In re: Marcos Alonzo Nieto and Hildy Jean Ortiz, 9th Cir. BAP (2012)

7/25/2019 In re: Marcos Alonzo Nieto and Hildy Jean Ortiz, 9th Cir. BAP (2012)

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281 Thi s di sposi t i on i s not appropr i at e f or publ i cat i on.

Al t hough i t may be ci t ed f or what ever per suasi ve val ue i t mayhave ( see Fed. R. App. P. 32. 1) , i t has no pr ecedent i al val ue.See 9t h Ci r . BAP Rul e 8013- 1.

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

I n r e: ) BAP Nos. EC- 11- 1607- DJ uKi) EC- 11- 1619- DJ uKi

MARCOS ALONZO NI ETO and ) EC- 11- 1643- DJ uKiHI LDY J EAN ORTI Z, ) EC- 12- 1015- DJ uKi

)Debt or s. ) Bk. No. 11- 26173

______________________________)I n r e: )

) BAP Nos. EC- 11- 1613- DJ uKiHARVEY P. MI CKELSEN and ) EC- 12- 1017- DJ uKiSTEPHANI E B. MI CKELSEN, ) EC- 12- 1018- DJ uKi

) EC- 12- 1019- DJ uKiDebt or s. )

) Bk. No. 09- 42649______________________________)I n r e: )

) BAP Nos. EC- 11- 1641- DJ uKiBEN LEANDO DYE and KAELYN ) EC- 12- 1016- DJ uKiMARI E DYE, )

) Bk. No. 11- 22020Debt or s. )

______________________________))

J AMES PATRI CK CHANDLER; SEAN )GJ ERDE, )

)

Appel l ant s, ))v. ) M E M O R A N D U M1

)J . MI CHAEL HOPPER, Tr ust ee; )J AN P. J OHNSON, Chapter 13 )Tr ust ee; AUGUST BURDETTE )LANDI S, Acti ng Uni t ed St at es )Tr ust ee; MARCUS ALONZO NI ETO; )HI LDY J EAN ORTI Z; HARVEY P. )MI CKELSEN; STEPHANI E B. )MI CKELSEN; BEN LEANDO DYE; )KAELYN MARI E DYE; MI CHAEL G. )PETERS; J ENNI FER PETERS, )

)Appel l ees. )______________________________)

FILED

DEC 06 2012

SUSAN M SPRAUL, CLERKU.S. BKCY. APP. PANELOF THE NINTH CIRCUIT


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2 Unl ess ot her wi se i ndi cat ed, al l chapt er and sect i onr ef er ences are t o t he Bankrupt cy Code, 11 U. S. C. 101- 1532, andal l Rul e r ef er ences ar e t o t he Feder al Rul es of Bankrupt cyPr ocedur e, Rul es 1001- 9037. The Feder al Rul es of Ci vi l Pr ocedur ear e r ef er r ed t o as Ci vi l Rul es.

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Ar gued and Submi t t ed on Oct ober 19, 2012at Sacr ament o, Cal i f or ni a

Fi l ed - December 6, 2012

Appeal f r om t he Uni t ed St at es Bankrupt cy Cour tf or t he Easter n Di str i ct of Cal i f or ni a

Honor abl e Chr i st opher M. Kl ei n, Chi ef Bankrupt cy J udge, Pr esi di ng

Appear ances: Appel l ant J ames Pat r i ck Chandl er , appear ed i n pr oper ; Appel l ant Sean Gj erde appear ed i n pr o per ;Kr i st en A. Koo appear ed f or Appel l ee J an P.J ohnson, Chapt er 13 Tr ust ee; Ant oni a G. Dar l i ngappear ed f or Appel l ee, August B. Landi s, Act i ngUni t ed St at es Trust ee.

Bef ore: DUNN, J URY, and KI RSCHER, Bankr upt cy J udges.

What al l par t i es ant i ci pat ed woul d be a r el at i vel y

st r ai ght f or war d no asset chapt er 72 case spawned l i t i gat i on

r esul t i ng i n t en j udgment s i n t hr ee di f f er ent bankrupt cy cases

now bef or e t he panel on appeal , al l of whi ch r el ate i n some

f ashi on t o sanct i ons agai nst t he debt or s counsel and hi s

part ner . Because t he j udgment s were ent ered on a def aul t basi s,and because nei t her appel l ant sought r el i ef f r om t he def aul t

j udgment s f r om t he bankrupt cy cour t i n t he f i r st i nst ance, we

DI SMI SS each of t hese appeal s.

/ / /

/ / /


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3 A subst ant i al por t i on of t hi s Memor andum sets out f act spr i or t o t he event s act ual l y i nvol ved i n t he pendi ng appeal s.Never t hel ess, t he hi st or i c f act s ar e i mpor t ant t o a f ul lunder st andi ng of t hese appeal s.

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I . FACTUAL BACKGROUND

A. Set t i ng t he St age: Bankrupt cy Cour t Mat t er s Oct ober 19, 2009Thr ough Apr i l 18, 2011. 3

Harvey P. and St ephani e B. Mi ckel sen pai d At t orney Sean P.

Gj er de $2, 000 t o f i l e a chapt er 7 bankrupt cy pet i t i on on t hei r

behal f , whi ch he di d on Oct ober 19, 2009. Ul t i matel y

di ssat i sf i ed wi t h t he ser vi ces Mr . Gj er de had per f or med, t he

Mi ckel sens r et ai ned subst i t ut e counsel ( Subst i t ut e Counsel ) on

Febr uar y 10, 2010. The Mi ckel sens ther eaf t er sent Mr . Gj er de a

l et t er dated May 6, 2010, out l i ni ng why they bel i eved he shoul d

r ef und t he $2, 000 i n f ees t hey had pai d hi m. Mr . Gj er de

r esponded by l et t er dat ed May 11, 2010, st at i ng t hat al l pr obl ems

wi t h the Mi ckel sens case wer e caused by t he chapt er 7 t r ust ee,

Pr em N. Dhawan ( Chapt er 7 Tr ust ee) . I n t hi s l et t er , Mr . Gj er de

expr essed hi s opi ni on t hat he di d not t hi nk t he Mi ckel sens woul d

get much sympathy f r omt he bankr upt cy cour t , i f t hey br ought

t he mat t er t o i t s at t ent i on. As t hei r r esponse, t he Mi ckel sens

amended t hei r schedul es on May 27, 2010 to exempt a cl ai m agai nstMr . Gj er de.

Subst i t ut e Counsel t hen sent a l et t er t o Mr . Gj er de on

J une 3, 2010, r est at i ng t he Mi ckel sens r equest f or a r ef und, and

gi vi ng Mr . Gj er de expl i ci t not i ce and oppor t uni t y t o respond as

cont empl at ed by Rul e 9011( c) . Af t er Mr . Gj er de f ai l ed t o

r espond, on J ul y 21, 2010, Subst i t ut e Counsel f i l ed a Mot i on t o


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Di sgor ge Legal Fees ( Mot i on t o Di sgor ge) and set t he mat t er f or

hear i ng t o be hel d August 31, 2010 ( August 31 Hear i ng) . The

Mot i on to Di sgor ge sought t he di sgor gement of t he at t or neys f ees

t he Mi ckel sens had pai d t o Mr . Gj erde and an order compel l i ng

Mr . Gj er de t o pay t he at t or neys f ees of Subst i t ut e Counsel

r equi r ed t o r epai r [ t he] damage caused by [ Mr . ] Gj er de s

i ncompet ent handl i ng of [ t he Mi ckel sens ] case.

Mr . Gj er de t i mel y f i l ed hi s r esponse under t he l ocal r ul es

of t he Bankr upt cy Cour t f or t he East er n Di st r i ct of Cal i f or ni a

( LBRs) on August 16, 2010. Not wi t hst andi ng hi s opposi t i on t o

t he Mot i on t o Di sgor ge, Mr . Gj er de di d not appear at t he

August 31 Hear i ng. At t he August 31 Hear i ng, t he bankr upt cy

cour t cont i nued t he hear i ng on t he Mot i on t o Di sgor ge to

Sept ember 28, 2010 ( Sept ember 28 Hear i ng) and di r ect ed

Subst i t ut e Counsel t o pr ovi de Mr . Gj er de not i ce of t he

Sept ember 28 Hear i ng. Subst i t ut e Counsel ser ved Mr . Gj erde wi t h

not i ce of t he Sept ember 28 Hear i ng vi a emai l and cer t i f i ed mai l

on August 31, 2010, and vi a t el ecopi er and r egul ar mai l onSept ember 1, 2010. Subst i t ut e Counsel f i l ed a decl ar at i on of

ser vi ce wi t h the bankr upt cy cour t on Sept ember 3, 2010.

Mr . Gj erde di d not appear at t he Sept ember 28 Hear i ng.

However , Mr . Gj er de ost ensi bl y was r epr esent ed at t he

September 28 Hear i ng by at t or ney Mat t hew Pear son, who r epor t ed he

was appear i ng on behal f of Mr . Gj erde. The r ecor d suggest s t hat

Mr . Pear son di d not r epr esent t o t he bankrupt cy cour t at t heSept ember 28 Hear i ng t hat he was act i ng as Mr . Gj erde s counsel .

Fol l owi ng the concl usi on of t he Sept ember 28 Hear i ng, on

Oct ober 5, 2010, t he bankr upt cy cour t ent ered on t he docket an


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unsi gned ci vi l mi nut e or der ( Mi nut e Or der ) . The Mi nut e Or der

pr ovi ded: Fi ndi ngs of f act and concl usi ons of l aw havi ng been

st at ed or al l y on t he r ecor d and good cause appear i ng. I T I S

ORDERED t hat t he mot i on i s gr ant ed, f ees di sgorged i n the amount

of $2, 000.

Subst i t ut e Counsel served t he Mi nut e Or der on Mr . Gj er de vi a

t el ecopi er , cer t i f i ed U. S. Mai l , and Fi r st Cl ass U. S. Mai l , al l

on Oct ober 7, 2010. I ncl uded wi t h t he Mi nut e Or der was a l et t er

( Demand Let t er ) f r om Subst i t ut e Counsel r equest i ng t hat

Mr . Gj erde send a check payabl e t o t he Mi ckel sens i n care of

Subst i t ut e Counsel . Mr . Gj erde r esponded t o t he Demand Let t er on

Oct ober 7, 2010, t aki ng t he posi t i on t hat because t he Mi nut e

Or der di d not r ef er t o hi m by name, he i nt ended t o i gnor e i t . He

al so demanded t hat Subst i t ut e Counsel not cont act hi m agai n

because he was r epr esent ed by counsel , al t hough Mr . Gj erde di d

not st at e who was servi ng as hi s counsel . Subst i t ut e Counsel

t hen sent , vi a t el ecopi er , e- mai l , and U. S. Mai l , a copy of t he

Mi nut e Or der and a l et t er r equest i ng t he di sgor ged f ees t oMr . Pearson on Oct ober 8, 2010, and when no response was

r ecei ved, began cal l i ng Mr . Pear son s of f i ce on Oct ober 21, 2010,

t o i nqui r e r egar di ng t he st at us of payment of t he di sgor ged f ees.

