Darrin Chauncey Gailey

UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF MICHIGAN
_______________________
In re:
DARRIN CHAUNCEY GAILEY,
Debtor.
_____________________________________/
Case No. 23-02132-swd
Chapter 13
Hon. Scott W. Dales
MEMORANDUM OF DECISION AND ORDER
PRESENT: 	HONORABLE SCOTT W. DALES
Chief United States Bankruptcy Judge
The court issued its Order to Show Cause dated October 22, 2025 (ECF No. 57, the "Show
Cause Order") after Ryan B. Moran, Esq., counsel for chapter 13 debtor Darrin Chauncey Gailey
(the "Debtor"), filed a proposed plan amendment purporting to use the court's notice with
opportunity to object procedure set forth in LBR 9013(c), but directed creditors to file objections
at the wrong address.
Lest it seem hasty, the court did not enter its Show Cause Order until after the Clerk issued
a Notice Regarding Filed Document (ECF No. 53, the "Clerk's Notice") calling the error to Mr.
Moran's attention. Mr. Moran, however, forced the court's hand: after entry of the Clerk's Notice,
he (1) failed to respond to the Clerk's Notice; (2) filed a certificate of no objection to the proposed
amendment; and (3) uploaded a proposed order for the court's signature to approve the improperly
prosecuted plan amendment.
And, 	despite 	the 	court's 	rejection 	of 	the 	proposed 	second 	post-confirmation 	plan
amendment through the Show Cause Order, Mr. Moran filed a third post-confirmation plan
amendment implicitly treating the second amendment as if it had been approved. See 3rd Amended
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Post-Confirmation Chapter 13 Plan (ECF No. 58). Either Mr. Moran had not read the Show Cause
Order carefully (or at all), or he misrepresented it. It is also conceivable that Mr. Moran was not
fully involved in the process, delegating the amendment procedure to his staff.
For further context, the court previously endeavored to address a similar problem in this
case involving the first post-confirmation plan amendment by sending a letter to Mr. Moran
advising him that "the notices you prepare, file, and serve … should reflect the correct address for
court filings (per our website, U.S. Bankruptcy Court, Western District of Michigan, 1 Division
Avenue N., Room 200, Grand Rapids, MI 49503)." See Letter from the Hon. Scott W. Dales to
Ryan B. Moran, Esq., dated May 23, 2025 (ECF No. 44). 	In response, Mr. Moran assured the
court that "[w]e have implemented an improved system to monitor and ensure compliance with all
court notices and deadlines," hired additional staff, and scheduled training and new procedures
"with the goal of eliminating similar errors in the future." See Letter from Ryan B. Moran to the
Court dated May 30, 2025 (ECF No. 47). The Clerk's Notice entered with respect to the second
proposed plan amendment shows how carefully Mr. Moran and his firm "implemented an
improved system" – not very.
Mr. Moran has not limited his substandard conduct to this case. After he failed to appear
in prosecution of a motion before another judge of this court, the court disciplined him by requiring
him to participate in professional ethics education. 	See Order Regarding Order to Show Cause
dated March 26, 2025 (In re Smith, ECF No. 46, Case No. 24-01117-jwb (Bankr. W.D. Mich.).
Similarly, in yet another case, after Mr. Moran failed to appear for a Rule 2004 examination
of his client, the court issued an Order to Show Cause dated May 30, 2025 (In re Soerries, ECF
No. 26, Case No. 25-00653-swd (Bankr. W.D. Mich.)), directing him (for the first time) to explain
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why the court should not require him to associate with local counsel. The United States Trustee
filed its own motion to sanction Mr. Moran (through disgorgement of fees). Ultimately, Mr. Moran
rebuffed both challenges in the Soerries matter with a modest disgorgement and waiver of fees,
and without having to associate with local counsel.
The court must also note that on the very morning of the return hearing on the Show Cause
Order, Mr. Moran's client in another case, In re Cook, Case No. 24-01744-swd (Bankr. W.D.
