Patricia Ann Lehtinen

OCR transcription for search; preserved printed pages are authoritative

dct | red on Doc |
A October 20, 2005. ILED

GLORIA L. FRANKLIN, CLERK

U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA CT 44 2005
1 ORDERED PUBLISHED
HAROLD'S. MARENUS, CLERK
2 KCY. APP. PANEL
Be HE NINTH CIRCUIT

3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5
6|| In re: BAP No. NC-04-1534-BMasS

7\) PATRICIA ANN LEHTINEN,
Bk. No. 03-46972

8 Debtor.
9
JIM G. PRICE,
10
Appellant,
Vv. OPINION
12

PATRICIA ANN LEHTINEN;
13 |] MARTHA G. BRONITSKY,
Chapter 13 Standing Trustee;

)

)

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11 )
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14]| UNITED STATES TRUSTEE, )
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15 Appellees.
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17 Argued and Submitted on June 24, 2005

at Sacramento, California
18

Filed - October 11, 2005
19 ;

Appeal from the United States Bankruptcy Court

20 for the Northern District of California

21 Honorable Randall J. Newsome, Chief Bankruptcy Judge, Presiding

22
23|| Before: BRANDT, MARLAR, and SMITH, Bankruptcy Judges.
24]
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pee 03-46972 Doc#50 Filed: 10/11/05 Entered: 10/20/05 15:31:

represent her both as counsel in her bankruptcy case

and as broker

in listing her house for sale, but did not disclose the potential

conflict of interest inherent in such dual representation.

Near the end of October, debtor contacted Price
intended to file bankruptcy and also that she wanted
to fix her house before selling it.
and filed her chapter 13 petition on 2 December 2003
a scheduled foreclosure, and later filed a plan.

On 19 February 2004 debtor attended the § 341 f:
creditors. Without informing debtor, Price sent
Zamanski, who is not an employee of his law firm, in
the §$ 341 meeting, the chapter 13 trustee objected to
which provided for a 10% payout to unsecured credit
informed debtor that because of the substantial equit
ner plan would not be confirmed without an amendment
her creditors. Price sent debtor an amended plan
which she never signed.

‘The trustee served a notice of the 3 June 200
Price

hearing on Price and the debtor. Meanwhile,

to tell him she
ko borrow money

Price agreed to represent her

on the eve of

irst meeting of

attorney Cal
his stead. At
debtor’s plan,

ors. Zamanski

y in her house,

to pay 100% to

for signature,

4 confirmation

had contacted

Rene Boisvert of Boulevard Equity Group about obtaining a loan for

debtor to fix up her house. Boisvert told debtor

would lend her the funds, pay off the first deed of

Washington Mutual,

proceeds of saie. As a condition of the loan,

Price as broker for the sale, because

“professional” involved.

with these terms,

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debton
Boisvert

At some point debtor became

that Boulevard

trust held by

and that Boulevard would be repaid from the

had to retain
wanted a

uncomfortable

and never completed the loan documents.

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In April 2004 debtor again met with Price, as she was concerned

about. her home being sold at a foreclosure

knowledge. Price contacted the trustee and Washing

sale without her

ton Mutual and

learned that the house had not yet been foreclosed, but that debtor

was delinquent post-petition on her mortgage and plan payments.

advised debtor that her case could be dismissed, told
the trustee to get caught up on plan payments, and t
to obtain a quick sale.

Price indicated to debtor his opinion that her
$340,000-$345,000. Debtor,
realtor, disagreed, based on her knowledge of compa
She believed

26

the aréa and the condition of her home.
could be sold for around $400,000. Transcript,
22:17-18 and 34:6-7.

Around this time Price inquired of the United

He

her to contact

» list the home

home was worth

whe apparently has a background as a

rable sales in
that the house
July 2004, at

States Trustee

(“UST”) about serving as a real estate broker in a case in which he

was also debtor’s counsel. The UST’s office advised
object to Price’s appointment as a broker because he
disinterestedness requirement of § 327.

Debtor testified she called the trustee’s office
and was advised that she had until the confirmation
to sell or refinance her home, or amend her plan,
required to attend the hearing.
first time she heard of the confirmation hearing.

