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In Re: Shirley A. Myers

June 1, 2012

IN RE: SHIRLEY A. MYERS


Name of Assigned Judge D. Leinenweber Sitting Judge or Harry if Other Magistrate Judge than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT

The bankruptcy court's imposition of sanctions against Mr. Kirby is affirmed.

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Before the Court is the appeal of debtor's former counsel, Marlin E. Kirby ("Kirby"). Mr. Kirby appeals the bankruptcy court's order of July 7, 2011 directing him to pay certain fees of debtor's subsequent counsel. For the following reasons, the bankruptcy court's ruling is AFFIRMED.

I. BACKGROUND

Mr. Kirby represented debtor Shirley A. Myers ("Myers") in her petition for bankruptcy, 10-B-11453. At some point, Myers became disenchanted with Kirby and approached another lawyer, Robert W. Maucker ("Maucker"), about taking over her case. Maucker agreed. Kirby filed a motion on January 28, 2011 to withdraw and Maucker filed on February 1, 2011 a motion to enter his appearance. A hearing was scheduled for February 3, 2011. Kirby attended, and the judge granted the leave to withdraw.

But at that hearing, Maucker informed the Court that Kirby, whose initial Rule 2016(B) statement disclosed only a $1,000 fee, had since received an additional $1,500 for his services for Myers without disclosing that to the Court as 11 U.S.C. § 329 requires. The bankruptcy judge, Pamela S. Hollis, on her own motion, set a hearing for April 12, 2011 to look into the matter. In her order, she specifically ordered Kirby to attend and gave him leave to file a written response by February 24, 2011. When Kirby did not file a response, Maucker called him on March 2, 2011. Kirby indicated he was going to return at least a large portion of the $1,500 and did not plan to file a response. In a phone call two days later, Kirby told Maucker he would return the entire amount when he attended the April 12, 2011 hearing.

But Kirby did not show at the April 12 hearing, and Judge Hollis issued a Rule to Show Cause ("RTSC") and issued a new order requiring Kirby to attend the RTSC hearing on April 28, 2011. Maucker sent Kirby a certified, return-receipt letter advising him of this and received the return receipt back in the mail. Again, Kirby failed to show and the Court issued an Order of Contempt and set a new court date of May 12, 2011. Maucker sent Kirby a letter by regular U.S. mail and left voice messages apprising him of the developments. Again, Kirby did not show. Judge Hollis issued a body writ. The record before the Court is unclear as to whether Kirby was arrested or if the mere issuance of the body writ was enough to get his attention, but in any case, he appeared before Judge Hollis on May 19, 2011.

Maucker then moved for reimbursement of his fees ($1,681.54) for appearing at the numerous hearings where Kirby did not show. Maucker finally received a $1,500 check for his client from Kirby on May 25, 2011. On May 26, 2011, the bankruptcy set a briefing schedule on Maucker's motion for reimbursement and adjourned the Section 329 exam, the Rule to Show Cause and the Order of Contempt. Mr. Kirby was to file his response by June 16, 2011, but instead filed on that same day a request for an extension, which was noticed for June 30, 2011, after the brief was due. Judge Hollis denied the motion on June 30, 2011 and granted Maucker's motion for fees in the amount of $1,500 (the amount was apparently rounded down in deference to some quibbling over the proper amount of reimbursement).

Mr. Kirby's explanation for all of his no-shows is that, once the bankruptcy court granted his motion to withdraw, he was no longer receiving notification of proceedings via the CM/ECF system. He said he informed Maucker and the bankruptcy court deputy prior to the scheduled § 329 hearing that he would be returning the fees "and that there would be no need for a hearing." Appellant's Br., 7. "Appellant did hear from the lower court and assumed that the Debtor or her new counsel would agree to some method for returning the fees. Instead, Appellant was informed by the US [sic] Marshall's [sic] the [sic] he has been held in contempt and that a body attachment was issued against him." Appellant's Br., 8.

II. LEGAL STANDARD

The Court reviews a bankruptcy court's imposition of sanctions under an abuse of discretion standard. An abuse of discretion occurs when no reasonable person could take the view adopted by the lower court. Johnson v. RJM Acquisitions, No. 11-601, 2012 U.S. Dist. LEXIS 36407, at *23 (S.D. Ill. Mar. 19, 2012). Courts have inherent contempt powers in all proceedings, including bankruptcy, to achieve the orderly and expeditious disposition of cases. Id. at *25. A court may remedy a violation of a specific order pursuant to its civil contempt powers, while the ...


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