Mich.), attended court to appear at his dismissal hearing because Mr. Moran and his staff did not
advise Mr. Cook that the trustee had withdrawn the motion earlier in the week. Mr. Moran agreed
to investigate the circumstances of the miscommunication, and the court sent a separate letter to
him regarding this seeming discourtesy to his client.
Additionally, after the hearing, when the court asked the Clerk's staff about the impact of
requiring Mr. Moran to associate with local counsel, it learned that Mr. Moran's office is
chronically truant in making routine filings, principally Official Form 121 (Statement About Your
Social Security Numbers). Admittedly the court did not raise this concern at the hearing with Mr.
Moran (having learned of it afterwards), but it has no reason to doubt the Clerk's report.
To his credit, Mr. Moran appeared at the return hearing in response to the Show Cause
Order, but to his demerit he (i) again blamed his staff for the errors in this case (as he did earlier
this year), and (ii) noted that his office has not been seeking compensation for post-confirmation
amendments anyway. 	To paraphrase Mr. Moran's dogged response to the Show Cause Order,
"good help is hard to find these days," and "you get what you pay for." Well, those dogs won't
hunt.
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First, when lawyers blame their staffs, they blame themselves: Mr. Moran cannot avoid his
ethical duty to train and supervise paraprofessionals who prepare filings for his signature. 	See
Mich. R. Prof. Conduct 5.3, Official Comment ("A lawyer should give such [paraprofessional]
assistants 	appropriate 	instruction 	and 	supervision 	concerning 	the 	ethical 	aspects 	of 	their
employment … and should be responsible for their work product."); see also LBR 9011(b)(1)
("Electronic filing of a petition, pleading, motion, proof of claim, or other document by an ECF
Filer constitutes the signature of that individual for all purposes, including those under Fed. R.
Bankr. P. 9011 and 28 U.S.C. § 1746, and has the same effect as if the individual had affixed that
individual's signature on a paper copy of the document being filed."). Second, the ethical
obligations of a lawyer to a client and the court do not hinge in any way on counsel's compensation,
if any. See In re Rose, 561 B.R. 70, 78 (Bankr. W.D. Mich. 2016) ("an attorney's ethical duties
exist regardless of whether the attorney is entitled to compensation for compliance with those
duties.").
The court acknowledges Mr. Moran's discharge and confirmation success rate in
chapter 13 cases in this district over the years, but they do not erase or excuse his recent pattern of
inattention to the needs of his clients and the procedural and professional requirements of this
court.
With respect to the remedy the court proposed in the Show Cause Order—requiring Mr.
Moran to associate with local counsel—he simply minimized the nature of the current offense
while pointing to the high percentage of his confirmed plans (according to his unchallenged
calculation); he said nothing about the possible hardships or inconvenience of requiring him to
affiliate except, perhaps, the additional cost to his clients. 	On this point, the court assured Mr.
Moran that he alone would bear that expense, rendering his concern unwarranted. In short, despite
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the opportunity, Mr. Moran failed to dissuade the court from requiring him to associate with local
counsel.
Mr. Moran's recent approach to the court's concerns in the several cases mentioned
above—in word during hearings and in deed beyond the courthouse—has been unsatisfactory, and
prompts the court to exercise its discretion under W.D. Mich. L. Gen. 2.4 ("If the law practice of
an attorney practicing before the court is not located in proximity to the place where court is held,
the court may—in its discretion—require the attorney to designate local counsel.").
The court with this sanction, like all sanctions, will tailor it to meet the problem. Here, Mr.
Moran, whose office is more than two hours away from each of the district's bankruptcy
courthouses, has displayed a lack of familiarity with local requirements including forms,
procedures, and appearances. 	He has ignored the Clerk's efforts to improve his practice (by
ignoring the Clerk's notices of defective filings) and paid scant attention to correspondence and
orders from the court.