Despi t e l eavi ng f i ve voi ce mai l messages r equest i ng a ret ur n

t el ephone cal l , Subst i t ut e Counsel r ecei ved no cal l f r om

Mr . Pearson.

On November 3, 2010, Subst i t ut e Counsel f i l ed a Mot i on t oCompel Sean P. Gj erde t o Compl y wi t h Cour t Or der and/ or f or

Coer ci ve Cont empt Sanct i ons ( Mot i on t o Compel ) , and set t he

mat t er f or hear i ng t o be hel d November 23, 2010 ( November 23


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Hear i ng) . The Mot i on t o Compel sought an order compel l i ng

Mr . Gj er de t o di sgor ge the at t or neys f ees t he Mi ckel sens had pai d

hi m and t he at t or neys f ees t he Mi ckel sens had i ncur r ed f or t he

ser vi ces per f ormed by Subst i t ut e Counsel . The Mot i on t o Compel

al so sought an or der gr ant i ng coer ci ve cont empt sanct i ons agai nst

Mr . Gj er de unt i l he compl i ed wi t h t he Mi nut e Or der . Subst i t ut e

Counsel ser ved both the Mot i on t o Compel and a not i ce of hear i ng

on t he Mot i on t o Compel on Mr . Gj erde and Mr . Pearson vi a f i r st

cl ass mai l on November 3, 2010.

Under t he LBRs, because t he mot i on was set f or hear i ng on

l ess t han 28 days not i ce, Mr . Gj er de had unt i l t he t i me of t he

November 23 Hear i ng t o f i l e or t o pr esent hi s opposi t i on t o t he

Mot i on t o Compel . See LBR 9014- 1( f ) ( 2) ( C) . Mr . Gj er de nei t her

f i l ed an opposi t i on nor appear ed at t he November 23 Hear i ng t o

pr esent one.

At t he concl usi on of t he November 23 Hear i ng, an unsi gned

ci vi l mi nut e or der ( Second Mi nut e Or der ) was ent er ed on t he

bankr upt cy cour t docket . The Second Mi nut e Or der provi ded:Fi ndi ngs of f act and concl usi ons of l aw havi ng been st at ed

oral l y on t he r ecor d and good cause appear i ng. I T I S ORDERED

t hat t he mot i on i s grant ed. I T I S FURTHER ORDERED, Sean Gj erde

( Cal i f or ni a St at e Bar 217467) shal l appear bef or e the under si gned

J udge on December 14, 2010 at 9: 30 a. m. , t o expl ai n why he has

not compl i ed wi t h t hi s Cour t s order . FURTHER: Chambers t o

i ssue Or der t o Show Cause regar di ng el ect r oni c f i l i ngpr i vi l eges.

On November 24, 2010, t he bankr upt cy cour t ent ered i t s Or der

t o Appear ( Show Cause Or der) , whi ch pr ovi ded:


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I T I S ORDERED t hat Sean P. Gj erde ( St ate Bar No.217467) shal l appear bef ore the undersi gned j udge onDecember 14, 2010, at 9: 30 a. m. and expl ai n why he hasnot compl i ed wi t h t hi s cour t s or der t o di sgor ge $2, 000pur suant t o 11 U. S. C. 329.

I T I S FURTHER ORDERED t hat Mr . Gj erde shal l show cause

why hi s el ect r oni c f i l i ng pr i vi l ege shoul d not bet ermi nated.

The deput y cl er k s cer t i f i cat e of ser vi ce at t ached t o t he Show

Cause Or der st at es t hat on November 29, 2010, she served t he Show

Cause Or der by pl aci ng t r ue and cor r ect copi es i n post age pai d

envel opes addr essed t o Mr . Gj erde and t o Subst i t ut e Counsel and

by deposi t i ng t he envel opes i n t he U. S. Mai l or by pl aci ng t he

copi es i n an i nt er of f i ce del i ver y recept acl e l ocat ed i n t he

Cl er k s Of f i ce.

Mr . Gj er de di d not appear at t he hear i ng on the Or der t o

Show Cause. At t he concl usi on of t he hear i ng on t he Or der t o

Show Cause, an unsi gned ci vi l mi nut e or der ( Thi r d Mi nut e Or der )

was ent er ed on t he bankrupt cy cour t docket on December 14, 2010.

The Thi r d Mi nut e Or der provi ded: Fi ndi ngs of f act and

concl usi ons of l aw havi ng been st at ed or al l y on t he r ecor d andgood cause appear i ng. The Cour t f i nds Mr . Sean P. Gj er de hel d i n

cont empt of cour t . The Thi r d Mi nut e Or der di r ect ed t hat an

order be prepared by Chamber s.

On J anuary 10, 2011, t he bankr upt cy cour t ent ered i t s Or der

of Cont empt ( Cont empt Or der ) , whi ch st at es i n i t s ent i r et y:

Sean P. Gj erde havi ng f ai l ed t o expl ai n why he has notdi sgor ged $2, 000 as or dered by t hi s cour t on Oct ober 5,

2010, whi ch order has not been appeal ed by Sean P.Gj er de or t he Nor t her n Cal i f or ni a Law Cent er , andhavi ng f ai l ed t o appear bef or e t he under si gned onDecember 14, 2010,

I T I S ORDERED t hat Sean P. Gj erde i s hel d i n cont emptof cour t .


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I T I S FURTHER ORDERED t hat al l f i l i ng pr i vi l eges ofSean P. Gj er de, Nor t her n Cal i f or ni a Law Cent er , or anyat t or ney associ at ed wi t h Nor t her n Cal i f or ni a Law Cent erare revoked.

I T I S FURTHER ORDERED t hat no case may be f i l ed i n t heEast er n Di st r i ct of Cal i f or ni a by Sean P. Gj er de,

Nor t her n Cal i f or ni a Law Cent er , or any at t or neyassoci at ed wi t h Nor t her n Cal i f or ni a Law Cent er wi t houtpr i or per mi ssi on f r om t he Chi ef J udge of t hi s cour t .

The deput y cl er k s cer t i f i cat e of ser vi ce at t ached t o t he

Cont empt Or der st ates t hat on J anuary 11, 2011, she ser ved t he

Cont empt Or der by pl aci ng t r ue and cor r ect copi es i n post age pai d

envel opes addr essed t o Mr . Gj erde and t o Subst i t ut e Counsel and

by deposi t i ng t he envel opes i n t he U. S. Mai l or by pl aci ng t he

copi es i n an i nt er of f i ce del i ver y recept acl e l ocat ed i n t he

Cl er k s Of f i ce.

The next day, Mr . Gj er de di r ect ed a l et t er t o t he at t ent i on

of t he bankr upt cy j udge who i ssued t he Cont empt Or der . I n t hi s

l et t er , Mr . Gj er de asser t ed t hat hi s pr i mar y pr obl em wi t h t he

Mi nut e Or der was the cor r ect amount . He asser t ed he shoul d not

have been requi r ed t o di sgorge $2, 000, when onl y $1, 701 was pai df or or on account of hi s at t orneys f ees. The r emai ni ng $299 was

pai d t o hi m by t he Mi ckel sens as t he cour t f i l i ng f ee i n t he

case, and he had used t he f unds f or t hat pur pose. Mr . Gj er de

st at ed i n the l et t er t hat he had of f er ed t o pay t he $1, 701 amount

wi t hout success, but t hat he now woul d be wi l l i ng t o pay the

$2, 000 t o have my f i l i ng pr i vi l eges rei nst at ed. He expl ai ned

t he har dshi p t he Cont empt Or der had pl aced on hi s ot her cl i ent s.He al so i nf or med t he bankrupt cy cour t t hat , absent r ei nst at ement

of hi s f i l i ng pr i vi l eges, t her e woul d appear l i t t l e r eason t o

pay out t hi s money whi ch I assume was your i nt ent i on.


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Mr . Gj er de f ur t her t ook the bankrupt cy cour t t o t ask f or

suspendi ng t he f i l i ng pr i vi l eges of Mr . Gj er de s par t ner , J ames

Chandl er , asser t i ng t hat because Mr . Chandl er had no not i ce of

t he pr oceedi ngs, Mr . Chandl er s pr i vi l eges wer e r emoved i n

vi ol at i on of hi s due pr ocess r i ght s.

The bankrupt cy cour t deemed Mr . Gj er de s l et t er t o be a

mot i on f or r econsi der at i on of t he Mi nut e Or der and t he Or der of

Cont empt , and ent ered a f ur t her or der on J anuary 14, 2011, whi ch

set a hear i ng on t he mot i on f or r econsi der at i on t o be hel d

J anuar y 25, 2011 ( J anuar y 25 Hear i ng) . When Mr . Gj er de di d not

appear at t he J anuar y 25 Hear i ng, t he bankrupt cy cour t cont i nued

t he hear i ng t o Febr uar y 1, 2011 ( Febr uar y 1 Hear i ng) . Not abl y,

t he Uni t ed St at es Trust ee ( UST) j oi ned i n t he pr oceedi ngs

begi nni ng wi t h t he J anuar y 25 Hear i ng, si gnal i ng that br oader

concer ns wer e devel opi ng wi t h r espect t o Mr . Gj er de s bankrupt cy

pr act i ce. On J anuar y 25, 2011, Subst i t ut e Counsel served a

not i ce of t he Febr uar y 1 Hear i ng on Mr . Gj er de vi a emai l ,

t el ecopi er , and f i r st cl ass mai l .Mr . Gj er de di d appear at t he Febr uar y 1 Hear i ng. The ci vi l

mi nut es of t he Febr uar y 1 Hear i ng r ef l ect onl y that t he hear i ng

was cont i nued t o Apr i l 5, 2011 ( Apr i l 5 Hear i ng) . What was

di scussed at t he Febr uar y 1 Hear i ng we do not know, as we have

not been pr ovi ded a t r anscr i pt of t hose pr oceedi ngs. What i s

cl ear f r om t he r ecor d t hat has been pr esent ed t o us i s t hat af t er

t he Febr uar y 1 Hear i ng t he pr oceedi ngs expanded si gni f i cant l y i nscope.

On Mar ch 8, 2011, Subst i t ut e Counsel f i l ed a mot i on

( Pr evai l i ng Par t y Fees Mot i on) , seeki ng $6, 582. 52, an amount


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whi ch pur port ed t o repr esent t he reasonabl e expenses and

at t or neys f ees i ncur r ed i n pr esent i ng t he ear l i er Mot i on t o

Compel and par t i ci pat i ng i n t he r esul t i ng cont empt pr oceedi ngs

agai nst Mr . Gj er de. Subst i t ut e Counsel schedul ed t he Pr evai l i ng

Par t y Fees Mot i on t o be hear d at t he Apr i l 5 Hear i ng, and on

Mar ch 8, 2011, served t he Pr evai l i ng Par t y Fees Mot i on and t he

not i ce of i t s schedul ed hear i ng on Mr . Gj er de vi a U. S. Mai l .

