. A deposition of Ms. Bascus was admitted into evidence.
6. The United States Trustee called several witnesses, including three debtors (Rocio Herrera, Pam Green, and Brenda Rone) who had dealt with Freeman. The United States Trustee also called Sam Baker, an analyst, who testified as to previous orders and summary reports of activity concerning Ms. Bascus. Tom Powers, the Chapter 13 Trustee for Ms. Green and Ms. Rone, testified as to cases filed in the Northern District of Texas involving Freeman.
7. Freeman called the following witnesses: Karla Rojas, Ester Love, Jeff Lalo and David McKeand. All are Freeman employees.
Findings of Fact
Rocio Herrera
8. Rocio Herrera resides and owns property in the State of Texas.
9. Ms. Herrera was facing foreclosure of her property. The foreclosure was scheduled for May 5, 2015.
10. Ms. Herrera received a letter from the J. Freeman Law Firm. The letter was an advertisement representing that Freeman could assist Ms. Herrera as to the foreclosure.
11. Ms. Herrera contacted Freeman by phone and spoke with a Freeman representative named Mike Matthew. Mr. Matthew is not an attorney. However, Ms. Herrera understood that she was speaking with an attorney, and Mr. Matthew did not disclose to Ms. Herrera that he was not an attorney.
12. Freeman is located in Atlanta, Georgia. Mr. Matthew is in the Atlanta office. Dan Saxton is the only attorney in the Atlanta office. Mr. Saxton is not licensed to practice in Texas or admitted to the Eastern District of Texas.
13. On May 5, 2015, Freeman, by and though Mr. Matthew, advised Ms. Herrera that the foreclosure on her home could be stopped by a mortgage loan modification, which would be handled by Freeman. The loan modification would cost a total of $4500. Freeman then received $1500 paid by Ms. Herrera. Later that same day, Freeman, by and through Mr. Matthew, advised Ms. Herrera to file Chapter 13 bankruptcy. Mr. Matthew then told Ms. Herrera that a bankruptcy petition preparer would contact her to prepare the filing.
14. Freeman never provided Ms. Herrera with a written offer from her lender for mortgage relief prior to accepting the $1500 payment on May 5, 2015.
15. Freeman, by and through its non-lawyer employee, contacted Natasha Bascus to prepare Ms. Herrera's petition. Ms. Bascus then contacted Ms. Herrera by phone and charged her $150 to prepare the petition.
16. Ms. Herrera filed her Chapter 13 petition on May 5, 2015, and the Court assigned her bankruptcy case number 15-40846. She filed the petition pro se, without any reference to Freeman or the loan modification. In addition, Ms. Bascus failed to sign - and failed to obtain Ms. Herrera's signature on - the petition preparer notice required under § 110(b)(2)(B)(I)
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