During the return hearing, when the court solicited his views of an appropriate sanction, he
suggested that simply answering the court's questions in open court was sanction enough. 	The
court disagrees. The Michigan Rules of Professional Conduct put it this way:
Compliance with the rules, as with all law in an open society, depends
primarily upon understanding and voluntary compliance, secondarily upon
reinforcement by peer and public opinion, and finally, when necessary, upon
enforcement through disciplinary proceedings.
Mich. R. Prof. Conduct 1.0 (Scope).
Mr. Moran's latest offense, in the court's eyes, is strike three. 	Indeed, on at least three
occasions this year, in open court, the court raised its apprehensions with Mr. Moran, but
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regrettably any concern for his own reputation appears insufficient to bring about improvement in
training and supervising his support staff, conforming his forms, and following local practices.
Requiring him to associate with local bankruptcy counsel may supply local expertise. 	It will
almost certainly leverage another lawyer's reputational interests—the court will require both
lawyers to sign motions, amendments, and other filings—and may provide needed mentorship with
the goal of bringing about change in Mr. Moran's practice and office management. Requiring Mr.
Moran to bear the expense of local counsel may also serve as a reminder that the careless practice
of law imposes costs on the client—here, in effect, Mr. Moran who will be hiring co-counsel for
the incoming lawyer's local expertise, as a cost of doing business in our district over the next
several months.
The court's affiliation requirement for Mr. Moran will apply to all cases pending before the
undersigned, whether filed before and after today's decision. Further, because the court does not
intend to extend this requirement to cases pending before the court's other judges, and because the
Clerk randomly assigns cases (depending on a debtor's county of residence or principal place of
business listed on the petition), it is not feasible to require local counsel to sign future petitions
and documents simultaneously filed with the petitions.
The court predicts Mr. Moran may require some time to find local counsel, and that he will
not welcome the additional expense. For these reasons, it will postpone the requirement briefly
(to give him a chance to affiliate) and will terminate the requirement approximately forty-five days
after it begins, assuming Mr. Moran's practice here improves.
If the court were convinced that Mr. Moran was incorrigible and if his offenses were more
severe, it would consider referring him to the district court for more robust discipline under the
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rules. 	The court, however, does not view him in this way. 	Instead, he is a talented, perhaps
overconfident, practitioner who is attempting to grow his Royal Oak practice by expanding into
our district. By expanding, however, Mr. Moran has been too slow to recognize local requirements
and perhaps too quick to avoid attending to matters in person. 	He, like many lawyers who
represent consumer debtors, faces the pressure of running a small business—time and scheduling
constraints, staff training, travel and other expenses, among many challenges. Unfortunately, even
acknowledging past success and hoping for future compliance, the constellation of his recent
missteps has captured the Clerk's and the court's attention. Because the court cannot continue to
count on Mr. Moran's knowledge of the rules or his desire to preserve his reputation, alone,
relatively modest measures, in the nature of a constructive sanction tethered to the reasons for
imposing it, are in order.
NOW, THEREFORE, IT IS HEREBY ORDERED that beginning on December 15, 2025,
and ending on January 29, 2026, every motion, amendment, complaint, application, response or
other papers (other than voluntary petitions) that Ryan B. Moran, Esq., files in a case or proceeding
assigned to the undersigned, shall bear the signature of Mr. Moran and a bankruptcy attorney who
maintains an office in close proximity to the courthouses in which intradistrict venue lies under
LBR 1014.
IT IS FURTHER ORDERED that the court may extend the local counsel requirement or
take other disciplinary action, after notice and a hearing, if the court believes Mr. Moran has not
sufficiently addressed the concerns described herein.
IT IS FURTHER ORDERED that the Clerk shall serve a copy of this Memorandum of
Decision and Order pursuant to Fed. R. Bankr. P. 9022 and LBR 5005-4 upon the Debtor,
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Ryan B. Moran, Esq., the United States Trustee, and Kurt A. Steinke, Esq., chapter 13 trustee, and
send a courtesy copy to the other judges of this court.
END OF ORDER
IT IS SO ORDERED.
Dated November 12, 2025
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