for the united states trustee there are three basic statements in this case for which judge segment sanctioned from and these are one mr well statement that taylor's lack equity in their home just interrupt you with something in the nature of a threshold question sir because we're dealing with bankruptcy you nine thousand and eleven and frankly if i said i'm not an expert in bankruptcy it would be one of the understatement of the year but i query whether we have ever in a presidential opinion declare that our rule levon jurisprudence is transferable to automatically applicable in the nine thousand and eleven context i think we've only got a few opinions dealing with nine zero eleven do you have any position on that would you know whether we've spoken in some way that i've missed now the general rule is that the rol  i don't have to inform me right now i believe there may be some technical differences between the two whether they would not only but i'm not sure any of those differences coming to come into play in this case have failed to make payments to discharge the arrearages on the mortgage or have failed to make the current monthly payment on the mortgage since the filing of the chapter thirteen petition or have failed to do both and wasn't that in fact given the disjunctive nature of the declaration correct in one of the disjunctive respect well we you know i think the question here basically is how do you naturally read that language and well the first question is wasn't that a basis for the sanction or have i read the bases for the sanctions in there were actually without without seeming right there and we're calling it that and this is actually the third of the three bases that i mentioned at the outset there's actually two alternative bases before the sanction there are the first basis is simply that the statement is wrong that you that you can read that same it is saying that the that the taylors have paid nothing since the commencement of a bankruptcy case or at again judge sigman orally notified the uterine firm that she was considering sanctions for quote filing b things without any knowledge and then the opening statement at the hearing on july twenty third which i believe show that the district court was wrong in concluding that the bankruptcy judge abused her discretion is that right that's not quite right actually your standard of review over the district court is finery and that imposing sanctions well known that is an issue for abuse of discretion that is correct should we not be looking at the sanctions here and separating out the sanctions as they are imposed upon each individual and the firm differently and if so what is the basis in the rule we're in any kind of rule eleven jurisprudence that you know for sanctioning mr you've written for as i understand it being responsible for generally for the culture of the law for i didn't see anything linking him directly to the filing of a single pleading or submission  i read the record i read all the testimony in fact he was a witness he testified to how little he knew about new track and he testified that he had no involvement on with this particular matter how can we sustain sanctions of proximate cause test here and if so just how proximate is that if somebody is sloppy and places the incorrect the entry of an amount  question if the actual question only if it's a factual determination then it's completely and banded and the courts the district courts under eleven the bankruptcy courts under nine thousand eleven can sanction whoever they want to so long as they can find out there somewhere in the universe in an actual cause sense some responsibility for what ultimately occurs in the courtroom through some style submission well again it's a question for online and certainly if this court deals looks at the record and feels that that was a completely unfounded factual finding by judge sigmund you can reverse that part of her ruling under the clear air standard you have you have some time judge sigmund on may first which started these proceedings i don't think anybody had any idea that the fact that a motion for relief from state proceeding as to which repeated false representations had been made that payments had actually been made which weren't made would end up leading to a motion for sanctions and a an opinion practice lapses or worse perhaps of that his counsel be any kind of factor in our determination and in fact who was it correct for the district court to which is the context which is the computers that are feeding information and that reuters are taking information it is being put into like leadings without investigating necessarily investigating with that information is is part of this case well i think that there is a i don't know if  condit well i mean i think we all know of the hill decision that came out of western pennsylvania recently in state court in which warriors admitted that they didn't even review pleadings that were filed in these noble investigation but is it very heart that's what ruhleben is that has been absolutely correct your honor and and sounds like you've thrown a talent no not at all i think reasonable investigation actually occurred in this case that is how can reasonable investigation occur when you actually have a document in your possession that states a factor in this case a figure that is completely contrary to a figure you yourself then placed in a submission to the court a pleading well what different from what you have and that was provided to you by your or are referring obviously now to the proof of claim which my client did not file the objection to the proof of claim i'm referring also to the motion for stay the motion for a stay i'm not aware of any  it was my motion a motion for relief from the motion for relief stated two things one that there had they were three payments behind and that true payments had not been made at all one was in suspense that's what it says there was a suspense account right there as of the time of the filing which is january fifteenth the september payment had been made short there was no flood insurance payment made then the october payment came in the same amount no payment at all was received