Decl ar at i ons i n suppor t of t he under l yi ng Mot i on f or

Cont empt wer e f i l ed by Subst i t ut e Counsel ( Subst i t ut e Counsel

Decl arat i on) on March 22, 2011, by the Chapt er 7 Trust ee

( Chapt er 7 Tr ust ee Decl ar at i on) ( at t he di r ect i on of t he UST) on

March 22, 2011, by an assi st ant UST ( UST Decl arat i on) on

March 28, 2011, and by t he Chapt er 13 Tr ust ee f or t he East ern

Di st r i ct of Cal i f or ni a, Sacrament o Di vi si on ( Chapt er 13 Tr ust ee

Decl ar at i on) . Par ed t o t hei r essences, t he r espect i ve

decl ar at i ons st at ed:

Subst i t ut e Counsel Decl ar at i on - Subst i t ut e Counsel had been

at t empt i ng si nce t he spr i ng of 2010 t o assi st t he Mi ckel sens t oobt ai n a ref und of t he moni es t hey pai d i n conj unct i on wi t h t hei r

bankrupt cy f i l i ng. Those f unds wer e pai d ei t her t o Sean P.

Gj er de and Associ at es, t he Law Of f i ce of Sean P. Gj er de, or t he

Nor t her n Cal i f or ni a Law Cent er , P. C. ( NCLC) . I n May 2010,

Mr . Gj erde acknowl edged i n wr i t i ng t hat both he and Mr . Chandl er

compr i sed t he NCLC. Mr . Gj er de i ni t i al l y t ook t he posi t i on t hat

because t he Mi nut e Or der di d not name hi m personal l y, i t was notdi r ect ed t o hi m. Begi nni ng i n J anuar y, 2011, Mr . Gj er de began t o

asser t t hat not i ce had not been gi ven t o t he f i r m. Despi t e

Mr . Gj er de s cl ai m t o t he cont r ar y i n hi s J anuar y 12, 2011 l et t er


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t o t he bankr upt cy court , Mr . Gj erde had made no at t empt t o meet

wi t h Subst i t ut e Counsel t o r esol ve t he di sput e. The l ast

communi cat i on Subst i t ut e Counsel r ecei ved f r om Mr . Gj er de was a

l et t er dat ed Mar ch 9, 2011, whi ch st at ed t hat hi s counsel had

advi sed hi m not t o communi cat e wi t h t he Mi ckel sens so he woul d

not be abl e to r esol ve t he money i ssue at t hat t i me.

Chapt er 7 Tr ust ee Decl ar at i on - The UST request ed that t he

Chapt er 7 Tr ust ee appr i se t he bankrupt cy cour t of hi s exper i ence

r egar di ng t he qual i t y of Mr . Gj er de s wor k, and of Mr . Gj er de s

at t i t ude i n deal i ng wi t h t he i ssues i n t he Mi ckel sens case.

The Chapter 7 Tr ust ee deter mi ned t hat t he Mi ckel sens had

i mpr oper l y asser t ed f eder al exempt i ons, r at her t han Cal i f or ni a

st at e exempt i ons, i n asset s. Most si gni f i cant l y, Mr . Gj er de had

l i st ed on Schedul e B t wo l i f e i nsur ance pol i ci es wi t h a t ot al

val ue of $175, 000, and t hen f ul l y exempt ed t hose pol i ci es under

522( d) ( 7) . Mr . Gj er de was unr esponsi ve t o t he Chapt er 7

Tr ust ee s ef f or t s t o cont act hi m r egar di ng t he i mproper use of

f eder al exempt i ons. The f ai l ur e t o ci t e t he pr oper exempt i onsr equi r ed t he Chapt er 7 Tr ust ee t o r et ai n counsel t o pr eserve t he

bankr upt cy est at e s i nt er est i n t he i nsur ance pol i ci es.

Fol l owi ng a subsequent r equest f or document at i on concerni ng

t he i nsur ance pol i ci es, Mr . Gj er de asser t ed t he pol i ci es had no

cash val ue and of f ered t o amend t he Mi ckel sens schedul es t o so

r ef l ect . Af t er t he Chapt er 7 Tr ust ee and hi s counsel r evi ewed

t he i nsurance pol i cy document at i on, t hey det er mi ned t hat t hecombi ned cash sur r ender val ue was appr oxi matel y $22, 116. 63. The

Chapt er 7 Tr ust ee r equest ed conf i r mat i on of t hi s cash surr ender

val ue f r om t he i nsur ance compani es. I n r esponse, Mr . Gj er de


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f i l ed an amended schedul e C asser t i ng $11, 070 of t he val ue exempt

pur suant t o Cal . Code Ci v. P. 703. 140( b) . Fol l owi ng t he f i l i ng

of t he amendment , t he Chapt er 7 Tr ust ee obt ai ned t ur nover of t he

f ul l cash val ue of t he i nsur ance pol i ci es f r om t he i nsur ance

compani es, subj ect t o t he Mi ckel sens al l owed exempt i on i n t he

amount of $11, 070.

Ther eaf t er t he Mi ckel sens r et ai ned Subst i t ut e Counsel , who

amended schedul e C t o cl ai m t he ent i r e l i f e i nsur ance pr oceeds as

exempt under t he wi l d car d exempt i on. Ul t i mat el y, t he

Chapt er 7 Tr ust ee was r equi r ed t o t ur n over al l of t he l i f e

i nsurance pr oceeds t o the Mi ckel sens.

As a second mat t er , t he Chapt er 7 Tr ust ee wr ot e t o i nst r uct

t he I nt er nal Revenue Ser vi ce ( I RS) t o f or war d t he Mi ckel sens

schedul ed ( and exempt ed) 2009 f ederal i ncome tax r ef und t o the

Chapt er 7 Tr ust ee. Mr . Gj er de quest i oned t he Chapt er 7 Tr ust ee s

counsel about t he l egal aut hor i t y under whi ch t he Chapt er 7

Tr ust ee was asser t i ng t hat t he 2009 r ef und was proper t y of t he

bankrupt cy est at e. Chapt er 7 Tr ust ee s counsel had t o wr i t e t oMr . Gj er de t o pr ovi de t he aut hor i t y.

Fi nal l y, t he Mi ckel sens had been i nvol ved i n a pr epet i t i on

aut omobi l e acci dent , r esul t i ng i n ( 1) a per sonal i nj ur y cl ai m

t hat was nei t her schedul ed nor exempt ed, and ( 2) l oss of t hei r

vehi cl e whi ch was not di scl osed i n t hei r St at ement of Fi nanci al

Af f ai r s. A r ecent sal e by t he Mi ckel sens of t hei r pr i or Ar i zona

r esi dence al so was not di scl osed i n t hei r bankrupt cy document s.These er r or s wer e cor r ect ed by Subst i t ute Counsel .

The Chapter 7 Tr ust ee conduct ed a t ot al of t hree 341(a)

meet i ngs i n t he Mi ckel sens case. The f i r st , on November 24,


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2009, was cont i nued by t he Chapt er 7 Tr ust ee, because Mr . Gj erde

f ai l ed t o appear wi t h t he Mi ckel sens. Whi l e Mr . Gj er de s

par t ner , Mr . Chandl er , di d appear , Mr . Chandl er admi t t ed he knew

not hi ng about t he Mi ckel sens bankrupt cy pet i t i on, schedul es and

st at ement of f i nanci al af f ai r s. As a r esul t , t he Chapt er 7

Tr ust ee bel i eved t he Mi ckel sens wer e not wel l r epresent ed at t he

f i r st 341( a) meet i ng. Mr . Gj er de di d at t end t he second

341( a) meet i ng on December 9, 2009, at whi ch t i me, Mr . Gj erde

mi sr epr esent ed t o the Chapt er 7 Tr ust ee that t he i nsurance

pol i ci es had no cash sur r ender val ue. Mr . Gj er de al so admi t t ed

hi s l ack of exper i ence wi t h bankrupt cy mat t er s, l eadi ng t he

Chapt er 7 Tr ust ee t o cont i nue t he 341( a) meet i ng agai n to

pr ovi de Mr . Gj er de wi t h t i me t o cor r ect pr obl ems wi t h t he

asser t ed exempt i ons and to pr ovi de addi t i onal document at i on to

t he Chapt er 7 Tr ust ee.

The Chapter 7 Tr ust ee emphasi zed t hat , because of a l ack of

adequat e di scl osures, i mpr oper l y asser t ed exempt i ons, and a l ack

of cooper at i on and communi cat i on f r om Mr . Gj er de, t he Chapt er 7Tr ust ee bel i eved i t was necessar y t o engage l egal counsel t o

assi st hi m i n admi ni st er i ng t he Mi ckel sens case.

Mr . Gj erde wr ote t o t he Chapt er 7 Trust ee and hi s counsel on

Febr uary 1, 2010, demandi ng t hat t he Mi ckel sens case be cl osed,

and t hr eat eni ng t o f i l e a mot i on agai nst t he Chapt er 7 Tr ust ee

and hi s counsel f or hol di ng up t hi s case and f or wast i ng t he

t i me and r esour ces of t he Uni t ed St at es, of t he Cour t and of[ Mr . Gj er de s] t i me. The gi st of Mr . Gj er de s compl ai nt was

t hat t he Chapt er 7 Trust ee and hi s counsel were maki ng excessi ve

demands and had no r i ght t o al l t he needl ess i nf or mat i on


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r equest ed. I n t he l et t er , Mr . Gj er de i mpl i ed he woul d f i l e a

mot i on t o have t he Chapter 7 Tr ust ee removed; Mr . Gj erde had made

a si mi l ar , mor e speci f i c, t hr eat i n t he case of anot her of hi s

cl i ent s al so bei ng admi ni st er ed by the Chapt er 7 Tr ust ee.

The Chapter 7 Tr ust ee next di scussed hi s exper i ence wi t h

Mr . Gj erde i n t he other case. The Chapt er 7 Trust ee was

appoi nt ed i n t hat case on August 29, 2009, f ol l owi ng conver si on

of t he case f r om chapt er 13 t o chapt er 7. I n t hat case,

Mr . Gj er de al so i mpr oper l y used f eder al r at her t han Cal i f or ni a

exempt i ons, r equi r i ng t he Chapt er 7 Tr ust ee t o r et ai n counsel t o

obj ect t o t he exempt i ons.

I n addi t i on, t he Chapt er 7 Tr ust ee advi sed Mr . Gj er de t hat

chapt er 7 debt ors were not aut hor i zed t o operate a busi ness

wi t hout cour t appr oval and r equest ed t hat Mr . Gj erde pr ovi de

evi dence of i nsur ance and i nst r uct hi s cl i ent s t o cl ose t hei r

busi ness. Mr . Gj er de was not r esponsi ve. Mr . Gj er de di d not

appear at t he 341( a) meet i ng. The subst i t ut e at t or ney who di d

appear was unf ami l i ar wi t h t he case. At t hi s 341( a) meet i ng,t he debt or s st at ed under oat h t hat t he f ai r mar ket val ue of t he

busi ness was $100, 000. The debt or s and Mr . Gj er de f ai l ed t o

appear at t he cont i nued 341( a) meet i ng. I nst ead, Mr . Gj er de

sent cor r espondence t o counsel f or t he Chapt er 7 Tr ust ee, st at i ng

t hat unl ess t he Chapt er 7 Trust ee concl uded t he 341( a) meet i ng

and ei t her cl osed t he case as a no asset case, t hereby abandoni ng

t he busi ness t o t he debt or s, or agr eed t o t he di smi ssal of t hecase, he woul d f i l e a mot i on t o r emove t he Chapt er 7 Trust ee.