Price and told him she wanted to sell her home. She

ar

that it would

would fail the

in late April,
hearing either

d that she was

Debtor testified that this was the

Debtor called

did not inform

Price that she had already listed her home with a family friend and

accepted an offer on 20 May 2004 for $390,000;

closed 23 July 2004. Findings of Fact, Opinion, and

4.

the transaction

Conclusions of

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Law (“Opinion”), at 5 and 7.
request of another client, he had agreed to appear at
afternoon in Alameda County Superior Court, altho
conflicted with the 2:00 p.m. confirmation hearing
request a continuance of either hearing. Debto

confirmation hearing alone, and informed the court

foreclosure sale on 10 June 2004.
or listing the home for sale. When debtor later

explain why he had written the letter,

Opinion, at 6.

At the confirmation hearing, the bankruptcy c
order to show cause (“First OSC”)

disgorge compensation received from the debtor for

8 July hearing on the First OSC, the court ordered Pr
$300 of the $1500 fee he charged debtor. Opinion,

Later the same day,
had “blatantly lied” to her about the dismissal of

asked her to pay him to file another bankruptcy,

5.

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Price did not appear at the confirmation hearing.

trying to get her to stop procrastinating and “do something.”

then informed Price of the pending sale and the plan

appear at both the § 341 meeting and confirmation hearing.

and

At the
1:00 p.m. that
ugh he knew it
T. He did not
r went to the

of the pending

60 days.

sale. The court confirmed the plan with a 100% payout to unsecured
creditors, conditioned upon close of escrow within
Opinion, at 6.

Without verifying the outcome of the confirmation hearing,
Price wrote debtor a letter the next day stating that her case had
been dismissed and that Washington Mutual could proceed with the

He proposed refiling another case

asked Price to

he responded that he was

She

confirmation.

purt issued an

why Price should not have to

his failure to
At the

ice to disgorge

a 7.

debtor filed a letter alleging that Price

her case, had

retain him to

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list her house. Her letter reported that Price “co

to secure my home as a listing under his real estate

ntinuaily tried

company,” and

that when she went to obtain a loan from Price’s “friend,” the loan

was conditioned upon her using Price as listing bro
Price had suggested she list her home at $340,000
sale,” she sold the home without any repairs for
listing it for only one and a half weeks. Debtor
really feel Mr. Price is an unethical attorney/real

conflicts of interest issues.”

ker. Although

for a “quick
$390,000 after
concluded: “I

tor with grave

On 13 July the court issued another order, attaching debtor’s

letter and requiring Price to “show cause why he

sanctioned pursuant to the court’s

powers . . for bad faith conduct [and/or] suspended
(“Second OSC”). At the hearing on the Second OSC,

Price and the debtor testified, the court found:

inherent

should not be
sanction
or disbarred.”

at which both

1. Price violated California Rules of Professional Conduct

3-500, [7] and California Business and Profess

Hons Code

§6068 (m), [7] when he failed to disclose to the Débtor that
Zamanski would appear and represent her at the Meeting of

Creditors, and when he failed to obtain the
consent to 4Zamanski’s representation of her at th
of Creditors.

2 California RPC 3-500 provides: “A member s
client reasonably informed about significant develop
to the employment or representation, including promp
with reasonable requests for information and copies
documents when necessary to keep the client so infor

3 That section provides:

It is the duty of an attorney to do all of the
following:

(m) To respond promptly to reasonable status in

Debtor's

ne Meeting

hall keep a
ments relating
tly complying
of significant
med.”

quiries

of clients and to keep clients reasonably informed of

significant developments in matters with regard
the attorney has agreed to provide legal servic

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to which

es.

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2. Price violated California Rule of Professional Conduct

3-500, and California Business
§6068 (m),
Confirmation Hearing.

3.

3-110(A),[*] when he intentionally failed to a

and Professions
when he failed to inform the Debtor of the

Code

Price violated California Rule of Professional Conduct

ppeear and

represent the Debtor at the Meeting of Creditots and the

Confirmation Hearing.

4. Price violated the basic duties an attorney
client to represent the Debtor with undivided 1

to act in the Debtor’s best interests.

Opinion, at 15-16.

owes to a

byalty, to
exercise independent judgment on the Debtor’s behalf,

and

The court ordered Price to disgorge the balance

of the fees debtor had paid him, suspended him from the practice of

law in the U.S.

California for three months, beginning 22 October 200

Bankruptcy Court for the Northern District of

4, and directed

that a copy of its Opinion be forwarded to the California State Bar.

