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Next Friend Filing Under FRBP 1004.1 Dismissed
Thank you to all for the input on the next friend filing issue!
An update. Its a complicated factual situation:
1. It was a bare bones filing.
2. Husband has now died.
3. Surviving joint debtor spouse lives out of state. They were not
separated, just necessary for employment.
4. Family home in CA where now deceased husband lived is on track for a
foreclosure sale in late July.
5. US Trustee filed a motion for sanctions/disgorgement against me for
failing to file the documents required under 11 U.S.C. 521 even though it
had not been 14 days since the case was filed. ARGHHHHHH!
I held a cordial conversation with Margaux Ross, Attorney for the US
Trustee. The US Trustee is going to dismiss the sanctions motion.
Nevertheless, what I learned during the conversation was a bit disconcerting. I pass
it along for general consumption.
She explained the US Trustee is very concerned about fraudulent/abusive filings. She informed me that the US Trustees Office does not have the
resources to contact the attorneys first before filing such
sanctions/disgorgement motions because of tracking requirements. (They do have the resources
to file a 30 page disgorgement motion including exhibits instead though.) Furthermore, because cases are closed so fast in the Northern Division
there is no time to communicate first. The Disclosure of Compensation ofAttorney for Debtors needs to be filed with initial documents (even though LBR
1002.1(c) incorporating Court Manual 2.1(b)(1)(N) says within 14 days). Otherwise, if there are extenuating circumstances we should contact her inany SF or ND filing to explain in order avoid a motion for disgorgement. She further informed me the US Trustee takes the position that next friend filings must be promptly followed by a motion to authorize representation
by the alleged next friend. The concern being that otherwise anybody could
file a bankruptcy case for anybody else and add to abusive/fraudulent
filings. While looking at it through the spectrum of preventing fraud and abuse
this makes sense. However, such a requirement serves to negatively impact efficient and economical access to the bankruptcy courts by minors or
incompetents, which is the point of FRBP 1004.1 in the first place. Regardless such a motion requirement is not contained anywhere in FRBP 1004.1, any
other FRBP, Central District local rules or the judges procedures, which I
mentioned in respectful disagreement with the stated policy.
The exception to the next friend procedure according to Margaux Ross is if there is a power of attorney. Then no motion is required. There is case law in support of filing under authority granted in a power of attorney including In re Hurt 234 B.R. 1 (BC D. NH, 1999). There is authority to the
contrary saying filing under power of attorney without court approval of such
filing is not allowed, including the Rutter Group Bankruptcy practice
guide which cites In Re Hurford (BC ED MI 2003) 290 BR 299, 301-301 becauseFRBP 1008 and 28 USC 1746 require the bankruptcy petition to be verified or
to contain an unsworn declaration under penalty of perjury and a debtor
cannot grant authority to verify under oath the truthfulness of statementscontained in the petition and supporting documents that are uniquely within the
debtors knowledge. FRBP 1004.1 was promulgated in 2002 in order to
codify the existing application of FRCP 17(c) to bankruptcy proceedings. Much of
the case law predates that promulgation.
The Notice of Dismissal of Case If Required Documents Are Not Filed or
Signed in my clients case makes reference to there being no applicable power
of attorney on file. So it appears filing under a power of attorney fliesin the Central District of CA even though FRBP 1004.1 makes no provisionsfor use of power of attorney to file for an incompetent debtor. Filing
under the next friend procedure delineated in FBRP 1004.1 apparently does not
fly in the minds of some in the clerks office, US Trustee and it looks like
at least one judge. My clients case was not dismissed for lack of a
motion to allow a next friend filing, but because there was no power of
attorney on file (a.k.a. lack of familiarity with FRBP 1004.1 and the concept of a
next friend)
The surviving joint debtor in the midst of trying to bury her husband needs to choose between the unpleasant options she faces on how to proceed. It just may be more cost effective to file a new case, even though it should
not be required.
The lovely vicissitudes of life in the Central District of California....
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
In a message dated 6/19/2017 10:14:07 A.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
[_Attachment(s)_ (mip://03bf8b28/default.html#TopText) from Peter M.
Lively included below]
Mark,
I think you next call after the initial clerk should have been to a
supervisor at the clerk's office rather than the judge's staff.
Kathy Campbell and her staff are very responsive to these types of issues.
You also may want to start out your next friend case with a motion to
excuse some of the requirements - see attached old sample. The motion probably
wouldn't have resolved the 72 hour problem, but it helps the court
understand what the debtor(s) are trying to accomplish.