Ul t i mat el y, t he bankrupt cy cour t ent er ed an or der r equi r i ng t he

debt or s t o at t end a cont i nued 341( a) meet i ng; t he or der al so


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pr ovi ded that no di schar ge woul d be ent er ed i n t he case unt i l

t hi r t y days af t er t he 341( a) meet i ng was concl uded.

Rather t han compl y wi t h any of t he request s of t he Chapt er 7

Tr ust ee, Mr . Gj er de f i l ed a mot i on t o di smi ss t he case, proposi ng

t hat t he debt or s woul d r e- f i l e i t at a l at er dat e. When advi sed

t hat t he Chapt er 7 Tr ust ee i nt ended t o obj ect t o t he di smi ssal ,

Mr . Gj er de wr ot e t o t he Chapt er 7 Tr ust ee and hi s counsel st at i ng

t hat t he Chapt er 7 Tr ust ee had no st andi ng t o obj ect t o di smi ssal

of t he case, and t hat he woul d t ake l egal act i on agai nst t he

Chapt er 7 Tr ust ee i f t he Chapt er 7 Tr ust ee obj ect ed t o di smi ssal .

Af t er t he bankrupt cy cour t deni ed t he debt or s mot i on t o di smi ss,

t he debt or s r et ai ned subst i t ut e counsel .

UST Decl arat i on - The UST revi ewed t he bankrupt cy cour t f i l es of

al l 77 bankr upt cy cases f i l ed i n t he East er n Di st r i ct of

Cal i f or ni a by Mr . Gj er de and summar i zed t he i ssues or pr obl ems i n

t hose cases. Most not abl y, t he UST st at ed t hat i n onl y f our of

t he 77 cases wer e no i ssues seen. Thi r t y of t he cases wer e

chapt er 13 cases; onl y t wo of t hose cases r eached pl anconf i r mat i on. Twent y- seven of t he cases wer e di smi ssed bef or e

conf i r mat i on, and one case had pl an conf i r mat i on deni ed i n

December, 2010, wi t h no new pl an f i l ed as of t he date of t he UST

Decl ar at i on. For t y- seven of t he cases wer e chapt er 7 cases.

El even of t he cases wer e di smi ssed f or f ai l ur e to f i l e document s.

Mr . Gj er de ei t her qui t or was f i r ed i n f i ve of t he cases.

Twent y- f our cases r esul t ed i n debtor di schar ge. One case wascl osed wi t hout a di schar ge and has not been r eopened. Si x cases

were pendi ng.

The UST chr oni cl ed t he most common er r or s and i ssues seen i n


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Mr . Gj er de s f i l i ngs: i ncompl et e soci al secur i t y number

decl ar at i ons submi t t ed wi t h t he pet i t i on i n 20 cases; no mast er

addr ess l i st f i l ed wi t h t he pet i t i on i n 15 cases; no Exhi bi t D

and cer t i f i cat e f i l ed wi t h t he pet i t i on i n 25 cases; no pl an was

f i l ed i n 21 chapt er 13 cases; Mr . Gj er de f ai l ed t o appear at

l east once at a 341( a) meet i ng i n 10 cases; t he 341( a)

meet i ng was cont i nued i n 11 cases f or cor r ect i ons or f or l at e

submi t t ed document s; and bl ank document s were f i l ed i n t hr ee

cases. The UST al so poi nt ed out t hat 14 of t he cases were r epeat

f i l i ngs wher e Mr . Gj er de or hi s f i r m wer e counsel i n t he pr i or

cases as wel l , but wher e t he pr i or cases wer e not l i st ed on t he

pet i t i on.

To ensure t hat t he anal ysi s of Mr . Gj er de s wor k was f ai r ,

t he UST al so revi ewed t he cases of t wo ot her at t orneys i n

pr act i ce si nce 2008. Af t er set t i ng out t he r esul t s of t hat

r evi ew, t he UST concl uded t hat Mr . Gj erde was i ncompetent t o

pr act i ce l aw. The UST f ur t her st at ed t hat Mr . Gj er de had shown

no i nt er est i n i mpr ovi ng hi s ski l l s, despi t e bei ng t ol d by manyt r ust ees t hat hi s wor k was subst andar d.

Chapt er 13 Trust ee Decl arat i on - The Chapt er 13 Trust ee pr ovi ded

i n det ai l a chr oni cl e of t he pr obl ems i n each of t he

17 chapt er 13 cases i n whi ch he was t he t r ust ee and Mr . Gj erde

served as counsel f or t he debt or ( s) .

Mr . Gj er de f i l ed pl eadi ngs i n pr epar at i on f or t he Apr i l 5

Hear i ng as f ol l ow:- Sean P. Gj er de s Br i ef Re: Reconsi der at i on of [ t he Cont empt

Or der ] . Mr . Gj er de asser t ed t hat t he NCLC accept ed $2, 000 f r om

t he Mi ckel sens, whi ch const i t ut ed a payment of $1, 701 t oward


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at t or neys f ees and $299 t owar d t he f i l i ng f ee f or t he Mi ckel sens

case. Mr . Gj er de t her ef or e r equest ed t hat t he bankrupt cy cour t

modi f y t he Or der of Cont empt t o pr ovi de that onl y $1, 701 be

di sgor ged. Mr . Gj er de asser t s t hat on Mar ch 22, 2011, he pai d

t he Mi ckel sens $1, 701 by t r ansmi t t i ng payment t o Subst i t ut e

Counsel . The ul t i mat e sent ence of t hi s br i ef st at ed: Wi t h

r egar d t o the suspensi on of f i l i ng r i ght s i n t he [Cont empt

Or der ] , Gj er de wi shes t o i nf or m t he Cour t t hat he i s wi t hdr awi ng

f r om pr act i ci ng bef or e t he East er n Di st r i ct Bankrupt cy Cour t at

t hi s t i me.

- Sean P. Gj er de s Opposi t i on t o Debt or s Mot i on f or At t or neys

Fees and Cost s. Mr . Gj er de asser t ed t hat i t i s cl ear that

Subst i t ut e Counsel t ook the Mi ckel sens r equest f or di sgor gement

of f ees as a make- work pr oj ect f or whi ch t hey now sought

$6, 534 f ees and $48. 62 cost s f or a mot i on t hat r equest ed

di sgor gement of onl y $1, 701, maki ng t he amount of Subst i t ut e

Counsel s at t or neys f ees unr easonabl e. He compl ai ned as t o t he

amount i n par t because t he case has l ong been cl osed and the[ Mi ckel sens] have been di schar ged f or over 6 mont hs. Mr . Gj er de

poi nt ed out t hat because the or i gi nal Mot i on t o Di sgor ge

cont ai ned a r equest f or Subst i t ut e Counsel f ees t hat wer e not

gr ant ed, i t was not appr opr i at e t o gr ant t hose f ees i n t he

cont ext of a separ at e mot i on. Fi nal l y, he asser t ed t hat

Subst i t ut e Counsel s Decl ar at i on coyl y st at ed t hat t he f ees

wer e suppor t ed by a bi l l i ng r epor t , not t hat t he f ees had been,or wer e expect ed t o be, pai d by t he Mi ckel sens.

- Rebut t al of [ Subst i t ut e Counsel Decl ar at i on] . Mr . Gj er de

asser t ed t hat t he Subst i t ut e Counsel Decl ar at i on suppor t ed t he


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poi nt he had made f r om t he begi nni ng of t he cont r over sy: t he

Mi ckel sens hi r ed Sean P. Gj erde, such t hat any di sgor gement order

shoul d be di r ect ed t o Sean P. Gj er de, not t o t he NCLC. He

pr ot est ed t hat he had never r ef used t o di sgor ge the f ees pai d by

t he Mi ckel sens, but r at her had r epeat edl y asser t ed t he or der

shoul d be di r ect ed t o hi m per sonal l y and he woul d di sgor ge t he

f ees accor di ngl y. He cont ended t hat t he st atement he had made i n

hi s i ni t i al br i ef r egar di ng r econsi der at i on of t he Cont empt Or der

t hat [ t he NCLC] accept ed a t ot al of $2, 000 f r om t he Mi ckel sens

was i naccurate, because t he money was pai d t o hi m. He st ated

t hat even where cases were f i l ed by hi m under t he name of t he

NCLC, i n r eal i t y, hi s pr act i ce as t o bankrupt cy cases al ways was

kept separ at e f r om t hose bankrupt cy cases f i l ed and admi ni st er ed

by t he co- owner of t he NCLC, Mr . Chandl er . Mr . Gj erde t hen ur ged

t he bankrupt cy cour t t o avoi d pr ej udi ci ng Mr . Chandl er s cl i ent s,

st at i ng t hat Mr . Chandl er s abi l i t y t o r epr esent hi s cl i ent s i n

pendi ng mat t ers has been hampered si gni f i cant l y by t he bankr upt cy

cour t s t er mi nat i on of Mr . Chandl er s el ect r oni c f i l i ng r i ght s byway of t he Cont empt Or der , wi t h whi ch Mr . Chandl er never had been

ser ved.

Whi l e t he vast maj or i t y of hi s cl i ent s wer e, i n Mr . Gj er de s

vi ew, pl eased wi t h hi s ser vi ces, r epeat ed mi st akes and act ual

mi sconduct by hi s f or mer assi st ant s made hi s cont i nued pr act i ce

i mpr act i cal , and r espondi ng t o t he f al se and unsubst ant i at ed

accusat i ons of Tr ust ee J an P. J ohnson, t he f al se accusat i ons oft he [ UST] and Ms. Ant oni a G. Dar l i ng of t he Depar t ment of J ust i ce

[ had] become t oo oner ous a bur den t o j ust i f y cont i nui ng t o

pr act i ce bef or e t hi s cour t .


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Not wi t hst andi ng t he wr i t t en opposi t i on t o t he mat t er s t o be

det ermi ned at t he Apr i l 5 Hear i ng, no appearance was made by or

on behal f of Mr . Gj er de at t he Apr i l 5 Hear i ng. At t he

concl usi on of t he Apr i l 5 Hear i ng, t he bankrupt cy cour t ent er ed

ci vi l mi nut es t o t he ef f ect t hat f i ndi ngs of f act and concl usi ons

of l aw wer e st at ed or al l y on t he r ecor d, t hat t he Pr evai l i ng

Par t y Fees Mot i on was gr ant ed, and t hat t he or der was t o be

pr epar ed by Subst i t ut e Counsel . On Apr i l 11, 2011, Subst i t ut e

Counsel f i l ed a suppl ement al decl ar at i on ( Suppl ement al

Decl ar at i on) ( 1) t o advi se t he bankrupt cy cour t t hat on Apr i l 5,

2011, t wo cashi er s checks wer e del i ver ed t o her of f i ce - one i n

t he amount of $2, 000 and one i n t he amount of $3, 000, t he

r emi t t er of bot h havi ng been Mr . Chandl er ; and ( 2) t o suppor t , as

di r ect ed by t he bankrupt cy cour t at t he Apr i l 5 Hear i ng,

addi t i onal at t or neys f ees and cost s i ncur r ed bet ween t he per i od

March 5, 2011 and Apr i l 5, 2011.