Price timely appealed, and we granted his me

pending appeal of the suspension provision. At oral
indicated that he does not dispute the disgorgement
No appellees briefed or argued this appeal. We

briefs, and one was filed by David A. Smyth, appellar

tion for stay
argument Price
sanction.

invited amicus

it in an appeal

to us concerning similar issues. In re Brooks-Hamillton, 329 B.R.
270 (9th Cir. BAP 2005).
II. JURISDICTION
The bankruptcy court had jurisdiction via 28 U.3.C. § 1334 and
$ 157(b) (1) and (b) (2) (A), and we do under 28 U.S.C.) § 158({c).
We note parenthetically that Price does not |challenge, on

appeal, the bankruptcy court’s power to enter a final

4 RPC 3-110(A) provides: “A member shall not
intentionally, recklessly, or repeatedly fail to per
services with competence.”

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judgment under

Form legal

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(any

28 U.S.C. § 157, nor, so far as we can tell,

bankruptcy court. Accordingly, he has waived any i
the core or non-core nature of the disciplinary pr
appellate court will not consider issues not properl

the [trial] court. Furthermore, on appeal, argument

a party in its opening brief are deemed waived.” §$

pceeding:

did he in the

ssue respecting

w“w [A]n

VY raised before

Ss not raised by

mith v. Marsh,

her case,

ambit of a core proceeding, 28 U.S.C. § 157(b) (2
reasons ably and persuasively articulated in Part III
in In re Sheridan, 362 F.3d 96, 121-126 (lst Cir. 20¢
dissenting). The majority in Sheridan, ruling on the
question, held that an omnibus disciplinary proceed
arising out of a single case) is a non-core matter
disciplined attorney’s consent to entry of a final j
bankruptcy court could not be presumed.
issues in the bankruptcy court, and has waived them
need not and do not reach these questions.

III. ISSUE

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Whether the bankruptcy court abused its discreti

194 F.3d 1045, 1052 (9th Cir. 1998). See also In re Sedona Inst.,
220 B.R. 74, 76 (9th Cir. BAP 1998), In re Jodoin, 209 B.R. 132, 143
(9th Cir. BAP 1997}, and Laboa v. Calderon, 224 F.3d 972, 980 n.6
(Sth Cir. 2000}.

In any event, as the acts or actions on /which Price’s
suspension was predicated took place in the course of his

representation of debtor in matters central to the administration of

the disciplinary proceeding fits comfortably within the

J) (A), for the
of the dissent
4) (Lynch, J.,
core/non-core
ing (i.e., not
} and that the

udgment by the

Because Price failed to raise the core/non-core and consent

on appeal, we

on in ordering

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a sanction of suspension.
Iv.

STANDARDS OF REVIEW

order for abuse of discretion. In re DeVille,

(9th Cir. BAP 2002), aff'd, 361 F.3d 539 (9th Cir. 2

re Rainbow Magazine, Inc., 77 F.3d 278, 283 (9t

192 B.R. at 975.

Crayton,
A trial court’s interpretation and application

is reviewed for abuse of discretion.

We review an award of sanctions and the terms of

280

In re Mendez,

a disciplinary

B.R. 483, 492

O04) (citing In

nh Cir. 1996));
of a local rule

231 B.R.

Id.;

86, 88 (9th Cir. BAP 1999), aff'd, 230 F.3d 1367

(table).
A bankruptcy court necessarily abuses its di
its decision on an erroneous view of the

bases

erroneous: factual findings. Cooter & Gell v.

Hartm

(9th Cir. 2006)
scretion if it
law or clearly

arx Corp., 496

U.S. 364, 405 (1990).

“must have a definite and firm conviction that the b

reviewing the entire record, has a firm and definite

a Mistake has been committed. Anderson v. Bessemer

Under the abuse of discretic

committed a clear error of judgment in the conclus

n standard, we
ankruptcy court

Eon it reached

before reversal is proper.” In re Black, 222 B.R.| 896, 899 (9th
Cir. BAP 1998) (citations and quotation marks omitted).

We review findings of fact for clear error. Rule 8013. A
factual finding is clearly erroneous if the appellate court, after

conviction that

City, 470 U.S.

564, 573 (1985).

trial judge's choice between them cannot be clearly
at 574,

Findings of fact based upon

particular deference by appellate courts. Id. at 57

_9.

