Lydia Wilson

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
LYDIA WILSON, 	No. 11-10683
Debtor(s).
______________________________________/
Memorandum on Motion for Sanctions
_________________
In this Chapter 7 case, attorney Bram Dresden admitted to filing the petition, schedules and
statement of affairs without the debtor’s signature. The court has already determined that Dresden at
the very least acted incompetently in violation of Rule 3-110 of the California State Bar Rules of
Professional Conduct and violated Rule 9011 of the Federal Rules of Bankruptcy Procedure by filing
the bankruptcy papers without obtaining the client’s signature. The court has referred to the Standing
Committee on Professional Conduct the issue of whether Dresden’s conduct crossed over from mere
gross incompetence to active dishonesty.1
In this motion, Chapter 7 Trustee Linda Green seeks three things: return of Dresden’s fees,
discipline, and recovery of costs born by the estate for attorney Dresden’s intentional acts in
the amount of $22,615.049 for Trustee’s Counsel and $9,485.00 for Trustee.
1One additional allegation is made here that was not discussed in the court’s prior
Memorandum: that Dresden actively falsified a bank balance. The court will ask the Standing
Committee to consider this allegation as well.
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Entered on Docket
June 24, 2011
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 11-10683 Doc# 76 Filed: 06/24/11 Entered: 06/24/11 14:58:08 Page 1 of 3

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The court already has dealt with the discipline issue. Dresden clearly is not entitled to any fees
for such a bungled case and shall forfeit his fees. 	The forfeited fees shall be paid to the Trustee
pursuant to § 329(a)(1)(A) of the Bankruptcy Code unless the debtor can show that the fees were
exemptible at the time of filing. 	That leaves only the estate’s claim for recovery of legal fees and
trustee fees.
The Trustee argues that by filing a petition, schedules and a statement of affairs that were not
actually signed by the client, the Trustee was forced to defend a motion to dismiss made by the debtor.
Moreover, the lack of signed papers have made her statutory duties pursuant to § 704(a) much more
difficult. She argues that Dresden ought to reimburse the estate for these expenses caused by his
wrongdoing. Such compensation is permissible, pursuant to the court’s inherent powers, provided that
Dresden acted in bad faith. In re DeVille, 280 B.R. 483, 495 (9th Cir. BAP 2002), aff’d 361 F.3d 539
(9 th Cir. 2004). 	Dresden argues that he made mistakes “based on inadvertence and lack of knowledge
but not with the intent to deceive.”
The court finds that Dresden’s conduct went far beyond inadvertence or lack of knowledge into
bad faith falsification. Dresden does not deny that he unilaterally reduced a bank balance to a false
amount from the accurate figure his client gave him. It does not take any sort of special knowledge to
know what the word “none” means, but in at least three places (jewelry, business fixtures, and property
held for another) the papers Dresden filed were materially false and Dresden knew the truth.
Moreover, Dresden lied to the court when he told the court that he had filed the case by mistake. His
subsequent conduct and his admission that he sometimes filed documents without bothering to obtain
his clients’ signatures completely belie this assertion and make the court feel strongly that Dresden has
no business practicing law. The court has no difficulty finding that Dresden has acted in bad faith and
ought to make the estate whole for the extra expenses incurred by the Trustee as a direct result of his
bad faith conduct.
However, there is no basis for awarding the estate all of its fees to date as the Trustee seeks.
Much of the work done by counsel would have to be done anyway. Fair compensation is only for the
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Case: 11-10683 Doc# 76 Filed: 06/24/11 Entered: 06/24/11 14:58:08 Page 2 of 3

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extra work caused by Dresden’s wrongdoing. 	The Trustee has included no attorney time records in
her motion, nor has she shown how any extra trustee fees have been incurred by the estate. The court
feels that $7,500.00 is sufficient to reimburse the estate for its extra expenses incurred as a result of
Dresden’s wrongful acts, and will order him to pay that amount to the estate.
Counsel for the Trustee shall submit an appropriate form of order.
Dated: June 24, 2011
SAlan Jaroslovsky
U.S. Bankruptcy Judge
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Case: 11-10683 Doc# 76 Filed: 06/24/11 Entered: 06/24/11 14:58:08 Page 3 of 3