On Apr i l 14, 2011, t he bankr upt cy cour t ent ered an order

( Pr evai l i ng Par t y Fee Or der ) pur suant t o [ 105( a) ] and [ t he]cour t s i nher ent aut hor i t y t o pr event abuse, gr ant i ng t he

Pr evai l i ng Par t y Fees Mot i on and r equi r i ng Mr . Gj er de and t he

NCLC t o pay the Mi ckel sens t he sumof $10, 072. 62 i n addi t i on t o

t he $2, 000 pr evi ousl y or der ed di sgor ged i n t he Mi nut e Or der .

Recogni zi ng t he $3, 000 pai d on Apr i l 5, 2011, t he Pr evai l i ng

Par t y Fee Or der di r ected t hat Mr . Gj erde and t he NCLC r emi t ,

f or t hwi t h, t he r emai ni ng bal ance due of $7, 072. 62 t o Subst i t ut eCounsel .

On Apr i l 18, 2011, t he bankrupt cy cour t ent er ed a ci vi l

mi nut e or der whi ch deni ed Mr . Gj er de s Mot i on f or Reconsi der at i on


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( Four t h Ci vi l Mi nut e Or der ) .

On Apr i l 28, 2011, Mr . Gj er de f i l ed hi s document ent i t l ed

Mot i on f or St ay of At t orney Fee Award, Request t o Have Onl i ne

Access Rei nst at ed Pendi ng Appeal ( "St ay Mot i on) . Mr . Gj er de

cont ended t hat t he Apr i l 5 Hear i ng shoul d not have pr oceeded

wi t hout t he pr esence of ei t her hi msel f or hi s at t or ney,

Mr . Pear son, i n l i ght of t he not at i on on t he Apr i l 4 pr e- hear i ng

di sposi t i on cal endar whi ch st at ed that no appear ance was

necessary. He asser t ed he was depr i ved of due pr ocess when t he

cour t conduct ed t he Apr i l 5 Hear i ng because, i n r el i ance on t he

post i ng of no appear ance he made pl ans t o appear i n another

cour t . He asser t ed t hat he was pr ej udi ced by what he consi dered

t he l at e f i l i ngs of t he UST Decl ar at i on and t he Chapt er 13

Tr ust ee Decl ar at i on. Mr Gj er de cont ended t hat t he f ee awar d was

unconsci onabl e where i t was f or an amount more than f i ve t i mes

t he amount of t he di sgor gement i t sel f .

A subst ant i al por t i on of t he St ay Mot i on i s

i ncompr ehensi bl e. Mr . Gj er de not i ced t he hear i ng on t he St ayMot i on f or J une 21, 2011. Bef or e t he hear i ng coul d t ake pl ace,

Mr . Gj er de f i l ed, on May 9, 2011, a not i ce of appeal ( Fi r st

Appeal ) , st at i ng t hat he was appeal i ng t he bankrupt cy cour t s

or der ent er ed Apr i l 18, 2011, and al l i nt er l ocut or y or der s t hat

gave r i se t o t hat or der , i ncl udi ng but not l i mi t ed t o t he Mi nut e

Or der , t he Cont empt Or der , and t he Prevai l i ng Par t y Fee Or der .

The Not i ce of Appeal was dat ed Apr i l 21, 2011.The bankrupt cy cour t t r ansmi t t ed t he Fi r st Appeal t o t hi s

panel on May 11, 2011, and the Fi r st Appeal was ass i gned BAP

No. EC- 11- 1227. On May 13, 2011, our mot i ons panel i ssued a


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Not i ce of Def i ci ent Appeal and I mpendi ng Di smi ssal ( BAP

Def i ci ency Not i ce) on t he basi s t hat t he Fi r st Appeal was

unt i mel y, havi ng been f i l ed mor e t hat f our t een days af t er ent r y

of t he Four t h Mi nut e Or der , whi ch deni ed Mr . Gj er de s mot i on f or

r econsi der at i on. The BAP Def i ci ency Not i ce r equi r ed t hat

Mr . Gj er de, wi t hi n f our t een days, pr ovi de an adequat e l egal

expl anat i on as t o why the Fi r st Appeal shoul d not be di smi ssed.

See Docket #3 i n BAP Case No. EC- 11- 1227. On J une 16, 2011, t he

panel r ecei ved f r om t he bankrupt cy cour t a not i ce i ndi cat i ng t hat

Mr . Gj er de had f ai l ed t o f i l e a desi gnat i on of r ecor d, a

st at ement of i ssues, a r epor t er s t r anscr i pt , and/ or a not i ce

r egar di ng t he t r anscri pt . I n addi t i on, t he not i ce i ndi cat ed

Mr . Gj er de had not pai d t he f i l i ng f ee f or t he Fi r st Appeal . See

Docket #6 i n BAP Case No. EC- 11- 1227. On J une 20, 2011, our

mot i ons panel di smi ssed t he Fi r st Appeal ( 1) f or non- payment of

t he appeal f i l i ng f ee, and ( 2) f or l ack of j ur i sdi cti on, not i ng

t hat Mr . Gj er de had f ai l ed t o respond t o the BAP Def i ci ency

Not i ce. See Docket #7 i n BAP Case No. EC- 11- 1227.On J une 27, 2011, Mr . Gj er de f i l ed a mot i on f or

r econsi der at i on of t he di smi ssal or der ent er ed i n t he Fi r st

Appeal . See Docket #8 i n BAP Case No. EC- 11- 1227. I n t hat

mot i on, Mr . Gj er de asser t ed he had been unabl e to f i l e the Fi r st

Appeal pr oper l y because t he Cont empt Or der ent ered J anuary 10,

2011 made i t i mpossi bl e t o f i l e anythi ng wi t h t he cour t i n any

pr oper f ashi on. He al so asser t ed t hat pr i or at t empt s to f i l et he Fi r st Appeal had been r ej ected by the bankr upt cy cour t on t wo

separate occasi ons. On August 1, 2011, t he mot i ons panel ent ered

a l i mi t ed r emand t o the bankrupt cy cour t t o i ssue f i ndi ngs of


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f act r egar di ng t he t i mel i ness of t he not i ce of appeal t hat

i ni t i at ed t he Fi r st Appeal . See Docket #14 i n BAP Case

No. EC- 11- 1227.

On r emand, t he bankr upt cy cour t conduct ed an evi dent i ary

hear i ng on t he i ssue of whet her Mr . Gj er de had at t empt ed t o f i l e

a t i mel y not i ce of appeal t hat had been r ej ect ed by the Cl er k of

t he Bankr upt cy Cour t ( Cour t Cl er k) . The bankrupt cy cour t

det er mi ned t hat nei t her Mr . Gj er de nor hi s par al egal , Shaun

Smi t h, wer e cr edi bl e wi t nesses. Each t est i f i ed he had r ecei ved a

not i ce f r om t he Cour t Cl er k ret ur ni ng a not i ce of appeal t ender ed

t hr ough t he mai l on Apr i l 26, 2011, yet nei t her coul d pr oduce t he

wr i t i ng t o evi dence t hi s communi cat i on f r om t he Cour t Cl er k or

t he envel ope i n whi ch i t had been mai l ed. I n cont r ast , a deput y

Cour t Cl er k t est i f i ed r egar di ng t he bankrupt cy cour t s i nt er nal

pr ocedur e f or r etur ni ng document s t hat were t endered but not

accept ed f or f i l i ng. Thi s pr ocedur e i ncl uded ( 1) pr epar at i on of

a memorandum t o accompany the document r et urned, and ( 2) not at i on

of t he memor andum on t he cour t s admi ni st r at i ve docket . Theadmi ni st r at i ve docket i n t he case ref l ect ed t hat no such

memor andum had been prepared.

The bankrupt cy cour t f ound t hat t he not i ce of appeal was not

t ender ed t o t he Cour t Cl er k unt i l May 9, 2011, and t hat i t was

accept ed f or f i l i ng on t hat dat e. The bankrupt cy cour t al so

not ed t hat Mr . Gj er de f ai l ed t o appear at t he J une 21, 2011

hear i ng he had set on hi s Stay Mot i on r egar di ng t he Pr evai l i ngPar t y Fee Or der . As a consequence, t he bankr upt cy cour t deni ed

t he St ay Mot i on and awarded $627. 00 t o Subst i t ut e Counsel , who

pr epar ed f or and at t ended t he hear i ng on Mr . Gj er de s St ay


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Mot i on. That order was ent ered J ul y 8, 2011, and was never

appeal ed.

Based on t he f i ndi ngs of t he bankrupt cy cour t , t he mot i ons

panel deni ed Mr . Gj er de s mot i on f or r econsi der at i on of t he or der

di smi ssi ng t he Fi r st Appeal f or l ack of j ur i sdi ct i on based on an

unt i mel y f i l ed not i ce of appeal . See Docket #21 i n BAP Case

No. EC- 11- 1227. The mot i ons panel t her eaf t er deni ed Mr . Gj er de s

r equest f or cer t i f i cat i on of t he appeal di r ect l y t o t he Ni nt h

Ci r cui t Cour t of Appeal s. See Docket #24 i n BAP Case

No. EC- 11- 1227.

These backgr ound f act s ar e r eci t ed her e t o make cl ear t hat

no ef f ect i ve appeal was t aken f r om any or der of t he bankrupt cy

cour t i n t he Mi ckel sen case ent er ed on or bef or e Apr i l 18, 2011,

and t hat al l such or der s ar e f i nal or der s.

B. Facts Rel at i ng t o t he Cur r ent Appeal s.

Cur r ent l y bef or e t he panel ar e t en or der s ent er ed by t he

bankrupt cy cour t on or af t er Oct ober 25, 2011. Mr . Gj er de i s t he

appel l ant i n t hr ee of t he appeal s. Mr . Chandl er i s t he appel l anti n t he r emai ni ng seven appeal s. We now t ur n t o t he f act s

r el at i ng t o t hese appeal s.

Addi t i onal Fact s

Mr . Chandl er came to the at t ent i on of t he UST i ndi r ect l y as

a r esul t of a new compl ai nt agai nst Mr . Gj er de. I n J anuar y 2011,

t he UST was cont acted by Ki mber l ey J orgensen, one of t he debt ors

i n Case No. 10- 43436- E13L, wi t h a compl ai nt t hat her bankr upt cycase had been di smi ssed because her at t orney, Mr . Gj erde, had

f ai l ed t o per f or m t he necessary ser vi ces t o mai nt ai n her case.