Best regards,
Peter
Peter M. Lively, J.D., M.B.A.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
Telephone: (310) 391-2400 * Toll Free: (800) 307-3328 * Fax: (310)
391-2462
On Fri Jun 16 2017 19:02:51 GMT-0700 (Pacific Daylight Time),
jesseelaw@aol.com [cdcbaa] wrote:
I am frustrated beyond words with a fiasco I have had filing a joint
Chapter 13 case under FRBP 1004.1's next friend procedure! If anybody out
there has filed one who can shed any light, I would appreciate it.
While I have discussed filing for an incompetent debtor many times on this list serve and otherwise, I filed my first petition on Monday using the
next friend procedure under FRBP 1004.1. Before filing I again reviewed FRBP
1004.1 and searched the local rules and Judge Saltzman pages on the courtwebsite for any related procedural requirements (there are none). Husbandwas incapacitated, terminally ill in an unconscious state for several daysso his wife and joint debtor signed as his next friend (noted as such on
the filing - husband, by his next friend, wife, pursuant to FRBP 1004.1) for
their Chapter 13 case in Santa Barbara. Clerks office issued a Notice that
case will be dismissed within 72 hours if husband does not sign the
document, because no power of attorney on file. I called the ecf help desk. Clerk
there had never heard of next friend proceeding and said I should speak
with the judges courtroom deputy. Called courtroom deputy and left
explanatory voice mail about the petition being filed under FRBP 1004.1 and the
husband being incompetent and wanting to address the deficiency notice. Call
returned by another clerk Wednesday morning before I was in the office
leaving a voicemail saying I had to look at the docket and file the documents
required as noted on the docket and that the matter could not be addressed by
telephone. Called back, no answer, left voicemail explaining again in evenmore detail that it was filing for an incompetent person. Thursday no callback, I called both that clerk and courtroom deputy numbers a couple timesthrough the day, no answer on either. I finally decided to prepare a
declaration explaining the next friend procedure and why it was filed in this
case. (Not that any such declaration is in any way required under the FRBP,
the local rules or the Judges procedures on the Court website.) It quotedFRBP 1004.1 and noted that next friends are not required to comply with any
particular appointment or qualification procedure before filing a "next
friend" petition. In re Murray, 199 B.R. 165, 173 (M.D.Tenn. 1996). After filing
my declaration, I called again leaving a voicemail explanation for both
the courtroom deputy and the other clerk that left me a voicemail Wednesday
morning. No return call Thursday or today. This afternoon I received: ORDER
and Notice of Dismissal of Case for Failure to File Initial Petition
Documents Within 72 Hours - Both Debtors Dismissed. Based Upon Judicial
Instructions.
Apparently based upon the notation of judicial instructions Judge Saltzman was consulted and presumably saw my declaration (at least I hope so) yet
she ordered not only the incompetent husband dismissed as debtor but also the
wife who had also individually signed all the documents and for whom therewas no deficiency.
I certainly can understand that a judge might want proof of incompetence,but there is no requirement anywhere I looked requiring it be proactivelyfiled. There is no procedural requirement I found anywhere requiring thematter be set for motion after filing a petition and the deficiency noticecertainly made no such reference. Setting an OSC re: dismissal would seem
the appropriate procedure if a judge wants to determine the husband's
incompetence.
FRBP 1004.1 is a rare filing procedure, but it should nevertheless be partof the clerk's training and procedural checklist. It is particularly
frustrating that the ecf help desk clerk had no idea what the next friendprocedure was and rather flippantly said it was like her best friend filing a
bankruptcy for her which can't be done. I bit my tongue and acknowledged it
was a rare occurrence but she just passed the buck to the clerks in SantaBarbara, none of whom I could ever reach to try to resolve the matter (even
more frustrating). Instead the case was dismissed seemingly without anyregard for FRBP 1004.1.
It appears, presuming the client wants the additional trouble and expense,I will need to file a motion for reconsideration. I think I better do itas noticed hearing so I have the opportunity to be heard in the Courtroomand have it all on the record. Again frustrating because the entire purpose
of FRBP 1004.1 is to allow incompetents and minors convenient and cost
effective access to the bankruptcy courts.
Any wisdom from those having dealt with this rarity before is appreciated.
Mark Jessee
Thank you to all for the input on the next friend filing issue!