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If two views of the evidence are

credibility

possible, the

erroneous. Id.

are given

4. Zz

See also

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re Padilla, 213 B.R. 349, 352 (9th Cir.

BAP 1997)).

A court may

disbar or suspend an attorney only upon clear jand convincing
evidence. Crayton, 192 B.R. at 975.
Finally, due process is a question of law which we review de
novo, DeVille, 280 B.R. at 492.
V. DISCUSSION

At the outset, Price challenges the bankruptcy

authority to discipline attorneys. Our review of

order also focuses on whether the

bankruptcy court afforded appellant sufficient due 91
the evidence supports the findings, and whether the f
at 978.

was reasonable. 192 BLR,

Crayton,

We conclude that the bankruptcy court could di

and afforded him due process. He has not shown that

court clearly erred in its factual findings, nor

clear and convincing evidence.

the bankruptcy court did not consider the ABA

determining the appropriate sanction.
purpose.
4

A. Bankruptcy Court Authority

The bankruptcy court possesses the inherent

court’s

a disciplinary

procedure followed by the

rocess, whether

penalty imposed

scipline Price

the bankruptcy

that it lacked

Thus discipline was appropriate, but

Standards in

We vacate and remand for that

authority “to

impose sanctions for a pattern of bad faith conduct that transcends

conduct addressed by particular rules or statutes.”

B.R. at 494 (citing § 105{a)}); Chambers v. NASCO, Inc,

51 (1991); and In re Rainbow Magazine, Inc., 77 F.

(9th Cir. 1996}. Congress implicitly recognized this

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DeVille, 280
501 U.S. 32,
Bd 278, 283-84

inherent power

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C

it.

nSe: 03-46972 Doc#50 Filed: 10/11/05 Entered: 10/20/05 15:31:14

in enacting § 105(a):

The court may issue any order, process, or
that is necessary or appropriate to carry
provisions of this title.
providing for the raising of an issue by a

No provision of this

judgment
out the
title
party in

interest shall be construed to preclude the court from,
Sua sponte, taking any action or making any determination
necessary or appropriate to enforce or implement court
orders or rules, or to prevent an abuse of process.

See Rainbow Magazine, 77 F.3d at 284; see also In re| Dyer, 322 F.3d
1178, 1189-90 (9th Cir. 2003) (discussing contempt authority).

Section 105 empowers bankruptcy courts to impose

criminal or punitive sanctions. Dyer, 322 F.3d at i

197.

civil but not

In Dyer,

the Ninth Circuit considered the propriety of monetary sanctions

imposec against a creditor for violations of the automatic stay.

addition to ordering the creditor to pay the trust

costs, the bankruptcy court imposed a sanction of

In
ee’s fees and

$50,000. The

Circuit held that this was a punitive sanction not authorized under

the bankruptcy court’s contempt authority or its inherent authority,

and noted that a civil penalty is either compensatory
to coerce compliance.
operate, it is a criminal penalty or sanction.
1192. The Circuit concluded that “[t]he bankruptcy cc

Sanction authority .

not authorize significant punitive damages, so
sanctions cannot stand, whatever [ereditor’s]
culpability.” Id. at 1197.

We have observed that the bankruptcy court’s inhe
includes the power to suspend or disbar attorneys wha

192 B.R. at 976. At first glance,

' Crayton,

cast doubt on that proposition. Dyer clarifies

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Dyer,

, like its civil contempt authority,

or is designed

To the extent that a penaltty does not so

322 F.3d at

urt’s inherent

does
the punitive
degree of

rent authority

appear before

Dyer appears to

that neither

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contempt nor inherent authority authorizes the bank

impose punitive or criminal sanctions. The Dyer cour

is ordinarily entitled to, such as the right to a jur

322 F.3d at 1197. It noted that “the bankruptcy cou

and the district court[,]” and that

court to adjudicate criminal contempt raise

constitutional questions.” Id. at 1194 (citations d

nor designed to coerce compliance, they are arg

sancticns, but “[a] lawyer disciplinary proceeding is

y trial.

Ss

ruptcy court to
t was concerned

with the lack cf due process protections that a criminal defendant

Dyer,

rt is unable to
preside over a jury trial absent explicit consent from the parties

“allowing a non Article III

fundamental

mitted).

As attorney suspension and disbarment are neithér compensatory

Lably criminal

not a criminal

nor criminal, but an investigation into the conduct

respondent.” Canatella v. California, 404 F.3d 1106,
2005) (citation and quotation marks omitted}.