in november no payment at all was received in december at the time the motion was filed they were two months full behind plus another month in which they were they were short and the motion reflected that there was a suspense account with the balance which is being credited to their account so there is nothing at all false about that the other aspect of the motion for relief from say was an allegation that there was no equity in the property and it was not necessary to a reorganization there was already a judgment in this case this investor but there was equating i don't know we've there was not as as their it's not of record whether they're exactly honor however this matter this house eventually went to sheriff's sale and was taken on the red after the debtors defaulted in bankruptcy there was no equity that they did there was no no bidders at the sheriff's sale it went for less than the amount if you look at the schedules filed by the debtor there are massive confusion and misinformation and one point the schedule say one it didn't list the judgment secondly it lists the time that i'm sorry you're talking about the misrepresentations made by the debtor i'm talking about the evidence of whether there was equity in the property the first of all it was never an issue in the case what happened is in the proceedings which went on all summer the trustee asked miss doyle what she knew about the equity in the property but was never that the motion wasn't pushed i thought mr this your part that the representation was made that there so that that's what was before the court really annoyed judge sigmond is the fact that an unanswered series of requests for admission were proffered and but that's the responsibility of the debtors counsel who didn't answer them at the hearing mr boyle said what they asked her what was the basis for your allegations i know where the property is and i didn't believe there was any equity in that property would you turned out to be true or you would not dispute at the heart of the problem here is that information is taking and from a computer and that information is including court please but you don't dispute that some of that information is just dead wrong not not the information that the huge or infirm god it was the boss could bill is firm which did the proof but you have to look at that in the context of the objection the only of gentlemen but but your position then has to be that she had no obligation to go beyond what was on the the face of the p r c filed by another for what i'm saying is she had no obligation to go beyond the face of what was in the objection the only thing that was in the objection was an objection to the it will then say yes or no my question of flood insurance and answer my question did she or did she not have an obligation to look behind what was in the p o c that she and her fern did not prepare but that another firm had prepared and upon which she apparently relied but i don't think that she did all she was the only issue in the you can't contend that the contents are accurate we have having some basis to stay there right here again except for the fact your honor is that the objection was limited to flood insurance chargers which the judge found were properly impose had nothing to do with h s b c or huge and it was imposed by fema doing a map plan and the record shows that both the huge and firm and h s b c on three separate occasions provided information either to miss him or the debtors counsel or to the debtors themselves on how to eliminate the flood insurance but it was part of the judgment and that was the only objection is it i mean if you're asking was  did she review every aspect of the proof of claim before making that same i think one answer is almost certainly no see it was not exactly a length billion complex document and it wasn't but she was defend me i raised the question with mr she and i and i actually alluded to it again with you intending it to be something of a softball but let me take you back to the representation made in in the this juncture that in the motion that debtors have failed to make payments to discharge the arrearages on the mortgage or have failed to make the current monthly payment on the mortgage since the filing of the chapter thirteen petition or have failed to do both my understanding was that that was at least eight basis one basis that the bankruptcy who are used for it sanction and i understand the sh to be taking the position that it really is inaccurate it really is a misrepresentation why would i but i want to know from you if that is the case or or if rather at least one disjunctive portion of that representation as well clearly it's accurate your honor because i already went over the payment history this bankruptcy court can at least be said to have been wrong but is using this as a basis right and i think you also have to look at what judge fullam said in his opinion in the may first hearing judge sigman stated on the record that no sanctions would be imposed as a result of the filing of the motion for relief although she was unhappy that mr fitz givens had come there that fact the fact remains your honor that the judge said there will be no sanctions i'm going to give you a break you're going to know sanctions as a result of the motion for relief and then he issued the order to show cause as a result of yet another debtors misrepresentation that you have been asking mr fitzgibbon for months for a complete accounting and should if she had not she had not she didn't what doesn't make sense is that she issues in order to show cause involving hearings and engines on the basis of misrepresentation that's correct and that's been what i've been trying to clarify that yeah i mean it doesn't make sense that she would want to sanction the party that allegedly didn't make  after the fact no safe harbor imposition of sanctions under nine zero one one speaking of sanctions and judge me in a trap and yes to that it may be as it has no other question about that but i'll go hey nance weren't you on notice that you were the hearings there were four days of hearings is five remember correctly if you were notified that you were that you may be sanctioned