An update. Its a complicated factual situation:
1. It was a bare bones filing.
2. Husband has now died.
3. Surviving joint debtor spouse lives out of state. They were
not separated, just necessary for employment.
4. Family home in CA where now deceased husband lived is on track for
a foreclosure sale in late July.
5. US Trustee filed a motion for sanctions/disgorgement against me
for failing to file the documents required under 11 U.S.C. 521 even though it
had not been 14 days since the case was filed.
ARGHHHHHH!
I held a cordial conversation with Margaux Ross, Attorney for the US
Trustee. The US Trustee is going to dismiss the sanctions motion.
Nevertheless, what I learned during the conversation was a bit
disconcerting. I pass it along for general consumption.
She explained the US Trustee is very concerned about fraudulent/abusive
filings. She informed me that the US Trustees Office does not have the
resources to contact the attorneys first before filing such
sanctions/disgorgement motions because of tracking requirements. (They do
have the resources to file a 30 page disgorgement motion including exhibitsinstead though.) Furthermore, because cases are closed so fast in
the Northern Division there is no time to communicate first. The
Disclosure of Compensation of Attorney for Debtors needs to be filed with
initial documents (even though LBR 1002.1(c) incorporating Court Manual
2.1(b)(1)(N) says within 14 days). Otherwise, if there are extenuating
circumstances we should contact her in any SF or ND filing to explain in order
avoid a motion for disgorgement.
She further informed me the US Trustee takes the position that next friend
filings must be promptly followed by a motion to authorize representation by the
alleged next friend. The concern being that otherwise anybody could file a
bankruptcy case for anybody else and add to abusive/fraudulent filings.
While looking at it through the spectrum of preventing fraud and abuse thismakes sense. However, such a requirement serves to negatively impactefficient and economical access to the bankruptcy courts by minors or
incompetents, which is the point of FRBP 1004.1 in the first place.
Regardless such a motion requirement is not contained anywhere in FRBP 1004.1,
any other FRBP, Central District local rules or the judges procedures, which I
mentioned in respectful disagreement with the stated policy.
The exception to the next friend procedure according to Margaux Ross is if
there is a power of attorney. Then no motion is required. There is case
law in support of filing under authority granted in a power of attorney
including In re Hurt 234 B.R. 1 (BC D. NH, 1999). There is authority to
the contrary saying filing under power of attorney without court approval of
such filing is not allowed, including the Rutter Group Bankruptcy practice
guide which cites In Re Hurford (BC ED MI 2003) 290 BR 299, 301-301 because FRBP
1008 and 28 USC 1746 require the bankruptcy petition to be verified or to
contain an unsworn declaration under penalty of perjury and a debtor cannotgrant authority to verify under oath the truthfulness of statements contained in
the petition and supporting documents that are uniquely within the debtorknowledge. FRBP 1004.1 was promulgated in 2002 in order to codify theexisting application of FRCP 17(c) to bankruptcy proceedings. Much of the case
law predates that promulgation.
The Notice of Dismissal of Case If Required Documents Are Not Filed orSigned in my clients case makes reference to there being no applicable power of
attorney on file. So it appears filing under a power of attorney flies in
the Central District of CA even though FRBP 1004.1 makes no provisions for use
of power of attorney to file for an incompetent debtor. Filing under
the next friend procedure delineated in FBRP 1004.1 apparently does not fly in
the minds of some in the clerks office, US Trustee and it looks like at least
one judge. My clients case was not dismissed for lack of a motion to
allow a next friend filing, but because there was no power of attorney on file
(a.k.a. lack of familiarity with FRBP 1004.1 and the concept of a next friend)
The surviving joint debtor in the midst of trying to bury her husband needs
to choose between the unpleasant options she faces on how to proceed. It
just may be more cost effective to file a new case, even though it should not be
required.
The lovely vicissitudes of life in the Central District of
California....
Mark T.
JesseeLaw Offices of Mark T. Jessee"A Debt Relief Agency"50 W.Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805) 497-5868 (805)
497-5864 (Facsimile)
In a message dated 6/19/2017 10:14:07 A.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Mark,
I think you next call after the initial clerk should have been to a supervisor at the clerk's office rather than the judge's staff.
Kathy Campbell and her staff are very responsive to these types of
issues.
You also may want to start out your next friend case with a motion to
excuse some of the requirements - see attached old sample. The motion probably wouldn't have resolved the 72 hour problem, but it helps the
court understand what the debtor(s) are trying to accomplish.