Echeles, 430 F.2d 347, 349 (7th Cir. 1970) (d

suspension proceedings are special proceedings resu
court’s inherent power over their officers).

Accordingly, the “normal protections

defendant do not apply.” Rosenthal,

subject to disciplinary action is not entitled to the

innocence, the “beyond a reasonable doubt”

.confrontation of witnesses, id. at 564-65,

22

lisbarment

afforde
910 F.2d at 564,

burden
or a jury trial.

also, In re Smith, 123 F. Supp. 2d 351, 354 (N.D. Tex,

proceeding.” Rosenthal v. Justices of the Supreme Court of
California, 910 F.2d 561, 564 (9th Cir. 1990). It is|“neither civil

of the lawyer-

11i0 (9th Cir.

see also In re

and
ting from the
sed oa criminal
An attorney
presumption of
of proof,

See

2000), atf’d,

275 F.3d 42 (5th Cir. 20013 (table) {attorney subject to
disciplinary proceedings not entitled to jury trial or full
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evidentiary hearing under the Sixth Amendment). Dyex

not require us to hold that a bankruptcy court lack

B. Disciplinary Procedure

We have observed that “[t]here is no uniform

disciplinary proceedings in the federal system.
individual judicial districts are free to define t
followed and the grounds for punishment.” Crayton,
n.? (citation omitted).

In the Northern District of California, the bank

which incorporates CLR 11-1 through 11-9,

appearing in that district. CLR 11-6, entitled
provides: .
(a) General. In the event that a Judge has

believe that an attorney has engaged in unprd

conduct, the Judge may do any or all of the fol
(1) Initiate proceedings for civil or

42 of the Federal Rules of Criminal Procedure;

(2) Impose other appropriate sanctions;

(3) Refer the matter to the appropriate dig
authority of the state or jurisdiction in ¥
attorney is licensed to practice;

(4) Refer the matter to the
Committee on Professional Conduct; or

Court’s

(5) Refer the matter to the Chief Judge f
him to consider whether to issue an order to s
under Civ. L.R. 11-7.

(emphasis added).

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suspend or disbar the attorneys who appear before it.

192 B.R.

contempt under Title 18 of the United States Code

The bankruptcy court apparently imposed the susp

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therefore does

S$ authority to

procedure for

Instead, the

he rules to be

at 976

ruptcy court is
empowered to supervise and discipline attorneys via BLR 1001-2,

relating to attorneys

“Discipline,”

cause to
fessional
owing:

criminal
and Ruie

ciplinary
yvhich the

Standing

or her or
hew cause

ension here at

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(2), which authorizes “ot

issue based on subsection
sanctions.”

We have recommended that matters involving atto
be referred to the Standing Committee. Crayton,

from serving in the dual roles of prosecutor and

authorities do not require such a referral,

B.R. at 286. There,
this one,
repeated Rule 9011 violations,
sanction.
no referral to standing committee, no finding of
of bankruptcy jurisdiction to suspend.

to the contrary.

CLR 11-6 authorizes the court to take
listed actions.
appropriate sanctions.”

matter to the state bar

Committee.

Contrary to Price’s assertions,

matter to the State Bar of California

Opinion, at 16.

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1g

investigation, prosecution and discipline of attorneys.
Brooks
in a case arising from the sa
we upheld a six-month suspension from

as well as a compens

He did cite

the proposition that a finding of bad faith is requil

Subsection 2 authorizes the court toa

(an “appropriate disciplinar

and under subsection 4 it may refer the matter ta

the bankrup
authority to impose its own sanctions in addition to
| (more precisély,
forwarded a copy of the Opinion “for its review and co

Nor did the court err in not referr

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ner appropriate

mney discipline

2 B.R. at 978.

The rationale for this recommendation is that it “relieves a court

arbiter in the

* Id. The
~Hamilton, 329

me district as
practice for

atory monetary

The suspended attorney’s arguments there were procedural:

pad faith, and

consideration of his prior failures in other cases, rather than lack

Dyer, but for

red. We ruled

“any ovr all” of the

impose “other

Under subsection 3, the court may refer the

y authority”),
the Standing

Ley court had
referring the
the court
nsideration”).

ing the matter

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to the Standing Committee.

Cc. Due Process

Price argues that he did not receive adequate] notice of the
particular alleged misconduct or the disciplinary tule upon which
the court intended to base sanctions.

