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In re Smith

United States District Court, N.D. Ohio, Eastern Division

April 25, 2018

IN RE STEVEN D. SMITH and TONYA M. SMITH, Appellants.

          OPINION AND ORDER

          CHRISTOPHER A. BOYKO United States District Judge

         This matter comes before the Court upon the Notice of Appeal (ECF DKT #1) of Debtor-Appellants, Steven D. Smith and Tonya M. Smith. For the following reasons, the above-captioned Appeal from Orders of the United States Bankruptcy Court for the Northern District of Ohio is dismissed and the Appellants' Motion for Stay Pending Appeal (ECF DKT #8) is denied as moot.

         I. BACKGROUND

         The underlying Chapter 7 Proceeding (No. 17-10766) was filed on February 15, 2017. On May 1, 2017, a Motion to Dismiss was filed on behalf of Debtor Steven Smith, stating that Debtor mistakenly thought his prior discharge was in 2009 when it was actually in 2010. Due to repeated filing deficiencies on Debtors' counsel's part, the Motion was not set for hearing until October 31, 2017. In the meantime, both Debtors completed their required financial management course and a Discharge Order for both Debtors was automatically generated on August 30, 2017. Due to the pending dismissal motion, the Bankruptcy Court sua sponte vacated the discharge on September 6, 2017 as erroneously entered.

         On October 25, 2017, Debtor Tonya Smith filed a Motion to Reinstate the Discharge. The Bankruptcy Court, however, noticed counsel with two filing deficiencies. An Amended Motion was filed on November 6, 2017. That Motion was also non-compliant. However, on December 8, 2017, an Order discharging only Joint Debtor Tonya M. Smith was entered.

         Counsel moved for a continuance of the October 31, 2017 Hearing because of a trial conflict. Consequently, the Hearing on Steven Smith's Motion to Dismiss was continued to December 5, 2017. On December 5, 2017, an attorney other than Geoffrey Oglesby appeared for Debtor but lacked sufficient knowledge about the timing of the case filing. Once again, the Hearing was continued until December 19, 2017. On December 7, 2017, the Bankruptcy Court issued an Order requiring Debtor's Counsel to appear and show cause at the December 19, 2017 Hearing why the fees paid by Debtors should not be disgorged and refunded for inadequate representation.

         On December 19, 2017, Debtors filed a Motion to Reconsider, reinstate Steven Smith's discharge and dismiss the Show Cause Order.

         At the Hearing held on December 19, 2017, Attorney Oglesby explained that Steven Smith was mistaken regarding the date of his prior bankruptcy discharge. Also, Attorney Oglesby admitted that he failed to check the Pacer system himself to verify when his client received a discharge. Attorney Oglesby informed the Bankruptcy Court that the Debtors paid him $750.00 in attorney's fees.

         The Bankruptcy Judge found as follows:

Mr. Smith did not receive a benefit from the services rendered by Counsel commensurate with the fees charged in this case. Counsel, not Debtor, was responsible for determining whether the timing for filing of this case was appropriate. Further it took five months for the Motion to Dismiss to be considered by the court because of improper noticing by counsel and the failure to timely submit an order on the Motion. The case for Mr. Smith should
not have been filed and when counsel discovered his error, it should not have taken more than 5 months to prosecute the motion to correct that error. Accordingly, the fees paid by Debtors exceed the value of services provided and Mr. Oglesby is hereby ordered to refund $375.00 to the Debtors by January 31, 2018. See 11 U.S.C. § 329(b)(2). He is further ordered to file a certification with the Court regarding compliance with this Order by February 2, 2018. Failure to do so may result in additional sanctions, including, but not limited to, additional monetary sanctions, suspension of ECF filing privileges and referral for appropriate disciplinary action.

         On December 22, 2017, the instant Notice of Appeal and Statement of Election (ECF DKT #1) was filed in this Court. The subject of the Appeal is described as “Judgement vacating the discharge and ordering the return of funds in contempt.” Debtor Steven Smith argues that: “All those in a position to object were put on notice that Mr. Smith had filed within the eight-year period, however no one objected to the discharge. The court lacked the ability to vacate the discharge.” Further: “Since there was no cause to disgorge fees, we request that order also be vacated.” (Appellant's Brief, ECF DKT #4 at 5, 8).

         II. LAW AND ANALYSIS

         Standard ...


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