Ms. J orgensen had l ocat ed a new at t orney, but needed her r ecor ds


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Chapt er 13 Tr ust ee Ni et o/ Or t i z Mot i on, on t he basi s t hat t he

debt or s had hi r ed Mr . Chandl er i ndi vi dual l y, not NCLC. The

opposi t i on st at ed t hat t he cur r ent act i on, by whi ch i t appear s

Mr . Chandl er meant t he Ni et o/ Or t i z Case, had been f i l ed wi t hout

t he appr oval of ei t her t he debt or s or Mr . Chandl er . Mr . Chandl er

st at ed t hat an unnamed assi st ant i n hi s of f i ce, an i ndependent

cont r act or si nce t er mi nat ed, had f i l ed t he pet i t i on wi t hout t he

debt or s si gnat ur es and wi t hout pr esent i ng t he document s t o

Mr . Chandl er f or appr oval or di r ect i on. The pr ayer i n t he

opposi t i on r equest ed t hat t he cour t deny t he Chapt er 13 Tr ust ee

Ni et o/ Or t i z Mot i on, t hat t he debt or s be per mi t t ed t o pr oceed i n

t he case wi t h t hei r chosen at t or ney, and t hat a di f f er ent

t r ust ee be appoi nt ed t o avoi d any pot ent i al pr ej udi ce agai nst

Debt or s. ( Emphasi s added. ) Mr . Chandl er f i l ed a decl ar at i on i n

suppor t of t he Opposi t i on, i n whi ch he chr oni cl ed a hi st or y of

i mpr oper act i ons t aken by t wo unnamed assi st ant s over t he cour se

of mor e t han si x mont hs. Mr . Chandl er deni ed t hat he wi l l f ul l y

had vi ol ated t he Cont empt Or der , compl ai ni ng t hat he di d not haveadequat e due pr ocess not i ce of t he pr oceedi ngs l eadi ng t o t he

ent r y of t he Cont empt Or der . Never t hel ess, havi ng l ear ned of t he

Cont empt Or der on Mar ch 3, 2011, he woul d have sought t he

per mi ssi on of t he pr esi di ng j udge bef or e f i l i ng t he Ni et o/ Or t i z

Case, i f [ he] had been gi ven t he oppor t uni t y to r evi ew and

appr ove t he case bef or e i t was f i l ed.

On Apr i l 13, 2011, Mr . Chandl er f i l ed wi t h t he bankrupt cycour t an Appl i cat i on f or Rei nst at ement of Fi l i ng Pr i vi l eges


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4 The Chandl er Appl i cat i on was not f i l ed wi t h any capt i on

or i n any par t i cul ar case.

5 The Chandl er Appl i cat i on appear s t o r el at e t o f ouri dent i cal or der s ent er ed by t he bankrupt cy cour t on Apr i l 6,2011, i n f our separ at e cases: ( 1) J oy Lynn Tabur a, CaseNo. 11- 23433- C- 7; ( 2) Sal l y Rose Kr emere, Case No. 11- 23434- C- 7;( 3) Di ane R. Br i t t on, Case No. 11- 23435- C- 7; and ( 4) Ser gy R.Lakhno, Case No. 11- 23436- C- 7. Each or der i s ent i t l ed Or der onOr der t o Show Cause r e Di smi ssal . The t ext of each order r eadsi n i t s ent i ret y:

Thi s i s a mot i on t o di smi ss a case wher e t he f i l i ng f eeof $299 was not pai d. Debt or s counsel , [ NCLC] ,appeared and ur ged t he case be di smi ssed as a dupl i cat eof anot her case. The case shal l be di smi ssed. Thef i l i ng f ee, however , r emai ns due as a post - pet i t i ondebt i n t he dupl i cat e case. Mor eover , J ames C.Chandl er , Esq. , and hi s col l eague Sean P. Gj er de, whohave pr act i ced l aw under t he name [ NCLC] , have beenbar r ed by t hi s cour t f r om el ectr oni c f i l i ng pr i vi l egesf or t he r easons st at ed or al l y on t he r ecor d Apr i l 5,2011, i n t he case I n r e Mi ckel sen, No. 09- 42649- C- 7.

The f i l i ng pr i vi l eges of Mr . Chandl er , Mr . Gj er de, and[ NCLC] , wi l l not be el i gi bl e f or consi der at i on ofr ei nst at ement unl ess and unt i l t he f i l i ng f ee i n t hi scase has been pai d.

SO ORDERED.

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( Chandl er Appl i cat i on) , 4 r eci t i ng t hat on Mar ch 16, 2011, t he

bankrupt cy cour t had r evoked hi s f i l i ng pr i vi l eges based on t he

Cont empt Or der agai nst Mr . Gj erde and t he NCLC. Mr . Chandl er di d

not at t ach to t he Chandl er Appl i cat i on a copy of t he Mar ch 16,

2011 act i on of t he bankrupt cy cour t f r om whi ch he sought r el i ef ;

nor does i t appear anywhere i n t he r ecor d bef ore the panel . 5

I n hi s decl ar at i on i ncor por at ed i nt o t he Chandl er

Appl i cat i on, Mr . Chandl er f aul t ed mul t i pl e unnamed empl oyees f or

any and al l f i l i ng pr obl ems. He asser t ed t hat he and Mr . Gj er de


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al ways had mai nt ai ned separate bankr upt cy pr act i ces even whi l e

j oi nt l y usi ng t he NCLC name. He f ur t her asser t ed t hat ef f ect i ve

J anuar y 1, 2011, hi s st af f had been di r ect ed t o f i l e al l of hi s

new bankrupt cy cases i n t he East er n Di st r i ct of Cal i f or ni a

r ef l ect i ng hi s af f i l i at i on wi t h t he Law Of f i ces of J ames P.

Chandl er , not wi t h the NCLC.

Mr . Chandl er conceded at oral argument t hat he never made

any at t empt t o obt ai n a hear i ng on t he Chandl er Appl i cat i on, or

t hat hi s f i l i ng pr i vi l eges ever wer e r ei nst at ed despi t e hi s

asser t i on i n t he Chandl er Appl i cat i on t hat he had pai d t he $1, 196

t o cover unpai d f i l i ng f ees i n f our cases appar ent l y i dent i f i ed

i n t he March 16, 2011 act i on. To t he ext ent t he March 16, 2011

act i on of t he bankrupt cy cour t was an or der , Mr . Chandl er t ook no

appeal f r om t hat or der .

The Bankr upt cy Cour t s Or der t o Show Cause

At t he Apr i l 26 Hear i ng, at whi ch Mr . Chandl er was present ,

t he bankr upt cy cour t cont i nued pr oceedi ngs on t he Chapt er 13

Tr ust ee mot i ons t o J une 22, 2011 ( J une 22 Hear i ng) . Fol l owi ngt he Apr i l 26 Hear i ng, t he bankrupt cy cour t i ssued an Or der t o

Show Cause ( Apr i l 27 Show Cause Or der) di r ect i ng both

Mr . Gj erde and Mr . Chandl er t o appear at t he J une 22 Hear i ng and

show cause why t hey shoul d not be sanct i oned pur suant t o

Rul e 9011 f or f i l i ng pet i t i ons wi t hout f i r st obt ai ni ng cl i ent

si gnat ur es. The Apr i l 27 Show Cause Or der al so consol i dat ed t he

pr oceedi ngs on both mot i ons of t he Chapt er 13 Tr ust ee and set adi scover y schedul e.

On May 3, 2011, t he Chapter 13 Trust ee propounded di scovery

r equest s t o Mr . Gj erde and t o Mr . Chandl er . When nei t her


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Mr . Gj er de nor Mr . Chandl er pr ovi ded r esponses t o the di scover y

r equest s, ot her t han t o serve obj ect i ons, t he Chapt er 13 Tr ust ee

f i l ed a mot i on on J une 14, 2011, t o compel di scover y ( Di scover y

Mot i on) pur suant t o Ci vi l Rul e 37 and set i t t o be hear d wi t h

other pendi ng mat t ers at t he J une 22 Hear i ng.

On May 18, 2011, Mr . Gj er de f i l ed a mot i on t o st r i ke

( Gj er de Mot i on t o St r i ke) t he Apr i l 27 Show Cause Or der on t he

basi s that i t vi ol at ed Rul e 9011. I n ef f ect , he asser t ed t hat

t he Apr i l 27 Show Cause Or der served t o j oi n hi m i mpr oper l y as a

par t y t o t he Chapt er 13 Tr ust ee mot i ons i n t he Ni et o/ Or t i z and

Dye cases.

The J une 22 Hear i ng

Bot h Mr . Chandl er and Mr . Gj erde appear ed at t he J une 22

Hear i ng. The bankrupt cy cour t deni ed Mr . Gj er de s Mot i on t o

St r i ke af t er r eadi ng t he Apr i l 27 Show Cause Or der i nt o the

r ecor d and est abl i shi ng t hr ough Mr . Gj er de s t est i mony under oat h

t hat he had r ecei ved and read the Apr i l 27 Show Cause Or der .

I n def endi ng t he Di scover y Mot i on, Mr . Chandl er asser t edt hat i n l i ght of t he f act t hat t he Chapt er 13 Tr ust ee mot i ons

r ai sed t he i ssue of cont empt , he had r equest ed r epr esent at i on

f r om hi s i nsur ance car r i er t hat had not yet been pr ovi ded. He

f ur t her asser t ed he si mpl y had not had suf f i ci ent t i me t o gat her

t he document s r equest ed, i n part because of a ser i ous back

i nj ur y. He al so compl ai ned t hat t he Di scover y Mot i on was f i l ed

on shor t ened not i ce t hat gave hi m i nsuf f i ci ent t i me t o r espond.Mr . Gj er de al so asser t ed t hat he had been at t empt i ng to

obt ai n r epr esent at i on t hr ough hi s i nsur ance car r i er . Mr . Gj er de

compl ai ned about needi ng t o pr oduce wet si gnatur es f or ever y


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si ngl e l ast f i l e. He f ur t her asser t ed t hat t he Bankrupt cy Code

di d not aut hor i ze a t r ust ee t o r equest t he wet si gnat ur es,

al t hough he di d concede t hat t he bankr upt cy cour t coul d make t he

r equest . Mr . Gj er de r equest ed an addi t i onal f our weeks t o l ocat e

al l of hi s f i l es.

The di scover y propounded by t he Chapter 13 Tr ust ee al so

r equest ed i dent i f i cat i on of t he empl oyees whom Mr . Chandl er and

Mr . Gj er de wer e bl ami ng f or i mpr oper f i l i ngs. Mr . Chandl er and

Mr . Gj er de had obj ect ed t o pr ovi di ng t hat i nf or mat i on, ci t i ng t he

need t o pr ot ect t he pr i vacy of t hi r d par t i es and t hei r own

payrol l mat t er s. The bankrupt cy cour t det er mi ned i t was

appr opr i at e t o r edact any soci al secur i t y i nf or mat i on, but r ul ed

t hat t he Chapt er 13 Trust ee was ent i t l ed t o l ear n t he names of

t he per sons accused of f i l i ng cases wi t hout aut hor i t y and t o

depose t hem, i f appr opr i at e.