Due process is, of course, required. An attorney subject to
discipline is entitled to notice of the precise [nature of the
Charges leveled against him and an opportunity |to be heard.

Crayton, 192 B.R. at 978 (citing In re Ruffalo, 390 U.S. 554, 5506

and 552 (1968)). As the Ninth Circuit noted in} affirming our
opinion in Deville, “Ordinarily a court proposing to impose
sancticns notifies the person charged both of the particular alleged
misconduct and of the particular disciplinary authority under which
the court is planning to proceed.” 361 F.3d at 548.

The Second OSC identifies four instances of alleged misconduct:
(1) Price’s failure to inform debtor of her confirmation hearing;
(2) his pressuring of the debtor to list her house for sale with his
brokerage firm; (3) the lender’s (Boisvert’s) condition of retaining
Price as the broker for the loan transaction; and (4) his letter to
the debtor erroneously informing her that her bankruptcy case had
been dismissed and that a foreclosure sale was imminent. The OSC
further states that “the facts point to a clear conflict of interest
between Mr. Price acting as the debtor’s lawyer, §$oeliciting the
debtor to use his services as a real estate broker, end serving as
a loan broker.” It cites to Cal. Eth. Op. 1982-69,, 1982 WL 31793
(Cal. St. Bar Comm. Prof. Resp. 1982), which states; that while an

attorney may ethically act as both attorney and real) estate broker

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in the same transaction, such dual

substantial risks. The attorney must conform to th

both professions; in the case of conflict, the
California standards control.

A_though the Second OSC did not cite to the
that

ultimately relied upon, it notified Price

considering sanctions, including suspension or 4d
specified the sanctionable conduct and the evidence

shert,

Price also had the opportunity to present eviden
of his failure to inform debtor of the substitution

the § 341 meeting, and did so. As the other derelic

the bankruptcy court support the sanction imposed, aj
mentioning that conduct in the Second OSC was harmléd
Inc., 278 B.R. 189,

§ 2111; In re Maximus Comouters,

BAP 2002).

D. Evidence
1. Adequacy?:

The bankruptcy court found:

a. Zamanski’s involvement as

was required to disclose and obtain debto
Zamanski’s involvement,

S-10.

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representation

isbarment,

charges so that he could prepare an adequate defensa.

The bankruptcy court afforded Price due process}.

an appearance

debtor’s 341 meeting was a significant development.

but failed to do s

nSe: 03-46972 Doc#50 Filed: 10/11/05 Entered: 10/20/05 15:31:1

presents
e standards of

State Bar of

provisions it
the court was
and

required. fn

it adequately informed him of the offending conduct and

ce on the issue

of counsel for
tions found by
ny error in not
ss. 28 U.S.C.

194 (9th Cir.

attorney at
Price
r’s consent to

O. Opinion at

Price failed to inform the debtor that she was required.to

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hearing. Id. at 12-13.

Price’s numerous solicitations to serve a

real estate broker, his cavalier valuatio
and his failure to focus solely on the deb
conflicted with his duties to act with une
and exercise independent judgment on beha
best interests. His conduct was outragec
unprofessional and unethical.
the bankruptcy court found mu

12.

In addition,

testimony not credible. Id. at 10,

Price argues that the bankruptcy court erre

convincing evidence, citing Crayton, 192 B.R. at 975

suspension. While acknowledging that a bad fai

generally required before a court may impose sanct
inherent powers, we concluded that a bad faith requir
necessarily extend to “every possible disciplinary e
court’s inherent power, especially where it is exerci

the public against unqualified practitioners.” Id.

Ninth Circuit, a court may also sanction upon

willfulness, recklessness, or other fault by the of

and if a bad faith finding is required,

suffice. See id. (citing Unigard Sec. Ins. v.

attend the confirmation hearing. Id. at l

Id. at 14-1

sanctions without first making a finding of bad fait

at 977.

an implicit

QO-11.

Price intentionally failed to appear at the confirmation

s the debtor’s
m of her home,
tor in her case
jivided loyalty
lf of debtor’s
usly improper,
5.

ch of Price’s

d in imposing
h by clear and

Crayton does

not support the proposition that a bad faith finding is required for

th finding is
ions under its
rement does not
ixercise of the
sed to protect
In the
a finding of

fending party,

finding will

Lakewood Eng’dq &

982 F.2d 363, 368 n.2 (9th Cir.

Mfg.,

Trust Corp., 32 F.3d 1360, 1363 ($th Cir. 1994);

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1992}; Hedees

ASe: 03-46972 Doc#50 Filed: 10/11/05 Entered: 10/20/05 15:31:1

v. Resolution

and Toombs v.