for the conduct before the bankruptcy court right but i think that what the case law says even if this court doesn't feel like adopting the penny and standard that the second circuit has imposed requiring subject of bad faith for a sue a sponsor nine eleven motion the fact is that it says that if it's on its own initiative the court must describe the specific conduct that appears to violate subdivision b which didn't happen but that's that's not what i understand  grounds is one thing right notice is to this the civic forms the sanctions materially different well i agree with that but it's still that we had no idea of what they were looking for from the huge and firm we didn't know that there what that a i'm sorry that what the court and more importantly the trustee because the trustee had never filed anything and the trustee ended up taking the lead i mean when you hear the question to mr givens regarding the equity in the property that was never an issue before we had no notice that there was going to be a sanction because of the allegation of lack of equity in the property which was never an issue in the case the sanctions seem so benign to me at this fits is if it's givens it's yes he was reason your honor that this hearing ever got to may was the fact that a blatantly false representation had been made to the court that payments were made there were checks attached to the answer to the motion for relief which ended up being mailed those very checks the front of the checks were on there and they were mailed two and a half months later right before the actual here you know what i see though is that you're you're justifying the wrongdoing of the attorneys on the basis of the wrongdoing of the january gets continued to made because of false representations of payments were made which were not by the time we get to may there are different circumstances but you can't judge the accuracy of the pleading by that condition in may and  payments had not been made when that motion was filed or when that when the submission was filed but they had been by the time the hearing that they were received in the foreclosure department three days before the hearing the same checks which were represented to have mr she and i was by no means overstating when i confessed at the outset my lack of expertise in the bankruptcy field and that extends throughout my legal career but what little i do know it strikes me is is rather unusual that that the u s trustee would be appearing in a relatively small amount matter i'm not saying not important a relatively small amount matter chapter thirteen he and i wrong about that well no i mean certainly the sanction this case as mr part pointed out is not i think a huge issue to either so are you concerned about what may have driven the bankruptcy judge here and what certainly judge one seemed to think animated the bankruptcy judges decision  and that is the nature of the practice or the evolution of the practice and the distance that has resulted from computerized relationships between client and attorney is that what is at least partly important to use trustee here well that is important to the united states trustee though and i will point out that there are several other cases pending right now in different bankruptcy works where that issue is  problem well the problem is a failure to investigate but it begins does it not as i understand the actual history of the case from take taking information from the screen not investigating further to ascertain whether it's it's reliable or not or accurate or not well there's actually two different things going on here in this actually brings me into the response that i wanted to make about the alike about the finding here the two problems that there are going on are one taking the new track materials as gospel which  value and that and that is that it's a problem though again there's no that's not actually what happened with any of these three but statements in this case what did happen here was that they took the they took the new track information and never sought to go beyond that and i  track and she says that what their new track information is to be the law number mortgages and property address payment amount late fees and he think there would be would be due and owing at the time what's not mentioned there is there is nothing in your track that tells them what the equity from what is it attorney to do when you turn on the screen and you see this information and you have to file a pleading or you think you have two choices you can either file the pleading without the without the allegations that you can support that is there welcome that's not that's not what happened here because they weren't saying they were not sanction for using any that information from your truck they were sanctioned for putting allegations that were not taken from your track and for example that is exactly what happened with the allegation regarding the lack  that wasn't part of the new of the new track information mr weld did not rely on anything at all when she put that in there waiting list to she and one last question i want to take you back once again to the the imposition of the sanction on the street uterine because i'm trying to understand what the position of the u s attorney is and frankly i'm left at least with with what is at least the notion that you are you have something in the nature of violations could be sanctioned and her factual finding was that this or your dream caused that something i would consider making a decision but you said something before that there were other cases with this type of situation pending is what you were saying and that there are number of cases pending and decided and reported that involve s some of them involve problems with other wall from some providers but there are a number of cases involving similar issues basically errors and proofs of claim errors in motions for relief from stay virtually a one off human error but the errors occur because of a policy or procedure that itself is faulty and again i think there are different types of faulty procedures out there we would argue that what happened this case made it and one of them what's happened in