Sanctioned Bankruptcy Attorney Can’t Blame Paralegal for Case Flaws

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By Diane Davis

Nov. 22 — A bankruptcy attorney who allowed an untrained, unsupervised paralegal to prepare and file all of the documents in the debtors’ Chapter 13 case must be sanctioned ( In re Ruebling , 2016 BL 385302, Bankr. C.D. Ill., No. 15-71627, 11/18/16 ).

Judge Mary P. Gorman of the U.S. Bankruptcy Court for the Central District of Illinios Nov. 18 concluded that debtors’ attorney, Kevin Linder, violated the Bankruptcy Code, Bankruptcy Rules, Judicial Code, and the court’s standing order.

As a sanction, Linder’s fee application was denied in its entirety, and he must disgorge the $1,100 paid as a retainer. In addition, for a one-year period, Linder must be personally present and witness the signing of any document by a debtor that will be filed with the debtor’s actual or electronic signature affixed, the court said. He will also be required to file an affidavit identifying the document filed and the date the document was signed.

Linder’s certification of compliance with Federal Rule of Bankruptcy 9011 will mean that “he made a reasonable inquiry into the facts underlying the information contained in the document,” the court said.

The conditions placed on Linder allowing him to continue his electronic filing privileges are “burdensome” but necessary because he can “no longer blame his paralegal and clients for the inaccuracies in his documents,” the court said.

The electronic signatures of debtors Aaron and Linda Ruebling affixed to their bankruptcy petition represented under penalty of perjury that they had signed the petition on Oct. 22, 2015, and the information provided was true and correct. Attorney Linder’s electronic signature was also affixed to the petition certifying under Rule 9011, that “to the best of his ‘knowledge, information, and belief, formed after an inquiry reasonable under the circumstances’ the factual allegations of the petitions had evidentiary support.”

The Local Rules also require that the original signature of any non-filing party must be obtained before the document is electronically filed. A standing order of the court provides that when an electronic signature is affixed to a filed document, the filer must have and maintain the originally signed document.

Linder filed the bankruptcy petition without first obtaining the signatures of the debtors on it, the court said. Linder argued through counsel, Bruce Kugler, that he shouldn’t be sanctioned because he was authorized by the debtors. He also argued that Linder’s actions weren’t done knowingly or willfully. Linder was dealing with family health issues, he said, and talked to his paralegal about filing the petition and authorized her to go ahead because he assumed that the debtors had signed the petition.

Based on Linder’s fee application, the court determined that Linder had an initial meeting with the debtors in May 2015, and then had little to do with the preparation, execution, and filing of the bankruptcy documents. Linder’s paralegal prepared all of the documents and met with the debtors without supervision by Linder, the court said. Linder also didn’t review or analyze the information provided by the debtors, the court said.

The court found that this practice was not an isolated incident in Linder’s bankruptcy practice. Linder must “be required to focus on his bankruptcy practice and to review all documents filed in his cases both as to substance and form,” the court said.

Kevin Linder, Linder Law Office, Springfield, Ill., represented debtors Aaron E Ruebling, and Linda Ruebling.

Kenneth Takis Siomos, Springfield, Ill, represented Chapter 7 Trustee John H Germeraad.

U.S. Trustee Timothy E. Ruppel, Region 10 Peoria Office - U.S. Trustee, Peoria, Ill.

To contact the reporter on this story: Diane Davis in Washington, D.C. at DDavis@bna.com

To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com

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