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Leone, 777 F.2d 465, 471 (9th Cir. 1985)}. The ban

findings suffice under these standards.

Next, Price
finding “[t]hereafter, the Court issued an order for
on July 26th and show cause why he should not be sa
suspended or disbarred from practice before this
conduct described in the Debtor’s July 8, 2004 1
contends that the Second OSC “simply ordered appellan
show cause why he should not be sanctioned for bad
It did not refer to debtor’s letter.”
the Second OSC, attached to which is a copy of d
letter, states,

(attached Exhibit A)

finding that he:

argues the bankruptcy court clearly erred

This is sin

“[Tihe court received a facsimile ff

which raises serious ethical is

Mr. Price’s conduct in this case.” Second OSC, page
2. Clear and convincing?
Price also argues that the evidence was
convincing, and thus that the bankruptcy court cl

a,

“did not obtain the Debtor’s consent fa
represent her at the Meeting. of Creditors.”
“went to view the Debtor’s house and valued

to $345,000 for a quick sale.

presented of any additional efforts by Pric

the value of the house.” Id. at 4.

“then told the Debtor that she needed to f

plan or fix the house and sell it,

list the house at $340,000 ‘as is’ for a qu

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22

Nd

and enc

kruptcy court’s

in
Price to appear
nctioned and/or
Court for the
etter.” Price
t to appear and
faith conduct.
iply incorrect:
ebtor’s 8 July
rom the debtor
sues regarding

2, lines 5-6.

pot clear and

arly erred in

ry Zamanski to
Opinion at 3.
it at $340,000
evidence was

e to determine
tle an amended

ouraged her to

ick sale.” Id.

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“responded that he was trying to get

procrastinating and do something.” Id. a
To review a factual finding for clear error

considered by the bankruptcy court. In re Massoud

163 (9th Cir. BAP 2000). So, too, to review for comp
higher “clear and convincing” standard.
complete transcript of the evidentiary heari
importantly, the portion of the transcript containing
judge’s examination of the debtor, which was most li
the disputed findings. Further, we are to give parti

to the bankruptcy court’s findings of fact that

credibility. Anderson, 470 U.S. at 575.
It is Price’s burden to show clear er

responsibility to provide an adequate record.
163.

entitled to presume that the missing portions are not

to show clear error. In re Friedman, 126 B.R. 63,

1991).

the lack of clear and convincing evidence.

22

L

fg

As he chose not to include the complete tran

bankruptcy court’s factual findings where the record
68

Likewise, when, as here, the record is insuff

her to stop
7.

we must have

before us the entire transcript and all other relevant evidence

248 B.R. 160,

liance with the

Price provided neither a

nor, most
the bankruptcy
kely to support
cular deference
are based upon

ror, and his

Massoud, 284 B.R. at

Script, we are

helpful to his

position. In re Gionis, 170 B.R. 675, 680-81 (9th Cir. BAP 1994),
aff'd, 92 F.3d 1192 (9th Cir. 1996). And we may affirm the

is inadequate
(9th Cir. BAP

icient to show

E. Reasonableness of Sanctions
The bankruptcy court did not abuse its discretion in deciding
to impose sanctions; the remaining question is jwhether those
sanctions were reasonable.
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In Crayton, we adopted the ABA Standards:

The ABA Standards set forth a model which can
categorize misconduct and to identify the a
sanction. They promote the thorough,
consideration of relevant factors,
consistency when imposing

reasonable disciplinary sanction. The failure t
such factors constitutes an abuse of discretioy

and help t
attorney discipline.
consider these factors as appropriate in determining a
Oo consider
Le

pe used to
ppropriate

rational
o achieve
We

192 B.R. at 980 (emphasis added, citation

Crayton,
also recommended use of state bar standards and relev
supplemental points of reference. Id.

The factors to be considered in determining

Sanction are:

increase in the degree of discipline imposed, such as

and the vulnerability of the victim. Id.

Standards 9.21 and 9.22). Mitigating factors,

(Citing ABA Standard 9.31 and 9.32).