Best regards,
Peter
Peter M. Lively, J.D., M.B.A.Law Office of Peter
M. Lively * Personal Financial Law Center I11268 Washington
Boulevard, Suite 203, Culver City, California 90230-4647Telephone: (310) 391-2400 * Toll Free: (800) 307-3328 *
Fax: (310) 391-2462
On Fri Jun 16 2017 19:02:51 GMT-0700 (Pacific Daylight Time),
jesseelaw@aol.com [cdcbaa] <cdcbaa@yahoogroups.com> wrote:
I am frustrated beyond words with a fiasco I have had filing a joint
Chapter 13 case under FRBP 1004.1's next friend
procedure! If anybody out there has filed one who can shed any
light, I would appreciate it.
While I have discussed filing for an incompetent debtor many times on this
list serve and otherwise, I filed my first petition on Monday using the next
friend procedure under FRBP 1004.1. Before filing I again
reviewed FRBP 1004.1 and searched the local rules and Judge Saltzman pages on the court website for any related procedural requirements
(there are none). Husband was incapacitated, terminally ill in an
unconscious state for several days so his wife and joint debtor signed as
his next friend (noted as such on the filing - husband, by his next friend,
wife, pursuant to FRBP 1004.1) for their Chapter 13 case in Santa Barbara.
Clerks office issued a Notice that case will be dismissed within 72 hours if
husband does not sign the document, because no power of attorney on file. I
called the ecf help desk. Clerk there had never heard of next friend
proceeding and said I should speak with the judges courtroom deputy. Called
courtroom deputy and left explanatory voice mail about the petition being filed under FRBP 1004.1 and the husband being incompetent and wanting to address the deficiency notice. Call returned by another clerk Wednesday
morning before I was in the office leaving a voicemail saying I had to look at
the docket and file the documents required as noted on the docket and
that the matter could not be addressed by telephone. Called back, no
answer, left voicemail explaining again in even more detail that it was filing
for an incompetent person. Thursday no call back, I called both that clerk and
courtroom deputy numbers a couple times through the day, no answer on either.
I finally decided to prepare a declaration explaining the next friend
procedure and why it was filed in this case. (Not that any such declaration is
in any way required under the FRBP, the local rules or the Judges procedures
on the Court website.) It quoted FRBP 1004.1 and noted that next friends are
not required to comply with any particular appointment or qualification
procedure before filing a "next friend" petition. In re Murray, 199
B.R. 165, 173 (M.D.Tenn. 1996). After filing my declaration, I called again
leaving a voicemail explanation for both the courtroom deputy and the other
clerk that left me a voicemail Wednesday morning. No return call Thursday or
today. This afternoon I received: ORDER and Notice of Dismissal of Case
for Failure to File Initial Petition Documents Within 72 Hours - Both Debtors Dismissed. Based Upon Judicial Instructions.
Apparently based upon the notation of judicial instructions Judge Saltzman
was consulted and presumably saw my declaration (at least I hope so) yet she
ordered not only the incompetent husband dismissed as debtor but also the wife
who had also individually signed all the documents and for whom there was no
deficiency.
I certainly can understand that a judge might want proof of incompetence, but there is no requirement anywhere I looked requiring it
be proactively filed. There is no procedural requirement I found
anywhere requiring the matter be set for motion after filing a
petition and the deficiency notice certainly made no such
reference. Setting an OSC re: dismissal would
seem the appropriate procedure if a judge wants to determine
the husband's incompetence.
FRBP 1004.1 is a rare filing procedure, but it should nevertheless be
part of the clerk's training and procedural
checklist. It is particularly frustrating that the ecf help
desk clerk had no idea what the next friend procedure was and rather
flippantly said it was like her best friend filing a bankruptcy for her which
can't be done. I bit my tongue and acknowledged it was a rare occurrence
but she just passed the buck to the clerks in Santa Barbara, none
of whom I could ever reach to try to resolve the matter (even more
frustrating). Instead the case was dismissed
seemingly without any regard for FRBP 1004.1.
It appears, presuming the client wants the additional trouble
and expense, I will need to file a motion for reconsideration.
I think I better do it as noticed hearing so I have the opportunity to be heard in the Courtroom and have it all on the record. Again
frustrating because the entire purpose of FRBP 1004.1 is to allow incompetents
and minors convenient and cost effective access to the bankruptcy
courts.
