Parker v. Jacobs

• Decision Date: 26 January 2012
• Docket Number: No. 2:11–CV–546–WKW.,2:11–CV–546–WKW.
• Citation: 466 B.R. 542
• Parties: Darryl A. PARKER, Appellant, v. Teresa R. JACOBS, Appellee.
• Court: U.S. District Court — Middle District of Alabama

466 B.R. 542

Darryl A. PARKER, Appellant,

v.Teresa R. JACOBS, Appellee.

No. 2:11–CV–546–WKW.

United States District Court, M.D. Alabama, Northern Division.

Jan. 26, 2012.

Darryl A. Parker, Montgomery, AL, pro se.

Britt Batson Griggs, U.S. Bankruptcy Administrator, Montgomery, AL, for Appellee.

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS, Chief Judge.

Darryl A. Parker appeals the United States Bankruptcy Court for the Middle District of Alabama's Order denying his motion to vacate, entered on June 2, 2011, and the Order entered on April 8, 2011, disbarring Mr. Parker from the practice of law in this district's bankruptcy court. The appeal is brought pursuant to 28 U.S.C. § 158(a) and Federal Rule of Bankruptcy Procedure 8001(b). Having considered the parties' briefs, the relevant law and the record as designated, the court finds that the bankruptcy court's orders are due to be affirmed.

I. JURISDICTION AND VENUE

Appellate jurisdiction of the district court to hear this appeal is exercised pursuant to 28 U.S.C. § 158(a). Venue is proper because an appeal “shall be taken only to the district court for the judicial district in which the bankruptcy judge is serving.” § 158.

II. STANDARD OF REVIEW

Decisions regarding the imposition of sanctions are reviewed for an abuse of discretion. In re Walker, 532 F.3d 1304, 1308 (11th Cir.2008). Applying this standard, a reviewing court “ ‘must affirm unless [it] find[s] that the [lower] court has made a clear error of judgment, or has applied the wrong legal standard.’ ” Amlong & Amlong, P.A. v. Denny's, Inc. 500 F.3d 1230, 1238 (11th Cir.2007) (quoting United States v. Frazier, 387 F.3d 1244, 1259 (11th Cir.2004) (en banc)). The reviewing court also “may affirm on any legal ground supported by the record.” In re Walker, 532 F.3d at 1308.

III. FACTUAL AND PROCEDURAL BACKGROUND

Mr. Parker, the appellant, is an attorney licensed to practice law in the state of Alabama, and represents debtors in Chapters 7 and 13 proceedings in the United States Bankruptcy Court for the Middle District of Alabama. Teresa Jacobs, the appellee, is the bankruptcy administrator for the United States Bankruptcy Court for the Middle District of Alabama, whose duties include “seek [ing] to prevent, through monitoring and reporting, abuses in the bankruptcy system.” U.S. Bankr.Admin., M.D. Ala., http:// www. almba. uscourts. gov. (last visited on Jan. 26, 2012).

On February 17, 2011, Ms. Jacobs initiated a miscellaneous proceeding in the bankruptcy court for sanctions against Mr. Parker, alleging multiple violations of Federal Rule of Bankruptcy Procedure 9011(b)(3) and 11 U.S.C. § 526(a)(2). In re Darryl A. Parker, Misc. Case No. 11–301–WRS (Bankr.M.D.Ala. Feb. 17, 2011) (Doc. # 1–1) (henceforth “Mot. Sanctions”). The Orders from which Mr. Parker now appeals evolve from this miscellaneous proceeding.¹

The misconduct for which Ms. Jacobs sought sanctions did not arise from a single case, but rather from multiple cases in which Mr. Parker was involved. Ms. Jacobs outlined a plethora of alleged § 9011(b)(3) and § 526(a)(2) infractions by Mr. Parker. She cited six Chapter 7 petitions filed by Mr. Parker where he had made false statements pertaining to the debtor's county of residence. She also referenced twenty-eight cases in which Mr. Parker, as the debtors' attorney, failed to pay timely the filing fee mandated by Federal Rule of Bankruptcy Procedure 1006 and 28 U.S.C. § 1930, and pointed out that, in many of those instances, the clients already had paid Mr. Parker the required fee.

As further support for the motion for sanctions, Ms. Jacobs highlighted Mr. Parker's own pro se Chapter 7 proceeding, which she argued was replete with false statements and incomplete disclosures. Citing the Alabama Rules of Professional Conduct, Ms. Jacobs argued that Mr. Parker's transgressions were “indicative of a lack of the requisite, diligence, knowledge and skill necessary for [Mr.] Parker to competently represent clients in bankruptcy.” (Mot. Sanctions 4 (citing Ala. Rules of Prof'l Conduct R. 1.1 & R. 1.3).) She sought “appropriate sanctions ... sufficient to deter repetition and continuation of such conduct.” (Mot. Sanctions 4.)