The bankrupt cy cour t set a f ur t her hear i ng f or J ul y 25, 2011

( J ul y 25 Hear i ng) t o t ake evi dence on an awar d of sanct i ons

under Ci vi l Rul e 37( a) ( 5) . Because of t he l ack of di scover y, t hehear i ng on the Chapt er 13 Tr ust ee mot i ons and the Apr i l 27 Show

Cause Or der were cont i nued t o t he same dat e.

UST s Sanct i ons Mot i on

On J une 14, 2011, t he UST f i l ed i t s Mot i on f or Or der of

Ci vi l Cont empt and Sanct i ons ( UST Sanct i ons Mot i on) agai nst

bot h Mr . Gj er de and Mr . Chandl er f or ( 1) vi ol at i ng t he Or der of

Cont empt , and ( 2) vi ol at i ng LBR 9004- 1( c) ( 1) ( C) , whi ch pr ovi des:Al l pl eadi ngs and non- evi dent i ar y document s shal l besi gned by t he i ndi vi dual at t or ney f or t he par t ypr esent i ng t hem, or by t he par t y i nvol ved i f t hat par t yi s appear i ng i n pr opr i a per sona. Af f i davi t s andcer t i f i cat i ons shal l be si gned by t he per son of f er i ng


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6 The Mi ckel sen case had been cl osed by t he cour t on

November 10, 2010. On J une 15, 2011, t he UST f i l ed a mot i on t or eopen t he Mi ckel sen case on t he basi s t hat f ur t her pr oceedi ngswere necessary on t he Cont empt Or der pr evi ousl y ent ered i n t hatcase. The bankr upt cy cour t ent ered an order r eopeni ng t heMi ckel sen case on J une 17, 2011, and an amended or der r eopeni ngt he case on J une 24, 2011 ( Amended Reopeni ng Or der ) i n or der t ocl ar i f y t hat no t r ust ee need be appoi nt ed i n t he r eopened case.On J ul y 7, 2011, Mr . Gj er de f i l ed a not i ce of appeal ( SecondAppeal ) f r omt he Amended Reopeni ng Or der , on t he basi s t hat t heMi ckel sen case cur r ent l y was wi t h t he Ni nt h Ci r cui t Cour t ofAppeal s. The Second Appeal , BAP No. EC- 11- 1363, was di smi ssed by

our mot i ons panel on Oct ober 11, 2011, because Mr . Gj erde hadf ai l ed t o compl y wi t h t he br i ef i ng schedul e i ssued on J ul y 19,2011, and al so had f ai l ed t o respond t o t he panel s condi t i onalor der of di smi ssal r el at i ng t o t he del i nquent br i ef . The mot i onspanel f ur t her not ed t hat t he Second Appeal was i nt er l ocut or y anddetermi ned t hat l eave t o cont i nue the appeal was not warr ant ed.

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t he evi dent i ar y mat er i al cont ai ned i n the document .The name of t he per son si gni ng t he document shal l bet yped under neat h t he si gnat ur e.

( 1) Si gnatur es on Document s Submi t t edEl ect roni cal l y

. . .( C) The Use of / s/ Name or a Sof t ware Generated-

El ect r oni c Si gnat ur e. The use of / s/ Name or asof t war e- gener at ed el ect r oni c si gnat ur e on document sconst i t ut es t he r egi st er ed user s r epr esent at i on t hatan or i gi nal l y si gned copy of t he document exi st s and i si n t he r egi st er ed user s possessi on at t he t i me off i l i ng.

The UST Sanct i ons Mot i on was f i l ed i n t he Mi ckel sen case,

not wi t hst andi ng t hat t he case at i ssue i nvol ved debt or s

Mi chael G. Pet er s and J enni f er L. Pet er s. 6 I n part i cul ar , t he

UST al l eged i n t he UST Sanct i ons Mot i on t hat t hr ee cases were

f i l ed by or on behal f of Mr . Gj er de, Mr . Chandl er , and/ or t he

NCLC as f ol l ows:

The Pet er s hi r ed Mr . Gj er de t o f i l e a chapt er 13 case f or

t hem i n May of 2010. The Pet ers met wi t h Mr . Gj erde on May 4,


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2010, and he agr eed t o r epr esent t hem. The Pet ers pai d NCLC

$1, 000 by cr edi t car d on t hat date, and on Sept ember 30, 2010,

wr ote a check to Mr . Gj erde i n t he amount of $1, 274. The Pet ers

al so pr ovi ded Mr . Gj er de a post - dat ed check f or t he bal ance of

hi s f ees, whi ch he deposi t ed pr i or t o i t s dat e wi t h t he r esul t

t hat i t was r et ur ned f or i nsuf f i ci ent f unds. The Pet er s r epl aced

t hat check wi t h cash. I n t ot al Mr . Pet er s bel i eves he pai d

$3, 226 pl us t he f i l i ng f ee.

The Pet er s f i r st case ( Pet er s I ) was f i l ed by Mr . Gj er de

on Oct ober 21, 2010, but was di smi ssed because of t he i nadequacy

of t he unconf i r med pl an. I n par t i cul ar , t he Chapt er 13 Tr ust ee

f i l ed bot h an obj ect i on t o conf i r mat i on and a mot i on t o di smi ss,

nei t her of whi ch Mr . Gj er de addr essed. Pet er s I was di smi ssed

on Mar ch 11, 2011. The Pet er s second case ( Pet er s I I ) was

f i l ed on March 14, 2011, af t er t he Cont empt Or der had been

ent er ed, i n t he f ace of a pendi ng f or ecl osur e. Pet er s I I was

f i l ed by Mr . Chandl er , not by Mr . Gj erde or t he NCLC. When

Mr . Chandl er f i l ed Pet er s I I , he had not met wi t h t he Pet er s, norhad he obt ai ned t he Pet er s si gnat ur es on t he Pet er s I I pet i t i on

i n vi ol at i on of LBR 9004- 1. Pet er s I I was di smi ssed Apr i l 1,

2011, af t er Mr . Chandl er f ai l ed t o f i l e mi ssi ng document s i n t he

case.

Af t er Pet er s I I was f i l ed, t he Chapt er 13 Tr ust ee Dye Mot i on

was f i l ed, seeki ng t o sanct i on Mr . Chandl er f or f i l i ng new cases

i n vi ol at i on of t he Cont empt Or der . Ther ef or e, Mr . Chandl er di dnot f i l e t he Pet er s t hi r d case ( Pet er s I I I ) . I nstead, t he

document s f or Pet ers I I I were pr epared by NCLC, and the document s

wer e f i l ed wi t h t he cour t on Apr i l 13, 2011, by NCLC s par al egal ,


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Shaun Smi t h. The Pet er s asser t t hey di d si gn t he pet i t i on f or

Pet er s I I I bef or e i t was f i l ed. Unbeknownst t o t he Pet er s, t he

Pet er s I I I pet i t i on l i sted t he Pet er s as f i l i ng i n pr o per . I n

hi s af f i davi t i n suppor t of t he UST Sanct i ons Mot i on, Mr . Pet er s

st at ed t hat when Pet er s I I I was f i l ed, he and hi s wi f e st i l l

bel i eved t hey were bei ng r epr esent ed by Mr . Gj erde. They

conf i r med wi t h Mr . Gj er de s of f i ce t hat he woul d be r epr esent i ng

t hem at t he 341( a) meet i ng i n Pet er s I I I . I t was at t hat

341( a) meet i ng t hat t he Pet er s r eal i zed t hey were

unr epr esent ed. Al t hough Mr . Gj erde appear ed at t he 341( a)

meet i ng, he took t he quest i onnai r e the UST had gi ven t he Peters

as debt or s not r epr esent ed by counsel , he f i l l ed i n t he space f or

at t or ney compensat i on t o ref l ect t he Pet er s had pai d no f ees t o

hi m, and he had t he Pet er s si gn t he quest i onnai r e. The

Chapt er 13 Tr ust ee then r ef used t o al l ow Mr . Gj er de to repr esent

t he Pet ers at t he 341( a) meet i ng because he was not l i st ed as

counsel of r ecor d.

On J une 22, 2011, Mr . Gj er de f i l ed a r equest t hat t he USTSanct i ons Mot i on be di smi ssed on t he basi s t hat i t was f i l ed i n

vi ol at i on of LBR 8020- 1. I n essence, Mr . Gj er de asser t ed t hat

t he bankrupt cy cour t was wi t hout j ur i sdi ct i on over t he Mi ckel sen

case, or any mat t er f i l ed i n t hat case, so l ong as t he Fi r st

Appeal was pendi ng. Mr . Gj er de f i l ed an al t er nat i ve pl eadi ng on

t he same date, t hr ough whi ch he demanded a j ur y t r i al and

appoi nt ment of counsel , pur suant t o Fed. R. Cr i m. P. 42, i f t heUST Sanct i ons Mot i on were al l owed t o pr oceed.

The hear i ng on t he UST Sanct i ons Mot i on was schedul ed f or

J ul y 25, 2011 ( J ul y 25 Hear i ng) , at t he same t i me as t he


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Chapt er 13 Tr ust ee mot i ons, t he Di scover y Mot i on, and t he cour t s

Apr i l 27 Show Cause Or der .

The J ul y 25 Hear i ng

Mr . Chandl er di d not appear at t he J ul y 25 Hear i ng. As a

consequence, t he bankrupt cy cour t ent er ed def aul t agai nst hi m on

al l pendi ng mat t er s, i . e. , t he Chapt er 13 Tr ust ee Ni et o/ Or t i z

Mot i on, t he Chapt er 13 Trust ee Dye Mot i on, t he Di scover y Mot i on,

t he UST Sanct i ons Mot i on, and t he Apr i l 27 Show Cause Or der .

Mr . Gj er de was r epr esent ed at t he J ul y 25 Hear i ng by

Tom J ohnson. Mr . J ohnson advi sed t he bankrupt cy cour t t hat i n

J une 2010, Mr . Gj er de had been i ndi ct ed i n a cr i mi nal mat t er

i nvol vi ng hi s l aw pr act i ce and mor t gage f r aud. Al t hough

Mr . J ohnson had begun r epr esent i ng Mr . Gj erde whi l e Mr . Gj erde

was under i nvest i gat i on pr i or t o t he i ndi ct ment , he onl y recent l y

had been asked t o repr esent Mr . Gj erde i n t he bankr upt cy cour t

mat t er s. Because t he di scovery r equest s i nvol ved mat t er s

pot ent i al l y r el at ed t o t he f eder al i ndi ct ment , Mr . J ohnson asked

f or addi t i onal t i me t o eval uat e t he di scover y request s t o pr ot ectMr . Gj er de f r om possi bl e sel f - i ncri mi nat i on. Al t hough skept i cal

t hat t he bankrupt cy cour t mat t er s coul d i mpact Mr . Gj er de s

r i ght s wi t h r espect t o t he f eder al i ndi ct ment , wher e t he act i ons

concerned i n t he i ndi ct ment t ook pl ace bef ore J une 2010 and t he

mat t er s bef or e t he bankrupt cy cour t t ook pl ace begi nni ng af t er

t he Cont empt Or der was ent ered i n J anuary 2011, t he bankr upt cy

cour t never t hel ess grant ed Mr . Gj er de a f ur t her cont i nuance andset t he evi dent i ary hear i ng f or Sept ember 8, 2011 ( Sept ember 8

Hear i ng) .