Any wisdom from those having dealt with this rarity before is
appreciated.
Mark Jessee
The post was migrated from Yahoo.
Mark,
I think you next call after the initial clerk should have been to a supervisor at the clerk's office rather than the judge's staff.
Kathy Campbell and her staff are very responsive to these types of issues.
You also may want to start out your next friend case with a motion to excuse some of the requirements -see attached old sample. The motion probably wouldn't have resolved the 72 hour problem, but it helps the court understand what the debtor(s) are trying to accomplish.
Best regards,Peter
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
Telephone: (310) 391-2400* Toll Free: (800) 307-3328 * Fax: (310) 391-2462
On Fri Jun 16 2017 19:02:51 GMT-0700 (Pacific Daylight Time), jesseelaw@aol.com [cdcbaa] wrote:
I am frustrated beyond words with a fiasco I have had filing a joint Chapter 13 case underFRBP 1004.1'snext friend procedure! If anybody out there has filed one who can shed any light, I would appreciate it.
While I have discussed filing for an incompetent debtor many times on this list serve and otherwise, I filed my first petition on Monday using the next friend procedure under FRBP 1004.1. Before filingI again reviewedFRBP 1004.1 and searched the local rules and Judge Saltzman pages on the courtwebsitefor any related procedural requirements (there are none).Husband was incapacitated, terminally ill in an unconscious state for several daysso his wife and joint debtor signed as his next friend (noted as such on the filing - husband, by his next friend, wife, pursuant to FRBP 1004.1) for their Chapter 13 case in Santa Barbara. Clerks office issued a Notice that case will be dismissed within 72 hours if husband does not sign the document, because no power of attorney on file. I called the ecf help desk. Clerk there had never heard of next friend proceeding and said I should speak with the judges courtroom deputy. Called courtroom deputy and left explanatory voice mail about the petition being filed under FRBP 1004.1 and the husband being incompetent and wanting to address the deficiency notice. Call returned by another clerk Wednesday morning before I was in the office leaving a voicemail saying I had to look at the docket and file the documents required as noted on the docket and thatthe mattercould not be addressed by telephone. Called back, no answer, left voicemail explaining again in even more detail that it was filing for an incompetent person. Thursday no call back, I called both that clerk and courtroom deputy numbers a couple times through the day, no answer on either. I finally decided to prepare a declaration explaining the next friend procedure and why it was filed in this case. (Not that any such declaration is in any way required under the FRBP, the local rules or the Judges procedures on the Court website.) It quoted FRBP 1004.1 and noted that next friends are not required to comply with any particular appointment or qualification procedure before filing a "next friend" petition. In re Murray, 199 B.R. 165, 173 (M.D.Tenn. 1996). After filing my declaration, I called again leaving a voicemail explanation for both the courtroom deputy and the other clerk that left me a voicemail Wednesday morning. No return call Thursday or today. This afternoon I received: ORDER and Notice of Dismissal of Case for Failure to File Initial Petition Documents Within 72 Hours - Both Debtors Dismissed. Based Upon Judicial Instructions.
Apparently based upon the notation of judicial instructions Judge Saltzman was consulted and presumably saw my declaration (at least I hope so) yet she ordered not only the incompetent husband dismissed as debtor but also the wife who had also individually signed all the documents and for whom there was no deficiency.
I certainly can understandthat a judgemight want proof of incompetence, but there is no requirement anywhere Ilooked requiring it be proactively filed. There is no procedural requirement I found anywhere requiring the matter be set for motion after filing a petitionopriate procedure ifa judge wants to determine the husband's incompetence.
FRBP 1004.1 is a rare filing procedure, butit should nevertheless be part of the clerk's training andprocedural checklist.Itwhat the next friend procedure was and rather flippantly said it was like her best friend filing a bankruptcy for her which can't be done. I bit my tongue and acknowledged it was a rare occurrence but shejust passed the buck to the clerks in Santa Barbara, none ofwhom I could ever reach to try to resolve the matter (even more frustrating).r FRBP 1004.1.
It appears,presuming the client wants the additional trouble andthink I better do it as noticed hearing so I have the opportunity to be heard in the Courtroomand have it all on the record.Again frustrating because the entire purpose of FRBP 1004.1 is to allow incompetents and minors convenient and cost effective accessto the bankruptcy courts.
Any wisdom from those having dealt with this rarity before is appreciated.
Mark Jessee
The post was migrated from Yahoo.