The bankruptcy judge scheduled a hearing on the motion for sanctions for April 7, 2011, and provided notice to Mr. Parker, electronically to two e-mail addresses that Mr. Parker had listed with the bankruptcy court and by first-class mail to his office address. Mr. Parker did not appear for the hearing or file a response to the motion for sanctions. He also failed to notify the bankruptcy judge prior to the hearing that he would be absent. Mr. Parker's failure to appear for the April 7, 2011 hearing was consistent with his past behavior: As noted by the bankruptcy judge, Mr. Parker was “frequently a no-show at hearings,” and, when Mr. Parker did attend, he was “habitually ... late and unprepared.” (H'rg Tr. 2, April 7, 2011 (Doc. # 10–1); Order 2, April 8, 2011 (Doc. # 1–2).)

At the April 7, 2011 hearing, at which Ms. Jacobs appeared through her counsel, the bankruptcy judge summarized Mr. Parker's violations: Mr. Parker “willfully ... hold[s] off on paying filing fees”; he does not “observe ... normal courtroom decorum”; he has made a “series of material omissions” and falsehoods in cases; and in one case, in particular, he “covered up one set of lies with another set of lies, and then a third set of lies, all quite willful.” (H'rg Tr. 8, April 7, 2011.) The bankruptcy judge concluded: Mr. Parker is “not a good detail man,” but even worse, he is “a dishonest, unethical lawyer [who] harms his clients, and [who] files false pleadings and false statements in Bankruptcy Court.” (H'rg Tr. 11, April 7, 2011.) The bankruptcy judge orally pronounced the sanction: He would “disbar ... [Mr. Parker] from practicing in bankruptcy court from this point forward and remove him as counsel of record” on his pending cases. (H'rg Tr. 9, 14, April 7, 2011.)

The bankruptcy judge followed through in a written order entered the next day on April 8, 2011. He reiterated the “numerous instances” where Mr. Parker “knowingly fil[ed] false statements with the Court,” including in his own Chapter 7 petition, and “fail[ed] to timely pay filing fees.” (Order 4, April 8, 2011.) He found that, in his own Chapter 7 case, Mr. Parker went so far to avoid creditor detection that, in his petition, he transposed his first and middle names (“Avon D. Parker” instead of “Darryl A. Parker”) and listed his city of residence as Auburn, Alabama, when in fact he lived in Montgomery, Alabama. The bankruptcy judge also referenced a Chapter 7 petition filed by Mr. Parker on behalf of a debtor (“the Porterfield case”), where he “knowingly and intentionally filed false schedules ... with the intent to defraud creditors” by reporting that the debtor was single and did not own any real property. (Order 2, April 8, 2011.) The bad faith conduct in the Porterfield case did not end there. When the false statements were brought to light by the trustee in an adversary proceeding, Mr. Parker sought to dismiss Mr. Porterfield's Chapter 7 bankruptcy case, which the bankruptcy court found was a violation of Rule 9011 and an attempt to make an “end run” around the trustee's adversary proceeding against him. In the Porterfield case, after a hearing, Judge Sawyer entered an order, enjoining Mr. Parker “from filing any bankruptcy cases under any Chapter of the Bankruptcy Code, in any bankruptcy court in the United States, for a period of 120 days,” effective February 28, 2011.² (Order 1, Porterfield case (Doc. # 8–15).)

Repetitive filing fee infractions also were enumerated by the bankruptcy judge. The bankruptcy judge relied upon the numerous petitions “where [Mr.] Parker ha[d] violated rules concerning the payment of filing fees,” as outlined in Ms. Jacobs's motion for sanctions. (Order 5, April 8, 2011.) He also cited a case (“the Richardson case”) where he had reprimanded Mr. Parker for “a well established practice of his playing fast and loose with the Court and with his client's money” by taking advantage of the bankruptcy court's electronic filing system, which to permit attorneys to make a single payment at the end of the day for all petitions filed in a single day, “is configured to allow the filing of a petition without immediate payment.” (Order 3, Richardson Case (Doc. # 8–20).) Although Mr. Parker was ordered in that case to refund his client's money and forward proof of the same within ten days, the bankruptcy judge noted in his April 8, 2011 Order that “[t]o date, [Mr.] Parker has not complied with the Court's order” in the Richardson case. (Order 4, April 8, 2011.)

After reviewing the totality of Mr. Parker's conduct across the spectrum of cases in which Mr. Parker had appeared, the bankruptcy judge concluded that Mr. Parker “ha[d] made a practice of misappropriating client funds and intentionally making false statements in his own and his clients' bankruptcy petitions.” (Order 5, April 8, 2011.) Consequently, the bankruptcy judge “disbarred [Mr. Parker] from the practice of law in the United States Bankruptcy Court for the Middle District of Alabama,” reasoning that because the “violations of attorney ethics” by Mr. Parker were “so widespread,” the “only appropriate sanction [was] disbarment.” ³ (Order 5, April 8, 2011.)

On April 14, 2011, Mr. Parker filed a motion to vacate the Order of disbarment. He contended that he missed the hearing “for good cause” because on that date he “was suffering from influenza, [f]ever, and other symptoms commiserate with this illness” and, as a sole practitioner, had nobody else to send in his place. (Mot. Vacate 1 (Doc. # 1–3).) He submitted a doctor's note indicating that on April 8, 2011, the nursing staff identified “flu-like symptoms.” (Mot. Vacate, Ex. 1.)

The bankruptcy judge held a hearing on Mr. Parker's motion to vacate on June 1, 2011. Mr. Parker showed up for this one. He...