/ / /


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7 These mat t er s i ncl uded t he UST s Sanct i ons Mot i on andt he evi dent i ar y hear i ng on t he remand f r om t he Fi r st Appeal .

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The September 8 Hear i ng

Mr . J ohnson s appear ance f or Mr . Gj erde at t he Sept ember 8

Hear i ng was l i mi t ed t o the Chapt er 13 Tr ust ee Ni et o/ Or t i z Mot i on

and t he Chapt er 13 Trust ee Dye Mot i on. Mr . Gj erde r epr esent ed

hi msel f wi t h r espect t o t he ot her mat t er s. 7

Once agai n Mr . J ohnson r equest ed a st ay of t he mat t ers i n

bankrupt cy cour t , t hi s t i me pendi ng r esol ut i on of Mr . Gj er de s

t r i al i n the f eder al case, whi ch was t hen set t o commence on

J anuar y 23, 2012. The UST and t he bankrupt cy cour t expr essed

concer n as t o cont i nui ng har m t o t he publ i c i n t he event

Mr . Gj er de and/ or t he NCLC st i l l wer e f i l i ng bankrupt cy cases.

The bankr upt cy cour t cont i nued al l hear i ngs t o Oct ober 19, 2011

( Oct ober 19 Hear i ng) , t o per mi t t he par t i es t o det er mi ne

whet her a st ay of t he pr oceedi ngs woul d har m t he publ i c.

The Oct ober 19 Hear i ng.

At t he Oct ober 19 Hear i ng, Kr i st y Kel l ogg st ood i n f or

Mr . J ohnson, who was unavai l abl e because of a j ur y ver di ct j ust

r ecei ved i n a pendi ng st at e cour t mat t er t hat r equi r ed hi sat t endance. Ms. Kel l ogg st at ed t hat Mr . J ohnson had f i l ed a

subst i t ut i on of counsel ear l i er i n t he day, and t hat she had a

wr i t t en st at ement f r om Mr . Gj er de r equest i ng t hat t he bankrupt cy

cour t al l ow Mr . J ohnson t o wi t hdr aw as hi s at t or ney of r ecor d,

and per mi t t i ng Mr . Gj er de to repr esent hi msel f i n f ut ur e mat t er s.

Fi nal l y, when asked by t he bankr upt cy cour t where Mr . Gj erde was,

Ms. Kel l ogg st at ed: I was i nf or med t hat Mr . Gj erde was not


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goi ng t o be pr esent at t he hear i ng t oday. Col l oquy wi t h counsel

est abl i shed t hat Mr . Gj er de had cl ear l y si gnal ed hi s i nt ent not

t o appear at any f ut ur e hear i ngs. I n l i ght of t hat i nt ent , t he

bankr upt cy cour t pr oceeded on al l mat t ers pendi ng agai nst

Mr . Gj er de.

The r ecor d of t he Oct ober 19 Hear i ng r ef l ect s t hat t he

bankr upt cy cour t had ordered a st ay cont i ngent on Mr . Gj erde

pl aci ng on hi s websi t e and al l adver t i sement s a not i f i cat i on t hat

he was not al l owed t o accept any new cases f or f i l i ng wi t hout

pr i or appr oval of t he bankrupt cy cour t . The UST r epor t ed t hat

Mr . Gj erde had made no such di scl osur e on hi s websi t e.

The bankrupt cy cour t admi t t ed exhi bi t s whi ch est abl i shed t he

amount s pai d to Mr . Gj erde and/ or t he NCLC by t he debt ors i n the

Pet er s, Dye, and Ni et o/ Or t i z cases, and t ook t est i mony f r om t he

UST and counsel f or t he Chapt er 13 Tr ust ee on thei r at t or neys

f ees. Ther eaf t er , t he bankrupt cy cour t ent er ed j udgment s on al l

mat t er s, and t hese appeal s f ol l owed:

Ni et o/ Or t i z -Mr . Gj er de and Mr . Chandl er , i dent i f i ed as doi ng busi ness as

t he NCLC, wer e or der ed j oi nt l y and sever al l y t o di sgor ge $3, 000

t o t he debt or s. Thi s j udgment i s bef or e t he panel as EC- 11- 1607

on Mr . Gj erde s Not i ce of Appeal and as EC- 11- 1643 on

Mr . Chandl er s Not i ce of Appeal .

Mr . Gj er de and Mr . Chandl er , i dent i f i ed as doi ng busi ness as

t he NCLC, wer e or der ed j oi nt l y and sever al l y t o pay $19, 500 t ot he Chapt er 13 Tr ust ee as t he cost of addi t i onal pr of essi onal

ser vi ces occasi oned by t hei r i nt ent i onal ci vi l cont empt . Thi s

j udgment i s bef or e t he panel as EC- 11- 1619 on Mr . Gj er de s Not i ce


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of Appeal and as EC- 12- 1015 on Mr . Chandl er s Not i ce of Appeal .

Dye -




on Mr . Chandl er s Not i ce of Appeal .


t he NCLC, wer e or der ed j oi nt l y and sever al l y t o pay $19, 500 t o

t he Chapt er 13 Tr ust ee as t he cost of addi t i onal pr of essi onal


j udgment i s bef or e t he panel as EC- 12- 1016 on Mr . Chandl er s

Not i ce of Appeal .

Pet er s -




on Mr . Chandl er s Not i ce of Appeal .

Mi ckel sen -Mr . Gj er de and Mr . Chandl er , i dent i f i ed as doi ng busi ness as

t he NCLC, wer e or der ed j oi nt l y and sever al l y t o pay $16, 020 t o

t he Chapt er 13 Tr ust ee as t he cost of addi t i onal pr of essi onal


j udgment i s bef or e t he panel as EC- 11- 1613 on Mr . Gj er de s Not i ce

of Appeal and as EC- 12- 1017 on Mr . Chandl er s Not i ce of Appeal .

However , i t appear s t hat t hi s j udgment was amended by t hebankrupt cy cour t on Oct ober 27, 2011 t o ref l ect t hat t he

appr opr i ate payee was t he UST r ather t han t he Chapt er 13 Tr ust ee.

Thi s amended j udgment i s bef or e t he panel as EC- 12- 1019 on


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Mr . Chandl er s Not i ce of Appeal .

I I . J URI SDI CTI ON

The bankrupt cy cour t had j ur i sdi ct i on under 28 U. S. C.

1334 and 157( b) ( 2) ( A) . We have j ur i sdi ct i on under 28 U. S. C.

158.

I I I . I SSUES

The broad i ssue bef or e us i s whet her t he bankr upt cy cour t

abused i t s di scr et i on when i t ent er ed t he def aul t j udgment s now

on appeal . However , t wo pr el i mi nar y i ssues exi st . The f i r st i s

whether t he panel may consi der appeal s f r omdef aul t j udgment s

wher e no mot i ons t o set asi de ei t her t he ent r y of def aul t or t he

ent r y of t he def aul t j udgment wer e f i r st br ought bef or e t he

bankr upt cy cour t . The second i s whether Mr . Gj erde and/ or

Mr . Chandl er have wai ved t he i ssues on appeal .

I V. STANDARDS OF REVI EW

A t r i al cour t s deci si on t o ent er a def aul t j udgment i s

r evi ewed f or an abuse of di scr et i on. See Est r ada v. Speno &

Cohen, 244 F. 3d 1050, 1056 ( 9t h Ci r . 2001) . We r evi ew sanct i onsand t he t er ms of a di sci pl i nar y or der f or abuse of di scret i on.

I n r e Nguyen, 447 B. R. 268, 276 ( 9t h Ci r . BAP 2011) ( en banc) .

The bankr upt cy cour t s choi ce of sanct i on i s r evi ewed f or abuse

of di scret i on. U. S. Di st . Ct . f or E. D. Wash. v. Sandl i n, 12 F. 3d

861, 865 ( 9t h Ci r . 1993) .

We appl y a two- part t est t o determi ne whether t he bankr upt cy

cour t abused i t s di scr et i on. Uni t ed St at es v. Hi nkson, 585 F. 3d1247, 1261- 62 ( 9t h Ci r . 2009) ( en banc) . Fi r st , we consi der de

novo whet her t he bankrupt cy cour t appl i ed t he cor r ect l egal

st andar d t o t he r el i ef r equest ed. I d. Then, we r evi ew t he


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bankr upt cy cour t s f act f i ndi ngs f or cl ear err or . I d. at 1262 &

n. 20. We must af f i r m t he bankrupt cy cour t s f act f i ndi ngs unl ess

we concl ude t hat t hey ar e ( 1) i l l ogi cal , ( 2) i mpl ausi bl e, or

( 3) wi t hout suppor t i n i nf er ences t hat may be dr awn f r om t he

f acts i n t he r ecor d. I d.

We may af f i r m t he bankrupt cy cour t s r ul i ng on any basi s

suppor t ed by t he r ecor d. See, e. g. , Hei l man v. Hei l man

( I n r e Hei l man) , 430 B. R. 213, 216 ( 9t h Ci r . BAP 2010) ; FDI C v.

Ki pperman ( I n r e Commerci al Money Cent er , I nc. ) , 392 B. R. 814,

826- 27 ( 9t h Ci r . BAP 2008) ; see al so McSherr y v. Ci t y of Long

Beach, 584 F. 3d 1129, 1135 ( 9t h Ci r . 2009) .

Gener al l y, we do not consi der an i ssue that was r ai sed but

t her eaf t er conceded by t he Appel l ant i n t he t r i al cour t . See

CDN, I nc. v. Kapes, 197 F. 3d 1256, 1258- 59 ( 9t h Ci r . 1999) ( The

wi t hdr awal of an obj ect i on i s t ant amount t o a wai ver of an i ssue

f or appeal . ) .

V. DI SCUSSI ON

A. Mr . Gj er de s Appeal s: EC- 11- 1607, EC- 11- 1613, EC- 11- 1610We begi n our exami nat i on of t he r ecor d wi t h a cl ar i f i cat i on

of what we wi l l not be deci di ng i n t hese appeal s. The val i di t y

of t he Cont empt Or der i s not bef or e us. I t i s a f i nal or der t hat

was not t i mel y appeal ed by Mr . Gj erde, as evi denced by t he

di smi ssal of hi s Fi r st Appeal . Consequent l y, we do not addr ess

t he i ssues Mr . Gj er de r ai sed i n hi s Openi ng Br i ef on Appeal t hat

r el at e t o t he bankr upt cy cour t s j ur i sdi ct i on t o ent er t heCont empt Or der or whet her Mr . Gj erde was deni ed due pr ocess by

t he ent r y

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In re: Marcos Alonzo Nieto and Hildy Jean Ortiz, 9th Cir. BAP (2012)

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