Friday, November 10, 2017

Bad Bankruptcy Practice Draws Kansas Censuse

The Kansas Supreme Court imposed a published censure for mishandled bankruptcy matters.

The misconduct involved a lack of diligence and failure to communicate with clients.

From the hearing panel findings below

On January 29, 2013, the respondent filed a chapter 7 bankruptcy petition on behalf of A.J. and M.J., husband and wife. At that time, the respondent's practice was to not list a possible federal and state earned income tax credit exemption on the schedule C to the bankruptcy petition. Rather, the respondent's practice was to amend the schedule C if a client received a federal or state earned income tax credit exemption. The respondent acknowledges that his practice was not the best practice. However, the respondent points out that a debtor may amend a schedule any time prior to discharge.

The practice led to unnecessary complications in a number of chapter 7 matters but now

Since the time of the misconduct, the respondent has made improvements to his practice to ensure that he timely responds to all motions filed. Additionally, in the 2 years between the misconduct and the hearing on the formal complaint, the respondent did not fail to respond to any additional motions. The hearing panel is convinced that the respondent's diligence issues have been resolved. To resolve the communication issue, the hearing panel urges the respondent to fully explain to C.C. the ramifications of the court's order revoking the discharge. The hearing panel also feels strongly that the respondent should notify the disciplinary administrator in writing confirming that he has rectified the previous failure to properly communicate with C.C., by fully explaining the ramifications of the court's order revoking the discharge. Nevertheless, while the hearing panel urges the respondent to take this corrective action, the hearing panel's formal recommendation, stated below, is not contingent upon the respondent's compliance with these steps.

A judgment had been entered against one client which the attorney later paid.

The court

The only remaining issue before us is the appropriate discipline for respondent's violations. At the panel hearing, the office of the Disciplinary Administrator recommended a 3-month suspension from the practice of law and that respondent undergo a reinstatement hearing pursuant to Supreme Court Rule 219 (2017 Kan. S. Ct. R. 263). The respondent argued that suspension seemed harsh and that his actions were the result of negligence and not done knowingly. The panel recommended published censure.

At the hearing before this court, the attorney for the office of the Disciplinary Administrator reported that after the panel hearing she had twice contacted Hon. Janice Miller Karlin, United States Bankruptcy Judge, the complainant in this case. Judge Karlin was contacted to discern whether she had observed any continuing concerns with respondent's practice. Both times, Judge Karlin responded that she had not witnessed further concerns. Due to the panel's recommendation and the observation from Judge Karlin, the office of the Disciplinary Administrator recommended that respondent be disciplined by published censure. We agree with the recommendation of both the Disciplinary Administrator and the panel, and we hold that respondent is to be disciplined by published censure.

Video of the oral argument is linked here.  

If professional responsibility professors want to educate their students on discipline process, this 16 minute oral argument, dealing with lapses of a 40 year practitioner with no prior discipline, is worth showing. Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2017/11/the-kansas-supreme-court-imposed-a-published-censure-for-a-mishandled-bankruptcy-matter.html

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