Price contends that the bankruptcy court. did

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selfish motive, refusal to acknowledge wrongful natu
at 98
for
absence of a prior disciplinary record and imposi

sanctions, may justify a reduction in the degree of di

nse: 03-46972 Doc#50 Filed: 10/11/05 Entered: 10/20/05 15:31:1

omitted). We

ant case Law as

an appropriate

1. Whether the duty violated was to a client, the public, the
legal system, or the profession;

2. Whether the lawyer acted intentionally, | knowingly, or
negligentiy;

3. Whether the lawyer’s misconduct caused/a serious or
potentially serious injury; and

4, Whether there are aggravating and/or mitigating factors.

Aggravating factors include considerations which justify an

a dishonest or
re of conduct,
L (citing ABA
example, the
tion of other
scipline. Id.

not weigh the

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‘|

appropriate factors. While the court made numero

conclusions, and may have considered the relevan

Opinion does not clearly reflect that consideration.

t factors,

Us findings and

the

Tt discusses

the first two categories of ABA factors, and arguably the third, but

does not reference possible aggravating or mitigatin

was technically an abuse of discretion. Crayton, 1
Given the severity of suspension, we will vacate the
remand to the bankruptcy court for that considerati

We note that ABA Standard 4.32 provides,
generally appropriate when a lawyer knows of a confl
and dees not fully disclose to a client the possible
conflict, and causes injury or potential injury
Aithough Price argues
because debtor never retained his services as a bre
reason why his soliciting debtor for that purpose
sufficient to trigger the disclosure requirement, be
have been material to her decision of whether to

services.

VI. CONCLUSION
The bankruptcy court was within its authority

Price, and afforded him due process.

the bankruptcy court clearly erred in its factual fin

it lacked clear and convincing evidence.

disclose that the court considered all appropria

determining what sanction to impose. Accordingly,
portion of the bankruptcy court’s order suspending

REMAND for further proceedings.

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22

y factors.

92 B.R.

“Suspension

Price has neit

But the x

This
at 980.

suspension and

Or.

is

ict of interest

effect of that

to a client.”

that the duty of disclosure never arose

ker, we see no

would not be

scause it would

use his broker

in sanctioning
her shown that
idings nor that
ecord does not
te factors in

we VACATE the

appellant and

4 Page 20 of

FILE coPY

U.S. Bankruptcy Appellate Panel
. of the Ninth Cireuit
125 South Grand Avenue, Pasadena, California 9110
Appeals from Central California (626) 229-7220
Appeals from all other Districts (626) 229-7225

OT

NOTICE OF ENTRY OF JUDGMENT

BAP No. NC-04-1534-BMas

RE: PATRICIA ANN LEHTINEN

A separate Judgment was entered in this case on 10411/05

BILL OF COSTS:

Bankruptcy Rule 8014 provides that costs on appeal shall be taxed by the
Clerk of the Bankruptcy Court. Cost bills should be filed with the Clerk

of the Bankruptcy Court from which the appeal was taken.
9th Cir. BAP Rule 8014-1

ISSUANCE OF THE MANDATE:

The mandate, a certified copy of the judgment sent to the |Clerk of

the Bankruptcy Court from which the appeal was taken, will

be issued

7 days after the expiration of the time for filing a petitiion for
rehearing unless such a petition is filed or the time is shortened or
enlarged by order. See Federal Rule of Appellate Procedure 41.

APPEAL TO COURT OF APPEALS:

An appeal to the Ninth Circuit Court of Appeals ig initiatled by

filing a notice of appeal with the Clerk of this Panel. The Notice

of Appeal should be accompariied by payment of the $255 filing fee
(effective November 1, 2003) and a copy of the order or decision on
appeal. Checks may be made payable to the U.S. Court of Appeals for

the Ninth Circuit. See Federal Rules of Appellate Procedure 6 and the
corresponding Rules of the United States Court of Appeals for the Ninth

Circuit for specific time requirements.

Case: 03-46972 Doc#50 Filed: 10/11/05 Entered: 10/20/05 15:31:14 Page 21 of

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CERTIFICATE OF MAILING

The undersigned, deputy clerk of the U.S. Bankruptcy
Appellate Panel of the Ninth Circuit, hereby certifies that a copy
of the document on which this certificate appears was’mailed this date
to all parties of record to this appeal. :

By: Edwina Clay

Deputy Clerk: October 11, 2005

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